item 14 exhibits financial statement schedules reports form 8k document list 1 financial statements called item 8 incorporated herein reference registrants annual report shareholders fiscal 1994 2 following financial statement schedules filed part form report independent public accountants financial statements financial statement schedules fiscal years ended september 30 1993 september 30 1992 ii schedule pages iv5 iv6 iii schedule v pages iv7 iv9 iv schedule vi pages iv10 iv12 v schedule x page iv13 3 exhibits required item 601 regulation sk exhibit number 31 restated certificate incorporation amendment restated certificate incorporation registrant incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1987 32 bylaws registrant incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1990 41 rights agreement dated january 21 1986 registrant first national bank boston incorporated herein reference registrants form 8a dated january 30 1986 42 amendment rights agreement dated december 5 1990 registrant liberty national bank trust company oklahoma city incorporated herein reference registrants form 8 amendment 1 form 8a dated december 11 1990 iv1 101 incentive stock option plan incorporated herein reference exhibit 42 registrants registration statement 3316771 form s8 102 consulting services agreement w h helmerich iii registrant effective january 1 1990 amended incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1990 103 restricted stock plan senior executives helmerich payne inc incorporated herein reference exhibit registrants proxy statement dated january 26 1990 104 form restricted stock award agreement restricted stock plan senior executives helmerich payne inc together amendments thereto incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1990 105 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1990 106 helmerich payne inc 1990 stock option plan incorporated herein reference exhibit registrants proxy statement dated january 25 1991 107 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1993 13 registrants annual report shareholders fiscal 1994 22 subsidiaries registrant 231 consent independent public accountants 232 consent independent auditors 27 financial data schedule compensatory plan arrangement iv2 b report form 8k reports form 8k filed fourth quarter fiscal year ended september 30 1994 iv3 report independent public accountants financial statements financial statement schedules fiscal years ended september 30 1993 september 30 1992 shareholders board directors helmerich payne inc audited accompanying consolidated balance sheet helmerich payne inc delaware corporation subsidiaries september 30 1993 related consolidated statements income shareholders equity cash flows two years period ended september 30 1993 financial statements responsibility companys management responsibility express opinion financial statements based audits conducted audits accordance generally accepted auditing standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion audit made purpose forming opinion basic financial statements taken whole schedules listed item 14a presented purposes complying securities exchange commissions rules part basic financial statements information schedules september 30 1993 two years period ended september 30 1993 subjected auditing procedures applied audit basic financial statements opinion fairly state material respects financial data required set forth therein relation basic financial statements taken whole opinion financial statements referred present fairly material respects financial position helmerich payne inc subsidiaries september 30 1993 results operations cash flows two years period ended september 30 1993 conformity generally accepted accounting principles arthur andersen llp tulsa oklahoma november 16 1993 iv4 helmerich payne inc schedule marketable securities september 30 1994 note 1 investments carried balance sheet cost except investment atwood carried equity method equity income 1994 atwood 1458000 dividends received atwood 2 formerly banks mid america iv5 helmerich payne inc schedule marketable securities september 30 1993 note 1 investments carried balance sheet cost except investment atwood carried equity method equity loss 1993 atwood 435000 dividends received atwood 2 formerly banks mid america iv6 helmerich payne inc schedule v property plant equipment year ended september 30 1994 thousands iv7 helmerich payne inc schedule v property plant equipment year ended september 30 1993 thousands iv8 helmerich payne inc schedule v property plant equipment year ended september 30 1992 thousands iv9 helmerich payne inc schedule vi accumulated depreciation depletion amortization property plant equipment year ended september 30 1994 thousands note 1 see note 1 consolidated financial statements companys policies regarding provisions depreciation depletion amortization iv10 helmerich payne inc schedule vi accumulated depreciation depletion amortization property plant equipment year ended september 30 1993 thousands note 1 see note 1 consolidated financial statements companys policies regarding provisions depreciation depletion amortization iv11 helmerich payne inc schedule vi accumulated depreciation depletion amortization property plant equipment year ended september 30 1992 thousands note 1 see note 1 consolidated financial statements companys policies regarding provisions depreciation depletion amortization iv12 helmerich payne inc schedule x supplementary consolidated income statement information years ended september 30 1994 1993 1992 iv13 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc hans helmerich hans helmerich president chief executive officer date december 16 1994 pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicated iv14 helmerich payne inc index exhibits incorporated referenceitem 14 exhibits financial statement schedules reports form 8k document list 1 financial statements called item 8 incorporated herein reference registrants annual report shareholders fiscal 1995 2 report independent public accountants financial statements financial statement schedules fiscal year ended september 30 1993 filed part form 3 exhibits required item 601 regulation sk iv1 compensatory plan arrangement iv2 b report form 8k reports form 8k filed fourth quarter fiscal year ended september 30 1995 iv3 report independent public accountants financial statements financial statement schedules fiscal year ended september 30 1993 shareholders board directors helmerich payne inc audited consolidated balance sheet helmerich payne inc delaware corporation subsidiaries september 30 1993 related consolidated statements income shareholders equity cash flows year ended financial statements responsibility companys management responsibility express opinion financial statements based audit conducted audit accordance generally accepted auditing standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audit provides reasonable basis opinion audit made purpose forming opinion basic financial statements taken whole schedules listed item 14a presented purposes complying securities exchange commissions rules part basic financial statements information schedules september 30 1993 year ended subjected auditing procedures applied audit basic financial statements opinion fairly state material respects financial data required set forth therein relation basic financial statements taken whole opinion financial statements referred present fairly material respects financial position helmerich payne inc subsidiaries september 30 1993 results operations cash flows year ended conformity generally accepted accounting principles arthur andersen llp tulsa oklahoma november 16 1993 iv4 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc hans helmerich hans helmerich president chief executive officer date december 18 1995 pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicated william l armstrong glenn cox william l armstrong director glenn cox director date december 18 1995 date december 18 1995 george dotson c w flint jr george dotson director c w flint jr director date december 18 1995 date december 18 1995 hans helmerich w h helmerich iii hans helmerich director ceo w h helmerich iii director date december 18 1995 date december 18 1995 george schaefer h w todd george schaefer director h w todd director date december 18 1995 date december 18 1995 john zeglis douglas e fears john zeglis director douglas e fears date december 18 1995 principal financial officer date december 18 1995 gordon k helm gordon k helm controller principal accounting officer date december 18 1995 helmerich payne inc index exhibits incorporated referenceitem 14 exhibits financial statement schedules reports form 8k document list 1 financial statements called item 8 incorporated herein reference registrants annual report shareholders fiscal 1996 2 exhibits required item 601 regulation sk exhibit number compensatory plan arrangement iv1 b report form 8k form 8k attached agreement plan merger proforma financial information covering ngo transaction filed securities exchange commission september 12 1996 compensatory plan arrangement iv2 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc hans helmerich hans helmerich president chief executive officer date december 18 1996 pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicated index exhibits incorporated reference compensatory plan arrangementitem 14 exhibits financial statement schedules reports form 8k document list 1 financial statements called item 8 incorporated herein reference registrants annual report shareholders fiscal 1997 2 exhibits required item 601 regulation sk exhibit number 31 restated certificate incorporation amendment restated certificate incorporation registrant incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 32 bylaws registrant incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 41 rights agreement dated january 8 1996 registrant liberty national bank trust company oklahoma city na incorporated herein reference registrants form 8a dated january 17 1996 101 incentive stock option plan incorporated herein reference exhibit 42 registrants registration statement 3316771 form s8 102 form incentive stock option plan stock option contract incentive stock option plan incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 103 consulting services agreement w h helmerich iii registrant effective january 1 1990 amended incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 compensatory plan arrangement iv1 104 restricted stock plan senior executives helmerich payne inc incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 105 form restricted stock award agreement restricted stock plan senior executives helmerich payne inc together amendments thereto incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 106 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 107 helmerich payne inc 1990 stock option plan incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 108 form nonqualified stock option agreement 1990 stock option plan incorporated reference exhibit 992 registrants registration statement 3355239 form s8 dated august 24 1994 109 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1993 1010 helmerich payne inc 1996 stock incentive plan incorporated herein reference registrants registration statement 33334939 form s8 dated september 4 1997 1011 form nonqualified stock option agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 992 registrants registration statement form s8 dated september 4 1997 1012 form restricted stock agreement helmerich payne inc 1996 stock incentive plan compensatory plan arrangement iv2 1013 helmerich payne inc nonemployee directors stock compensation plan hereby incorporated reference exhibit b registrants proxy statement dated january 27 1997 13 registrants annual report shareholders fiscal 1997 22 subsidiaries registrant 231 consent independent auditors 27 financial data schedule b report form 8k none compensatory plan arrangement iv3 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc hans helmerich hans helmerich president chief executive officer date december 19 1997 pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicated index exhibits compensatory plan arrangement compensatory plan arrangementitem 14 exhibits financial statement schedules reports form 8k document list 1 financial statements called item 8 incorporated herein reference registrants annual report shareholders fiscal 1998 2 exhibits required item 601 regulation sk exhibit number 31 restated certificate incorporation amendment restated certificate incorporation registrant incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 32 bylaws registrant incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 41 rights agreement dated january 8 1996 registrant liberty national bank trust company oklahoma city na incorporated herein reference registrants form 8a dated january 17 1996 101 incentive stock option plan incorporated herein reference exhibit 42 registrants registration statement 3316771 form s8 102 form incentive stock option plan stock option contract incentive stock option plan incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 103 consulting services agreement w h helmerich iii registrant effective january 1 1990 amended incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 compensatory plan arrangement iv1 104 restricted stock plan senior executives helmerich payne inc incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 105 form restricted stock award agreement restricted stock plan senior executives helmerich payne inc together amendments thereto incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 106 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 107 helmerich payne inc 1990 stock option plan incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 108 form nonqualified stock option agreement 1990 stock option plan incorporated reference exhibit 992 registrants registration statement 3355239 form s8 dated august 24 1994 109 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1993 1010 helmerich payne inc 1996 stock incentive plan incorporated herein reference registrants registration statement 33334939 form s8 dated september 4 1997 1011 form nonqualified stock option agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 992 registrants registration statement form s8 dated september 4 1997 1012 form restricted stock agreement helmerich payne inc 1996 stock incentive plan incorporated reference registrants annual report form 10k securities exchange commission fiscal 1997 compensatory plan arrangement iv2 1013 helmerich payne inc nonemployee directors stock compensation plan hereby incorporated reference exhibit b registrants proxy statement dated january 27 1997 13 registrants annual report shareholders fiscal 1998 22 subsidiaries registrant 231 consent independent auditors 27 financial data schedule b report form 8k none compensatory plan arrangement iv3 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc hans helmerich hans helmerich president chief executive officer date december 18 1998 pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicated william l armstrong glenn cox william l armstrong director glenn cox director date december 18 1998 date december 18 1998 george dotson hans helmerich george dotson director hans helmerich director ceo date december 18 1998 date december 18 1998 w h helmerich iii l f rooney iii w h helmerich iii director l f rooney iii director date december 18 1998 date december 18 1998 edward b rust jr george schaefer edward b rust jr director george schaefer director date december 18 1998 date december 18 1998 john zeglis douglas e fears john zeglis director douglas e fears date december 18 1998 principal financial officer date december 18 1998 gordon k helm gordon k helm controller principal accounting officer date december 18 1998 index exhibits b report form 8k none compensatory plan arrangementitem 14 exhibits financial statement schedules reports form 8k document list 1 financial statements called item 8 incorporated herein reference registrants annual report shareholders fiscal 2000 2 exhibits required item 601 regulation sk exhibit number compensatory plan arrangement iv1 b report form 8k none compensatory plan arrangement iv2 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc hans helmerich hans helmerich president chief executive officer date december 28 2000 pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicated exhibit index compensatory plan arrangement compensatory plan arrangementitem 14 exhibits financial statement schedules reports form 8k document list 1 financial statements called item 8 incorporated herein reference registrants annual report shareholders fiscal 2001 2 exhibits required item 601 regulation sk exhibit number 31 restated certificate incorporation amendment restated certificate incorporation registrant incorporated herein reference exhibit 31 registrants annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 32 bylaws registrant incorporated herein reference exhibit 32 registrants annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 41 rights agreement dated january 8 1996 registrant liberty national bank trust company oklahoma city na incorporated herein reference registrants form 8a dated january 18 1996 sec file 00104221 101 consulting services agreement w h helmerich iii registrant effective january 1 1990 amended incorporated herein reference exhibit 103 registrants annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 102 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 106 registrants annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 103 helmerich payne inc 1990 stock option plan incorporated herein reference exhibit 107 registrants annual report form 10k securities exchange commission fiscal 1996 sec file 001 04221 compensatory plan arrangement iv1 104 form nonqualified stock option agreement 1990 stock option plan incorporated reference exhibit 992 registrants registration statement 3355239 form s8 dated august 26 1994 105 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 106 registrants annual report form 10k securities exchange commission fiscal 1999 sec file 00104221 106 helmerich payne inc 1996 stock incentive plan incorporated herein reference exhibit 991 registrants registration statement 33334939 form s8 dated september 4 1997 107 form nonqualified stock option agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 992 registrants registration statement 33334939 form s8 dated september 4 1997 108 form restricted stock agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 1012 registrants annual report form 10k securities exchange commission fiscal 1997 sec file 00104221 109 helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 991 registrants registration statement 333 63124 form s8 dated june 15 2001 1010 form agreements helmerich payne inc 2000 stock incentive plan restricted stock award agreement ii incentive stock option agreement iii nonqualified stock option agreement incorporated reference exhibit 992 registrants registration statement 33363124 form s8 dated june 15 2001 13 registrants annual report shareholders fiscal 2001 21 subsidiaries registrant compensatory plan arrangement iv2 231 consent independent auditors b report form 8k none compensatory plan arrangement iv3 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc hans helmerich hans helmerich president chief executive officer date december 27 2001 pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicated index exhibits compensatory plan arrangementitem 14 controls procedures evaluation disclosure controls procedures within 90 day period prior filing date annual report form 10k companys management supervision participation companys chief executive officer chief financial officer evaluated effectiveness design operation companys disclosure controls procedures based evaluation companys chief executive officer chief financial officer believe companys disclosure controls procedures designed ensure information required disclosed company reports files submits securities exchange act 1934 recorded processed summarized reported within time periods specified secs rules forms companys disclosure controls procedures operate important information flows appropriate collection disclosure points timely manner effective ensure information accumulated communicated companys management made known companys chief executive officer chief financial officer particularly period annual report form 10k prepared appropriate allow timely decision regarding required disclosure b changes internal controls significant changes companys internal controls factors could significantly affect companys internal controls subsequent evaluation corrective actions regard significant deficiencies material weaknesses part iv item 15item 14 principal accountant fees services information incorporated reference company’s definitive proxy statement annual meeting stockholders held march 3 2004 filed commission later 120 days september 30 2003 part iv item 15item 14 principal accountant fees services information incorporated reference company’s definitive proxy statement annual meeting stockholders held march 2 2005 filed commission later 120 days september 30 2004 part iv item 15item 14 principal accountant fees services information incorporated reference companys definitive proxy statement annual meeting stockholders held march 7 2007 filed commission later 120 days september 30 2006 part iv item 15item 14 principal accountant fees services information incorporated reference companys definitive proxy statement annual meeting stockholders held march 5 2008 filed commission later 120 days september 30 2007 part iv item 15item 14 principal accountant fees services information caption audit fees incorporated reference companys definitive proxy statement annual meeting stockholders held march 4 2009 filed commission later 120 days september 30 2008 part iv item 15item 14 principal accountant fees services information required item incorporated herein reference material caption audit fees definitive proxy statement annual meeting stockholders held march 3 2010 filed commission later 120 days september 30 2009 part iv item 15item 14 principal accountant fees services information required item incorporated herein reference material caption audit fees definitive proxy statement annual meeting stockholders held march 2 2011 filed commission later 120 days september 30 2010 part iv item 15item 14 principal accountant fees services information required item incorporated herein reference material caption audit fees definitive proxy statement annual meeting stockholders held march 7 2012 filed sec later 120 days september 30 2011 part iv item 15item 14 principal accountant fees services information required item incorporated herein reference material caption audit fees definitive proxy statement annual meeting stockholders held march 6 2013 filed sec later 120 days september 30 2012 part iv item 15item 14 principal accountant fees services information required item incorporated herein reference material caption proposal 2ratification appointment independent auditorsaudit fees definitive proxy statement annual meeting stockholders held march 5 2014 filed sec later 120 days september 30 2013 part iv item 15item 14 principal accountant fees services information required item incorporated herein reference material caption proposal 2ratification appointment independent auditorsaudit fees definitive proxy statement annual meeting stockholders held march 2 2016 filed sec later 120 days september 30 2015 part iv item 15item 14 principal accountant fees services information required item incorporated herein reference material caption proposal 2ratification appointment independent auditorsaudit fees definitive proxy statement annual meeting stockholders held march 1 2017 filed sec later 120 days september 30 2016 part iv item 15item 14 principal accountant fees services information required item incorporated herein reference material caption “proposal 2ratification appointment independent auditorsaudit fees” definitive proxy statement annual meeting stockholders held march 7 2018 filed sec later 120 days september 30 2017 part iv item 15item 14 principal accountant fees services information required item incorporated herein reference material caption “proposal 2ratification appointment independent auditorsaudit fees” definitive proxy statement annual meeting stockholders held march 5 2019 filed sec later 120 days september 30 2018 part iv item 15item 14 principal accountant fees services information required item incorporated herein reference material caption “proposal 2ratification appointment independent auditorsaudit fees” definitive proxy statement annual meeting stockholders held march 3 2020 filed sec later 120 days september 30 2019 part iv item 15item 14 principal accountant fees services information required item incorporated herein reference material caption “proposal 2ratification appointment independent auditorsaudit fees” definitive proxy statement annual meeting stockholders held march 2 2021 filed sec later 120 days september 30 2020 part iv item 15item 14 principal accountant fees services information required item incorporated herein reference material caption proposal 2ratification appointment independent auditorsaudit fees definitive proxy statement annual meeting stockholders held march 4 2015 filed sec later 120 days september 30 2014 part iv item 15item 14 exhibits financial statement schedules reports form 8k document list 1 financial statements called item 8 incorporated herein reference registrants annual report shareholders fiscal 1999 2 exhibits required item 601 regulation sk exhibit number 31 restated certificate incorporation amendment restated certificate incorporation registrant incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 32 bylaws registrant incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 41 rights agreement dated january 8 1996 registrant liberty national bank trust company oklahoma city na incorporated herein reference registrants form 8 dated january 17 1996 101 incentive stock option plan incorporated herein reference exhibit 42 registrants registration statement 3316771 form s8 102 form incentive stock option plan stock option contract incentive stock option plan incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 103 consulting services agreement w h helmerich iii registrant effective january 1 1990 amended incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 compensatory plan arrangement iv1 104 restricted stock plan senior executives helmerich payne inc incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 105 form restricted stock award agreement restricted stock plan senior executives helmerich payne inc together amendments thereto incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 106 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 107 helmerich payne inc 1990 stock option plan incorporated herein reference registrants annual report form 10k securities exchange commission fiscal 1996 108 form nonqualified stock option agreement 1990 stock option plan incorporated reference exhibit 992 registrants registration statement 3355239 form s8 dated august 24 1994 109 supplemental savings plan salaried employees helmerich payne inc 1010 helmerich payne inc 1996 stock incentive plan incorporated herein reference registrants registration statement 33334939 form s8 dated september 4 1997 1011 form nonqualified stock option agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 992 registrants registration statement form s8 dated september 4 1997 1012 form restricted stock agreement helmerich payne inc 1996 stock incentive plan incorporated reference registrants annual report form 10k securities exchange commission fiscal 1997 compensatory plan arrangement iv2 1013 helmerich payne inc nonemployee directors stock compensation plan hereby incorporated reference exhibit b registrants proxy statement dated january 27 1997 13 registrants annual report shareholders fiscal 1999 22 subsidiaries registrant 231 consent independent auditors 27 financial data schedule b report form 8k none compensatory plan arrangement iv3 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc hans helmerich hans helmerich president chief executive officer date december 17 1999 pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicated exhibit index compensatory plan arrangement compensatory plan arrangement compensatory plan arrangementitem 14 principal accountant fees services information incorporated reference company’s definitive proxy statement annual meeting stockholders held march 1 2006 filed commission later 120 days september 30 2005 part iv item 15 item 7 managements discussion analysis financial condition results operations information required item may found pages 12 16 managements discussion analysis results operations financial condition registrants annual report shareholders fiscal 1994 incorporated herein reference item 8item 7 managements discussion analysis financial condition results operations information required item may found pages 12 16 managements discussion analysis results operations financial condition registrants annual report shareholders fiscal 1995 incorporated herein reference ii 2 item 8item 7 managements discussion analysis financial condition results operations information required item may found pages 11 16 managements discussion analysis results operations financial condition registrants annual report shareholders fiscal 1996 incorporated herein reference item 8item 7 managements discussion analysis financial condition results operations information required item may found pages 10 15 managements discussion analysis results operations financial condition registrants annual report shareholders fiscal 1997 incorporated herein reference item 8item 7 managements discussion analysis results operations financial condition information required item may found pages 10 18 managements discussion analysis results operations financial condition registrants annual report shareholders fiscal 1998 incorporated herein reference item 7a quantitative qualitative disclosures market risk information required item may found following pages managements discussion analysis results operations financial condition registrants annual report shareholders fiscal 1998 incorporated herein reference ii3 item 8item 7 managements discussion analysis results operations financial condition information required item may found pages 10 17 managements discussion analysis results operations financial condition registrants annual report shareholders fiscal 2000 incorporated herein reference ii3 item 7a quantitative qualitative disclosures market risk information required item may found following pages managements discussion analysis results operations financial condition registrants annual report shareholders fiscal 2000 incorporated herein reference item 8item 7 managements discussion analysis results operations financial condition information required item may found pages 10 17 managements discussion analysis results operations financial condition registrants annual report shareholders fiscal 2001 incorporated herein reference ii2 item 7a quantitative qualitative disclosures market risk information required item may found following pages managements discussion analysis results operations financial condition notes consolidated financial statements registrants annual report shareholders fiscal 2001 incorporated herein reference item 8item 7 managements discussion analysis results operations financial condition information required item may found pages 23 39 companys annual report stockholders fiscal 2002 caption managements discussion analysis results operations financial condition incorporated herein reference item 7aitem 7 management’s discussion analysis results operations financial condition information required item may found pages 10 33 company’s annual report caption “management’s discussion analysis results operations financial condition” item 7aitem 7 management’s discussion analysis results operations financial condition information required item may found pages 10 38 company’s annual report caption “management’s discussion analysis results operations financial condition” item 7aitem 7 managements discussion analysis financial condition results operations information required item may found incorporated reference pages 6 38 companys annual report exhibit 13 form 10k caption managements discussion analysis financial condition results operations item 7aitem 7 managements discussion analysis financial condition results operations information required item may found incorporated reference pages 6 39 companys annual report exhibit 13 form 10k caption managements discussion analysis financial condition results operations item 7aitem 7 managements discussion analysis financial condition results operations information required item may found incorporated reference pages 6 42 companys annual report exhibit 13 form 10k caption managements discussion analysis financial condition results operations item 7aitem 7 managements discussion analysis financial condition results operations information required item may found incorporated reference pages 6 41 annual report exhibit 13 form 10k caption managements discussion analysis financial condition results operations item 7aitem 7 managements discussion analysis financial condition results operations information required item may found incorporated reference pages 6 41 annual report exhibit 13 form 10k caption managements discussion analysis financial condition results operations item 7aitem 7 managements discussion analysis financial condition results operations information required item may found incorporated reference pages 4 36 annual report exhibit 13 form 10k caption managements discussion analysis financial condition results operations item 7aitem 7 managements discussion analysis financial condition results operations information required item may found incorporated reference pages 3 17 annual report exhibit 13 form 10k caption managements discussion analysis financial condition results operations item 7aitem 7 managements discussion analysis financial condition results operations item 8 financial statements supplementary data included form 10k amounts fiscal year 2009 restated reflect venezuelan operations discontinued operations refer item 1 business additional information regarding discontinued operations fiveyear summary selected financial data total assets years include amounts related discontinued operations item 7 managements discussion analysis financial condition results operations risk factors forwardlooking statements following discussion read conjunction part form 10k well consolidated financial statements related notes thereto included item 8 financial statements supplementary data form 10k future operating results may affected various trends factors beyond control include among factors fluctuations oil natural gas prices unexpected expiration termination drilling contracts currency exchange gains losses expropriation real personal property changes general economic conditions disruptions global credit markets rapid unexpected changes technologies risks foreign operations uninsured risks changes domestic foreign policies laws regulations uncertain business conditions affect businesses accordingly past results trends used investors anticipate future results trends exception historical information matters discussed managements discussion analysis financial condition results operations include forwardlooking statements forwardlooking statements based various assumptions caution believe assumptions reasonable make good faith assumed facts almost always vary actual results differences assumed facts actual results material including cautionary statement take advantage safe harbor provisions private securities litigation reform act 1995 forwardlooking statements made us persons acting behalf factors identified cautionary statement factors discussed item 1a risk factors form 10k important factors necessarily inclusive important factors could cause actual results differ materially expressed forwardlooking statement made us persons acting behalf except required law undertake duty update revise forwardlooking statements based changes internal estimates expectations otherwise executive summary helmerich payne inc primarily contract drilling company total fleet 340 drilling rigs september 30 2013 contract drilling segments consist us land segment 302 rigs offshore segment nine offshore platform rigs international land segment 29 rigs september 30 2013 continued expand rig fleet 2013 even pronounced volatility oil natural gas prices impacted drilling market conditions prospects position market strengthened high quality fleet longterm contracts customer base ended year encouraged recent customer discussions indicating potential increase activity 2013 placed service 20 new flexrigs fixedterm contracts september 30 2013 276 active rigs compared 264 active rigs time prior year addition customers continuing efforts enhance drilling efficiencies expect become even focused technology safety 2014 believe superior field performance safety record allow us continue gain market share coming years discussed note 2 consolidated financial statements venezuelan subsidiary classified discontinued operations june 30 2010 seizure drilling assets country venezuelan government except specifically discussed following results operations pertain continuing operations unless otherwise indicated references 2013 2012 2011 following discussion referring fiscal 2013 2012 2011 results operations per share amounts included results operations discussion stated diluted basis net income 2013 7366 million 679 per share compared 5810 million 534 per share 2012 4342 million 399 per share 2011 included net income aftertax gains sale investment securities 979 million 091 per share 2013 06 million 001 per share 2011 net income also includes aftertax gains sale assets 122 million 011 per share 2013 123 million 011 per share 2012 88 million 008 per share 2011 consolidated operating revenues 34 billion 2013 32 billion 2012 25 billion 2011 total number revenue days drilling activity also increased record levels 2013 number revenue days us land segment totaled 88620 2013 compared 86340 2012 73905 2011 us land rig utilization 82 percent 2013 89 percent 2012 86 percent 2011 average number us land rigs available 295 rigs 2013 266 rigs 2012 237 rigs 2011 revenue offshore segment increased 2013 declining 2012 rig utilization offshore rigs 89 percent 2013 compared 79 percent 2012 77 percent 2011 revenue rig utilization international land segment increased 2013 2012 rig utilization international land segment 82 percent 2013 77 percent 2012 70 percent 2011 2013 2011 1621 million 09 million gains sale investment securities respectively sell investment securities 2012 interest dividend income 17 million 14 million 20 million 2013 2012 2011 respectively direct operating costs 2013 19 billion 55 percent operating revenues compared 18 billion 56 percent operating revenues 2012 14 billion 56 percent operating revenues 2011 depreciation expense 4556 million 2013 3875 million 2012 3155 million 2011 included depreciation abandonments equipment 91 million 2013 164 million 2012 49 million 2011 depreciation expense exclusive abandonments increased threeyear period placed service 20 new rigs 2013 48 2012 36 2011 depreciation expense 2014 expected increase 2013 new rigs placed service 2013 additional rigs placed service 2014 see liquidity capital resources conditions warrant management performs analysis industry market conditions impacting longlived assets drilling segment based analysis management determines impairment required 2013 2012 2011 impairment recorded general administrative expenses totaled 1263 million 2013 1073 million 2012 915 million 2011 190 million increase 2013 2012 due increases salaries bonuses stockbased compensation approximately 173 million associated growth number employees increases wages comparative periods remaining increase primarily due higher corporate overhead associated supporting continued growth drilling business interest expense 61 million 2013 87 million 2012 174 million 2011 interest expense primarily attributable fixedrate debt outstanding interest expense decreased 2013 2012 primarily due reduction outstanding debt balances capitalized interest 88 million 129 million 82 million 2013 2012 2011 respectively capitalized interest attributable rig construction program provision income taxes totaled 3928 million 2013 3290 million 2012 2524 million 2011 effective income tax rate 353 percent 2013 compared 364 percent 2012 367 percent 2011 deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary allowances provided carrying value net deferred tax assets based managements judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future see note 4 consolidated financial statements additional income tax disclosures 2013 2012 2011 incurred 152 million 161 million 158 million respectively research development expenses primarily related ongoing development rotary steerable system tools anticipate research development expenses continue 2014 2013 2012 income discontinued operations 152 million 74 million respectively compared loss discontinued operations 2011 05 million third fiscal quarter 2013 fourth fiscal quarter 2012 settled arbitration disputes third parties affiliated bolivarian republic venezuela petroleos de venezuela sa pdvsa petroleo sa petroleo related seizure property venezuela proceeds 150 million 75 million received recorded discontinued operations 2013 2012 respectively loss discontinued operations 2011 result venezuelan drilling business including eleven rigs associated real personal property seized venezuelan government june 30 2010 whollyowned subsidiaries helmerich payne international drilling co helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 venezuelan government pdvsa petroleo subsidiaries seek damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery gain contingencies recognized consolidated financial statements following tables summarize operations reportable operating segment comparison years ended september 30 2013 2012 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 270223 283640 2013 2012 respectively rig utilization excludes two flexrigs completed ready delivery september 30 2013 operating income us land segment increased 9326 million 2013 9070 million 2012 included us land revenues 2013 approximately 190 million early termination revenue customers requested delivery delays new flexrigs included us land revenues 2012 approximately 101 million early termination revenue excluding early termination related revenue customer requested delivery delay revenue new flexrigs average revenue per day 2013 increased 548 28168 27620 2012 primarily attributable increases dayrates early 2012 stabilized slightly declined 2013 direct operating expenses percentage revenue 51 percent 2013 53 percent 2012 rig utilization decreased 82 percent 2013 89 percent 2012 total number rigs september 30 2013 302 compared 282 rigs september 30 2012 net increase due 20 new flexrigs completed placed service two new flexrigs completed ready delivery two older conventional rigs removed service subsequent september 30 2013 announced entered agreements five customers build operate 13 new flexrigs november 14 2013 nine announced flexrigs remained delivered expect complete deliver approximately two rigs per month september 2014 depreciation includes charges abandoned equipment 82 million 159 million 2013 2012 respectively included abandonments removal two conventional rigs 2013 seven mechanical highly mobile rigs 2012 excluding abandonment amounts depreciation 2013 increased 21 percent 2012 due increase available rigs result new flexrigs added fiscal 2013 additional rigs scheduled completion fiscal 2014 anticipate depreciation expense continue increase fiscal 2014 september 30 2013 248 302 existing rigs us land segment generating revenue 248 rigs generating revenue 158 fixedterm contracts 90 working spot market november 14 2013 number existing rigs fixedterm contracts segment 156 number rigs working spot market increased 99 comparison years ended september 30 2013 2012 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 19701 18346 2013 2012 respectively also excluded effects offshore platform management contracts currency revaluation expense segment operating income offshore segment increased 270 percent 2013 2012 primarily due increase revenue days increase dayrates reduced onetime charge 64 million fully discussed note 13 consolidated financial statements increase revenue days primarily due two rigs working 2013 compared working portion 2012 offset partially third rig completing contract 2012 idle 2013 september 30 2013 2012 eight nine rigs working comparison years ended september 30 2013 2012 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 42542 27720 2013 2012 respectively also excluded effects currency revaluation expense international land segment operating income 446 million 2013 compared 204 million 2012 included international land revenues 2013 approximately 53 million related early termination fees revenues 2013 increased 968 million 2012 international land operations rig utilization increasing 82 percent 2013 77 percent 2012 total number rigs remained constant 29 average revenue per day 2013 compared 2012 increased 4248 609 attributable early termination related revenue remaining increase primarily due higher dayrates april 2013 announced entered agreement build new 3000 horsepower ac drive rig scheduled begin operations international land segment spring 2014 comparison years ended september 30 2012 2011 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 283640 193093 2012 2011 respectively operating income us land segment increased 9070 million 2012 6916 million 2011 included us land revenues 2012 2011 approximately 101 million 54 million respectively early termination revenue excluding early termination related revenue average revenue per day 2012 increased 1885 27620 25735 2011 primarily attributable increases dayrates 2012 compared 2011 direct operating expenses increased 257 percent 2012 2011 however expense percentage revenue 53 percent 2012 2011 rig utilization increased 89 percent 2012 86 percent 2011 total number rigs september 30 2012 282 compared 248 rigs september 30 2011 net increase due 46 new flexrigs completed placed service three flexrigs transferred international land segment three idle conventional rigs sold four older mechanical highly mobile rigs two older conventional rigs removed service depreciation includes charges abandoned equipment 159 million 38 million 2012 2011 respectively excluding abandonment amounts depreciation 2012 increased 22 percent 2011 due increase available rigs comparison years ended september 30 2012 2011 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 18346 33718 2012 2011 respectively also excluded effects offshore platform management contracts currency revaluation expense segment operating income average rig margin per day offshore segment declined 2012 2011 partly rig previously working offshore trinidad completed contract first quarter fiscal 2012 returned us second quarter fiscal 2012 idle remainder fiscal year additionally second rig standby five months 2012 compared working 2011 comparison years ended september 30 2012 2011 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 27720 24207 2012 2011 respectively also excluded effects currency revaluation expense international land segment operating income 204 million 2012 compared 197 million 2011 revenues 2012 increased 432 million 2011 international land operations rig utilization increasing 77 percent 2012 70 percent 2011 total number rigs september 30 2012 29 compared 24 rigs september 30 2011 increase due two new flexrigs completed placed service three flexrigs transferred us land segment operating income average margin per day decreased 2012 compared 2011 primarily due early termination revenue earned 2011 higher operating expenses 2012 liquidity capital resources capital spending 8091 million 2013 11 billion 2012 6943 million 2011 net cash provided operating activities 9972 million 2013 10 billion 2012 9776 million 2011 2014 capital spending currently estimated 850 million addition capital maintenance requirements tubulars special projects annual estimate assumes continued new build cadence two rigs per month september 2014 historically financed operations primarily internally generated cash flows periods internally generated cash flows sufficient meet liquidity needs either borrow available credit sources may sell portfolio securities likewise generating excess cash flows may invest shortterm money market securities manage portfolio marketable securities close fiscal 2013 fair value 3056 million consisting atwood oceanics inc schlumberger ltd value portfolio subject fluctuation market may vary considerably time portfolio recorded fair value balance sheet 2013 cash proceeds sale investment securities 2322 million including 2141 sale marketable equity availableforsale securities 181 million sale three limited partnerships generated cash proceeds sale investment limited partnership 39 million 2011 sell portfolio securities 2012 proceeds asset sales totaled 280 million 2013 399 million 2012 268 million 2011 income asset sales 2013 totaled 189 million year sales old damaged rig equipment drill pipe used ordinary course business company authorization board directors repurchase four million common shares calendar year repurchases may made using cash equivalents available sources fiscal 2012 purchased 1747819 common shares aggregate cost 776 million held treasury shares purchases common shares fiscal 2013 increased dividend first fiscal quarter third fiscal quarter representing 41st consecutive year dividend increases paid dividends 087 per share total 931 million 2013 75 million intermediateterm unsecured debt obligations mature august 2014 interest rate maturity 656 percent terms debt obligations require maintain ratio debt total capitalization less 55 percent 120 million senior unsecured fixedrate notes outstanding september 30 2013 mature period july 2014 july 2016 interest notes paid semiannually based annual rate 610 percent annual principal repayments 40 million due july 2014 july 2016 complied financial covenants require us maintain funded leverage ratio less 55 percent interest coverage ratio defined less 250 100 300 million unsecured revolving credit facility mature may 25 2017 credit facility 100 million available use letters credit anticipate majority borrowings facility accrue interest spread london interbank offered rate libor also pay commitment fee based unused balance facility borrowing spreads well commitment fees determined according scale based ratio total debt total capitalization spread libor ranges 1125 percent 175 percent per annum commitment fees range 15 percent 35 percent per annum based debt total capitalization september 30 2013 spread libor commitment fees would 1125 percent 15 percent respectively financial covenants facility require us maintain funded leverage ratio defined less 50 percent interest coverage ratio defined less 300 100 credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2013 borrowings two letters credit outstanding amount 272 million two outstanding letters credit replaced two collateral trusts terminated first quarter fiscal 2013 upon termination amount totaling 261 million returned us september 30 2013 2728 million available borrow 300 million unsecured credit facility subsequent september 30 2013 issued third letter credit facility amount 35 million reduced amount available borrow 2693 million september 30 2013 two letters credit outstanding totaling 12 million issued support international operations letters credit issued separately 300 million credit facility reduce available borrowing capacity discussed previous paragraph applicable agreements unsecured debt described contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2013 compliance debt covenants september 30 2013 176 existing rigs contracts fixed terms original term durations ranging six months seven years expiring fiscal 2014 contracts provide termination election customer early termination payment paid contract terminated prior expiration fixed term customers primarily major oil companies large independent oil companies risk exists customer especially smaller independent oil company may become unable meet obligations may exercise early termination election future able pay early termination fee although expected time future revenue operating results could negatively impacted happen operating cash requirements scheduled debt repayments stock repurchases estimated capital expenditures including rig construction program fiscal 2014 expected funded current cash provided operating activities possibly funds available credit facility sales availableforsale securities current ratio 28 september 30 2013 24 september 30 2012 longterm debt total capitalization ratio including current portion longterm debt four percent september 30 2013 compared six percent september 30 2012 stock portfolio held material commitments balance sheet arrangements operating leases discussed contractual obligations september 30 2013 summarized table thousands ainterest fixedrate debt estimated based principal maturities see note 3 debt consolidated financial statementsbsee note 13 commitments contingencies consolidated financial statements table include obligations pension plan amounts recorded uncertain tax positions 2013 contributed 21 million pension plan based current information available plan actuaries estimate contributing least 01 million 2014 meet minimum contribution required law additional contributions may made 2014 fund unexpected distributions lieu liquidating pension assets future contributions beyond 2014 difficult estimate due multiple variables involved september 30 2013 133 million recorded uncertain tax positions related interest penalties however timing payments respective taxing authorities cannot estimated time income taxes fully described note 4 consolidated financial statements critical accounting policies estimates consolidated financial statements impacted accounting policies used estimates assumptions made management preparation estimates assumptions evaluated ongoing basis estimates based historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates different assumptions conditions following discussion critical accounting policies estimates used financial statements significant accounting policies summarized note 1 consolidated financial statements property plant equipment property plant equipment including renewals betterments stated cost maintenance repairs expensed incurred interest costs applicable construction qualifying assets capitalized component cost assets account depreciation property plant equipment using straightline method estimated useful lives assets considering estimated salvage value property plant equipment estimated useful lives salvage values require use management estimates certain events unforeseen changes operations technology market conditions could materially affect estimates assumptions related depreciation management believes estimates materially accurate past years presented report significant changes made determinations useful lives salvage values upon retirement disposal fixed assets cost related accumulated depreciation removed respective accounts gains losses recorded results operations impairment longlived assets management assesses potential impairment longlived assets whenever events changes conditions indicate carrying value asset may recoverable changes could prompt assessment may include equipment obsolescence changes market demand specific asset periods relatively low rig utilization declining revenue per day declining cash margin per day completion specific contracts andor overall changes general market conditions review longlived assets indicates carrying value certain assets estimated undiscounted future cash flows impairment charge made adjust carrying value estimated fair market value asset fair value drilling rigs determined based upon estimated discounted future cash flows estimated fair market value available cash flows estimated management considering factors prospective market demand recent changes rig technology effect rigs marketability cash investment required make rig marketable suitability rig size makeup existing platforms competitive dynamics including utilization fair value estimated applicable considering factors recent market sales rigs companies sales rigs appraisals factors use different assumptions could result impairment charge different reported fair value financial instruments fair value defined exit price would received upon sale asset paid upon transfer liability orderly transaction market participants measurement date degree judgment utilized measuring fair value assets liabilities generally correlates level pricing observability financial assets liabilities readily available actively quoted prices fair value measured actively quoted prices active markets generally pricing observability require less judgment measuring fair value conversely financial assets liabilities rarely traded quoted less price observability generally measured fair value using valuation models require judgment valuation techniques involve level management estimation judgment degree dependent price transparency asset liability market nature asset liability carrying amounts reported statement financial position current assets current liabilities qualifying financial instruments approximate fair value shortterm nature instruments marketable securities carried fair value generally determined quoted market prices categorized financial assets liabilities measured fair value threelevel hierarchy accordance accounting standards codification asc 820 see note 8 consolidated financial statements fair value disclosures selfinsurance accruals selfinsure significant portion expected losses relating workers compensation general liability employers liability automobile liability generally deductibles range 1 million 3 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events estimates recorded incurred outstanding liabilities workers compensation general liability claims incurred reported estimates based adjusters estimates historic experience statistical methods believe reliable nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs whollyowned captive insurance company finances significant portion physical damage risk companyowned drilling rigs well international casualty deductibles exception named wind storm risk gulf mexico insure rig related equipment values approximate current replacement cost inception date policy selfinsure 5 million per occurrence deductible well 20 percent estimated replacement cost offshore rigs 30 percent estimated replacement cost land rigs equipment two insurance policies covering eight offshore platform rigs named windstorm risk gulf mexico first policy covers four rigs 75 million aggregate insurance limit 3 million deductible second policy covers four rigs 40 million aggregate limit 35 million deductible maintain certain insurance coverage deductibles high 25 million excess insurance purchased coverage amounts limit exposure catastrophic claims assurance coverage respond adequate circumstances retained losses estimated accrued based upon estimates aggregate liability claims incurred using adjusters estimates historical loss experience estimation methods believed reliable nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense related liabilities selfinsure number risks including loss earnings business interruption pension costs obligations pension benefit costs obligations dependent various actuarial assumptions make assumptions relating discount rates expected return plan assets discount rate determined matching projected cash distributions appropriate corporate bond yields yield curve analysis discount rate raised 480 percent 406 percent september 30 2013 reflect changes market conditions highquality fixedincome investments expected return plan assets determined based historical portfolio results future expectations rates return actual results differ estimated assumptions accumulated amortized estimated future working life plan participants could therefore affect expense recognized obligations future periods september 30 2006 pension plan frozen benefit accruals discontinued result rate compensation increase assumption eliminated future periods anticipate pension expense decrease approximately 16 million 2014 2013 stockbased compensation historically granted stockbased awards key employees nonemployee directors part compensation estimate fair value stock option awards date grant applying blackscholes optionpricing model application valuation model involves assumptions judgmental highly sensitive assumptions include among others expected stock price volatility expected life stock options riskfree interest rate expected volatilities estimated using historical volatility stock based upon expected term option consider information determining grant date fair value would indicated future volatility would expected significantly different historical volatility expected term option derived historical data represents period time options estimated outstanding riskfree interest rate periods within estimated life option based us treasury strip rate effect time grant fair value award amortized straightline basis vesting period awards granted employees stockbased awards granted nonemployee directors expensed immediately upon grant fair value restricted stock awards determined based closing price common stock date grant amortize fair value restricted stock awards compensation expense straightline basis vesting period september 30 2013 unrecognized compensation cost related unvested restricted stock 175 million cost expected recognized weightedaverage period 27 years revenue recognition contract drilling revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized term related drilling contract costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs contracts terminated prior specified term early termination payments received us recognized revenues contractual requirements met new accounting standards october 1 2012 adopted accounting standards update asu 201104 fair value measurement topic 820 amendments achieve common fair value measurement disclosure requirements us gaap ifrss asu 201104 intended create consistency us gaap international financial reporting standards ifrs definition fair value guidance measure fair value disclose fair value measurements adoption provisions material impact consolidated financial statements october 1 2012 adopted asu 201105 comprehensive income topic 220 presentation comprehensive income asu 201105 issued increase prominence comprehensive income oci financial statements presentation oci shown separate statement applied retrospectively adoption impact amount oci reported consolidated financial statements february 2013 financial accounting standards board fasb issued asu 20132 comprehensive income asu amends asc 220 comprehensive income supersedes replaces asu 201105 presentation comprehensive income asu 201112 comprehensive income require reclassification adjustments comprehensive income presented either financial statements notes financial statements standard change current requirements reporting net income comprehensive income financial statements however guidance require entity provide enhanced disclosures present separately component reclassifications accumulated comprehensive income amendments asu effective prospectively reporting periods beginning december 15 2012 believe adoption guidance material impact consolidated financial statements quantitative qualitative disclosures market risk foreign currency exchange rate risk operations several south american countries africa middle east exposure currency valuation losses usually immaterial due fact virtually invoice billings receipts countries us dollars operating country currently considered highly inflationary defined cumulative inflation rates exceeding 100 percent recent threeyear period foreign operations use us dollar functional currency local currency monetary assets liabilities remeasured us dollars gains losses resulting foreign currency transactions included current results operations foreign economy considered highly inflationary would impact consolidated financial statements commodity price risk demand contract drilling services result exploration production companies spending money explore develop drilling prospects search crude oil natural gas spending driven cash flow financial strength affected trends crude oil natural gas commodity prices crude oil prices determined number factors including supply demand worldwide economic conditions geopolitical factors crude oil natural gas prices historically volatile difficult predict current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels volatility lead many exploration production companies base capital spending much conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices credit capital market risk addition customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets experienced 2008 2009 make difficult customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result reduction customer spending demand drilling services reduction spending could material adverse effect business financial condition results operations attempt secure favorable prices advanced ordering purchasing drilling rig components materials generally available acceptable prices assurance prices vary significantly future fluctuations market conditions causing increased prices materials supplies could material adverse effect future operating costs interest rate risk interest rate risk exposure results primarily shortterm rates mainly liborbased borrowings commercial banks debt september 30 2013 fixedrate interest obligations current risk due interest rate fluctuation following tables provide information september 30 2013 2012 interest rate risk sensitive instruments interest rate risk september 30 2013 dollars thousands interest rate risk september 30 2012 dollars thousands equity price risk september 30 2013 portfolio securities total fair value 3056 million total fair value portfolio securities 4516 million september 30 2012 make specific plans sell securities rather sell securities based market conditions circumstances securities subject wide variety number marketrelated risks could substantially reduce increase fair value holdings portfolio recorded fair value balance sheet changes unrealized aftertax value reflected equity section balance sheet november 14 2013 total fair value remaining securities increased approximately 3224 million estimated aftertax value 1982 million currently fair value exceeds cost investments continually monitor fair value investments unable predict future market volatility potential impact consolidated financial statements item 7aitem 7 managements discussion analysis financial condition results operations item 8 financial statements supplementary data included form 10k fiveyear summary selected financial data total assets years include amounts related discontinued operations venezuelan subsidiary classified discontinued operations june 30 2010 seizure drilling assets country venezuelan government total assets longterm debt 2014 prior periods restated reflect retrospective adoption accounting standards update 201503 interestimputation interest subtopic 83530 simplifying presentation debt issuance costs issued financial accounting standards board april 2015 item 7 managements discussion analysis financial condition results operations risk factors forwardlooking statements following discussion read conjunction part form 10k well consolidated financial statements related notes thereto included item 8 financial statements supplementary data form 10k future operating results may affected various trends factors beyond control include among factors fluctuations oil natural gas prices unexpected expiration termination drilling contracts currency exchange gains losses expropriation real personal property changes general economic conditions disruptions global credit markets rapid unexpected changes technologies risks foreign operations uninsured risks changes domestic foreign policies laws regulations uncertain business conditions affect businesses accordingly past results trends used investors anticipate future results trends exception historical information matters discussed managements discussion analysis financial condition results operations include forwardlooking statements forwardlooking statements based various assumptions caution believe assumptions reasonable make good faith assumed facts almost always vary actual results differences assumed facts actual results material including cautionary statement take advantage safe harbor provisions private securities litigation reform act 1995 forwardlooking statements made us persons acting behalf factors identified cautionary statement factors discussed item 1a risk factors form 10k important factors necessarily inclusive important factors could cause actual results differ materially expressed forwardlooking statement made us persons acting behalf except required law undertake duty update revise forwardlooking statements based changes internal estimates expectations otherwise executive summary helmerich payne inc primarily contract drilling company total fleet 390 drilling rigs september 30 2015 contract drilling segments consist us land segment 343 rigs offshore segment nine offshore platform rigs international land segment 38 rigs september 30 2015 fiscal 2015 placed service 30 new flexrigs completed another nine new flexrigs close fiscal 2015 170 contracted rigs compared 325 contracted rigs time prior year faced global oversupply oil shortterm outlook industry unfavorable however longterm strategy remains focused innovation technology safety customer satisfaction believe advanced rig fleet financial strength longterm contract backlog strong customer base bestinclass reputation position us well manage current slowdown take advantage opportunities lie ahead venezuelan subsidiary classified discontinued operations june 30 2010 seizure drilling assets country venezuelan government except specifically discussed following results operations pertain continuing operations unless otherwise indicated references 2015 2014 2013 following discussion referring fiscal years 2015 2014 2013 results operations per share amounts included results operations discussion stated diluted basis net income 2015 4222 million 387 per share compared 7087 million 646 per share 2014 7366 million 679 per share 2013 included net income aftertax gains sale investment securities 278 million 025 per share 2014 979 million 091 per share 2013 net income also includes aftertax gains sale assets 74 million 007 per share 2015 127 million 012 per share 2014 122 million 011 per share 2013 consolidated operating revenues 32 billion 2015 37 billion 2014 34 billion 2013 oil prices steeply declined 2015 customers aggressively reduced drilling budgets result experienced significant decline rig activity number revenue days us land segment totaled 75866 2015 compared 100638 2014 88620 2013 us land rig utilization 62 percent 2015 86 percent 2014 82 percent 2013 average number us land rigs available 336 rigs 2015 319 rigs 2014 295 rigs 2013 revenue offshore segment steadily decreased 2015 increasing 2014 2013 rig utilization offshore rigs 93 percent 2015 compared 89 percent 2014 2013 international land segment also affected decline oil prices causing revenue days decline 7474 2015 8303 2014 8707 2013 rig utilization international land segment 53 percent 2015 76 percent 2014 82 percent 2013 2014 2013 452 million 1621 million gains sale investment securities respectively interest dividend income 58 million 16 million 17 million 2015 2014 2013 respectively increase primarily result atwood oceanics inc declaring dividends 2015 direct operating costs 2015 17 billion 54 percent operating revenues compared 20 billion 54 percent operating revenues 2014 19 billion 55 percent operating revenues 2013 depreciation expense 6070 million 2015 5235 million 2014 4556 million 2013 included depreciation abandonments equipment 436 million 2015 230 million 2014 91 million 2013 depreciation expense exclusive abandonments increased threeyear period placed service 30 new rigs 2015 45 2014 20 2013 depreciation expense 2016 expected increase 2015 new rigs placed service 2015 additional rigs placed service 2016 see liquidity capital resources abandonments increased threeyear period primarily due decommissioning 23 rigs 2015 nine rigs 2014 two rigs 2013 conditions warrant management performs analysis industry market conditions impacting longlived assets drilling segment overall turn industry primarily caused low oil gas prices served impairment indicator impairment analysis performed based analysis management determines impairment required 2015 recorded 392 million impairment charges reduce carrying values seven scr rigs international land segment estimated fair value impairment charge expected impact liquidity debt covenants 2014 2013 impairment recorded general administrative expenses totaled 1349 million 2015 1351 million 2014 1263 million 2013 88 million increase 2014 2013 primarily due continued growth number employees comparative periods increases salaries bonuses stockbased compensation interest expense net amounts capitalized totaled 150 million 2015 47 million 2014 61 million 2013 interest expense primarily attributable fixedrate debt outstanding interest expense increased 2015 2014 primarily due issuance 500 million unsecured senior notes march 2015 interest expense decreased 2014 2013 primarily due reduction outstanding debt balances two years capitalized interest 70 million 77 million 88 million 2015 2014 2013 respectively capitalized interest attributable rig construction program provision income taxes totaled 2434 million 2015 3875 million 2014 3928 million 2013 effective income tax rate 366 percent 2015 compared 354 percent 2014 353 percent 2013 deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary allowances provided carrying value net deferred tax assets based managements judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future see note 4 consolidated financial statements additional income tax disclosures 2015 2014 2013 incurred 161 million 159 million 152 million respectively research development expenses primarily related ongoing development rotary steerable system tools anticipate research development expenses continue 2016 expenses incurred within country venezuela reported discontinued operations included 2013 proceeds arbitration disputes third parties affiliated bolivarian republic venezuela petroleos de venezuela sa pdvsa petroleo sa petroleo related seizure property venezuela june 30 2010 proceeds 150 million received recorded discontinued operations 2013 whollyowned subsidiaries helmerich payne international drilling co helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 venezuelan government pdvsa petroleo subsidiaries seek damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery gain contingencies recognized consolidated financial statements following tables summarize operations reportable operating segment comparison years ended september 30 2015 2014 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 231528 262532 2015 2014 respectively rig utilization 2015 excludes nine flexrigs completed ready delivery september 30 2015 operating income us land segment decreased 6984 million 2015 10 billion 2014 primarily due decrease revenue days decommissioning 23 rigs included us land revenues 2015 2014 approximately 2036 million 117 million respectively early termination fixedterm contracts excluding early termination related revenue average revenue per day 2015 decreased 550 27528 28078 2014 also factor decrease operating income comparative periods direct operating expenses percentage revenue 50 percent 2015 51 percent 2014 rig utilization decreased 62 percent 2015 86 percent 2014 total number rigs september 30 2015 343 compared 329 rigs september 30 2014 net increase due 30 new flexrigs completed placed service nine new flexrigs completed ready delivery five flexrigs transferred international land segment two flexrigs transferred international land segment one conventional rig transferred international land segment 23 older rigs removed service november 12 2015 six announced flexrigs remained delivered depreciation includes charges abandoned equipment 426 million 215 million 2015 2014 respectively included abandonments 2015 decommissioning 23 scr rigs including six conventional rigs six flexrig1s 11 flexrig2s spare equipment drilling rigs included abandonments 2014 decommissioning nine conventional rigs spare equipment drilling rigs excluding abandonment amounts depreciation 2015 increased 10 percent 2014 due increase available rigs result new flexrigs added fiscal 2015 additional rigs scheduled completion fiscal 2016 anticipate depreciation expense continue increase fiscal 2016 september 30 2015 145 343 existing rigs us land segment generating revenue 145 rigs generating revenue 120 fixedterm contracts 25 working spot market november 12 2015 number existing rigs fixedterm contracts segment 108 number rigs working spot market 24 comparison years ended september 30 2015 2014 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 32868 19007 2015 2014 respectively operating statistics include rigs owned us exclude offshore platform management labor service contracts currency revaluation expense total revenue segment operating income offshore segment decreased 2015 2014 primarily due one rig idle half year contractual decrease dayrate one rig several rigs moving lower pricing standby standbytype dayrate september 30 2015 2014 eight nine rigs contracted comparison years ended september 30 2015 2014 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 37776 47350 2015 2014 respectively also excluded effects currency revaluation expense international land segment operating loss 29 million 2015 compared operating income 364 million 2014 included international land revenues 2015 approximately 187 million related early termination fixedterm contracts excluding early termination revenue 2015 average rig revenue per day increased 7065 compared 2014 rigs transferred segment 2015 2014 favorably impacted revenue per day average number active rigs 205 2015 compared 227 2014 average rig expense increase attributable expenses incurred rigs become idle costs associated rigs transitioning locations average rig expense also impacted approximately 673 per day related charge allowance doubtful accounts 2015 total number available rigs increased two due five flexrigs transferred us land segment two flexrigs transferred us land segment one conventional rig transferred us land segment close 2015 2014 17 23 rigs working respectively fourth fiscal quarter 2015 recorded 392 million impairment charge reduce carrying values seven scr rigs located international land segment estimated fair value impairment charge expected impact liquidity debt covenants comparison years ended september 30 2014 2013 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 262532 270223 2014 2013 respectively rig utilization 2013 excludes two flexrigs completed ready delivery september 30 2013 operating income us land segment increased 10 billion 2014 9326 million 2013 primarily due increase revenue days included us land revenues 2014 2013 approximately 117 million 190 million respectively early termination fixedterm contracts excluding early termination related revenue average rig revenue per day 2014 slightly decreased 90 28078 28168 2013 direct operating expenses percentage revenue 51 percent 2014 51 percent 2013 rig utilization increased 86 percent 2014 82 percent 2013 total number available rigs september 30 2014 329 compared 302 rigs september 30 2013 net increase due 42 new flexrigs completed placed service six flexrigs transferred international land segment nine older conventional rigs removed service depreciation includes charges abandoned equipment 215 million 82 million 2014 2013 respectively included abandonments 2014 decommissioning nine conventional rigs spare equipment drilling rigs included abandonments 2013 decommissioning two conventional rigs excluding abandonment amounts depreciation 2014 increased 13 percent 2013 due increase available rigs comparison years ended september 30 2014 2013 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 19007 19701 2014 2013 respectively operating statistics include rigs owned us exclude offshore platform management labor service contracts currency revaluation expense total revenue segment operating income offshore segment increased 2014 2013 primarily due offshore management contracts included 2013 direct operating expenses onetime charge 64 million related incident gulf mexico september 30 2014 2013 eight nine rigs working comparison years ended september 30 2014 2013 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 47350 42542 2014 2013 respectively also excluded effects currency revaluation expense international land segment operating income 364 million 2014 compared 446 million 2013 included international land revenues 2013 approximately 53 million related early termination fees excluding 53 million early termination revenues 2013 segment operating income 2014 decreased 2013 revenue days decreasing 46 percent rig utilization decreasing 76 percent 2014 82 percent 2013 total number available rigs increased 36 september 30 2014 29 september 30 2013 2014 total number available rigs increased seven due one new 3000 horsepower ac drive rig added fleet six flexrigs transferred us land segment close 2014 2013 23 22 rigs working respectively liquidity capital resources capital spending 11 billion 2015 9529 million 2014 8091 million 2013 net cash provided operating activities 14 billion 2015 11 billion 2014 9972 million 2013 2016 capital spending currently estimated 300 million 400 million depending primarily drilling market conditions estimate includes contracted new builds capital maintenance requirements tubulars special projects historically financed operations primarily internally generated cash flows periods internally generated cash flows sufficient meet liquidity needs either borrow available credit sources may sell portfolio securities likewise generating excess cash flows may invest shortterm money market securities shortterm marketable securities 2015 purchased 456 million shortterm investments classified trading securities investments include us treasury securities us agency issued debt securities corporate bonds certificate deposit money market funds securities recorded fair value manage portfolio marketable securities close fiscal 2015 fair value 915 million consisting common shares atwood oceanics inc schlumberger ltd value portfolio subject fluctuation market may vary considerably time portfolio recorded fair value balance sheet 2015 sell marketable availableforsale securities 2014 cash proceeds sale availableforsale securities 492 million 2013 cash proceeds sale investment securities 2322 million including 2141 sale marketable equity availableforsale securities 181 million sale three limited partnerships proceeds asset sales totaled 225 million 2015 308 million 2014 280 million 2013 income asset sales 2015 totaled 117 million 196 million 2014 189 million 2013 year sales old damaged rig equipment drill pipe used ordinary course business company authorization board directors repurchase four million common shares calendar year repurchases may made using cash equivalents available sources 2015 purchased 810097 common shares aggregate cost 597 million held treasury shares purchases common shares fiscal 2014 2013 2015 paid dividends 275 per share total 2984 million paid 2438 per share 2644 million 2014 087 per share 931 million 2013 adjusting stock splits accordingly increased effective annual dividend per share every year 40 years 40 million senior unsecured fixedrate notes outstanding september 30 2015 mature july 2016 interest notes paid semiannually based annual rate 610 percent final annual principal repayment 40 million due july 2016 complied financial covenants require us maintain funded leverage ratio less 55 percent interest coverage ratio defined less 250 100 march 19 2015 issued 500 million 465 percent 10year unsecured senior notes net proceeds discount issuance cost used general corporate purposes including capital expenditures associated rig construction program interest payable semiannually march 15 september 15 year commencing september 15 2015 debt discount amortized interest expense using effective interest method debt issuance costs amortized straightline stated life obligation approximates effective yield method 300 million unsecured revolving credit facility mature may 25 2017 credit facility 100 million available use letters credit majority borrowings facility would accrue interest spread london interbank offered rate libor also pay commitment fee based unused balance facility borrowing spreads well commitment fees determined according scale based ratio total debt total capitalization spread libor ranges 1125 percent 175 percent per annum commitment fees range 15 percent 35 percent per annum based debt total capitalization september 30 2015 spread libor commitment fees would 1125 percent 15 percent respectively financial covenants facility require us maintain funded leverage ratio defined less 50 percent interest coverage ratio defined less 300 100 credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2015 borrowings three letters credit outstanding amount 482 million september 30 2015 2518 million available borrow 300 million unsecured credit facility subsequent september 30 2015 reduced outstanding letters credit 79 million increased available borrowing capacity 2597 million september 30 2015 two letters credit outstanding totaling 12 million issued support international operations letters credit issued separately 300 million credit facility reduce available borrowing capacity discussed previous paragraph applicable agreements unsecured debt described note 3 consolidated financial statements contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2015 compliance debt covenants september 30 2015 137 existing rigs fixed term contracts original term durations ranging six months seven years expiring fiscal 2016 contracts provide termination election customer early termination payment paid contract terminated prior expiration fixed term customers primarily major oil companies large independent oil companies risk exists customer especially smaller independent oil company may become unable meet obligations may exercise early termination election future able pay early termination fee although expected time future revenue operating results could negatively impacted happen operating cash requirements scheduled debt repayments interest payments stock repurchases estimated capital expenditures including rig construction program fiscal 2016 expected funded current cash provided operating activities however assurance continue generate cash flows current levels current ratio 41 september 30 2015 25 september 30 2014 longterm debt total capitalization ratio including current portion longterm debt ten percent september 30 2015 compared two percent september 30 2014 stock portfolio held material commitments balance sheet arrangements operating leases discussed contractual obligations september 30 2015 summarized table thousands ainterest fixedrate debt estimated based principal maturities see note 3 debt consolidated financial statements bsee note 13 commitments contingencies consolidated financial statements table include obligations pension plan amounts recorded uncertain tax positions 2015 contributed 22 million pension plan contributions may made fiscal 2016 fund unexpected distributions lieu liquidating pension assets future contributions beyond fiscal 2016 difficult estimate due multiple variables involved september 30 2015 223 million recorded uncertain tax positions related interest penalties however timing payments respective taxing authorities cannot estimated time income taxes fully described note 4 consolidated financial statements critical accounting policies estimates consolidated financial statements impacted accounting policies used estimates assumptions made management preparation estimates assumptions evaluated ongoing basis estimates based historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates different assumptions conditions following discussion critical accounting policies estimates used financial statements significant accounting policies summarized note 1 consolidated financial statements property plant equipment property plant equipment including renewals betterments stated cost maintenance repairs expensed incurred interest expense applicable construction qualifying assets capitalized component cost assets account depreciation property plant equipment using straightline method estimated useful lives assets considering estimated salvage value property plant equipment estimated useful lives salvage values require use management estimates certain events unforeseen changes operations technology market conditions could materially affect estimates assumptions related depreciation result abandonments management believes estimates materially accurate past years presented report significant changes made determinations useful lives salvage values upon retirement disposal fixed assets cost related accumulated depreciation removed respective accounts gains losses recorded results operations impairment longlived assets management assesses potential impairment longlived assets whenever events changes conditions indicate carrying value asset may recoverable changes could prompt assessment may include equipment obsolescence changes market demand specific asset periods relatively low rig utilization declining revenue per day declining cash margin per day completion specific contracts andor overall changes general market conditions review longlived assets indicates carrying value certain assets estimated undiscounted future cash flows impairment charge made adjust carrying value estimated fair value asset fair value drilling rigs determined based upon income approach using estimated discounted future cash flows market approach available cash flows estimated management considering factors prospective market demand recent changes rig technology effect rigs marketability cash investment required make rig marketable suitability rig size makeup existing platforms competitive dynamics including utilization fair value estimated applicable considering factors recent market sales rigs companies sales rigs appraisals factors use different assumptions could increase decrease estimated fair value assets could therefore affect impairment measurement fourth fiscal quarter 2015 recorded 392 million impairment charge reduce carrying values seven scr rigs located international land segment estimated fair value rigs fair value estimated using discounted future cash flows selfinsurance accruals selfinsure significant portion expected losses relating workers compensation general liability employers liability automobile liability generally deductibles range 1 million 3 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events assurance coverage respond adequate circumstances estimates recorded incurred outstanding liabilities workers compensation casualty claims retained losses estimated accrued based upon estimates aggregate liability claims incurred estimates liabilities retained losses based adjusters estimates historical loss experience statistical methods believe reliable nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs whollyowned captive insurance company finances significant portion physical damage risk companyowned drilling rigs well international casualty deductibles exception named wind storm risk gulf mexico insure rig related equipment values approximate current replacement cost inception date policy selfinsure number risks including loss earnings business interruption pension costs obligations pension benefit costs obligations dependent various actuarial assumptions make assumptions relating discount rates expected return plan assets discount rate determined matching projected cash distributions appropriate corporate bond yields yield curve analysis discount rate lowered 427 percent 432 percent september 30 2015 reflect changes market conditions highquality fixedincome investments expected return plan assets determined based historical portfolio results future expectations rates return actual results differ estimated assumptions accumulated amortized estimated future working life plan participants could therefore affect expense recognized obligations future periods september 30 2006 pension plan frozen benefit accruals discontinued result rate compensation increase assumption eliminated future periods anticipate pension expense decrease approximately 14 million 2016 2015 stockbased compensation historically granted stockbased awards key employees nonemployee directors part compensation estimate fair value stock option awards date grant applying blackscholes optionpricing model application valuation model involves assumptions judgmental highly sensitive assumptions include among others expected stock price volatility expected life stock options riskfree interest rate expected volatilities estimated using historical volatility stock based upon expected term option expected term option derived historical data represents period time options estimated outstanding riskfree interest rate periods within estimated life option based us treasury strip rate effect time grant fair value award amortized straightline basis vesting period awards granted employees stockbased awards granted nonemployee directors expensed immediately upon grant fair value restricted stock awards determined based closing price common stock date grant amortize fair value restricted stock awards compensation expense straightline basis vesting period september 30 2015 unrecognized compensation cost related unvested restricted stock 212 million cost expected recognized weightedaverage period 22 years revenue recognition contract drilling revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized term related drilling contract costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs contracts terminated prior specified term early termination payments received us recognized revenues contractual requirements met new accounting standards april 2015 financial accounting standards board fasb issued accounting standards update asu 201503 interestimputation interest subtopic 83530 simplifying presentation debt issuance costs asu 201503 amends fasb accounting standards codifications asc require debt issuance cost presented balance sheet direct deduction carrying amount related liability prior amendment debt issuance costs reported balance sheet asset amended guidance effective financial statements issued fiscal years beginning december 15 2015 however elected early adopt effective january 1 2015 election requires retrospective application represents change accounting principle asu provides debt issuance costs similar debt discounts effect reduce proceeds borrowing thereby increasing effective interest rate result adoption september 30 2014 consolidated balance sheet restated shown note 1 consolidated financial statements april 2014 fasb issued asu 201408 reporting discontinued operations disclosures disposals components entity amendments asu 201408 change criteria reporting discontinued operations enhancing disclosures area new guidance disposals representing strategic shift operations presented discontinued operations strategic shifts major effect organizations operations financial results addition new guidance requires expanded disclosures discontinued operations provide financial statement users information assets liabilities income expenses discontinued operations pronouncement effective fiscal years beginning december 15 2014 interim periods within years adoption pronouncement expected material impact financial statements may 2014 fasb issued asu 201409 revenue contracts customers supersedes virtually existing revenue recognition guidance new standard requires entity recognize revenue transfers promised goods services customers amount reflects consideration entity expects receive exchange goods services update also requires additional disclosure nature amount timing uncertainty revenue cash flows arising customer contracts including significant judgments changes judgments assets recognized costs incurred obtain fulfill contract provisions asu 201409 effective interim annual periods beginning december 15 2017 option using either full retrospective modified retrospective approach adopting new standard currently evaluating alternative transition methods potential effects adoption update financial statements july 2015 fasb issued asu 201511 inventory topic 330 simplifying measurement inventory update simplifies subsequent measurement inventory replaces current lower cost market test lower cost net realizable value test net realizable value defined estimated selling prices ordinary course business less reasonably predictable costs completion disposal transportation new standard applied prospectively effective annual reporting periods beginning december 15 2016 interim periods within annual periods early adoption permitted expect adoption standard material impact financial statements quantitative qualitative disclosures market risk foreign currency exchange rate risk contracts work foreign countries generally provide payment us dollars however argentina paid argentine pesos argentine branch one secondtier subsidiaries remits us dollars us parent converting argentine pesos us dollars argentine foreign exchange market repatriating us dollars future contracts applicable law may require payments made foreign currencies assurance experience argentina elsewhere devaluation foreign currency foreign exchange restrictions difficulties repatriating us dollars even able negotiate contract provisions designed mitigate risks event future payments foreign currencies inability timely exchange foreign currencies us dollars may incur currency devaluation losses could material adverse impact business financial condition results operations hypothetical 10 decrease value argentine pesos relative us dollar september 30 2015 would result 25 million decrease fair value monetary assets liabilities denominated argentine pesos operating country currently considered highly inflationary defined cumulative inflation rates exceeding 100 percent recent threeyear period based inflation data published respective governments estimates published sources may indicate argentina highly inflationary country regardless foreign operations use us dollar functional currency local currency monetary assets liabilities remeasured us dollars gains losses resulting foreign currency transactions included current results operations commodity price risk demand contract drilling services derived exploration production companies spending money explore develop drilling prospects search crude oil natural gas spending driven cash flow financial strength affected trends crude oil natural gas commodity prices crude oil prices determined number factors including global supply demand establishment compliance production quotas oil exporting countries worldwide economic conditions geopolitical factors crude oil natural gas prices historically volatile difficult predict degree certainty current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels volatility lead many exploration production companies base capital spending much conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices credit capital market risk addition customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets experienced past make difficult customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result customer credit defaults reduced demand drilling services could material adverse effect business financial condition results operations attempt secure favorable prices advanced ordering purchasing drilling rig components materials generally available acceptable prices assurance prices vary significantly future fluctuations market conditions causing increased prices materials supplies could material adverse effect future operating costs interest rate risk interest rate risk exposure results primarily shortterm rates mainly liborbased borrowings commercial banks debt september 30 2015 fixedrate interest obligations current risk due interest rate fluctuation following tables provide information september 30 2015 2014 interest rate risk sensitive instruments interest rate risk september 30 2015 dollars thousands interest rate risk september 30 2014 dollars thousands equity price risk september 30 2015 portfolio securities total fair value 915 million total fair value portfolio securities 2223 million september 30 2014 hypothetical 10 decrease market prices securities portfolio september 30 2015 would decrease fair value availableforsale securities 92 million make specific plans sell securities rather sell securities based market conditions circumstances securities subject wide variety number marketrelated risks could substantially reduce increase fair value holdings portfolio recorded fair value balance sheet changes unrealized aftertax value reflected equity section balance sheet november 12 2015 total fair value remaining securities increased approximately 987 million currently fair value exceeds cost investments continually monitor fair value investments unable predict future market volatility potential impact consolidated financial statements item 7aitem 7 managements discussion analysis financial condition results operations risk factors forwardlooking statements following discussion read conjunction part form 10k well consolidated financial statements related notes thereto included item 8 financial statements supplementary data form 10k future operating results may affected various trends factors beyond control include among factors fluctuations oil natural gas prices unexpected expiration termination drilling contracts currency exchange gains losses expropriation real personal property changes general economic conditions disruptions global credit markets rapid unexpected changes technologies risks foreign operations uninsured risks changes domestic foreign policies laws regulations uncertain business conditions affect businesses accordingly past results trends used investors anticipate future results trends exception historical information matters discussed managements discussion analysis financial condition results operations include forwardlooking statements forwardlooking statements based various assumptions caution believe assumptions reasonable make good faith assumed facts almost always vary actual results differences assumed facts actual results material including cautionary statement take advantage safe harbor provisions private securities litigation reform act 1995 forwardlooking statements made us persons acting behalf factors identified cautionary statement factors discussed item 1a risk factors form 10k important factors necessarily inclusive important factors could cause actual results differ materially expressed forwardlooking statement made us persons acting behalf except required law undertake duty update revise forwardlooking statements based changes internal estimates expectations otherwise executive summary helmerich payne inc primarily contract drilling company total fleet 395 drilling rigs september 30 2016 contract drilling segments consist us land segment 348 rigs offshore segment nine offshore platform rigs international land segment 38 rigs september 30 2016 fiscal 2016 placed service ten new flexrigs completed another five new flexrigs close fiscal 2016 118 contracted rigs compared 168 contracted rigs time prior year fiscal years 2015 2016 drilling industry experienced significant declines activity 1400 drilling rigs idled us decline caused dramatic reductions personnel investment industry significantly impacted financial results across oilfield services companies nevertheless late fiscal 2016 began see us land active rig count increase customers increasing drilling budgets throughout downturn longterm strategy remained focused innovation technology safety customer satisfaction believe advanced rig fleet financial strength longterm contract backlog strong customer base bestinclass reputation position us well effectively manage company challenging times take advantage opportunities lie ahead prior october 1 2015 financial reporting purposes fiscal years foreign operations ended august 31 facilitate reporting consolidated results resulting onemonth reporting lag compared remainder company starting october 1 2015 reporting yearend foreign operations changed august 31 september 30 eliminating previously existing onemonth reporting lag accordingly results operations follow changed reflect periodspecific effects change see note 1 consolidated financial statements additional information regarding change venezuelan subsidiary classified discontinued operations june 30 2010 seizure drilling assets country venezuelan government except specifically discussed following results operations pertain continuing operations unless otherwise indicated references 2016 2015 2014 following discussion referring fiscal years 2016 2015 2014 results operations per share amounts included results operations discussion stated diluted basis net loss 2016 568 million 054 loss per share compared net income 4204 million 385 per share 2015 7066 million 644 per share 2014 included 2016 net loss aftertax loss 159 million 015 loss per share otherthantemporary impairment marketable equity security position atwood oceanics inc atwood net loss 2016 also includes aftertax loss 120 million 011 loss per share settlement litigation 2014 net income includes aftertax gains sale investment securities 278 million 025 per share net loss 2016 includes aftertax gains sale assets 61 million 006 per share net income 2015 2014 include aftertax gains sale assets 74 million 007 per share 121 million 011 per share respectively net loss 2016 includes 38 million loss 004 loss per share discontinued operations consolidated operating revenues 16 billion 2016 32 billion 2015 37 billion 2014 oil prices steeply declined 2015 remained low 2016 customers aggressively reduced drilling budgets result experienced significant decline rig activity number revenue days us land segment totaled 36984 2016 compared 75866 2015 100638 2014 us land rig utilization 30 percent 2016 62 percent 2015 86 percent 2014 average number us land rigs available 339 rigs 2016 336 rigs 2015 319 rigs 2014 revenue offshore segment decreased 2016 2015 several rigs moved lower pricing standby one less average rig operated 2016 compared 2015 rig utilization offshore rigs 82 percent 2016 compared 93 percent 2015 89 percent 2014 international land segment also affected decline oil prices causing revenue days decline 5364 2016 7284 2015 8262 2014 rig utilization international land segment 39 percent 2016 51 percent 2015 74 percent 2014 2016 recorded 260 million otherthantemporary impairment charge marketable equity security position atwood remained loss position fiscal year atwood offshore drilling industry severely impacted downturn energy sector 2014 452 million gains sale investment securities interest dividend income 32 million 58 million 15 million 2016 2015 2014 respectively higher income 2015 primarily result atwood declaring dividends 2015 dividends ceased early 2016 direct operating costs 2016 8988 million 55 percent operating revenues compared 17 billion 54 percent operating revenues 2015 20 billion 54 percent operating revenues 2014 depreciation expense 5986 million 2016 6080 million 2015 5240 million 2014 included depreciation abandonments equipment 393 million 2016 436 million 2015 230 million 2014 additionally recorded impairment charges rig related equipment 63 million 2016 392 million 2015 depreciation expense exclusive abandonments decreased 2016 2015 one percent increasing 2015 2014 previous comparative year due lower levels capital expenditures 2016 depreciation expense 2017 expected decline 2016 capital expenditures expected continue decrease see liquidity capital resources abandonments threeyear period primarily due abandonment used drilling equipment years decommissioning 23 rigs 2015 9 rigs 2014 conditions warrant management performs analysis industry market conditions impacting longlived assets drilling segment overall turn industry primarily caused low oil gas prices served impairment indicator impairment analysis performed based analysis management determines impairment required 2016 recorded 63 million impairment charge reduce carrying value rig related equipment classified held sale estimated fair values based expected sales prices used drilling equipment rigs decommissioned service prior fiscal periods written estimated recoverable value time decommissioning impairment charge expected impact liquidity debt covenants 2015 recorded 392 million impairment charges reduce carrying values seven scr rigs international land segment estimated fair value 2014 impairment recorded six seven international rigs impaired 2015 along rig related assets classified held sale september 30 2016 plan sell assets current condition general administrative expenses totaled 1462 million 2016 1347 million 2015 1353 million 2014 contributing increase 2016 2015 expenses related employee work force reductions including employee severance expenses additional pension expense additional employer match 401kemployee thrift plan due partial plan termination status whereby affected participants fully vested 401k accounts interest expense net amounts capitalized totaled 229 million 2016 150 million 2015 47 million 2014 interest expense primarily attributable fixedrate debt outstanding interest expense increased 2016 2015 2014 primarily due issuance 500 million unsecured senior notes march 2015 capitalized interest 28 million 70 million 77 million 2016 2015 2014 respectively capitalized interest attributable rig construction program income tax benefit 197 million 2016 compared income tax expense 2414 million 2015 3880 million 2014 effective income tax rate 271 percent 2016 compared 365 percent 2015 354 percent 2014 deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary allowances provided carrying value net deferred tax assets based managements judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future see note 4 consolidated financial statements additional income tax disclosures 2016 2015 2014 incurred 103 million 161 million 159 million respectively research development expenses primarily related ongoing development rotary steerable system tools anticipate research development expenses continue 2017 expenses incurred within country venezuela reported discontinued operations march 2016 venezuelan government implemented previously announced plans new foreign currency exchange system implementation system resulted reported loss discontinued operations 38 million fiscal 2016 corresponds companys former operations venezuela whollyowned subsidiaries helmerich payne international drilling co helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 venezuelan government petroleos de venezuela sa pdvsa petroleo sa subsidiaries seek damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery gain contingencies recognized consolidated financial statements following tables summarize operations reportable operating segment comparison years ended september 30 2016 2015 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 82337 231528 2016 2015 respectively rig utilization 2016 excludes four flexrigs completed ready delivery september 30 2016 operating income us land segment decreased 741 million 2016 6984 million 2015 included us land revenues 2016 2015 approximately 2190 million 2036 million respectively early termination fixedterm contracts excluding early termination related revenue average revenue per day 2016 decreased 2080 25448 27528 2015 low oil prices continued negative effect customer spending customers renew expiring contracts others elected terminate fixedterm contracts early result experienced 51 percent decrease revenue days comparing 2016 2015 fixedterm contracts customarily provide termination election customer early termination payment paid us contract terminated prior expiration fixed term except limited circumstances including sustained unacceptable performance us direct operating expenses percentage revenue 49 percent 2016 50 percent 2015 september 2016 entered settlement agreement subsequently approved court regarding lawsuit filed employee injured working us land rig taking account amounts paid various insurers recorded 188 million expense reduced operating income negatively impacted average rig expense per day 508 see note 13 consolidated financial statements additional disclosure regarding lawsuit depreciation includes charges abandoned equipment 388 million 426 million 2016 2015 respectively included abandonments 2016 retirement used drilling equipment included abandonments 2015 decommissioning 23 scr rigs including six conventional rigs six flexrig1s 11 flexrig2s spare equipment drilling rigs recorded fiscal 2016 63 million impairment charge reduce carrying value rig related equipment classified held sale estimated fair values based expected sales prices used drilling equipment rigs decommissioned service prior fiscal periods written estimated recoverable value time decommissioning excluding abandonment depreciation 2016 decreased 2015 primarily due low levels capital expenditures 2016 decommissioning rigs 2015 anticipate depreciation expense decline fiscal 2017 capital expenditures expected continue decrease fiscal 2017 rig utilization decreased 30 percent 2016 62 percent 2015 total number rigs september 30 2016 348 compared 343 rigs september 30 2015 net increase due five new flexrigs completed 2016 included operating statistics two flexrigs expected delivered field first quarter 2017 september 30 2016 95 348 existing rigs us land segment generating revenue 95 rigs generating revenue 72 fixedterm contracts 23 working spot market november 17 2016 number existing rigs fixedterm contracts segment 72 number rigs working spot market 33 comparison years ended september 30 2016 2015 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 23138 33254 2016 2015 respectively operating statistics include rigs owned us exclude offshore platform management labor service contracts currency revaluation expense average rig revenue per day average rig expense per day average rig margin per day decreased 2016 compared 2015 primarily due several rigs moving lower pricing standby special dayrates september 30 2016 seven nine platform rigs contracted compared eight september 30 2015 comparison years ended september 30 2016 2015 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 20458 37420 2016 2015 respectively also excluded effects currency revaluation income expense international land segment operating loss 141 million 2016 compared 71 million 2015 included international land revenues 2015 approximately 187 million related early termination fixedterm contracts excluding early termination per day revenue 2566 2015 average rig margin per day 2016 compared 2015 increased 468 10406 low oil prices continued negative effect customer spending result experienced 26 percent decrease revenue days comparing 2016 2015 average number active rigs 147 2016 compared 200 2015 average rig expense per day decreased 6210 18 percent compared 2015 average rig expense impacted expenses rigs become idle costs associated rigs transitioning locations fourth fiscal quarter 2015 recorded 392 million impairment charge reduce carrying values seven scr rigs located international land segment estimated fair value six rigs along rig related assets classified held sale september 30 2016 plan sell assets current condition included direct operating expenses 2016 98 million foreign currency transaction losses primarily due devaluation argentine peso december 2015 comparison years ended september 30 2015 2014 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 231528 262532 2015 2014 respectively rig utilization 2015 excludes nine flexrigs completed ready delivery september 30 2015 operating income us land segment decreased 6984 million 2015 10 billion 2014 primarily due decrease revenue days decommissioning 23 rigs included us land revenues 2015 2014 approximately 2036 million 117 million respectively early termination fixedterm contracts excluding early termination related revenue average revenue per day 2015 decreased 550 27528 28078 2014 also factor decrease operating income comparative periods direct operating expenses percentage revenue 50 percent 2015 51 percent 2014 rig utilization decreased 62 percent 2015 86 percent 2014 total number rigs september 30 2015 343 compared 329 rigs september 30 2014 net increase due 30 new flexrigs completed placed service nine new flexrigs completed ready delivery five flexrigs transferred international land segment two flexrigs transferred international land segment one conventional rig transferred international land segment 23 older rigs removed service depreciation includes charges abandoned equipment 426 million 215 million 2015 2014 respectively included abandonments 2015 decommissioning 23 scr rigs including six conventional rigs six flexrig1s 11 flexrig2s spare equipment drilling rigs included abandonments 2014 decommissioning nine conventional rigs spare equipment drilling rigs excluding abandonment amounts depreciation 2015 increased 10 percent 2014 due increase available rigs comparison years ended september 30 2015 2014 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 33254 18889 2015 2014 respectively operating statistics include rigs owned us exclude offshore platform management labor service contracts currency revaluation expense total revenue segment operating income offshore segment decreased 2015 2014 primarily due one rig idle half year contractual decrease dayrate one rig several rigs moving lower pricing standby standbytype dayrate september 30 2015 2014 eight nine rigs contracted comparison years ended september 30 2015 2014 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 37420 45258 2015 2014 respectively also excluded effects currency revaluation income expense international land segment operating loss 71 million 2015 compared operating income 351 million 2014 included international land revenues 2015 approximately 187 million related early termination fixedterm contracts excluding early termination per day revenue 2566 2015 average rig margin per day 2015 compared 2014 increased 197 9938 rigs transferred segment 2015 2014 favorably impacted average rig revenue per day average number active rigs 200 2015 compared 226 2014 average rig expense per day increase attributable expenses incurred rigs become idle costs associated rigs transitioning locations average rig expense 2015 also impacted approximately 690 per day related charge allowance doubtful accounts 2015 total number available rigs increased two due five flexrigs transferred us land segment two flexrigs transferred us land segment one conventional rig transferred us land segment close 2015 2014 15 22 rigs working respectively fourth fiscal quarter 2015 recorded 392 million impairment charge reduce carrying values seven scr rigs located international land segment estimated fair value impairment charge impact liquidity debt covenants liquidity capital resources capital spending 2572 million 2016 11 billion 2015 9515 million 2014 net cash provided operating activities 08 billion 2016 14 billion 2015 11 billion 2014 2017 capital spending currently estimated approximately 200 million depending primarily drilling market conditions estimate includes capital maintenance requirements tubulars special projects primarily related upgrading existing rig fleet historically financed operations primarily internally generated cash flows periods internally generated cash flows sufficient meet liquidity needs either borrow available credit sources may sell portfolio securities likewise generating excess cash flows may invest shortterm money market securities shortterm marketable securities 2015 invested 456 million shortterm investments classified trading securities reinvested maturities earnings 2016 resulting shortterm investments totaling 441 million september 30 2016 investments include us treasury securities us agency issued debt securities corporate bonds certificate deposit money market funds securities recorded fair value manage portfolio marketable securities close fiscal 2016 fair value 715 million consisting common shares atwood oceanics inc schlumberger ltd value portfolio subject fluctuation market may vary considerably time portfolio recorded fair value balance sheet fourth quarter 2016 determined decline fair value cost basis atwood temporary result recorded noncash charge totaling 260 million 2016 2015 sell marketable availableforsale securities 2014 cash proceeds sale availableforsale securities 492 million proceeds asset sales totaled 218 million 2016 226 million 2015 302 million 2014 income asset sales 2016 totaled 99 million 118 million 2015 191 million 2014 year sales old damaged rig equipment drill pipe used ordinary course business company authorization board directors repurchase four million common shares calendar year repurchases may made using cash equivalents available sources 2015 purchased 810097 common shares aggregate cost 597 million held treasury shares 2016 repurchase shares common stock 2016 paid dividends 2763 per share total 3002 million paid 275 per share 2984 million 2015 2438 per share 2644 million 2014 adjusting stock splits accordingly increased effective annual dividend per share every year well 40 years 40 million senior unsecured fixedrate notes outstanding matured july 2016 final annual principal repayment 40 million along interest paid cash hand july 2016 march 19 2015 issued 500 million 465 percent 10year unsecured senior notes net proceeds discount issuance cost used general corporate purposes including capital expenditures associated rig construction program capital maintenance requirements projects interest payable semiannually march 15 september 15 debt discount amortized interest expense using effective interest method debt issuance costs amortized straightline stated life obligation approximates effective yield method july 13 2016 terminated previous 300 million unsecured revolving credit facility borrowings 403 million letters credit transferred new 300 million unsecured revolving credit facility mature july 13 2021 new facility 75 million available use letters credit majority borrowings facility would accrue interest spread london interbank offered rate libor also pay commitment fee based unused balance facility borrowing spreads well commitment fees determined according scale based ratio total debt total capitalization spread libor ranges 1125 percent 175 percent per annum commitment fees range 15 percent 30 percent per annum based debt total capitalization september 30 2016 spread libor commitment fees would 1125 percent 15 percent respectively one financial covenant facility requires us maintain funded leverage ratio defined less 50 percent credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality including limitation priority debt defined agreement may exceed 175 net worth company september 30 2016 borrowings three letters credit outstanding amount 388 million september 30 2016 2612 available borrow 300 million unsecured credit facility subsequent september 30 2016 another letter credit issued 15 million lowering amount available borrow 2597 million addition letters credit mentioned preceding paragraph september 30 2016 two letters credit outstanding totaling 12 million issued support international operations additional letters credit issued separately 300 million credit facility discussed preceding paragraph reduce available borrowing capacity facility applicable agreements unsecured debt contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2016 compliance debt covenants september 30 2016 88 existing rigs fixed term contracts original term durations ranging six months five years expiring fiscal 2017 contracts provide termination election customer early termination payment paid contract terminated prior expiration fixed term customers primarily major oil companies large independent oil companies risk exists customer especially smaller independent oil company may become unable meet obligations may exercise early termination election future able pay early termination fee although expected time future revenue operating results could negatively impacted happen operating cash requirements scheduled debt repayments interest payments stock repurchases estimated capital expenditures including rig upgrade construction program fiscal 2017 expected funded current cash provided operating activities however assurance continue generate cash flows current levels current ratio 48 september 30 2016 42 september 30 2015 longterm debt total capitalization ratio 97 percent september 30 2016 compared 98 percent september 30 2015 stock portfolio held material commitments balance sheet arrangements operating leases discussed contractual obligations september 30 2016 summarized table thousands ainterest fixedrate debt estimated based principal maturities see note 3 debt consolidated financial statements bsee note 13 commitments contingencies consolidated financial statements table include obligations pension plan amounts recorded uncertain tax positions 2016 make contributions pension plan contributions may made fiscal 2017 fund unexpected distributions lieu liquidating pension assets future contributions beyond fiscal 2017 difficult estimate due multiple variables involved september 30 2016 163 million recorded uncertain tax positions related interest penalties however timing payments respective taxing authorities cannot estimated time income taxes fully described note 4 consolidated financial statements critical accounting policies estimates consolidated financial statements impacted accounting policies used estimates assumptions made management preparation estimates assumptions evaluated ongoing basis estimates based historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates different assumptions conditions following discussion critical accounting policies estimates used financial statements significant accounting policies summarized note 1 consolidated financial statements property plant equipment property plant equipment including renewals betterments stated cost maintenance repairs expensed incurred interest expense applicable construction qualifying assets capitalized component cost assets account depreciation property plant equipment using straightline method estimated useful lives assets considering estimated salvage value property plant equipment estimated useful lives salvage values require use management estimates certain events unforeseen changes operations technology market conditions could materially affect estimates assumptions related depreciation result abandonments management believes estimates materially accurate past years presented report significant changes made determinations useful lives salvage values upon retirement disposal fixed assets cost related accumulated depreciation removed respective accounts gains losses recorded results operations impairment longlived assets management assesses potential impairment longlived assets whenever events changes conditions indicate carrying value asset may recoverable changes could prompt assessment may include equipment obsolescence changes market demand specific asset periods relatively low rig utilization declining revenue per day declining cash margin per day completion specific contracts andor overall changes general market conditions review longlived assets indicates carrying value certain assets estimated undiscounted future cash flows impairment charge made adjust carrying value estimated fair value asset fair value drilling rigs determined based upon income approach using estimated discounted future cash flows market approach available cash flows estimated management considering factors prospective market demand recent changes rig technology effect rigs marketability cash investment required make rig marketable suitability rig size makeup existing platforms competitive dynamics including utilization fair value estimated applicable considering factors recent market sales rigs companies sales rigs appraisals factors use different assumptions could increase decrease estimated fair value assets could therefore affect impairment measurement third fiscal quarter 2016 recorded 63 million impairment charge reduce carrying values used drilling equipment classified held sale us land segment estimated fair value rig related equipment fair value estimated based expected sales prices selfinsurance accruals selfinsure significant portion expected losses relating workers compensation general liability employers liability automobile liability generally deductibles range 1 million 3 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events assurance coverage respond adequate circumstances estimates recorded incurred outstanding liabilities workers compensation casualty claims retained losses estimated accrued based upon estimates aggregate liability claims incurred estimates liabilities retained losses based adjusters estimates historical loss experience statistical methods believe reliable nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs whollyowned captive insurance company finances significant portion physical damage risk companyowned drilling rigs well international casualty deductibles exception named wind storm risk gulf mexico insure rig related equipment values approximate current replacement cost inception date policy selfinsure number risks including loss earnings business interruption cyber risks pension costs obligations pension benefit costs obligations dependent various actuarial assumptions make assumptions relating discount rates expected return plan assets discount rate determined matching projected cash distributions appropriate corporate bond yields yield curve analysis discount rate lowered 364 percent 427 percent september 30 2016 reflect changes market conditions highquality fixedincome investments expected return plan assets determined based historical portfolio results future expectations rates return actual results differ estimated assumptions accumulated amortized estimated future working life plan participants could therefore affect expense recognized obligations future periods september 30 2006 pension plan frozen benefit accruals discontinued result rate compensation increase assumption eliminated future periods anticipate pension expense decrease approximately 47 million 2017 2016 stockbased compensation historically granted stockbased awards key employees nonemployee directors part compensation estimate fair value stock option awards date grant applying blackscholes optionpricing model application valuation model involves assumptions judgmental highly sensitive assumptions include among others expected stock price volatility expected life stock options riskfree interest rate expected volatilities estimated using historical volatility stock based upon expected term option expected term option derived historical data represents period time options estimated outstanding riskfree interest rate periods within estimated life option based us treasury strip rate effect time grant fair value award amortized straightline basis vesting period awards granted employees stockbased awards granted nonemployee directors expensed immediately upon grant fair value restricted stock awards determined based closing price common stock date grant amortize fair value restricted stock awards compensation expense straightline basis vesting period september 30 2016 unrecognized compensation cost related unvested restricted stock 192 million cost expected recognized weightedaverage period 21 years revenue recognition contract drilling revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized term related drilling contract costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs contracts terminated prior specified term early termination payments received us recognized revenues contractual requirements met new accounting standards may 2014 financial accounting standards board fasb issued accounting standards update asu 201409 revenue contracts customers supersedes virtually existing revenue recognition guidance may 2016 accounting guidance issued clarify yet effective revenue recognition guidance issued may 2014 additional guidance change core principle revenue recognition guidance issued fasb may 2014 rather provides clarification accounting collections sales taxes well recognition revenue associated contract modifications ii noncash consideration iii based collectability consideration customer asu provides full retrospective modified retrospective use cumulative effect method period adoption yet determined adoption method employ july 2015 fasb extended effective date standard interim annual periods beginning december 15 2017 currently evaluating potential effects adoption update financial statements july 2015 fasb issued asu 201511 inventory topic 330 simplifying measurement inventory update simplifies subsequent measurement inventory replaces current lower cost market test lower cost net realizable value test net realizable value defined estimated selling prices ordinary course business less reasonably predictable costs completion disposal transportation new standard applied prospectively effective annual reporting periods beginning december 15 2016 interim periods within annual periods early adoption permitted expect adoption standard material impact financial statements january 2016 fasb issued asu 201601 financial instrumentsoverall subtopic 82510 recognition measurement financial assets financial liabilities standard requires entities measure equity investments result consolidation accounted equity method fair value recognize changes fair value net income provisions asu 201601 effective interim annual periods starting december 15 2017 adoption cumulativeeffect adjustment beginning retained earnings recorded adopt standard october 1 2018 subsequent adoption changes fair value availableforsale investments recognized net income effect subject stock market fluctuations february 2016 fasb issued asu 201602 leases topic 842 asu 201602 require organizations lease assetsreferred lesseesto recognize balance sheet assets liabilities rights obligations created leases asu 201602 lessee required recognize assets liabilities leases lease terms 12 months lessor accounting remains substantially similar current gaap addition disclosures leasing activities expanded include qualitative along specific quantitative information public entities asu 201602 effective fiscal years beginning december 15 2018 including interim periods within fiscal years asu 201602 mandates modified retrospective transition method currently evaluating potential impact adopting guidance consolidated financial statements march 2016 fasb issued asu 201609 compensationstock compensation topic 718 improvements employee sharebased payment accounting asu 201609 simplifies several aspects accounting sharebased payment transactions including income tax consequences classification awards either equity liabilities classification statement cash flows public entities asu 201609 effective fiscal years beginning december 15 2016 interim periods within fiscal years early adoption permitted currently evaluating potential impact adopting guidance consolidated financial statements june 2016 fasb issued asu 201613 financial instrumentscredit losses asu sets forth current expected credit loss cecl model requires companies measure expected credit losses financial instruments held reporting date based historical experience current conditions reasonable supportable forecasts replaces existing incurred loss model applicable measurement credit losses financial assets measured amortized cost applies offbalance sheet credit exposures standard effective interim annual periods beginning december 15 2019 currently assessing impact standard consolidated financial statements disclosures august 2016 fasb issued asu 201615 classification certain cash receipts cash payments consensus emerging issues task force asu intended reduce diversity practice presentation classification certain cash receipts cash payments providing guidance eight specific cash flow issues asu effective interim annual periods beginning december 15 2017 early adoption permitted including adoption interim period currently assessing impact standard consolidated statement cash flows quantitative qualitative disclosures market risk foreign currency exchange rate risk contracts work foreign countries generally provide payment us dollars however argentina paid argentine pesos argentine branch one secondtier subsidiaries remits us dollars us parent converting argentine pesos us dollars argentine foreign exchange market repatriating us dollars future contracts applicable law may require payments made foreign currencies assurance experience argentina elsewhere devaluation foreign currency foreign exchange restrictions difficulties repatriating us dollars even able negotiate contract provisions designed mitigate risks december 2015 argentine peso experienced sharp devaluation resulting aggregate foreign currency loss 85 million three months ended december 31 2015 subsequent devaluation argentine peso stabilized argentine foreign exchange market controls place fewer restrictions repatriating us dollars changes limited current foreign currency exchange rate risk argentina however future may incur currency devaluations foreign exchange restrictions difficulties repatriating us dollars argentina elsewhere could material adverse impact business financial condition results operations example assuming encounter future foreign exchange restrictions difficulties repatriating us dollars argentina resulting substantial accumulation argentine pesos hypothetical 10 decrease value argentine pesos relative us dollar could result 18 million decrease fair value monetary assets liabilities denominated argentine pesos estimates published sources indicate argentina highly inflationary country defined cumulative inflation rates exceeding 100 percent recent threeyear period based inflation data published respective governments regardless foreign operations use us dollar functional currency local currency monetary assets liabilities remeasured us dollars gains losses resulting foreign currency transactions included current results operations commodity price risk demand contract drilling services derived exploration production companies spending money explore develop drilling prospects search crude oil natural gas spending driven cash flow financial strength affected trends crude oil natural gas commodity prices crude oil prices determined number factors including global supply demand establishment compliance production quotas oil exporting countries worldwide economic conditions geopolitical factors crude oil natural gas prices historically volatile difficult predict degree certainty current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels volatility lead many exploration production companies base capital spending much conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices credit capital market risk addition customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets experienced past make difficult customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result customer credit defaults reduced demand drilling services could material adverse effect business financial condition results operations similarly may need access capital markets obtain financing ability access capital markets financing could limited among things oil gas prices existing capital structure credit ratings state economy health drilling overall oil gas industry liquidity capital markets many factors affect ability access capital markets outside control assurance given able access capital markets terms acceptable us required could material adverse impact business financial condition results operations attempt secure favorable prices advanced ordering purchasing drilling rig components materials generally available acceptable prices assurance prices vary significantly future fluctuations market conditions causing increased prices materials supplies could material adverse effect future operating costs interest rate risk interest rate risk exposure results primarily shortterm rates mainly liborbased borrowings commercial banks debt september 30 2016 fixedrate interest obligations current risk due interest rate fluctuation following tables provide information september 30 2016 2015 interest rate risk sensitive instruments interest rate risk september 30 2016 dollars thousands interest rate risk september 30 2015 dollars thousands equity price risk september 30 2016 portfolio securities total fair value 715 million total fair value portfolio securities 915 million september 30 2015 hypothetical 10 decrease market prices securities portfolio september 30 2016 would decrease fair value availableforsale securities 72 million make specific plans sell securities rather sell securities based market conditions circumstances securities subject wide variety number marketrelated risks could substantially reduce increase fair value holdings portfolio recorded fair value balance sheet changes unrealized aftertax value reflected equity section balance sheet unless decline fair value cost basis considered temporary case change recorded earnings november 17 2016 total fair value remaining securities decreased approximately 688 million currently fair value exceeds cost investments continually monitor fair value investments unable predict future market volatility potential impact consolidated financial statements item 7aitem 7 management’s discussion analysis financial condition results operations risk factors forwardlooking statements following discussion read conjunction part form 10k well consolidated financial statements related notes thereto included item 8 “financial statements supplementary data” form 10k future operating results may affected various trends factors beyond control include among factors fluctuations oil natural gas prices unexpected expiration termination drilling contracts currency exchange gains losses expropriation real personal property changes general economic conditions disruptions global credit markets rapid unexpected changes technologies risks foreign operations uninsured risks changes domestic foreign policies laws regulations uncertain business conditions affect businesses accordingly past results trends used investors anticipate future results trends exception historical information matters discussed management’s discussion analysis financial condition results operations include forwardlooking statements forwardlooking statements based various assumptions caution believe assumptions reasonable make good faith assumed facts almost always vary actual results differences assumed facts actual results material including cautionary statement take advantage “safe harbor” provisions private securities litigation reform act 1995 forwardlooking statements made us persons acting behalf factors identified cautionary statement factors discussed item 1a “risk factors” form 10k important factors necessarily inclusive important factors could cause actual results differ materially expressed forwardlooking statement made us persons acting behalf except required law undertake duty update revise forwardlooking statements based changes internal estimates expectations otherwise executive summary helmerich payne inc primarily contract drilling company total fleet 396 drilling rigs september 30 2017 contract drilling segments consist us land segment 350 rigs offshore segment 8 offshore platform rigs international land segment 38 rigs september 30 2017 close fiscal 2017 218 contracted rigs compared 118 contracted rigs time prior year us land drilling industry recovered alltime low approximately 380 active rigs summer 2016 900 rigs september 30 2017 led way reactivating rigs us gained significant market share process success time frame clear validation consider capable land drilling fleet market supplemented ability deliver bestinclass field performance customer satisfaction long term strategy remains focused innovation technology safety operational excellence reliability move forward believe advanced rig fleet financial strength long term contract backlog strong customer base position us well take advantage future opportunities except specifically discussed following results operations pertain continuing operations unless otherwise indicated references 2017 2016 2015 following discussion referring fiscal years 2017 2016 2015 results operations per share amounts included results operations discussion stated diluted basis net loss 2017 1282 million 120 loss per share compared net loss 568 million 054 loss per share 2016 4204 million net income 385 per share 2015 net loss 2017 2016 includes aftertax income early termination revenue associated drilling contracts terminated prior expiration fixed term 202 million 018 per share 1393 million 129 per share respectively net income 2015 includes aftertax income early termination revenue 1409 130 per share net loss 2017 2016 includes aftertax gains sale assets 143 million 013 per share 61 million 006 per share respectively net income 2015 includes aftertax gains sale assets 74 million 007 per share included 2016 net loss aftertax loss 159 million 015 loss per share otherthantemporary impairment marketable equity security position atwood oceanics inc “atwood” net loss 2016 also includes aftertax loss 120 million 011 loss per share settlement litigation 38 million loss 004 loss per share discontinued operations consolidated operating revenues 18 billion 2017 16 billion 2016 32 billion 2015 including early termination revenue 294 million 2190 million 2223 million respective year excluding early termination revenue operating revenue increased 3701 million 2017 compared 2016 oil prices steeply declined 106 per barrel june 2014 30 per barrel early 2016 second half calendar 2016 oil prices increased since mostly fluctuating within 45 55 per barrel price range primarily result impact oil prices drilling activity exploration production companies time frame number revenue days us land segment totaled 57120 2017 compared 36984 2016 75866 2015 us land rig utilization 45 percent 2017 30 percent 2016 62 percent 2015 average number us land rigs available 349 rigs 2017 339 rigs 2016 336 rigs 2015 rig utilization offshore rigs 74 percent 2017 compared 82 percent 2016 93 percent 2015 international land segment subject prolonged impact far decline oil prices causing revenue days decline 4951 2017 5364 2016 7284 2015 rig utilization international land segment 36 percent 2017 39 percent 2016 51 percent 2015 2016 recorded 260 million otherthantemporary impairment charge marketable equity security position atwood remained loss position fiscal year atwood offshore drilling industry severely impacted downturn energy sector may 2017 ensco plc “ensco” announced entered definitive merger agreement ensco would acquire atwood allstock transaction closed october 6 2017 terms merger agreement received 160 shares ensco share atwood common stock interest dividend income 59 million 32 million 58 million 2017 2016 2015 respectively higher income 2017 primarily due higher earnings available cash equivalents shortterm investments higher income 2015 primarily result atwood declaring dividends 2015 dividends ceased early 2016 direct operating costs 2017 12 billion compared 09 billion 2016 17 billion 2015 increase 2017 2016 primarily attributable higher level activity 2017 well startup expenses related reactivating 100 flexrigs returning work 2017 decrease 2016 2015 primarily due sharp decline drilling activity depreciation amortization expense 5855 million 2017 5986 million 2016 6080 million 2015 depreciation amortization includes amortization 11 million 2017 abandonments equipment 426 million 2017 393 million 2016 436 million 2015 additionally recorded impairment charges rig related equipment 63 million 2016 392 million 2015 depreciation expense exclusive abandonments decreased three percent 2017 2016 one percent 2016 2015 decreases primarily due lower levels capital expenditures 2017 2016 legacy assets reaching end depreciable lives abandonments threeyear period primarily due abandonment used drilling equipment years decommissioning 23 rigs 2015 management monitors industry market conditions impacting longlived assets intangible assets goodwill required impairment analysis performed determine impairment exists record impairment 2017 2016 recorded 63 million impairment charge reduce carrying value used drilling equipment rigs decommissioned service prior fiscal periods written estimated recoverable value time decommissioning 2015 recorded 392 million impairment charges reduce carrying value seven scr rigs international land segment estimated fair value general administrative expenses totaled 1510 million 2017 1462 million 2016 1347 million 2015 2017 incurred transaction costs 32 million related acquisition motive drilling technologies inc contributing increase 2016 2015 expenses related employee work force reductions including employee severance expenses additional pension expense additional employer match 401kemployee thrift plan due partial plan termination status whereby affected participants fully vested 401k accounts interest expense net amounts capitalized totaled 197 million 2017 229 million 2016 150 million 2015 interest expense primarily attributable fixedrate debt outstanding favorable adjustment interest expense 52 million 2017 related reversal previously booked uncertain tax positions statute limitations expired interest expense increased 2016 2015 primarily due issuance 500 million unsecured senior notes march 2015 capitalized interest 03 million 28 million 70 million 2017 2016 2015 respectively capitalized interest attributable rig construction program income tax benefit 567 million 2017 compared income tax benefit 197 million 2016 income tax expense 2414 million 2015 effective income tax rate 307 percent 2017 compared 271 percent 2016 365 percent 2015 deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary allowances provided carrying value net deferred tax assets based management’s judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future see note 5 consolidated financial statements additional income tax disclosures 2017 2016 2015 incurred 120 million 103 million 161 million respectively research development expenses primarily related ongoing development rotary steerable system tools anticipate research development expenses continue 2018 june 2 2017 completed merger transaction “motive merger” pursuant unaffiliated drilling technology company motive drilling technologies inc delaware corporation “motive” merged wholly owned subsidiary spring merger sub inc delaware corporation motive survived transaction wholly owned subsidiary company operations motive included nonreportable business segments motive merger accounted business combination accordance accounting standards codification “asc” 805 business combinations requires assets acquired liabilities assumed recorded acquisition date fair values motive proprietary bit guidance system algorithmdriven system considers total economic consequences directional drilling decisions proven consistently lower drilling costs efficient drilling increase hydrocarbon production smoother wellbores accurate well placement given strong longstanding technology innovation focus believe technology continue advance provide benefits industry effective time motive merger motive shareholders received aggregate cash consideration 743 million net customary closing adjustments may receive additional 250 million potential earnout payments based future performance transaction costs related motive merger incurred fiscal 2017 32 million recorded revenue 33 million net loss 22 million related motive merger fiscal 2017 additional information regarding motive acquisition described note 2 “business combinations” consolidated financial statements expenses incurred within country venezuela reported discontinued operations march 2016 venezuelan government implemented previously announced plans new foreign currency exchange system implementation system resulted reported loss discontinued operations 38 million fiscal 2016 corresponds company’s former operations venezuela whollyowned subsidiaries helmerich payne international drilling co helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 bolivarian republic venezuela petroleos de venezuela sa pdvsa petroleo sa seeking damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery following tables summarize operations reportable operating segment comparison years ended september 30 2017 2016 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 148218 82337 2017 2016 respectively 2017 us land segment operating loss 949 million compared operating income 741 million 2016 included us land revenues 2017 2016 approximately 245 million 2190 million respectively early termination fixedterm contracts fixedterm contracts customarily provide termination election customer early termination payment paid us contract terminated prior expiration fixed term except limited circumstances including sustained unacceptable performance us excluding early termination revenue 428 5921 per day 2017 2016 respectively average revenue per day 2017 decreased 3269 22179 25448 2016 activity increased yearoveryear response higher commodity prices resulting 54 percent increase revenue days comparing 2017 2016 however legacy term contracts high dayrates make lower proportion 2017 activity due continued contract expirations newly contracted rigs made majority 2017 activity priced relatively lower levels reflected 2017 market conditions average rig expense increased 506 per day 14623 2017 14117 2016 increase primarily attributable startup expenses related rigs returning work 2017 depreciation includes charges abandoned equipment 422 million 388 million 2017 2016 respectively included abandonments 2017 older rig components replaced upgrades rig fleet meet customer demands additional capabilities included abandonments 2016 retirement used drilling equipment fiscal 2016 recorded asset impairment charge us land segment 63 million reduce carrying value rig related equipment classified held sale estimated fair values based expected sales prices excluding abandonments depreciation 2017 decreased 2016 primarily due lower levels capital expenditures 2017 2016 certain legacy assets reaching end depreciable lives 2017 2016 rig utilization increased 45 percent 2017 30 percent 2016 total number rigs september 30 2017 350 compared 348 rigs september 30 2016 net increase due two new flexrigs completed 2017 included operating statistics september 30 2017 197 350 existing rigs us land segment generating revenue 197 rigs generating revenue 100 fixedterm contracts 97 working spot market november 16 2017 number existing rigs fixedterm contracts segment 103 number rigs working spot market 97 comparison years ended september 30 2017 2016 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 21578 23138 2017 2016 respectively operating statistics include rigs owned us exclude offshore platform management labor service contracts currency revaluation expense average rig revenue per day average rig margin per day increased 2017 compared 2016 primarily due several rigs moving higher pricing previous standby special dayrates second quarter fiscal 2017 sold one offshore rigs september 30 2017 five eight platform rigs contracted compared seven nine available rigs september 30 2016 comparison years ended september 30 2017 2016 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 10074 20458 2017 2016 respectively also excluded effects currency revaluation income expense international land segment operating loss 72 million 2017 compared 141 million 2016 excluding early termination revenue 955 per day 2017 average rig margin per day 2017 compared 2016 decreased 143 10263 low oil prices 2016 2017 continue negative effect customer spending experienced 8 percent decrease revenue days comparing 2017 2016 average number active rigs 136 2017 compared 147 2016 although direct operating expenses decreased 2017 1635 million 1840 million 2016 average rig expense per day increased 1123 4 percent compared 2016 average rig expense included direct operating expenses foreign currency transaction losses 60 million 98 million 2017 2016 respectively 2016 losses primarily due devaluation argentine peso december 2015 comparison years ended september 30 2016 2015 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 82337 231528 2016 2015 respectively rig utilization 2016 excludes four flexrigs completed ready delivery september 30 2016 operating income us land segment decreased 741 million 2016 6984 million 2015 included us land revenues 2016 2015 approximately 2190 million 2036 million respectively early termination fixedterm contracts excluding early termination related revenue average revenue per day 2016 decreased 2080 25448 27528 2015 low oil prices negative effect customer spending customers renew expiring contracts others elected terminate fixedterm contracts early result experienced 51 percent decrease revenue days comparing 2016 2015 fixedterm contracts customarily provide termination election customer early termination payment paid us contract terminated prior expiration fixed term except limited circumstances including sustained unacceptable performance us average rig expense per day increased 14117 2016 13483 2015 september 2016 entered settlement agreement subsequently approved court regarding lawsuit filed employee injured working us land rig taking account amounts paid various insurers recorded 188 million expense reduced operating income negatively impacted 2016 average rig expense per day 508 depreciation includes charges abandoned equipment 388 million 426 million 2016 2015 respectively included abandonments 2016 retirement used drilling equipment included abandonments 2015 decommissioning 23 scr rigs including six conventional rigs six flexrig1s 11 flexrig2s spare equipment drilling rigs recorded fiscal 2016 63 million impairment charge reduce carrying value rig related equipment classified held sale estimated fair values based expected sales prices used drilling equipment rigs decommissioned service prior fiscal periods written estimated recoverable value time decommissioning excluding abandonment depreciation 2016 decreased 2015 primarily due low levels capital expenditures 2016 decommissioning rigs 2015 rig utilization decreased 30 percent 2016 62 percent 2015 total number rigs september 30 2016 348 compared 343 rigs september 30 2015 net increase due five new flexrigs completed 2016 included operating statistics september 30 2016 95 348 existing rigs us land segment generating revenue 95 rigs generating revenue 72 fixedterm contracts 23 working spot market comparison years ended september 30 2016 2015 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 23138 33254 2016 2015 respectively operating statistics include rigs owned us exclude offshore platform management labor service contracts currency revaluation expense average rig revenue per day average rig expense per day average rig margin per day decreased 2016 compared 2015 primarily due several rigs moving lower pricing standby special dayrates september 30 2016 seven nine platform rigs contracted compared eight september 30 2015 comparison years ended september 30 2016 2015 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 20458 37420 2016 2015 respectively also excluded effects currency revaluation income expense international land segment operating loss 141 million 2016 compared 71 million 2015 included international land revenues 2015 approximately 187 million related early termination fixedterm contracts excluding early termination revenue 2566 per day 2015 average rig margin per day 2016 compared 2015 increased 468 10406 low oil prices continued negative effect customer spending result experienced 26 percent decrease revenue days comparing 2016 2015 average number active rigs 147 2016 compared 200 2015 average rig expense per day decreased 6210 18 percent compared 2015 average rig expense impacted expenses rigs become idle costs associated rigs transitioning locations fourth fiscal quarter 2015 recorded 392 million impairment charge reduce carrying value seven scr rigs located international land segment estimated fair value included direct operating expenses 2016 98 million foreign currency transaction losses primarily due devaluation argentine peso december 2015 liquidity capital resources capital spending 3976 million 2017 2572 million 2016 11 billion 2015 net cash provided operating activities 3572 million 2017 7536 million 2016 14 billion 2015 2018 capital spending currently estimated 250 million 300 million estimate includes capital maintenance requirements tubulars special projects primarily related upgrading existing rig fleet historically financed operations primarily internally generated cash flows periods internally generated cash flows sufficient meet liquidity needs either borrow available credit sources may sell portfolio securities likewise generating excess cash flows may invest shortterm money market securities shortterm marketable securities starting 2015 began investing shortterm investments classified trading securities reinvested maturities earnings 2017 2016 investments include us treasury securities us agency issued debt securities corporate bonds certificates deposit money market funds securities highly rated recorded fair value manage portfolio marketable securities close fiscal 2017 fair value 702 million consisting common shares atwood schlumberger ltd value portfolio subject fluctuation market may vary considerably time portfolio recorded fair value balance sheet fourth quarter 2016 determined decline fair value cost basis atwood temporary result recorded noncash charge totaling 260 million proceeds asset sales totaled 234 million 2017 218 million 2016 226 million 2015 income asset sales 2017 totaled 206 million 99 million 2016 118 million 2015 2017 sold one offshore rig year sales old damaged rig equipment drill pipe used ordinary course business 2017 paid dividends 280 per share total 3055 million 2016 paid dividends 2763 per share total 3002 million paid dividends 275 per share 2984 million 2015 adjusting stock splits accordingly increased effective annual dividend per share every year well 40 years march 19 2015 issued 500 million 465 percent 10year unsecured senior notes interest payable semiannually march 15 september 15 debt discount amortized interest expense using effective interest method debt issuance costs amortized straightline stated life obligation approximates effective interest method 300 million unsecured revolving credit facility mature july 13 2021 credit facility 75 million available use letters credit majority borrowings facility would accrue interest spread london interbank offered rate libor also pay commitment fee based unused balance facility borrowing spreads well commitment fees determined according scale based ratio total debt total capitalization spread libor ranges 1125 percent 175 percent per annum commitment fees range 15 percent 30 percent per annum based debt total capitalization september 30 2017 spread libor commitment fees would 1125 percent 15 percent respectively one financial covenant facility requires us maintain funded leverage ratio defined less 50 percent credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality including limitation priority debt defined agreement may exceed 175 net worth company september 30 2017 borrowings three letters credit outstanding amount 388 million september 30 2017 2612 million available borrow 300 million unsecured credit facility subsequent september 30 2017 company increased one three letters credit 05 million reduced availability facility 2607 million subsequent september 30 2017 company entered 12 million unsecured standalone line credit facility purposed issuance bid performance bonds needed international operations company currently two bonds issued line total value approximately 54 million applicable agreements unsecured debt contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2017 compliance debt covenants september 30 2017 112 existing rigs fixed term contracts original term durations ranging six months five years expiring fiscal 2018 contracts provide termination election customer early termination payment paid contract terminated prior expiration fixed term customers primarily major oil companies large independent oil companies risk exists customer especially smaller independent oil company may become unable meet obligations may exercise early termination election future able pay early termination fee although expected time future revenue operating results could negatively impacted happen operating cash requirements scheduled debt repayments interest payments stock repurchases estimated capital expenditures including rig upgrade construction program fiscal 2018 expected funded current cash provided operating activities however assurance continue generate cash flows current levels current ratio 36 september 30 2017 48 september 30 2016 longterm debt total capitalization ratio 106 percent september 30 2017 compared 97 percent september 30 2016 stock portfolio held material commitments balance sheet arrangements operating leases discussed contractual obligations september 30 2017 summarized table thousands interest fixedrate debt estimated based principal maturities see note 4 “debt” consolidated financial statements b see note 14 “commitments contingencies” consolidated financial statements table include obligations pension plan amounts recorded uncertain tax positions 2017 2016 make contributions pension plan contributions may made fiscal 2018 fund unexpected distributions lieu liquidating pension assets future contributions beyond fiscal 2018 difficult estimate due multiple variables involved september 30 2017 75 million recorded uncertain tax positions related interest penalties however timing payments respective taxing authorities cannot estimated time income taxes fully described note 5 consolidated financial statements critical accounting policies estimates consolidated financial statements impacted accounting policies used estimates assumptions made management preparation estimates assumptions evaluated ongoing basis estimates based historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates different assumptions conditions following discussion critical accounting policies estimates used financial statements significant accounting policies summarized note 1 consolidated financial statements property plant equipment property plant equipment including renewals betterments stated cost maintenance repairs expensed incurred interest expense applicable construction qualifying assets capitalized component cost assets account depreciation property plant equipment using straightline method estimated useful lives assets considering estimated salvage value property plant equipment estimated useful lives salvage values require use management estimates certain events unforeseen changes operations technology market conditions could materially affect estimates assumptions related depreciation result abandonments management believes estimates materially accurate past years presented report significant changes made determinations useful lives salvage values upon retirement disposal fixed assets cost related accumulated depreciation removed respective accounts gains losses recorded results operations impairment longlived assets finitelived intangibles management assesses potential impairment longlived assets finitelived intangibles whenever events changes conditions indicate carrying value may recoverable changes could prompt assessment may include equipment obsolescence changes market demand periods relatively low rig utilization declining revenue per day declining cash margin per day completion specific contracts andor overall changes general market conditions review longlived assets finitelived intangibles indicates carrying value certain assets estimated undiscounted future cash flows impairment charge made required adjust carrying value estimated fair value fair value drilling rigs determined based upon either income approach using estimated discounted future cash flows market approach cash flows estimated management considering factors prospective market demand recent changes rig technology effect rig’s marketability cash investment required make rig marketable suitability rig size makeup existing platforms competitive dynamics including utilization fair value estimated applicable considering factors recent market sales rigs companies sales rigs appraisals factors use different assumptions could increase decrease estimated fair value assets could therefore affect impairment measurement third fiscal quarter 2016 recorded 63 million impairment charge reduce carrying values used drilling equipment us land segment estimated fair value rig related equipment fair value estimated based expected sales prices selfinsurance accruals selfinsure significant portion expected losses relating worker’s compensation general liability employer’s liability automobile liability generally deductibles range 1 million 5 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events assurance coverage respond adequate circumstances estimates recorded incurred outstanding liabilities worker’s compensation casualty claims retained losses estimated accrued based upon estimates aggregate liability claims incurred estimates liabilities retained losses based adjusters’ estimates historical loss experience statistical methods believe reliable nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs whollyowned captive insurance company finances significant portion physical damage risk companyowned drilling rigs well international casualty deductibles exception “named wind storm” risk gulf mexico insure rigs related equipment values approximate current replacement cost inception date policy selfinsure number risks including loss earnings business interruption cyber risks pension costs obligations pension benefit costs obligations dependent various actuarial assumptions make assumptions relating discount rates expected return plan assets discount rate determined matching projected cash distributions appropriate corporate bond yields yield curve analysis discount rate increased 379 percent 364 percent september 30 2017 reflect changes market conditions highquality fixedincome investments expected return plan assets determined based historical portfolio results future expectations rates return actual results differ estimated assumptions accumulated amortized estimated future working life plan participants could therefore affect expense recognized obligations future periods september 30 2006 pension plan frozen benefit accruals discontinued result rate compensation increase assumption eliminated future periods anticipate pension expense decrease approximately 31 million 2018 2017 stockbased compensation historically granted stockbased awards key employees nonemployee directors part compensation estimate fair value stock option awards date grant applying blackscholes optionpricing model application valuation model involves assumptions judgmental highly sensitive assumptions include among others expected stock price volatility expected life stock options riskfree interest rate expected volatilities estimated using historical volatility stock based upon expected term option expected term option derived historical data represents period time options estimated outstanding riskfree interest rate periods within estimated life option based us treasury strip rate effect time grant fair value award amortized straightline basis vesting period awards granted employees nonemployee directors fair value restricted stock awards determined based closing price common stock date grant amortize fair value restricted stock awards compensation expense straightline basis vesting period september 30 2017 unrecognized compensation cost related unvested restricted stock 214 million cost expected recognized weightedaverage period 22 years revenue recognition contract drilling revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized term related drilling contract costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs contracts terminated prior specified term early termination payments received us recognized revenues contractual requirements met new accounting standards see note 1 consolidated financial statements recently adopted accounting standards new accounting standards yet adopted quantitative qualitative disclosures market risk foreign currency exchange rate risk contracts work foreign countries generally provide payment us dollars however argentina paid argentine pesos argentine branch one secondtier subsidiaries remits us dollars us parent converting argentine pesos us dollars argentine foreign exchange market repatriating us dollars future contracts applicable law may require payments made foreign currencies assurance experience argentina elsewhere devaluation foreign currency foreign exchange restrictions difficulties repatriating us dollars even able negotiate contract provisions designed mitigate risks december 2015 argentine peso experienced sharp devaluation resulting aggregate foreign currency loss 85 million three months ended december 31 2015 subsequent devaluation argentine peso stabilized argentine foreign exchange market controls place fewer restrictions repatriating us dollars changes reduced current foreign currency exchange rate risk argentina however future may incur currency devaluations foreign exchange restrictions difficulties repatriating us dollars argentina elsewhere could material adverse impact business financial condition results operations september 30 2017 hypothetical decrease value 10 percent would result insignificant decrease value monetary assets liabilities denominated argentine pesos approximately 133000 estimates published sources indicate argentina highly inflationary country defined cumulative inflation rates exceeding 100 percent recent threeyear period based inflation data published respective governments regardless foreign operations use us dollar functional currency local currency monetary assets liabilities remeasured us dollars gains losses resulting foreign currency transactions included current results operations commodity price risk demand contract drilling services derived exploration production companies spending money explore develop drilling prospects search crude oil natural gas spending driven cash flow financial strength affected trends crude oil natural gas commodity prices crude oil prices determined number factors including global supply demand establishment compliance production quotas oil exporting countries worldwide economic conditions geopolitical factors crude oil natural gas prices historically volatile difficult predict degree certainty current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels volatility lead many exploration production companies base capital spending much conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices credit capital market risk customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets experienced past make difficult customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result customer credit defaults reduced demand drilling services could material adverse effect business financial condition results operations similarly may need access capital markets obtain financing ability access capital markets financing could limited among things oil gas prices existing capital structure credit ratings state economy health drilling overall oil gas industry liquidity capital markets many factors affect ability access capital markets outside control assurance given able access capital markets terms acceptable us required could material adverse impact business financial condition results operations attempt secure favorable prices advanced ordering purchasing drilling rig components materials generally available acceptable prices assurance prices vary significantly future fluctuations market conditions causing increased prices materials supplies could material adverse effect future operating costs interest rate risk interest rate risk exposure results primarily shortterm rates mainly liborbased borrowings commercial banks debt september 30 2017 fixedrate interest obligations current risk due interest rate fluctuation following tables provide information september 30 2017 2016 interest rate risk sensitive instruments interest rate risk september 30 2017 dollars thousands interest rate risk september 30 2016 dollars thousands equity price risk september 30 2017 portfolio securities total fair value 702 million total fair value portfolio securities 715 million september 30 2016 hypothetical 10 decrease market prices securities portfolio september 30 2017 would decrease fair value availableforsale securities 72 million make specific plans sell securities rather sell securities based market conditions circumstances securities subject wide variety number marketrelated risks could substantially reduce increase fair value holdings portfolio recorded fair value balance sheet changes unrealized aftertax value reflected equity section balance sheet unless decline fair value cost basis considered temporary case change recorded earnings subsequent september 30 2017 atwood shares converted ensco shares merger agreement whereby received 160 shares ensco plc share atwood common stock november 16 2017 total fair value securities decreased approximately 632 million currently fair value exceeds cost investments continually monitor fair value investments unable predict future market volatility potential impact consolidated financial statements item 7aitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction part form 10k well consolidated financial statements related notes thereto included item 8 “financial statements supplementary data” form 10k future operating results may affected various trends factors beyond control actual results may differ materially anticipated forwardlooking statements result variety risks uncertainties including described annual report “cautionary note regarding forwardlooking statements” item 1a “risk factors” accordingly past results trends used investors anticipate future results trends executive summary helmerich payne inc provides performancedriven drilling services technologies intended make hydrocarbon recovery safer economical oil gas exploration production companies september 30 2018 drilling rig fleet included total 390 drilling rigs contract drilling segments consist us land segment 350 rigs offshore segment 8 offshore platform rigs international land segment 32 rigs september 30 2018 close fiscal year 2018 259 contracted rigs 153 fixed term contract 106 working welltowell compared 218 contracted rigs time prior year us land drilling industry recovered alltime low approximately 380 active rigs summer 2016 1000 rigs september 30 2018 led way reactivating rigs united states gained significant market share process believe success time frame validation capabilities land drilling fleet decisions downturn prepare eventual improvement business ability deliver bestinclass field performance customer satisfaction longterm strategy remains focused innovation technology safety operational excellence reliability move forward believe advanced uniform rig fleet financial strength long term contract backlog strong customer employee base position us well take advantage future opportunities market outlook revenues derived capital expenditures companies involved exploration development production crude oil natural gas “eps” core level capital expenditures dictated current expected future prices crude oil natural gas determined various supply demand factors commodities historically expect continue cyclical highly volatile respect us land drilling resurgence oil natural gas production coming united states brought unconventional shale drilling oil significantly impacted supply oil natural gas advent unconventional drilling united states began earnest 2009 continues evolve eps drill longer lateral wells time designed built delivered new technology ac drive rigs flexrigs market fast pace substantially growing fleet pace progress unconventional drilling interrupted decrease crude oil prices late 2014 106 per barrel june 2014 30 per barrel early 2016 late 2017 crude oil prices began recover along level activity unconventional drilling throughout time length lateral section wells drilled us continued grow progression longer lateral wells required many industries’ rigs upgraded certain specifications order meet technical challenges drilling longer lateral wells upgraded rigs meeting specifications commonly referred industry superspec rigs following specific characteristics ac drive 1500 horsepower drawworks 750000 lbs hookload rating 7500 psi mud circulating system multiplewell pad capability beginning 2018 saw demand superspec rigs increase crude oil ranged 59 66 per barrel 2018 demand superspec rigs continued increase benefitted gaining market share result largest superspec fleet industry largest number rigs could readily economically upgraded superspec classification fiscal year 2018 converted two flexrig4’s superspec capacity upgraded 52 rigs superspec including 51 flexrig3’s one flexrig5 september 30 2018 held 40 percent superspec market share us land drilling due financial strength position continue upgrade rigs superspec long market demand rigs remains high supply economically viable superspec upgradable rigs thus far fiscal year 2019 crude oil prices fallen recent highs still higher average price exploration production companies set 2018 capital budgets accordingly expect higher levels exploration production capital expenditures customers 2019 expect demand superspec rigs remain elevated robust well fiscal year 2019 well positioned continue upgrade rigs superspec meet customers’ needs addition opportunities driven marketing efforts non superspec rigs eg flexrig4 return market targeting customer programs require superspec capabilities offered lower price point still exceeding return hurdles also seeing growing interest customers enter multiyear contracts market remains strong supply economically viable superspec rigs depleted potential newly built rigs industry may return expect much higher levels pricing term contract coverage required industry sees significant capital deployed new build rigs international land drilling segment believe market leading position neuquén basin argentina may provide opportunities us deploy additional ac rigs united states seen periodic spot market work deeper drilling 3000 horsepower rigs northern argentina spot market contracts defined term operate wellbywell basis fiscal year 2018 reactivated four rigs colombia renewed interest deeper drilling 3000 horsepower rigs well two flexrig3 rigs expect colombia relatively stable market fiscal year 2019 potential upside overall seen increase tendering activity customers international market resulting higher oil prices believe international land operations potential area growth next several years acknowledge growth may sporadic expect us market time offshore drilling operations expected report relatively stable utilization cash flows upcoming fiscal year anticipate one platform rigs could either stacked placed lower margin stack rate towards end fiscal year 2019 recent developments acquisitions december 8 2017 completed acquisition “magvar acquisition” unaffiliated company magnetic variation services llc “magvar” whollyowned subsidiary company operations magvar included within nonreportable business segments comprehensive 3d geomagnetic reference modeling magvar provides measurement drilling “mwd” survey corrections identifying quantifying mwd tool measurement errors realtime greatly improving directional drilling performance wellbore placement founded 2010 magvar maintain headquarters colorado effective time magvar acquisition magvar shareholders received aggregate cash consideration 479 million net customary closing adjustments certain management members received restricted stock awards covering 213904 shares helmerich payne inc common stock closing 60 million cash consideration placed escrow released sellers twelve months acquisition closing date transaction costs related magvar acquisition incurred fiscal year 2018 approximately 12 million recorded consolidated statements operations within selling general administrative expense june 2 2017 completed merger transaction “motive merger” pursuant unaffiliated drilling technology company motive drilling technologies inc delaware corporation “motive” merged whollyowned subsidiary spring merger sub inc delaware corporation motive survived transaction whollyowned subsidiary company motive proprietary bit guidance system™ algorithmdriven system considers total economic consequences directional drilling decisions designed consistently lower drilling costs efficient drilling increased hydrocarbon production smoother wellbores accurate well placement given strong longstanding technology innovation focus believe technology continue advance provide benefits industry effective time motive merger motive shareholders received aggregate cash consideration 743 million net customary closing adjustments fiscal year 2018 motive shareholders received additional cash consideration 106 million earnout payment may eligible receive additional 125 million potential earnout payments based future performance transaction costs related motive merger incurred fiscal year 2017 32 million recorded consolidated statements operations within selling general administrative expense additional information regarding magvar motive acquisitions described note 3business combinations consolidated financial statements operations magvar motive included within nonreportable business segments magvar motive mergers accounted business combination accordance accounting standards codification “asc” 805 business combinations requires assets acquired liabilities assumed recorded acquisition date fair values impairments consistent policy evaluate drilling rigs related equipment impairment whenever events changes circumstances indicate carrying value assets may exceed estimated undiscounted future net cash flows evaluation among things includes review external market factors assessment future marketability specific rigs’ asset group given continued low utilization within international flexrig4 asset group two domestic international conventional rigs’ asset groups together continued delivery new capable rigs considered economic factors indicators rigs’ asset groups may potentially impaired september 30 2018 performed impairment testing international flexrig4 asset group aggregate net book value 630 million concluded net book value asset group recoverable estimated undiscounted future cash flows surplus approximately 23 percent significant assumptions used undiscounted cash flow model include timing awards future drilling contracts oil prices operating dayrates operating costs rig reactivation costs drilling rig utilization revenue efficiency estimated remaining economic useful life net proceeds received upon future saledisposition assumptions consistent company’s internal budgets forecasts future years significant assumptions classified level 3 inputs asc topic 820 fair value measurement disclosures based upon unobservable inputs primarily rely management assumptions forecasts although believe assumptions used analysis reasonable appropriate asset group weighted average expected future undiscounted net cash flows exceeds net book value asset group fiscal year 2018 yearend impairment evaluation different assumptions estimates could materially impact analysis resulting conclusion september 30 2018 engaged third party independent accounting firm performed market valuation utilizing market approach two domestic international conventional rigs’ asset groups aggregate net book values 90 million 152 million respectively concluded fair values two asset groups exceed net book values approximately 64 percent 141 percent respectively impairment recorded significant assumptions valuation exercise classified level 2 level 3 inputs asc topic 820 fair value measurement disclosures fourth quarter fiscal year 2018 ceasing operations ecuador within international land segment entered sales negotiation respect six conventional rigs within separated international conventional rigs’ asset group net book values 208 million present country pursuant rigs together associated equipment machinery would sold third party recycled certain components rigs 85 million net book value subject sale agreement transferred united states utilized flexrigs high activity demand sales transaction completed november 2018 recorded noncash impairment charge 92 million 70 million net tax 006 per diluted share included asset impairment charge consolidated statement operations fiscal year ended september 30 2018 result remaining rig within asset group disposed written resulting additional impairment charge 14 million 10 million net tax 001 per diluted share furthermore fourth quarter fiscal year 2018 within us land segment management committed plan auction several previously decommissioned rigs fiscal year 2019 result wrote estimated fair values recorded noncash impairment charge 57 million 42 million net tax 004 per diluted share included asset impairment charge consolidated statements operations fiscal year ended september 30 2018 fourth quarter fiscal year 2018 part annual goodwill impairment test performed detailed assessment terravici technology reporting unit 47 million goodwill allocated determined estimated fair value reporting unit less carrying amount recorded goodwill impairment losses 47 million 35 million net tax 003 per diluted share addition recorded intangible asset impairment loss 09 million 07 million net tax 001 per diluted share impairment losses included asset impairment charge consolidated statements operations fiscal year ended september 30 2018 goodwill impairment analysis performed remaining technology reporting units fourth quarter fiscal years 2018 2017 result impairment charges results operations fiscal years ended september 30 2018 2017 consolidated results operations per share amounts included results operations discussion stated diluted basis except specifically discussed following results operations pertain continuing operations net income loss net income fiscal year 2018 4827 million 439 earnings per share compared net loss 1282 million 120 loss per share fiscal year 2017 net income fiscal year 2018 net loss fiscal year 2017 include aftertax income early termination revenue associated drilling contracts terminated prior expiration fixed term 126 million 012 per share 202 million 018 per share respectively net income fiscal year 2018 net loss fiscal year 2017 include aftertax gains sale assets 167 million 015 per diluted share 143 million 013 per diluted share respectively additionally net income fiscal year 2018 net loss fiscal year 2017 includes aftertax income tax benefit 4772 million 436 per diluted share tax benefit 567 million 052 per diluted share respectively revenue consolidated operating revenues 25 billion fiscal year 2018 18 billion fiscal year 2017 including early termination revenue 171 million 294 million respective fiscal year excluding early termination revenue operating revenue increased 6948 million fiscal year 2018 compared fiscal year 2017 oil prices steeply declined 106 per barrel june 2014 30 per barrel early 2016 second half calendar year 2016 oil prices increased fluctuated within 42 54 per barrel price range fiscal year 2017 however second half fiscal year 2018 oil prices mostly 62 77 per barrel price range primarily result impact oil prices drilling activity exploration production companies time frame number revenue days us land segment totaled 77980 fiscal year 2018 compared 57120 fiscal year 2017 asset impairment management monitors industry market conditions impacting longlived assets intangible assets goodwill required impairment analysis performed determine impairment exists fourth quarter fiscal year 2018 ceasing operations ecuador entered sales negotiation respect six conventional rigs present country pursuant rigs together associated equipment machinery would sold third party recycled result recorded noncash impairment charge 92 million remaining rig within asset group disposed written resulting additional impairment charge 14 million 10 million net tax 001 per diluted share additionally fourth quarter fiscal year 2018 management committed plan auction several previously decommissioned rigs fiscal year 2019 result wrote estimated fair values recorded noncash impairment charge 57 million furthermore fourth quarter fiscal year 2018 recorded goodwill intangible assets impairment losses 56 million related terravici technology reporting unit fiscal year 2018 asset impairment charges included asset impairment charge consolidated statement operations fiscal year ended september 30 2018 record impairment fiscal year 2017 interest dividend income interest dividend income 80 million 59 million fiscal years 2018 2017 respectively higher income fiscal year 2018 primarily due higher earnings available cash equivalents shortterm investments direct operating expenses direct operating expenses fiscal year 2018 17 billion compared 12 billion fiscal year 2017 increase fiscal year 2018 fiscal year 2017 primarily attributable higher level activity fiscal year 2018 general administrative expense general administrative expenses totaled 2006 million fiscal year 2018 1510 million fiscal year 2017 fiscal year 2018 incurred transaction costs 12 million related acquisition magvar additionally increased employee general administrative headcount primarily result acquisition magvar motive caused increase employee compensation costs including taxes benefits stockbased compensation compared fiscal year 2017 depreciation amortization depreciation amortization expense 5838 million fiscal year 2018 5855 million fiscal year 2017 depreciation amortization includes amortization intangible assets 54 million 11 million fiscal years 2018 2017 respectively abandonments equipment 277 million 426 million fiscal years 2018 2017 respectively fiscal year 2018 depreciation expense also includes 97 million accelerated depreciation components rigs planned conversion fiscal year 2019 depreciation expense exclusive abandonments accelerated depreciation increased one percent fiscal year 2018 fiscal year 2017 drilling markets continued recover fiscal year 2017 began abandoning older rig components replaced upgrades rig fleet meet customer demands additional capabilities trend continued fiscal year 2018 interest expense net amounts capitalized totaled 243 million fiscal year 2018 197 million fiscal year 2017 interest expense primarily attributable fixedrate debt outstanding capitalized interest 04 million 03 million fiscal years 2018 2017 respectively capitalized interest attributable rig upgrade rig construction programs income taxes income tax benefit 4772 million fiscal year 2018 compared income tax benefit 567 million fiscal year 2017 effective income tax rate 30123 percent fiscal year 2018 compared 307 percent fiscal year 2017 effective tax rate fiscal year 2018 impacted income tax adjustments related reduction federal statutory corporate income tax rate part tax reform act enacted december 22 2017 increase deferred state income tax rate addition effective tax rates differ us federal statutory rate 245 percent fiscal year 2018 350 percent fiscal year 2017 due nondeductible permanent items state foreign income taxes deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary allowances provided carrying value net deferred tax assets based management’s judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future see note 8income taxes consolidated financial statements additional income tax disclosures research development fiscal years 2018 2017 incurred 182 million 120 million respectively research development expenses increase expense primarily related acquisitions motive magvar given portion ongoing expenses classified research development anticipate research development expenses continue fiscal year 2019 discontinued operations expenses incurred within country venezuela reported discontinued operations march 2016 venezuelan government implemented previously announced plans new foreign currency exchange system whollyowned subsidiaries helmerich payne international drilling co helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 bolivarian republic venezuela petroleos de venezuela sa pdvsa petroleo sa seeking damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery activity within discontinued operations fiscal years 2017 2018 primarily result impact exchange rate fluctuations remaining country assets liabilities us land operations segment 1 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 242617 148218 fiscal years 2018 2017 respectively operating income loss fiscal year 2018 us land segment operating income 1507 million compared operating loss 949 million fiscal year 2017 included us land revenues fiscal years 2018 2017 approximately 171 million 245 million respectively early termination fixedterm contracts fixedterm contracts customarily provide termination election customer early termination payment paid us contract terminated prior expiration fixed term except limited circumstances including sustained unacceptable performance us revenue excluding early termination revenue 219 428 per day fiscal years 2018 2017 respectively average revenue per day fiscal year 2018 increased 1013 23192 22179 fiscal year 2017 activity increased yearoveryear response higher commodity prices resulting 365 percent increase revenue days comparing fiscal year 2018 fiscal year 2017 direct operating expenses direct rig expense increased 13 billion fiscal year 2018 9842 million fiscal year 2017 increase primarily attributable increased activity additionally implemented wage increase field personnel regions april 2018 general administrative expense fiscal year 2018 general administrative expense increased 147 percent compared 2017 change primarily driven increase employee headcount resulted increase employee compensation including taxes benefits stockbased compensation asset impairment charge fourth quarter fiscal year 2018 management committed plan auction several previously decommissioned rigs fiscal year 2019 result wrote rigs estimated fair values recorded noncash impairment charge 57 million included asset impairment charge consolidated statement operations fiscal year ended september 30 2018 depreciation includes charges abandoned equipment 263 million 422 million fiscal years 2018 2017 respectively fiscal year 2018 depreciation expense also includes 97 million accelerated depreciation components rigs scheduled conversion fiscal year 2019 drilling markets continued recover fiscal year 2017 began abandoning older rig components meet customer demands additional capabilities trend continued fiscal year 2018 excluding abandonments accelerated depreciation fiscal year 2018 increased fiscal year 2017 utilization rig utilization increased 61 percent fiscal year 2018 45 percent fiscal year 2017 total number available rigs september 30 2018 september 30 2017 350 september 30 2018 232 350 existing rigs us land segment generating revenue 232 rigs generating revenue 136 fixedterm contracts 96 working welltowell november 9 2018 number existing rigs fixedterm contracts segment 141 number rigs working spot market 95 offshore operations segment 1 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 20279 21578 fiscal years 2018 2017 respectively operating statistics include rigs owned us exclude offshore platform management labor service contracts currency revaluation expense operating income fiscal year 2018 offshore segment operating income 261 million compared operating income 242 million fiscal year 2017 revenue average rig revenue per day increased fiscal year 2018 compared fiscal year 2017 primarily due several rigs moving higher pricing previous standby special dayrates april 2018 previously idle rig commenced work customer’s platform direct operating expenses average rig expense increased 26009 per day fiscal year 2018 23172 per day fiscal year 2017 increase primarily attributable rig startup expenses unfavorable adjustments selfinsurance expenses related workers’ compensation depreciation expense decreased 117 percent fiscal year 2018 compared fiscal year 2017 change primarily driven two rigs becoming fully depreciated fiscal year 2018 utilization second quarter fiscal year 2017 sold one offshore rigs september 30 2018 six eight platform rigs contracted compared five eight available platform rigs september 30 2017 international land operations segment 1 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 11828 10074 fiscal years 2018 2017 respectively also excluded effects currency revaluation income expense operating loss international land segment operating loss 07 million fiscal year 2018 compared operating loss 72 million fiscal year 2017 revenue activity increased primarily response higher commodity prices experienced 352 percent increase revenue days comparing fiscal year 2018 fiscal year 2017 average number active rigs 182 fiscal year 2018 compared 136 fiscal year 2017 direct operating expenses although direct operating expenses increased fiscal year 2018 1779 million 1635 million fiscal year 2017 average rig expense per day decreased 5550 187 percent decrease compared fiscal year 2017 average rig expense included direct operating expenses foreign currency transaction losses 40 million 60 million fiscal years 2018 2017 respectively losses primarily due ongoing devaluation argentine peso beginning december 2015 depreciation expense decreased 127 percent fiscal year 2018 compared fiscal year 2017 decrease due several rig components argentina became fully depreciated fiscal year 2018 asset impairment charge fourth quarter fiscal year 2018 ceasing operations ecuador entered sales negotiation respect six conventional rigs net book values 208 million present country pursuant rigs together associated equipment machinery would sold third party recycled certain components rigs 85 million net book value subject sale agreement transferred united states utilized flexrigs high activity demand sales transaction completed november 2018 recorded noncash impairment charge 92 million 70 million net tax 006 per diluted share included asset impairment charge consolidated statement operations fiscal year ended september 30 2018 related rigs result remaining rig within asset group disposed written resulting additional impairment charge 14 million 10 million net tax 001 per diluted share utilization increased 36 percent fiscal year 2017 49 percent fiscal year 2018 increase driven increase rig activity discussed operations results operations excluding corporate selling general administrative costs corporate depreciation follows operating loss operations fiscal year 2018 operating loss 359 million compared operating loss 94 million fiscal year 2017 change primarily driven acquisition magvar december 2017 twelve full months operations motive acquired june 2017 refer note 3business combinations consolidated financial statements additional disclosures asset impairment charge fourth quarter fiscal year 2018 recorded goodwill intangible assets impairment losses 56 million related terravici technology reporting unit 47 million goodwill allocated impairment loss included asset impairment charge consolidated statements operations fiscal year ended september 30 2018 results operation fiscal years ended september 30 2017 2016 consolidated results operations per share amounts included results operations discussion stated diluted basis except specifically discussed following results operations pertain continuing operations net loss net loss fiscal year 2017 1282 million 120 loss per share compared net loss 568 million 054 loss per share fiscal year 2016 net loss fiscal years 2017 2016 includes aftertax income early termination revenue associated drilling contracts terminated prior expiration fixed term 202 million 018 per share 1393 million 129 per share respectively net loss fiscal years 2017 2016 includes aftertax gains sale assets 143 million 013 per share 61 million 006 per share respectively included fiscal year 2016 net loss aftertax loss 159 million 015 loss per share otherthantemporary impairment marketable equity security position atwood oceanics inc “atwood” net loss fiscal year 2016 also includes aftertax loss 120 million 011 loss per share settlement litigation 38 million loss 004 loss per share discontinued operations revenue consolidated operating revenues 18 billion fiscal year 2017 16 billion fiscal year 2016 including early termination revenue 294 million 2190 million respective fiscal year primarily result impact oil prices drilling activity exploration production companies time frame number revenue days us land segment totaled 57120 fiscal year 2017 36984 fiscal year 2016 interest dividend income interest dividend income 59 million 32 million fiscal year 2017 2016 respectively higher income fiscal year 2017 primarily due higher earnings available cash equivalents shortterm investments direct operating expenses direct operating costs fiscal year 2017 12 billion 09 billion fiscal year 2016 increase fiscal year 2017 fiscal year 2016 primarily due increase drilling activity general administrative expense general administrative expenses totaled 1510 million fiscal year 2017 1462 million fiscal year 2016 fiscal year 2017 incurred transaction costs 32 million related acquisition motive addition bonuses paid employees increased fiscal year 2017 depreciation amortization depreciation amortization expense 5855 million fiscal year 2017 5986 million fiscal year 2016 depreciation amortization includes abandonments equipment 426 million fiscal year 2017 393 million fiscal year 2016 additionally recorded impairment charges rig related equipment 63 million fiscal year 2016 depreciation expense exclusive abandonments decreased three percent fiscal year 2017 fiscal year 2016 decrease primarily due relatively lower levels capital expenditures fiscal year 2017 legacy assets reaching end depreciable lives abandonments primarily due abandonment used drilling equipment fiscal years interest expense net amounts capitalized totaled 197 million fiscal year 2017 229 million fiscal year 2016 interest expense primarily attributable fixedrate debt outstanding favorable adjustment interest expense 52 million fiscal year 2017 related reversal previously booked uncertain tax positions statute limitations expired capitalized interest 03 million 28 million fiscal years 2017 2016 respectively capitalized interest attributable rig construction upgrade program income taxes income tax benefit 567 million fiscal year 2017 compared income tax benefit 197 million fiscal year 2016 effective income tax rate 307 percent fiscal year 2017 271 percent fiscal year 2016 deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary allowances provided carrying value net deferred tax assets based management’s judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future see note 8income taxes consolidated financial statements additional income tax disclosures research development fiscal years 2017 2016 incurred 120 million 103 million respectively research development expenses primarily related ongoing development rotary steerable system tools us land operations segment 1 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 148218 82337 fiscal years 2017 2016 respectively operating income loss fiscal year 2017 us land segment operating loss 949 million compared operating income 741 million fiscal year 2016 included us land revenues fiscal years 2017 2016 approximately 245 million 2190 million respectively early termination fixedterm contracts revenue excluding early termination revenue 428 5921 per day fiscal years 2017 2016 respectively average revenue per day fiscal year 2017 decreased 3269 22179 25448 fiscal year 2016 activity increased yearoveryear response higher commodity prices resulting 54 percent increase revenue days comparing fiscal year 2017 fiscal year 2016 however legacy term contracts high dayrates made lower proportion fiscal year 2017 activity due continued contract expirations newly contracted rigs made majority fiscal year 2017 activity priced relatively lower levels reflected depressed market conditions direct operating expenses average rig expense per day increased 14623 fiscal year 2017 14117 fiscal year 2016 increase primarily attributable startup expenses related rigs returning work fiscal year 2017 depreciation includes charges abandoned equipment 422 million 388 million fiscal years 2017 2016 respectively included abandonments fiscal year 2017 older rig components replaced upgrades rig fleet meet customer demands additional capabilities included abandonments fiscal year 2016 retirement used drilling equipment excluding abandonments depreciation fiscal year 2017 decreased fiscal year 2016 primarily due relatively low levels capital expenditures fiscal year 2017 fiscal year 2016 certain legacy assets reaching end depreciable lives fiscal year 2017 fiscal year 2016 asset impairment charge fiscal year 2016 recorded asset impairment charge us land segment 63 million reduce carrying value rig related equipment classified held sale estimated fair values based expected sales prices utilization rig utilization increased 45 percent fiscal year 2017 30 percent fiscal year 2016 total number rigs september 30 2017 350 compared 348 rigs september 30 2016 net increase due two new flexrigs completed fiscal year 2017 included operating statistics september 30 2017 197 350 existing rigs us land segment generating revenue 197 rigs generating revenue 100 fixedterm contracts 97 working spot market offshore operations segment 1 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 21578 23138 fiscal years 2017 2016 respectively operating statistics include rigs owned us exclude offshore platform management labor service contracts currency revaluation expense operating income fiscal year 2017 offshore segment operating income 242 million compared operating income 157 million fiscal year 2016 revenue average rig revenue per day average rig margin per day increased fiscal year 2017 compared fiscal year 2016 primarily due receiving full pricing fiscal year 2017 receiving lower pricing standby special dayrates fiscal year 2016 depreciation decreased slightly 59 percent fiscal year 2017 compared fiscal year 2016 due sale rig fiscal year 2017 assets becoming fully depreciated year direct operating expenses direct operating expense fiscal year 2017 decreased 97 percent compared fiscal year 2016 decrease primarily due two less rigs working year international land operations segment 1 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 10074 20458 fiscal years 2017 2016 respectively also excluded effects currency revaluation income expense operating loss international land segment operating loss 72 million fiscal year 2017 compared operating loss 141 million fiscal year 2016 revenue excluding early termination revenue 955 per day fiscal year 2017 average rig margin per day fiscal year 2017 compared fiscal year 2016 decreased 143 10263 low oil prices continued negative effect customer spending result experienced 8 percent decrease revenue days comparing fiscal year 2017 fiscal year 2016 average number active rigs 136 fiscal year 2017 compared 147 fiscal year 2016 direct operating expenses although direct operating expenses decreased fiscal year 2017 1635 million 1840 million fiscal year 2016 average rig expense per day increased 1123 4 percent compared fiscal year 2016 average rig expense included direct operating expenses foreign currency transaction losses 60 million 98 million fiscal years 2017 2016 respectively fiscal year 2016 losses primarily due devaluation argentine peso december 2015 depreciation decreased slightly 61 percent fiscal year 2017 compared fiscal year 2016 due assets becoming fully depreciated year operations results operations excluding corporate selling general administrative costs corporate depreciation follows operating loss operations fiscal year 2017 operating loss 94 million compared operating loss 75 million fiscal year 2016 change primarily driven acquisition motive june 2017 refer note 3business combinations consolidated financial statements additional disclosures liquidity capital resources sources liquidity sources available liquidity include existing cash balances hand cash flows operations availability credit facility liquidity requirements include meeting ongoing working capital needs funding capital expenditure projects paying dividends declared repaying outstanding indebtedness historically financed operations primarily internally generated cash flows periods internally generated cash flows sufficient meet liquidity needs borrow available credit sources access capital markets sell portfolio securities likewise generating excess cash flows may invest highly rated shortterm money market debt securities investments include us treasury securities us agency issued debt securities corporate bonds certificates deposit money market funds continued reinvest maturities earnings fiscal years 2018 2017 securities recorded fair value may seek access debt equity capital markets time raise additional capital increase liquidity necessary fund additional purchases exchange redeem senior notes repay amounts credit facility ability access debt equity capital markets depends number factors including credit rating market industry conditions market perceptions industry general economic conditions revenue backlog capital expenditure commitments cash flows cash flows fluctuate depending number factors including among others number drilling rigs contract dayrates receive contracts efficiency operate drilling units timing collections outstanding accounts receivable timing payments vendors operating costs capital expenditures date general inflationary trends material effect operating margins september 30 2018 2844 million cash hand 415 million shortterm investments cash flows fiscal years ended september 30 2018 2017 2016 presented operating activities net working capital excluding cash shortterm investments increased 876 million 4126 million september 30 2018 3250 million september 30 2017 due primarily increase accounts receivable inventories materials supplies offset increase accrued liabilities net cash provided operating activities 5445 million fiscal year 2018 compared 3616 million fiscal year 2017 1829 million increase cash provided operating activities primarily due increase net income due increased activity fiscal year fiscal year 2016 net cash provided operating activities 7545 million 3929 million decrease cash provided operating activities fiscal years 2017 2016 primarily due larger net loss reported fiscal year 2017 investing activities capital expenditures investing activities primarily related capital expenditures fleet capital expenditures 4666 million 2018 3976 million fiscal year 2017 2572 million fiscal year 2016 fiscal year 2019 capital spending currently estimated 650 million 680 million estimate includes normal capital maintenance requirements capital spending related reactivating idle rigs tubulars upgrades primarily related improving existing rig fleet acquisition business fiscal years 2018 2017 paid 479 million 704 million respectively net cash acquired acquisition drilling technology companies sale assets proceeds asset sales totaled 444 million fiscal year 2018 234 million fiscal year 2017 218 million fiscal year 2016 income asset sales fiscal year 2018 totaled 227 million 206 million fiscal year 2017 99 million fiscal year 2016 year sales old damaged rig equipment drill pipe used ordinary course business included operating activity within statement cash flow stock portfolio held manage portfolio marketable securities consisting common shares ensco plc “ensco” schlumberger ltd close fiscal year 2018 fair value 825 million value portfolio subject fluctuation market may vary considerably time portfolio recorded fair value balance sheet fourth quarter fiscal year 2016 determined decline fair value cost basis atwood oceanics inc “atwood” temporary result recorded noncash charge totaling 260 million may 2017 ensco announced entered definitive merger agreement ensco would acquire atwood allstock transaction closed october 6 2017 terms merger agreement received 160 shares ensco share atwood common stock securities portfolio subject wide variety marketrelated risks could substantially reduce increase fair value holdings general portfolio recorded fair value balance sheet changes unrealized aftertax value reflected equity section balance sheet stock portfolio held september 30 2018 presented financing activities increase 84 million net cash used financing activities fiscal year 2018 fiscal year 2017 primarily due excess tax benefit stockbased compensation occurred 2017 2018 decrease 433 million net cash used financing activities fiscal years 2017 2016 primarily due 400 million cash used payback longterm debt fiscal year 2016 dividends paid dividends 282 280 278 per share fiscal years 2018 2017 2016 respectively total dividends 3084 million 3055 million 3002 million fiscal years 2018 2017 2016 respectively adjusting stock splits accordingly increased effective annual dividend per share every fiscal year past 46 years declaration amount future dividends discretion board directors subject financial condition results operations cash flows factors board directors deems relevant credit facilities july 13 2016 entered 300 million unsecured revolving credit facility “2016 credit facility” maturity date july 13 2021 2016 credit facility maximum 75 million available use letters credit majority borrowings facility would accrue interest spread london interbank offered rate libor also paid commitment fee based unused balance facility borrowing spreads well commitment fees determined according scale based company’s debt total capitalization ratio spread libor ranged 1125 percent 175 percent per annum commitment fees ranged 015 percent 030 percent per annum based debt total capitalization september 30 2018 spread libor commitment fees would 1125 percent 015 percent respectively financial covenant facility required us maintain total debt total capitalization ratio less 50 percent 2016 credit facility contained additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality including limitation priority debt defined agreement could exceed 175 percent net worth company september 30 2018 borrowings three letters credit outstanding amount 393 million september 30 2018 2607 million available borrow 2016 credit facility subsequent september 30 2018 company decreased one three letters credit 13 million increased availability facility 2620 million subsequent fiscal yearend november 13 2018 entered 750 million unsecured revolving credit facility “2018 credit facility” connection entering 2018 credit facility terminated 2016 credit facility see note 19subsequent events consolidated financial statements information 2018 credit facility company 12 million unsecured standalone line credit facility purposed issuance bid performance bonds needed international land operations company currently outstanding obligations facility applicable agreements unsecured debt contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2018 compliance debt covenants anticipate continue compliance next fiscal year repurchase retirement common shares active stock repurchase program fiscal years 2018 2017 2016 evergreen authorization purchase four million shares per fiscal year future cash requirements operating cash requirements scheduled debt repayments interest payments declared dividends estimated capital expenditures including rig upgrade construction program fiscal year 2019 expected funded current cash provided operating activities however assurance continue generate cash flows current levels longterm debt total capitalization ratio 101 percent september 30 2018 compared 106 percent september 30 2017 offbalance sheet arrangements offbalance sheet arrangements term defined item 303a4ii regulation sk information regarding drilling contract backlog see item 1 “business contract backlog” material commitments contractual obligations september 30 2018 summarized table thousands 1 interest fixedrate debt estimated based principal maturities see note 7debt consolidated financial statements 2 see note 15commitments contingencies consolidated financial statements table include obligations pension plan amounts recorded uncertain tax positions fiscal years 2018 2017 make contributions pension plan contributions may made fiscal year 2019 fund unexpected distributions lieu liquidating pension assets future contributions beyond fiscal year 2019 difficult estimate due multiple variables involved september 30 2018 171 million recorded uncertain tax positions related interest penalties however timing payments respective taxing authorities cannot estimated time income taxes fully described note 8income taxes consolidated financial statements critical accounting policies estimates accounting policies consider significant summarized note 2summary significant accounting policies risks uncertainties consolidated financial statements included part ii item 8 financial statements supplementary data report preparation financial statements conformity us gaap requires management make certain estimates assumptions estimates assumptions affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates based historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources estimates assumptions evaluated ongoing basis actual results may differ estimates different assumptions conditions following discussion critical accounting policies estimates used financial statements property plant equipment property plant equipment including renewals betterments capitalized cost maintenance repairs expensed incurred interest expense applicable construction qualifying assets capitalized component cost assets account depreciation property plant equipment using straightline method estimated useful lives assets considering estimated salvage value property plant equipment estimated useful lives salvage values require use management estimates certain events unforeseen changes operations technology market conditions could materially affect estimates assumptions related depreciation result abandonments fiscal years presented report significant changes made determinations useful lives salvage values upon retirement disposal fixed assets cost related accumulated depreciation removed respective accounts gains losses recorded results operations impairment longlived assets goodwill intangible assets management assesses potential impairment longlived assets finitelived intangibles whenever events changes circumstances indicate carrying value may recoverable changes could prompt assessment may include equipment obsolescence changes market demand periods relatively low rig utilization declining revenue per day declining cash margin per day completion specific contracts andor overall changes general market conditions review longlived assets finitelived intangibles indicates carrying value certain assets estimated undiscounted future cash flows impairment charge made required adjust carrying value estimated fair value cash flows estimated management considering factors prospective market demand recent changes rig technology effect rig’s marketability cash investment required make rig marketable suitability rig size makeup existing platforms competitive dynamics including utilization fair value drilling rigs determined based upon either income approach using estimated discounted future cash flows market approach considering factors recent market sales rigs companies sales rigs appraisals factors use different assumptions could increase decrease estimated fair value assets could therefore affect impairment measurement review goodwill indefinitelived intangible assets impairment annually fourth fiscal quarter frequently events changes circumstances indicate carrying amount goodwill indefinitelived intangible assets may exceed fair value impairment testing goodwill evaluated reporting unit level initially assess goodwill impairment based qualitative factors determine whether existence events circumstances leads determination likely fair value one reporting units greater carrying amount testing necessary quantitative test elected quantitatively compare fair value reporting unit carrying amount including goodwill carrying amount exceeds fair value impairment charge recognized amount equal excess however loss recognized would exceed total amount goodwill allocated reporting unit impairment indefinitelived intangible assets measured difference fair value asset carrying value september 30 2018 performed impairment testing international flexrig4 asset group aggregate net book value 630 million concluded net book value drilling rig’s asset group recoverable estimated undiscounted future cash flows surplus approximately 23 percent significant assumptions used undiscounted cash flow model include timing awards future drilling contracts oil prices operating dayrates operating costs rig reactivation costs drilling rig utilization revenue efficiency estimated remaining economic useful life net proceeds received upon future saledisposition assumptions consistent company’s internal budgets forecasts future years significant assumptions classified level 3 inputs asc topic 820 fair value measurement disclosures based upon unobservable inputs primarily rely management assumptions forecasts although believe assumptions used analysis reasonable appropriate asset group weighted average expected future undiscounted net cash flows exceeds net book value asset group fiscal year 2018 yearend impairment evaluation different assumptions estimates could materially impact analysis resulting conclusion september 30 2018 engaged third party independent accounting firm performed market valuation utilizing market approach two domestic international conventional rigs’ asset groups aggregate net book values 90 million 152 million respectively concluded fair values two asset groups exceed net book values approximately 64 percent 141 percent respectively impairment recorded significant assumptions valuation exercise classified level 2 level 3 inputs asc topic 820 fair value measurement disclosures fiscal years 2018 2016 recognized 231 million 63 million respectively asset impairment charges selfinsurance accruals selfinsure significant portion expected losses relating workers’ compensation general liability employer’s liability automobile liability generally deductibles range 1 million 5 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events assurance coverage respond adequate circumstances estimates recorded incurred outstanding liabilities workers’ compensation casualty claims retained losses estimated accrued based upon estimates aggregate liability claims incurred estimates liabilities retained losses based adjusters’ estimates historical loss experience statistical methods believe reliable also engage actuary perform periodic review domestic casualty losses nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs whollyowned captive insurance company finances significant portion physical damage risk companyowned drilling rigs well international casualty deductibles actuary reviews captive losses annual basis insure land rigs related equipment values approximate current replacement costs inception date policies however selfinsure large deductibles policies also carry insurance varying deductibles coverage limits respect offshore platform rigs “named wind storm” risk gulf mexico selfinsure number risks including loss earnings business interruption cyber risks revenue recognition contract drilling revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized term related drilling contract costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs contracts terminated prior specified term early termination payments received us recognized revenues contractual requirements met pension costs obligations pension benefit costs obligations dependent various actuarial assumptions make assumptions relating discount rates expected return plan assets discount rate determined matching projected cash distributions appropriate corporate bond yields yield curve analysis discount rate increased 427 percent 379 percent september 30 2018 reflect changes market conditions highquality fixedincome investments expected return plan assets determined based historical portfolio results future expectations rates return actual results differ estimated assumptions accumulated amortized estimated future working life plan participants could therefore affect expense recognized obligations future periods september 30 2006 pension plan frozen benefit accruals discontinued result rate compensation increase assumption eliminated future periods anticipate pension expense decrease approximately 14 million fiscal year 2019 fiscal year 2018 stockbased compensation historically granted stockbased awards key employees nonemployee directors part compensation estimate fair value stock option awards date grant applying blackscholes optionpricing model application valuation model involves assumptions judgmental highly sensitive assumptions include among others expected stock price volatility expected life stock options riskfree interest rate expected volatilities estimated using historical volatility stock based upon expected term option expected term option derived historical data represents period time options estimated outstanding riskfree interest rate periods within estimated life option based us treasury strip rate effect time grant fair value award amortized straightline basis vesting period awards granted employees nonemployee directors fair value restricted stock awards determined based closing price common stock date grant amortize fair value restricted stock awards compensation expense straightline basis vesting period new accounting standards see note 2summary significant accounting policies risks uncertainties consolidated financial statements recently adopted accounting standards new accounting standards yet adopted item 7ananitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction part form 10k well consolidated financial statements related notes thereto included item 8 “financial statements supplementary data” form 10k future operating results may affected various trends factors beyond control actual results may differ materially anticipated forwardlooking statements result variety risks uncertainties including described form 10k “cautionary note regarding forwardlooking statements” item 1a “risk factors” accordingly past results trends used investors anticipate future results trends executive summary helmerich payne inc “hp” together subsidiaries identified “company” “we” “us” “our” except stated context requires otherwise operating subsidiaries provides performancedriven drilling solutions technologies intended make hydrocarbon recovery safer economical oil gas exploration production companies september 30 2020 drilling rig fleet included total 302 drilling rigs drilling services solutions segments consist north america solutions segment 262 rigs offshore gulf mexico segment eight offshore platform rigs international solutions segment 32 rigs september 30 2020 close fiscal year 2020 79 contracted rigs 56 fixedterm contract 23 working welltowell compared 218 contracted rigs september 30 2019 longterm strategy remains focused innovation technology safety operational excellence reliability move forward believe advanced uniform rig fleet technology offerings financial strength contract backlog strong customer employee base position us well respond continued volatile market conditions take advantage future opportunities market outlook revenues derived capital expenditures companies involved exploration development production crude oil natural gas “eps” generally level capital expenditures dictated current expected future prices crude oil natural gas determined various supply demand factors commodities historically expect continue cyclical highly volatile respect north america solutions resurgence oil natural gas production coming united states brought unconventional shale drilling oil significantly impacted supply oil natural gas type rig utilized us land drilling industry advent unconventional drilling oil united states began early 2009 continues evolve eps drill longer lateral wells tighter well spacing time designed built delivered market new technology ac drive rigs flexrig® substantially growing fleet pace progress unconventional drilling years cyclical volatile dictated crude oil natural gas price fluctuations times proven dramatic throughout time length lateral section wells drilled united states continued grow progression longer lateral wells required many industry’s rigs upgraded certain specifications order meet technical challenges drilling longer lateral wells upgraded rigs meeting specifications commonly referred industry superspec rigs following specific characteristics ac drive minimum 1500 horsepower drawworks minimum 750000 lbs hookload rating 7500 psi mud circulating system multiplewell pad capability technical requirements drilling longer lateral wells often necessitate use superspec rigs even required shorter lateral wells strong customer preference superspec due drilling efficiencies gained utilizing superspec rig result structural decline use nonsuperspec rigs across industry however result large superspec fleet gained market share became largest provider superspec rigs industry believe well positioned respond various market conditions early march 2020 increase crude oil supply resulting production escalations organization petroleum exporting countries oil producing nations opec combined decrease crude oil demand stemming global response uncertainties surrounding covid19 pandemic resulted sharp decline crude oil prices since beginning calendar year 2020 crude oil prices fell approximately 60 per barrel lowtomid20 per barrel range lower cases consequently seen significant decrease customer 2020 capital budgets representing decline nearly 50 calendar year 2019 levels corresponding dramatic decline demand land rigs overall rig count calendar year 2020 average significantly less calendar year 2019 calendar year 2020 north american solutions rig count declined 195 contracted rigs december 31 2019 69 contracted rigs september 30 2020 69 contracted rigs september 30 2020 58 active 11 stacked contracted rigs stacked remain terms contract typically pay reduced rate remaining term days generally reduced operating expenses typically reduced experienced much rig count decline second third fiscal quarters absolute level rigs remaining relatively stable fourth fiscal quarter additionally fourth fiscal quarter market experienced stabilization crude oil prices 40 per barrel range levels believe customers robust capital budgets entering 2021 already seeing evidence nearterm rig count activity projections consequently believe experience higher level rig activity fiscal year 2021 compared stand today however given current levels commodity prices lasting impacts global pandemic expect anticipate customers capital budgets support activity levels like experienced prior march 2020 utilization superspec flexrig® fleet peaked late calendar year 2018 216 221 superspec rigs working 98 percent utilization however recent decline demand land rigs resulted customers idling large portion superspec flexrig® fleet september 30 2020 167 idle superspec rigs flexrig® fleet 234 superspec rigs 29 percent utilization collectively business segments offshore gulf mexico international solutions exposed macro environment adversely affecting north america solutions segment unfavorable factors creating similar challenges business segments well hp recognizes uncertainties concerns caused covid19 pandemic however managed company time position strength financially operationally facing uncertainties magnitude covid19 pandemic indirect yet significant financial impact company global response coping pandemic resulted drop demand crude oil combined adequate supply crude oil resulted sharp decline crude oil prices causing customers pronounced pullbacks operations planned capital expenditures direct impact covid19 hps operations created challenges believe company adequately addressing ensure robust continuation operations albeit lower activity level company ‘essential critical infrastructure’ company defined department homeland security cybersecurity infrastructure security agency continues operate rigs technology solutions providing valuable services customers support global energy infrastructure health safety hp stakeholders employees customers vendors remain top priority company accordingly hp implemented additional policies procedures designed protect wellbeing stakeholders minimize impact covid19 ongoing operations safeguards implemented include • company mobilized global covid19 response team manage evolving situation • company moved global remote work model office personnel beginning march 13 2020 • company suspended nonessential travel • adhering center disease control cdc guidelines evaluating actual potential covid19 exposures ◦ operational thirdparty personnel required complete covid19 questionnaire prior reporting field location office personnel required complete one prior returning respective offices order evaluate actual potential covid19 exposures individuals identified high risk allowed location ◦ temperatures operational personnel taken prior allowed enter rig site ◦ company implemented enhanced sanitization cleaning protocols • complying local governmental jurisdiction policies procedures operations reside instances policies procedures stringent foreign operations north america operations resulted complete suspension certain period time drilling operations least one foreign jurisdiction september 30 2020 company aware 109 approximately 4100 employees confirmed cases covid19 since covid19 outbreak began believe approximately 52 contracted virus outside work location fatalities 100 109 employees confirmed cases returned work upon notified employee tested positive company follows preestablished guidelines places employee leave appropriate per cdc guidelines employees testing positive permitted return worksite 10 days employees considered level 1 exposure tested positive required quarantine permitted return worksite 14 days addition company applies enhanced sanitization procedures employee’s work location prior allowing employees reenter location since covid19 outbreak began rigs fully shut temporary shutdowns disinfecting measures disinfect facilities significant impact service believe service levels unchanged prepandemic levels financial perspective believe company well positioned continue going concern even protracted disruption caused covid19 taken measures reduce costs capital expenditures levels better reflect lower activity environment actions taken second quarter fiscal year 2020 included reduction annual dividend approximately 200 million reduction planned fiscal year 2020 capital spend 95 million reduction 50 million fixed operational overhead third quarter fiscal year 2020 company took steps reduce planned fiscal year 2020 capital spend another 40 million selling general administrative cost structures another 25 million annualized basis culmination costsaving initiatives resulted 160 million restructuring charge fiscal year 2020 anticipate cost reductions international solutions operations well working local jurisdictional regulations implement measures september 30 2020 company cash equivalents shortterm investments 5772 million availability 2018 credit facility defined herein 7500 million resulting approximately 13 billion nearterm liquidity currently anticipate need draw 2018 credit facility part companys normal operations regularly monitor creditworthiness customers vendors screening believe high risk failure honor counterparty obligations either payment delivery goods services also perform routine reviews accounts receivable amounts owed us assess quantify ultimate collectability amounts september 30 2020 company net allowance accounts receivable 18 million incurred bad debt expense 22 million fiscal year 2020 subsequent march 31 2020 adjusted credit risk monitoring specific customers response recent economic events described nature covid19 pandemic inherently uncertain result company unable reasonably estimate duration ultimate impacts pandemic including timing level subsequent recovery result company cannot certain degree impact company’s business results operations andor financial position future periods recent developments restructuring beginning third quarter fiscal year 2020 implemented cost controls began evaluating measures respond combination weakened commodity prices uncertainties related covid19 pandemic resulting market volatility restructured operations accommodate scale industry downturn reorganize operations align new marketing management strategies commenced number restructuring efforts result evaluation included among things reduction capital allocation plans changes organizational structure reduction staffing levels refer note 19restructuring charges consolidated financial statements business segments third quarter fiscal year 2020 part restructuring efforts see note 19restructuring charges consolidated financial statements consistent manner chief operating decision maker evaluates performance allocates resources implemented organizational changes moving productbased offering rig separate technology package integrated solutionbased approach combining proprietary rig technology automation software digital expertise rig operations previously reported within former us land hp technologies operating reportable segments managed presented within north america solutions reportable segment result beginning third quarter fiscal year 2020 drilling services operations organized following reportable operating business segments north america solutions offshore gulf mexico international solutions prior period segment disclosures recast segment changes real estate operations incubator program new research development projects whollyowned captive insurance companies included consolidated revenues expenses reflect elimination intercompany transactions selfinsurance october 1 2019 elected utilize whollyowned insurance captive “captive” insure deductibles workers’ compensation general liability automobile liability insurance programs casualty claims occurring prior october 1 2019 remain recorded within operating segments future adjustments claims continue reflected within operating segments reserves legacy claims occurring prior october 1 2019 remain liabilities operating segments resolved changes reserves reflected segment earnings occur continue utilize captive finance risk loss equipment rig property assets company captive maintain excess property casualty reinsurance programs thirdparty insurers effort limit financial impact significant events covered programs operating subsidiaries paying premiums captive typically monthly basis estimated losses based external actuarial analysis premiums currently held restricted account resulting transfer risk operating subsidiaries captive actuarial estimated underwriting expenses fiscal year ended september 30 2020 approximately 164 million recorded within drilling services operating expenses consolidated statement operations intercompany premium revenues expenses fiscal year ended september 30 2020 amounted 369 million eliminated upon consolidation intercompany insurance premiums reflected segment operating expenses within north america solutions offshore gulf mexico international solutions reportable operating segments reflected intersegment sales within company selfinsures employee health plan exposures excess employee deductibles starting second quarter fiscal year 2020 captive insurer issued stoploss program reimburse companys health plan claims exceed 50000 program also reviewed end policy year outside actuary one hundred percent stoploss premium set aside captive reserves stoploss program material impact consolidated basis dispositions fiscal year ended september 30 2020 closed sale portion real estate investment portfolio including six industrial sites total consideration net selling related expenses 407 million aggregate net book value 135 million resulting gain 272 million included within gain sale assets consolidated statement operations december 2019 closed sale whollyowned subsidiary helmerich payne international drilling co hpidc terravici drilling solutions inc terravici result sale 100 terravicis outstanding capital stock transferred purchaser exchange approximately 151 million resulting total gain sale terravici approximately 150 million prior sale terravici component north america solutions operating segment transaction represent strategic shift operations significant effect operations financial results going forward impairments second quarter fiscal year 2020 several significant economic events took place severely impacted current demand drilling services including significant drop crude oil prices caused opecs price war coupled decrease demand due covid19 pandemic property plant equipment inventory second quarter fiscal year 2020 maintain competitive edge challenging market company’s management introduced new strategy focused operating various types highly capable upgraded rigs phasing older less capable fleet resulted grouping superspec rigs legacy domestic flexrig® 3 asset group flexrig® 5 asset group creating new domestic superspec flexrig® asset group combining legacy domestic conventional asset group flexrig® 4 asset group flexrig® 3 nonsuperspec rigs one asset group domestic nonsuperspec asset group given current projected low utilization domestic nonsuperspec asset group international asset groups considered economic factors indicators asset groups may impaired result indicators performed impairment testing march 31 2020 domestic nonsuperspec international conventional flexrig® 3 flexrig® 4 asset groups aggregate net book value 6058 million concluded net book value asset group recoverable estimated undiscounted cash flows recorded noncash impairment charge 4414 million consolidated statement operations fiscal year ended september 30 2020 4414 million total impairment charge recorded 2924 million 1490 million recorded north america solutions international solutions segments respectively impairment measured amount net book value asset group exceeds fair value impairments recognized fiscal year 2020 significant assumptions used undiscounted cash flow model include timing awards future drilling contracts drilling rig utilization estimated remaining useful life net proceeds received upon future saledisposition assumptions classified level 3 inputs accounting standards codification asc topic 820 fair value measurement disclosures based upon unobservable inputs primarily rely management assumptions forecasts determining fair value asset group utilized combination income market approaches significant assumptions valuation based market participant classified level 2 level 3 inputs asc topic 820 fair value measurement disclosures march 31 2020 company also recorded additional noncash impairment charge related inprogress drilling equipment rotational inventory 449 million 386 million respectively aggregate book values 684 million 386 million respectively consolidated statement operations fiscal year ended september 30 2020 835 million total impairment charge recorded inprogress drilling equipment rotational inventory 758 million 77 million recorded north america solutions international solutions segments respectively goodwill consistent policy test goodwill annually impairment fourth quarter fiscal year frequently indicators goodwill might impaired due market conditions described second quarter fiscal year 2020 concluded goodwill intangible assets might impaired tested hp technologies reporting unit goodwill balance allocated intangible assets recorded recoverability resulted goodwill noncash impairment charge 383 million recorded asset impairment charge consolidated statement operations fiscal year ended september 30 2020 recoverable amount hp technologies reporting unit determined based fair value calculation uses cash flow projections based company’s financial projections presented board covering fiveyear period discount rate 14 percent cash flows beyond fiveyear period extrapolated using fifthyear data implied growth factor reporting unit level defined operating segment one level operating segment recoverable amount intangible assets tested impairment within hp technologies reporting unit determined based undiscounted cash flow projections using company’s financial projections presented board covering fiveyear period extrapolated remaining weighted average useful lives intangible assets significant assumptions used cash flow model include timing awards future contracts commercial pricing terms utilization discount rate terminal value assumptions classified level 3 inputs asc topic 820 fair value measurement disclosures based upon unobservable inputs primarily rely management assumptions forecasts although believe assumptions used analysis probabilityweighted average expected future cash flows reasonable appropriate different assumptions estimates could materially impact analysis resulting conclusion results operations fiscal years ended september 30 2020 2019 consolidated results operations per share amounts included results operations discussion stated diluted basis except specifically discussed following results operations pertain continuing operations net loss reported loss continuing operations 4964 million 462 loss per diluted share operating revenues 18 billion fiscal year ended september 30 2020 compared loss continuing operations 325 million 033 loss per diluted share operating revenues 28 billion fiscal year ended september 30 2019 included net loss fiscal year ended september 30 2020 income 19 million 002 impact per diluted share discontinued operations including discontinued operations recorded net loss 4945 million 460 loss per diluted share fiscal year ended september 30 2020 compared net loss 337 million 034 loss per diluted share fiscal year ended september 30 2019 revenue consolidated operating revenues 18 billion fiscal year 2020 28 billion fiscal year 2019 including early termination revenue 734 million 113 million respective fiscal year excluding early termination revenue operating revenue decreased 11 billion fiscal year 2020 compared fiscal year 2019 decrease fiscal year 2020 fiscal year 2019 driven lower activity pricing result collapse oil prices occurred march 2020 drove customers quickly reduce rig activity beginning second half march 2020 continuing throughout remainder fiscal year 2020 direct operating expenses excluding depreciation amortization direct operating expenses fiscal year 2020 12 billion compared 18 billion fiscal year 2019 decrease fiscal year 2020 fiscal year 2019 primarily attributable previouslymentioned lower activity levels depreciation amortization depreciation amortization expense 4819 million fiscal year 2020 5628 million fiscal year 2019 decrease depreciation amortization fiscal year ended september 30 2020 compared fiscal year ended september 30 2019 primarily attributable lower carrying cost impaired assets depreciation amortization includes amortization intangible assets 72 million 58 million fiscal years 2020 2019 respectively abandonments equipment 40 million 114 million fiscal years 2020 2019 respectively research development fiscal years ended september 30 2020 2019 incurred 216 million 275 million respectively research development expenses decrease expense primarily due reduced spending related development rotary steerable system tools given december 2019 sale terravici selling general administrative expense selling general administrative expenses decreased 1675 million fiscal year ended september 30 2020 compared 1944 million fiscal year ended september 30 2019 269 million decrease fiscal year 2020 compared fiscal year 2019 primarily due lower accrued variable compensation expense reduction staffing levels implemented third quarter fiscal year 2020 asset impairment fiscal year ended september 30 2020 impaired several assets including inventory property plant equipment goodwill resulted noncash impairment charge 5632 million 4375 million net tax 521 per diluted share included asset impairment charge consolidated statement operations comparatively fiscal year ended september 30 2019 mainly driven downsizing fleet flexrig® 4 drilling rigs wrote excess capital spares drilling support equipment aggregate net book value 2353 million result asset impairment charge 2243 million 1950 million net tax 178 per diluted share recorded consolidated statements operations restructuring charges beginning third quarter fiscal year 2020 implemented cost controls began evaluating measures respond combination weakened commodity prices uncertainties related covid19 pandemic resulting market volatility commenced number restructuring efforts result evaluation included among things reduction capital allocation plans changes organizational structure reduction staffing levels fiscal year ended september 30 2020 incurred 160 million restructuring charges interest dividend income interest dividend income 73 million 95 million fiscal years 2020 2019 respectively decrease interest dividend income fiscal year 2020 primarily due lower interest rates interest expense interest expense totaled 245 million fiscal year 2020 252 million fiscal year 2019 interest expense primarily attributable fixedrate debt outstanding income taxes income tax benefit 1401 million fiscal year 2020 compared income tax benefit 187 million fiscal year 2019 effective income tax rate 220 percent fiscal year 2020 compared 365 percent fiscal year 2019 effective rates differ us federal statutory rate 210 percent fiscal years 2020 2019 due nondeductible permanent items state foreign income taxes adjustments deferred state income tax rate deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary allowances provided carrying values net deferred tax assets based management’s judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future see note 9income taxes consolidated financial statements additional income tax disclosures discontinued operations expenses incurred within country venezuela reported discontinued operations whollyowned subsidiaries hpidc helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 bolivarian republic venezuela petroleos de venezuela sa pdvsa petroleo sa seeking damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery march 2016 venezuelan government implemented previously announced plans new foreign currency exchange system activity within discontinued operations fiscal years 2020 2019 primarily result impact exchange rate fluctuations due remeasurement uncertain tax liabilities north america solutions following table presents certain information respect north america solutions reportable segment 1 operations previously reported within hp technologies reportable segment managed presented within north america solutions reportable segment 2 operating metrics allow investors analyze various components segment financial results terms volume revenue per unit cost per unit margin per unit management uses metrics analyze historical segment financial results key inputs forecasting budgeting segment financial results 3 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 1715 million 2856 million fiscal years 2020 2019 respectively operating income loss north america solutions segment operating loss 3939 million fiscal year ended september 30 2020 compared operating income 809 million fiscal year ended september 30 2019 decrease primarily driven increased asset impairment charges reduced rig activity fiscal year 2020 revenues 15 billion 24 billion fiscal year 2020 2019 respectively included revenues fiscal year 2020 early termination revenue 688 million compared 64 million fiscal year 2019 fixedterm contracts customarily provide termination election customer early termination payment paid us contract terminated prior expiration fixed term except limited circumstances including sustained unacceptable performance us revenue excluding early termination per day revenue 1404 78 fiscal years 2020 2019 respectively average rig revenue per day decreased 904 25185 primarily due portion contracted rigs operating idlebutcontracted state third fourth quarters fiscal year 2020 lower average daily revenue average daily expense lower pricing rigs working spot market compared fiscal year 2019 revenue days declined 401 percent decline initially driven collapse oil prices occurred march 2020 led customers quickly reduce rig activity beginning second half march 2020 continuing throughout fiscal year 2020 level contracted rigs hit low 62 rigs august 2020 modestly recovery 69 rigs fiscal year end direct operating expenses average rig expense per day increased 487 15730 fiscal year ended september 30 2020 compared fiscal year ended september 30 2019 increase due higher selfinsurance expenses idle rig expenses partially offset previously mentioned effect idlebutcontracted rigs depreciation expense decreased 4380 million fiscal year ended september 30 2020 compared fiscal year ended september 30 2019 decrease depreciation fiscal year ended september 30 2020 compared fiscal year ended september 30 2019 primarily attributable lower carrying cost impaired assets depreciation includes charges abandoned equipment 25 million 106 million fiscal years ended september 30 2020 2019 respectively fiscal year ended september 30 2020 depreciation expense included 15 million accelerated depreciation components rigs scheduled conversion fiscal year 2021 compared 47 million accelerated depreciation fiscal year ended september 30 2019 asset impairment charge fiscal year ended september 30 2020 impaired domestic nonsuperspec asset group addition inprogress drilling equipment rotational inventory resulted aggregate noncash impairment charge 3682 million 2841 million net tax 341 per diluted share fiscal year ended september 30 2020 fiscal year ended september 30 2020 also recorded goodwill impairment loss 383 million 296 million net tax 035 per diluted share comparatively fiscal year ended september 30 2019 recorded asset impairment charge 2169 million 1886 million net tax 172 per diluted share mainly driven downsizing fleet flexrig® 4 drilling rigs noncash impairment charges included asset impairment charge consolidated statements operations fiscal years ended september 30 2020 2019 restructuring charges fiscal year ended september 30 2020 incurred 70 million restructuring charges primarily comprised onetime severance benefits employees result headcount reductions occurred third fiscal quarter 2020 utilization rig utilization decreased 47 percent fiscal year ended september 30 2020 compared 67 percent fiscal year ended september 30 2019 addition previously mentioned reduction revenue days decommissioned two rigs 35 rigs legacy domestic conventional asset group flexrig® 3 asset group respectively effective april 30 2020 september 30 2020 69 262 existing rigs north america solutions segment contracted 69 contracted rigs 54 fixedterm contracts 15 working spot market offshore gulf mexico following table presents certain information respect offshore gulf mexico reportable segment 1 operating metrics allow investors analyze various components segment financial results terms volume revenue per unit cost per unit margin per unit management uses metrics analyze historical segment financial results key inputs forecasting budgeting segment financial results 2 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 304 million 264 million fiscal years 2020 2019 respectively operating statistics include rigs exclude offshore platform management contract labor service revenues 260 million 401 million offshore platform management contract labor service expenses 170 million 259 million currency revaluation expense 301 thousand 10 thousand fiscal years 2020 2019 respectively operating income fiscal year ended september 30 2020 offshore gulf mexico segment operating income 75 million compared operating income 196 million fiscal year ended september 30 2019 decrease primarily attributable lower contribution two rigs demobilized back shore first quarter fiscal year 2020 one two rigs began mobilizing new platform march 2020 commenced drilling operations third quarter fiscal year 2020 additionally incurred 42 million bad debt expense fiscal year 2020 revenue average rig revenue per day increased 205 percent 45145 fiscal year 2020 compared fiscal year 2019 primarily due one customers shifting activity customerowned rig managed hp rig owned hp direct operating expenses average rig expense per day increased 37410 fiscal year 2020 28663 fiscal year 2019 primarily due factors mentioned restructuring charges fiscal year ended september 30 2020 incurred 13 million restructuring charges primarily comprised onetime severance benefits employees result headcount reductions occurred third fiscal quarter 2020 utilization september 30 2020 five eight available platform rigs contract compared six eight available platform rigs september 30 2019 international solutions following table presents certain information respect international solutions reportable segment 1 operating metrics allow investors analyze various components segment financial results terms volume revenue per unit cost per unit margin per unit management uses metrics analyze historical segment financial results key inputs forecasting budgeting segment financial results 2 operating statistics per day revenue expense margin include reimbursements “outofpocket” expenses 101 million 108 million fiscal years 2020 2019 respectively also excluded effects currency revaluation expense 85 million 81 million fiscal years 2020 2019 respectively operating income loss international solutions segment operating loss 1624 million fiscal year 2020 compared operating income 54 million fiscal year 2019 decrease primarily driven asset impairment charges fiscal year 2020 revenue experienced 283 percent decrease revenue days comparing fiscal year 2020 fiscal year 2019 average number active rigs 126 fiscal year 2020 compared 176 fiscal year 2019 average rig revenue per day decreased 69 percent primarily due shifting rig mix direct operating expenses average rig expense per day increased 23066 fiscal year 2020 compared 21626 fiscal year 2019 increase driven lower activity coupled fixed minimum levels country overhead depreciation expense decreased 175 million fiscal year ended september 30 2020 compared fiscal year ended september 30 2019 decrease depreciation fiscal year ended september 30 2020 compared fiscal year ended september 30 2019 primarily attributable lower carrying cost impaired assets asset impairment charge fiscal year ended september 30 2020 impaired international conventional flexrig® 3 flexrig® 4 asset groups addition rotational inventory resulted aggregate noncash impairment charge 1567 million 1238 million net tax 145 per diluted share included asset impairment charge consolidated statements operations fiscal year ended september 30 2020 comparatively fiscal year ended september 30 2019 mainly driven downsizing fleet flexrig® 4 drilling rigs wrote capital spares drilling support equipment result recorded asset impairment charge 74 million consolidated statements operations fiscal year ended september 30 2019 restructuring charges fiscal year ended september 30 2020 incurred 30 million restructuring charges primarily comprised onetime severance benefits employees result headcount reductions occurred third fiscal quarter 2020 utilization decreased fiscal year 2020 compared fiscal year 2019 september 30 2020 five 32 existing rigs international solutions segment contracted five contracted rigs two fixedterm contracts three working spot market operations results operations excluding corporate selling general administrative costs corporate restructuring corporate depreciation follows operating income october 1 2019 elected utilize captive insure deductibles workers’ compensation general liability automobile liability claims programs direct operating costs include accruals estimated losses approximately 164 million allocated captive fiscal year ended september 30 2020 intercompany premium revenues recorded captive fiscal year ended september 30 2020 amounted 369 million eliminated upon consolidation results operations fiscal years ended september 30 2019 2018 discussion results operations fiscal year ended september 30 2019 compared fiscal year ended september 30 2018 included part ii item 7 managements discussion analysis financial condition results operations annual report form 10k fiscal year ended september 30 2019 filed sec november 15 2019 incorporated reference form 10k liquidity capital resources sources liquidity sources available liquidity include existing cash balances hand cash flows operations availability 2018 credit facility liquidity requirements include meeting ongoing working capital needs funding capital expenditure projects paying dividends declared repaying outstanding indebtedness historically financed operations primarily internally generated cash flows periods internally generated cash flows sufficient meet liquidity needs may utilize cash hand borrow available credit sources access capital markets sell marketable securities likewise generating excess cash flows may invest highly rated shortterm money market debt securities investments include us treasury securities us agency issued debt securities corporate bonds commercial paper certificates deposit money market funds marketable securities recorded fair value may seek access debt equity capital markets time raise additional capital increase liquidity necessary fund additional purchases exchange redeem senior notes repay amounts 2018 credit facility ability access debt equity capital markets depends number factors including credit rating market industry conditions market perceptions industry general economic conditions revenue backlog capital expenditure commitments effects covid19 outbreak oil price collapse 2020 significant adverse consequences general economic financial business conditions well business financial position business financial position customers suppliers vendors may among things impact ability generate cash flows operations access capital markets acceptable terms affect future need ability borrow 2018 credit facility addition potential sources funding effects global events may impact liquidity need alter allocation sources capital implement additional cost reduction measures change financial strategy although covid19 outbreak oil price collapse could broad range effects sources uses liquidity ultimate effect thereon depend future developments cannot predicted time cash flows cash flows fluctuate depending number factors including among others number drilling rigs contract dayrates receive contracts efficiency operate drilling units timing collections outstanding accounts receivable timing payments vendors operating costs capital expenditures impacted covid19 outbreak oil price collapse 2020 revenues increase net working capital typically use capital conversely revenues decrease net working capital typically source capital date general inflationary trends material effect operating margins september 30 2020 4879 million cash equivalents hand 893 million shortterm investments cash flows fiscal years ended september 30 2020 2019 2018 presented operating activities purpose understanding impact cash flow operations net working capital calculated current assets excluding cash shortterm investments less current liabilities excluding dividends payable shortterm debt current portion longterm debt net working capital 1942 million september 30 2020 compared 3817 million september 30 2019 included accounts receivable september 30 2020 52 million early termination fees 424 million income tax receivables cash flows provided operating activities 5389 million fiscal year 2020 compared 8558 million fiscal year 2019 decrease cash provided operating activities primarily driven lower operating activity favorable variance use working capital cash flows provided operating activities fiscal year 2018 5579 million 2979 million increase compared fiscal year 2019 primarily due decrease working capital investing activities capital expenditures investing activities primarily related capital expenditures fleet capital expenditures 1408 million 4584 million 4666 million fiscal years 2020 2019 2018 respectively yearoveryear decrease capital expenditures driven decrease superspec upgrades lower maintenance capital expenditure levels result lower activity fiscal year 2021 capital spending currently estimated 85 105 million estimate includes normal capital maintenance requirements information technology spending limited number upgrades primarily related augmenting capabilities existing rig fleet acquisition business paid 162 million 479 million net cash acquired 2019 2018 fiscal year respectively acquisition drilling technology companies sale assets proceeds asset sales totaled 784 million 508 million 444 million fiscal year 2020 2019 2018 respectively current year increase primarily driven sale portion real estate investment portfolio fiscal year ended september 30 2020 closed sale portion real estate investment portfolio including six industrial sites total consideration net selling related expenses 407 million sale subsidiary december 2019 closed sale whollyowned subsidiary hpidc terravici result sale 100 terravicis outstanding capital stock transferred purchaser exchange approximately 151 million resulting total gain sale terravici approximately 150 million marketable securities september 2019 sold remaining 16 million shares valaris previously known ensco rowan plc total proceeds approximately 120 million september 30 2020 marketable securities consist primarily common shares schlumberger ltd close fiscal year 2020 fair value 73 million value securities subject fluctuation market may vary considerably time marketable securities recorded fair value balance sheet equity investment schlumberger ltd held september 30 2020 presented financing activities repurchase shares fiscal year 2020 repurchased 15 million shares 285 million compared one million shares 428 million fiscal year 2019 dividends paid dividends 238 284 282 per share fiscal years 2020 2019 2018 respectively total dividends paid 2603 million 3134 million 3084 million fiscal years 2020 2019 2018 respectively june 3 2020 reduced quarterly cash dividend 025 per share september 9 2020 declared cash dividend amount shareholders record november 13 2020 payable december 1 2020 declaration amount future dividends discretion board subject financial condition results operations cash flows factors board deems relevant credit facilities november 13 2018 entered credit agreement among company borrower wells fargo bank national association administrative agent lenders party thereto amended november 13 2019 providing unsecured revolving credit facility “2018 credit facility” set mature november 13 2024 2018 credit facility 7500 million aggregate availability maximum 750 million available use letters credit 2018 credit facility also permits aggregate commitments facility increased 3000 million subject satisfaction certain conditions procurement additional commitments new existing lenders borrowings 2018 credit facility accrue interest spread either london interbank offered rate libor base rate also pay commitment fee unused balance facility borrowing spreads well commitment fees determined based debt rating senior unsecured debt company determined moody’s standard poors spread libor ranges 0875 percent 1500 percent per annum commitment fees range 0075 percent 0200 percent per annum based unsecured debt rating company september 30 2020 spread libor would 1125 percent borrowings outstanding 2018 credit facility commitment fees 0125 percent financial covenant 2018 credit facility requires us maintain total debt total capitalization ratio less equal 50 percent 2018 credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality including limitation priority debt defined credit agreement may exceed 175 percent net worth company september 30 2020 compliance debt covenants anticipate continue compliance next quarter fiscal year 2021 september 30 2020 borrowings letters credit outstanding leaving 7500 million available borrow 2018 credit facility september 30 2020 two separate outstanding letters credit banks amounts 248 million 21 million respectively september 30 2020 also 200 million unsecured standalone line credit facility purpose obtaining issuance international letters credit bank guarantees performance bonds 200 million 43 million financial guarantees outstanding september 30 2020 subsequent september 30 2020 26 million financial guarantees expired applicable agreements unsecured debt contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality senior notes exchange offer consent solicitation redemption december 20 2018 settled offer exchange “exchange offer” outstanding 465 percent unsecured senior notes due 2025 hpidc 2025 notes 5000 million aggregate principal amount new 465 percent unsecured senior notes due 2025 company “company 2025 notes” registration rights ii cash pursuant issued approximately 4871 million aggregate principal amount company 2025 notes interest company 2025 notes payable semiannually march 15 september 15 year commencing march 15 2019 debt issuance costs amortized straightline stated life obligation approximates effective interest method following consummation exchange offer hpidc outstanding approximately 129 million aggregate principal amount hpidc 2025 notes december 20 2018 hpidc company wells fargo bank national association trustee entered supplemental indenture governing hpidc 2025 notes adopt certain proposed amendments pursuant consent solicitation conducted concurrently exchange offer september 27 2019 redeemed remaining approximately 129 million aggregate principal amount hpidc 2025 notes approximately 146 million including accrued interest prepayment premium simultaneously redemption hpidc 2025 notes hpidc released guarantor company 2025 notes 2018 credit facility result release hp obligor company 2025 notes 2018 credit facility repurchase common shares evergreen authorization board purchase four million common shares calendar year fiscal year ended september 30 2020 purchased 15 million common shares aggregate cost 285 million held treasury shares purchased 10 million common shares aggregate cost 428 million held treasury shares fiscal year ended september 30 2019 purchases common shares fiscal year ended september 30 2018 future cash requirements operating cash requirements scheduled debt repayments interest payments declared dividends estimated capital expenditures fiscal year 2021 expected funded current cash provided operating activities however assurance continue generate cash flows current levels june 3 2020 reduced quarterly cash dividend 025 per share needed may decide obtain additional funding 7500 million 2018 credit facility indebtedness unsecured senior notes totaled 4871 million september 30 2020 matures march 19 2025 september 30 2020 6507 million deferred tax liability consolidated balance sheets primarily related temporary differences financial income tax basis property plant equipment increased levels capital expenditures last several years subject accelerated depreciation methods including bonus depreciation available internal revenue code 1986 amended enabling us defer portion cash tax payments future years future levels capital expenditures results operations determine timing amount future cash tax payments expect able meet obligations utilizing cash investments hand well cash generated ongoing operations longterm debt total capitalization ratio 128 percent september 30 2020 compared 108 percent september 30 2019 additional information regarding debt agreements refer note 8debt consolidated financial statements offbalance sheet arrangements offbalance sheet arrangements term defined item 303a4ii regulation sk information regarding drilling contract backlog see item 1 “business contract backlog” material commitments contractual obligations september 30 2020 summarized table 1 interest fixedrate debt estimated based principal maturities see note 8debt consolidated financial statements 2 see note 6leases consolidated financial statements 3 see note 17commitments contingencies consolidated financial statements table include obligations pension plan amounts recorded uncertain tax positions fiscal years 2020 2019 make contributions pension plan contributions may made fiscal year 2021 fund unexpected distributions lieu liquidating pension assets future contributions beyond fiscal year 2021 difficult estimate due multiple variables involved september 30 2020 163 million recorded uncertain tax positions related interest penalties however timing payments respective taxing authorities cannot estimated time income taxes fully described note 9income taxes consolidated financial statements critical accounting policies estimates accounting policies consider significant summarized note 2summary significant accounting policies risks uncertainties consolidated financial statements included part ii item 8 financial statements supplementary data form 10k preparation financial statements conformity us gaap requires management make certain estimates assumptions estimates assumptions affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates based historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources estimates assumptions evaluated ongoing basis actual results may differ estimates different assumptions conditions following discussion critical accounting policies estimates used financial statements property plant equipment property plant equipment including renewals betterments capitalized cost maintenance repairs expensed incurred interest expense applicable construction qualifying assets capitalized component cost assets account depreciation property plant equipment using straightline method estimated useful lives assets considering estimated salvage value property plant equipment estimated useful lives salvage values require use management estimates certain events unforeseen changes operations technology market conditions could materially affect estimates assumptions related depreciation result abandonments fiscal years presented form 10k significant changes made determinations useful lives salvage values upon retirement disposal fixed assets cost related accumulated depreciation removed respective accounts gains losses recorded results operations impairment longlived assets goodwill intangible assets management assesses potential impairment longlived assets finitelived intangibles whenever events changes circumstances indicate carrying value may recoverable changes could prompt assessment may include equipment obsolescence changes market demand periods relatively low rig utilization declining revenue per day declining cash margin per day completion specific contracts change technology andor overall changes general market conditions review longlived assets finitelived intangibles indicates carrying value certain assets asset groups estimated undiscounted future cash flows impairment charge made required adjust carrying value estimated fair value cash flows estimated management considering factors prospective market demand recent changes rig technology effect rig’s marketability cash investment required make rig marketable suitability rig size makeup existing platforms competitive dynamics including utilization fair value drilling rigs determined based upon either income approach using estimated discounted future cash flows market approach considering factors recent market sales rigs companies sales rigs appraisals factors cost approach utilizing reproduction costs new adjusted asset age condition andor combination multiple approaches use different assumptions could increase decrease estimated fair value assets could therefore affect impairment measurement review goodwill impairment annually fourth fiscal quarter frequently events changes circumstances indicate likely carrying amount reporting unit holding goodwill may exceed fair value initially assess goodwill impairment based qualitative factors determine whether existence events circumstances leads determination likely fair value one reporting units greater carrying amount testing necessary quantitative test elected quantitatively compare fair value reporting unit carrying amount including goodwill carrying amount exceeds fair value impairment charge recognized amount equal excess however loss recognized would exceed total amount goodwill allocated reporting unit selfinsurance accruals selfinsure significant portion expected losses relating workers’ compensation general liability employer’s liability automobile liability generally deductibles range 1 million 10 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events assurance coverage apply adequate circumstances estimates recorded incurred outstanding liabilities workers’ compensation casualty claims retained losses estimated accrued based upon estimates aggregate liability claims incurred estimates liabilities retained losses based adjusters’ estimates historical loss experience statistical methods commonly used within insurance industry believe reliable also engage thirdparty actuary perform periodic review domestic casualty losses nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs whollyowned captive insurance company finances significant portion physical damage risk companyowned drilling rigs well international casualty deductibles actuary reviews captive losses annual basis insure working land rigs related equipment values approximate current replacement costs inception date policies however selfinsure large deductibles policies also carry insurance varying deductibles coverage limits respect stacked rigs offshore platform rigs “named wind storm” risk gulf mexico selfinsure number risks including loss earnings business interruption cyber risks revenue recognition drilling services solutions revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized straightline basis drilling service provided costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenue contracts terminated prior specified term early termination payments received us recognized revenues contractual requirements met income taxes deferred income taxes accounted liability method takes account differences basis assets liabilities financial reporting purposes amounts recognized income tax purposes net deferred tax liability balance yearend reflects application income tax accounting policies based management’s estimates judgments assumptions included net deferred tax liability balance deferred tax assets assessed realizability likely portion deferred tax assets realized future period deferred tax assets reduced valuation allowance based management’s estimates addition operate several countries throughout world tax returns filed jurisdictions subject review examination tax authorities within jurisdictions recognize uncertain tax positions believe greater 50 percent likelihood sustained cannot predict provide assurance ultimate outcome existing future assessments new accounting standards see note 2summary significant accounting policies risks uncertainties consolidated financial statements recently adopted accounting standards new accounting standards yet adopted item 7aitem 7 managements discussion analysis financial condition results operations item 8 financial statements supplementary data included form 10k fiveyear summary selected financial data total assets years include amounts related discontinued operations discussed note 2discontinued operations included item 8 financial statements supplementary data form 10k venezuelan subsidiary classified discontinued operations june 30 2010 seizure drilling assets country venezuelan government item 7 managements discussion analysis financial condition results operations risk factors forwardlooking statements following discussion read conjunction part form 10k well consolidated financial statements related notes thereto included item 8 financial statements supplementary data form 10k future operating results may affected various trends factors beyond control include among factors fluctuations oil natural gas prices unexpected expiration termination drilling contracts currency exchange gains losses expropriation real personal property changes general economic conditions disruptions global credit markets rapid unexpected changes technologies risks foreign operations uninsured risks changes domestic foreign policies laws regulations uncertain business conditions affect businesses accordingly past results trends used investors anticipate future results trends exception historical information matters discussed managements discussion analysis financial condition results operations include forwardlooking statements forwardlooking statements based various assumptions caution believe assumptions reasonable make good faith assumed facts almost always vary actual results differences assumed facts actual results material including cautionary statement take advantage safe harbor provisions private securities litigation reform act 1995 forwardlooking statements made us persons acting behalf factors identified cautionary statement factors discussed item 1a risk factors form 10k important factors necessarily inclusive important factors could cause actual results differ materially expressed forwardlooking statement made us persons acting behalf except required law undertake duty update revise forwardlooking statements based changes internal estimates expectations otherwise executive summary helmerich payne inc primarily contract drilling company total fleet 374 drilling rigs september 30 2014 contract drilling segments consist us land segment 329 rigs offshore segment 9 offshore platform rigs international land segment 36 rigs september 30 2014 continued expand rig fleet 2014 flexibility managing rate production allowed us quickly respond changing levels flexrig demand position market strengthened high quality fleet longterm contracts customer base market demand ac drive rigs continued increase year 2014 placed service 44 new flexrigs one new ac drive rig fixedterm contracts september 30 2014 325 active rigs compared 276 active rigs time prior year addition customers continue focus efficiency technology safety believe superior field performance safety record allow us continue gain market share coming years discussed note 2 consolidated financial statements venezuelan subsidiary classified discontinued operations june 30 2010 seizure drilling assets country venezuelan government except specifically discussed following results operations pertain continuing operations unless otherwise indicated references 2014 2013 2012 following discussion referring fiscal 2014 2013 2012 results operations per share amounts included results operations discussion stated diluted basis net income 2014 7087 million 646 per share compared 7366 million 679 per share 2013 5810 million 534 per share 2012 included net income aftertax gains sale investment securities 278 million 025 per share 2014 979 million 091 per share 2013 net income also includes aftertax gains sale assets 127 million 012 per share 2014 122 million 011 per share 2013 123 million 011 per share 2012 consolidated operating revenues 37 billion 2014 34 billion 2013 32 billion 2012 total number revenue days drilling activity also increased record levels 2014 number revenue days us land segment totaled 100638 2014 compared 88620 2013 86340 2012 us land rig utilization 86 percent 2014 82 percent 2013 89 percent 2012 average number us land rigs available 319 rigs 2014 295 rigs 2013 266 rigs 2012 revenue offshore segment steadily increased 2014 2013 2012 rig utilization offshore rigs 89 percent 2014 2013 compared 79 percent 2012 revenue rig utilization international land segment decreased 2014 2013 increasing 2013 2012 rig utilization international land segment 76 percent 2014 82 percent 2013 77 percent 2012 2014 2013 452 million 1621 million gains sale investment securities respectively sell investment securities 2012 interest dividend income 16 million 17 million 14 million 2014 2013 2012 respectively direct operating costs 2014 20 billion 54 percent operating revenues compared 19 billion 55 percent operating revenues 2013 18 billion 56 percent operating revenues 2012 depreciation expense 5235 million 2014 4556 million 2013 3875 million 2012 included depreciation abandonments equipment 230 million 2014 91 million 2013 164 million 2012 depreciation expense exclusive abandonments increased threeyear period placed service 45 new rigs 2014 20 2013 48 2012 depreciation expense 2015 expected increase 2014 new rigs placed service 2014 additional rigs placed service 2015 see liquidity capital resources conditions warrant management performs analysis industry market conditions impacting longlived assets drilling segment based analysis management determines impairment required 2014 2013 2012 impairment recorded general administrative expenses totaled 1351 million 2014 1263 million 2013 1073 million 2012 88 million increase 2014 2013 primarily due continued growth number employees comparative periods increases salaries bonuses stockbased compensation 190 million increase 2013 2012 due increases stockbased compensation approximately 173 million associated growth number employees increases wages comparative periods interest expense net amounts capitalized totaled 47 million 2014 61 million 2013 87 million 2012 interest expense primarily attributable fixedrate debt outstanding interest expense decreased 2014 2013 2012 primarily due reduction outstanding debt balances three years capitalized interest 77 million 88 million 129 million 2014 2013 2012 respectively capitalized interest attributable rig construction program provision income taxes totaled 3875 million 2014 3928 million 2013 3290 million 2012 effective income tax rate 354 percent 2014 compared 353 percent 2013 364 percent 2012 deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary allowances provided carrying value net deferred tax assets based managements judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future see note 4 consolidated financial statements additional income tax disclosures 2014 2013 2012 incurred 159 million 152 million 161 million respectively research development expenses primarily related ongoing development rotary steerable system tools anticipate research development expenses continue 2015 expenses incurred within country venezuela reported discontinued operations included 2013 2012 proceeds arbitration disputes third parties affiliated bolivarian republic venezuela petroleos de venezuela sa pdvsa petroleo sa petroleo related seizure property venezuela june 30 2010 proceeds 150 million 75 million received recorded discontinued operations 2013 2012 respectively whollyowned subsidiaries helmerich payne international drilling co helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 venezuelan government pdvsa petroleo subsidiaries seek damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery gain contingencies recognized consolidated financial statements following tables summarize operations reportable operating segment comparison years ended september 30 2014 2013 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 262532 270223 2014 2013 respectively rig utilization 2013 excludes two flexrigs completed ready delivery september 30 2013 operating income us land segment increased 10 billion 2014 9326 million 2013 primarily due increase revenue days included us land revenues 2014 2013 approximately 117 million 190 million respectively early termination revenue customers requested delivery delays new flexrigs excluding early termination related revenue customer requested delivery delay revenue new flexrigs average revenue per day 2014 slightly decreased 90 28080 28168 2013 direct operating expenses percentage revenue 51 percent 2014 51 percent 2013 rig utilization increased 86 percent 2014 82 percent 2013 total number rigs september 30 2014 329 compared 302 rigs september 30 2013 net increase due 42 new flexrigs completed placed service 6 flexrigs transferred international land segment 9 older conventional rigs removed service subsequent september 30 2014 two flexrigs transferred international land segment three additional flexrigs expected transferred 2015 subsequent september 30 2014 announced entered agreements two customers build operate six new flexrigs november 13 2014 41 announced flexrigs remained delivered depreciation includes charges abandoned equipment 215 million 82 million 2014 2013 respectively included abandonments 2014 decommission nine conventional rigs spare equipment drilling rigs included abandonments 2013 decommission two conventional rigs excluding abandonment amounts depreciation 2014 increased 13 percent 2013 due increase available rigs result new flexrigs added fiscal 2014 additional rigs scheduled completion fiscal 2015 anticipate depreciation expense continue increase fiscal 2015 september 30 2014 294 329 existing rigs us land segment generating revenue 294 rigs generating revenue 176 fixedterm contracts 118 working spot market november 13 2014 number existing rigs fixedterm contracts segment 179 number rigs working spot market increased 119 comparison years ended september 30 2014 2013 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 19007 19701 2014 2013 respectively operating statistics include rigs owned us exclude offshore platform management labor service contracts currency revaluation expense total revenue segment operating income offshore segment increased 2014 2013 primarily due offshore management contracts included 2013 direct operating expenses onetime charge 64 million related incident gulf mexico fully discussed note 13 consolidated financial statements september 30 2014 2013 eight nine rigs working ninth rig commenced operations first fiscal quarter 2015 comparison years ended september 30 2014 2013 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 47350 42542 2014 2013 respectively also excluded effects currency revaluation expense international land segment operating income 364 million 2014 compared 446 million 2013 included international land revenues 2013 approximately 53 million related early termination fees excluding 53 million early termination fee 2013 segment operating income 2014 decreased 2013 revenue days decreasing 46 percent rig utilization decreasing 76 percent 2014 82 percent 2013 total number rigs increased 36 september 30 2014 29 september 30 2013 2014 total number rigs increased seven due one new 3000 horsepower ac drive rig added fleet six flexrigs transferred us land segment november 13 2014 additional two rigs transferred us land segment another three expected transfer 2015 additional rigs added segment 2014 november 13 2014 expected added 2015 fixedterm contracts comparison years ended september 30 2013 2012 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 270223 283640 2013 2012 respectively rig utilization excludes two flexrigs completed ready delivery september 30 2013 operating income us land segment increased 9326 million 2013 9070 million 2012 included us land revenues 2013 approximately 190 million early termination revenue customers requested delivery delays new flexrigs included us land revenues 2012 approximately 101 million early termination revenue excluding early termination related revenue customer requested delivery delay revenue new flexrigs average revenue per day 2013 increased 548 28168 27620 2012 primarily attributable increases dayrates early 2012 stabilized slightly declined 2013 direct operating expenses percentage revenue 51 percent 2013 53 percent 2012 rig utilization decreased 82 percent 2013 89 percent 2012 total number rigs september 30 2013 302 compared 282 rigs september 30 2012 net increase due 20 new flexrigs completed placed service two new flexrigs completed ready delivery two older conventional rigs removed service depreciation includes charges abandoned equipment 82 million 159 million 2013 2012 respectively included abandonments removal two conventional rigs 2013 seven mechanical highly mobile rigs 2012 excluding abandonment amounts depreciation 2013 increased 21 percent 2012 due increase available rigs comparison years ended september 30 2013 2012 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 19701 18346 2013 2012 respectively operating statistics include rigs owned us exclude offshore platform management labor service contracts currency revaluation expense segment operating income offshore segment increased 270 percent 2013 2012 primarily due increase revenue days increase dayrates reduced onetime charge 64 million related incident gulf mexico fully discussed note 13 consolidated financial statements increase revenue days primarily due two rigs working 2013 compared working portion 2012 offset partially third rig completing contract 2012 idle 2013 comparison years ended september 30 2013 2012 operating statistics per day revenue expense margin include reimbursements outofpocket expenses 42542 27720 2013 2012 respectively also excluded effects currency revaluation expense international land segment operating income 446 million 2013 compared 204 million 2012 included international land revenues 2013 approximately 53 million related early termination fees revenues increased 968 million 2013 2012 international land operations rig utilization increased 82 percent 2013 compared 77 percent 2012 total number rigs remained constant 29 average revenue per day 2013 compared 2012 increased 4248 609 attributable early termination related revenue remaining increase primarily due higher dayrates liquidity capital resources capital spending 9529 million 2014 8091 million 2013 11 billion 2012 net cash provided operating activities 11 billion 2014 9972 million 2013 10 billion 2012 2015 capital spending currently estimated 14 billion 17 billion depending primarily drilling market conditions incremental demand additional new flexrigs fiscal year estimate includes contracted new builds capital maintenance requirements tubulars special projects historically financed operations primarily internally generated cash flows periods internally generated cash flows sufficient meet liquidity needs either borrow available credit sources may sell portfolio securities likewise generating excess cash flows may invest shortterm money market securities manage portfolio marketable securities close fiscal 2014 fair value 2223 million consisting atwood oceanics inc schlumberger ltd value portfolio subject fluctuation market may vary considerably time portfolio recorded fair value balance sheet 2014 cash proceeds sale availableforsale securities 492 million 2013 cash proceeds sale investment securities 2322 million including 2141 sale marketable equity availableforsale securities 181 million sale three limited partnerships sell portfolio securities 2012 proceeds asset sales totaled 308 million 2014 280 million 2013 399 million 2012 income asset sales 2014 totaled 196 million 189 million 2013 192 million 2012 year sales old damaged rig equipment drill pipe used ordinary course business company authorization board directors repurchase four million common shares calendar year repurchases may made using cash equivalents available sources fiscal 2012 purchased 1747819 common shares aggregate cost 776 million held treasury shares purchases common shares fiscal 2014 2013 subsequent september 30 2014 purchased 414992 common shares aggregate cost 323 million held treasury shares 2014 increased dividends paid second fiscal quarter fourth fiscal quarter representing 42nd consecutive year dividend increases paid dividends 2438 per share total 2644 million 2014 compared 087 per share 931 million paid 2013 028 per share 300 million paid 2012 80 million senior unsecured fixedrate notes outstanding september 30 2014 mature period july 2015 july 2016 interest notes paid semiannually based annual rate 610 percent annual principal repayments 40 million due july 2015 july 2016 complied financial covenants require us maintain funded leverage ratio less 55 percent interest coverage ratio defined less 250 100 300 million unsecured revolving credit facility mature may 25 2017 credit facility 100 million available use letters credit majority borrowings facility would accrue interest spread london interbank offered rate libor also pay commitment fee based unused balance facility borrowing spreads well commitment fees determined according scale based ratio total debt total capitalization spread libor ranges 1125 percent 175 percent per annum commitment fees range 15 percent 35 percent per annum based debt total capitalization september 30 2014 spread libor commitment fees would 1125 percent 15 percent respectively financial covenants facility require us maintain funded leverage ratio defined less 50 percent interest coverage ratio defined less 300 100 credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2014 borrowings three letters credit outstanding amount 342 million september 30 2014 2658 million available borrow 300 million unsecured credit facility september 30 2014 two letters credit outstanding totaling 12 million issued support international operations letters credit issued separately 300 million credit facility reduce available borrowing capacity discussed previous paragraph applicable agreements unsecured debt described contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2014 compliance debt covenants september 30 2014 193 existing rigs fixed term contracts original term durations ranging six months seven years expiring fiscal 2015 contracts provide termination election customer early termination payment paid contract terminated prior expiration fixed term customers primarily major oil companies large independent oil companies risk exists customer especially smaller independent oil company may become unable meet obligations may exercise early termination election future able pay early termination fee although expected time future revenue operating results could negatively impacted happen operating cash requirements scheduled debt repayments stock repurchases estimated capital expenditures including rig construction program fiscal 2015 expected funded current cash provided operating activities possibly additional borrowings sales availableforsale securities current ratio 25 september 30 2014 28 september 30 2013 longterm debt total capitalization ratio including current portion longterm debt two percent september 30 2014 compared four percent september 30 2013 stock portfolio held material commitments balance sheet arrangements operating leases discussed contractual obligations september 30 2014 summarized table thousands ainterest fixedrate debt estimated based principal maturities see note 3 debt consolidated financial statementsbsee note 13 commitments contingencies consolidated financial statements table include obligations pension plan amounts recorded uncertain tax positions 2014 contributed 73 million pension plan based current information available plan actuaries estimate contributing least 01 million 2015 meet minimum contribution required law additional contributions may made 2015 fund unexpected distributions lieu liquidating pension assets future contributions beyond 2015 difficult estimate due multiple variables involved september 30 2014 172 million recorded uncertain tax positions related interest penalties however timing payments respective taxing authorities cannot estimated time income taxes fully described note 4 consolidated financial statements critical accounting policies estimates consolidated financial statements impacted accounting policies used estimates assumptions made management preparation estimates assumptions evaluated ongoing basis estimates based historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates different assumptions conditions following discussion critical accounting policies estimates used financial statements significant accounting policies summarized note 1 consolidated financial statements property plant equipment property plant equipment including renewals betterments stated cost maintenance repairs expensed incurred interest expense applicable construction qualifying assets capitalized component cost assets account depreciation property plant equipment using straightline method estimated useful lives assets considering estimated salvage value property plant equipment estimated useful lives salvage values require use management estimates certain events unforeseen changes operations technology market conditions could materially affect estimates assumptions related depreciation management believes estimates materially accurate past years presented report significant changes made determinations useful lives salvage values upon retirement disposal fixed assets cost related accumulated depreciation removed respective accounts gains losses recorded results operations impairment longlived assets management assesses potential impairment longlived assets whenever events changes conditions indicate carrying value asset may recoverable changes could prompt assessment may include equipment obsolescence changes market demand specific asset periods relatively low rig utilization declining revenue per day declining cash margin per day completion specific contracts andor overall changes general market conditions review longlived assets indicates carrying value certain assets estimated undiscounted future cash flows impairment charge made adjust carrying value estimated fair value asset fair value drilling rigs determined based upon estimated discounted future cash flows estimated fair value available cash flows estimated management considering factors prospective market demand recent changes rig technology effect rigs marketability cash investment required make rig marketable suitability rig size makeup existing platforms competitive dynamics including utilization fair value estimated applicable considering factors recent market sales rigs companies sales rigs appraisals factors use different assumptions could increase decrease estimated fair value assets could therefore affect impairment measurement selfinsurance accruals selfinsure significant portion expected losses relating workers compensation general liability employers liability automobile liability generally deductibles range 1 million 3 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events estimates recorded incurred outstanding liabilities workers compensation general liability claims incurred reported estimates based adjusters estimates historic experience statistical methods believe reliable nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs whollyowned captive insurance company finances significant portion physical damage risk companyowned drilling rigs well international casualty deductibles exception named wind storm risk gulf mexico insure rig related equipment values approximate current replacement cost inception date policy selfinsure 5 million per occurrence deductible well 20 percent estimated replacement cost offshore rigs 30 percent estimated replacement cost land rigs equipment two insurance policies covering eight offshore platform rigs named windstorm risk gulf mexico first policy covers four rigs 75 million aggregate insurance limit 3 million deductible second policy covers four rigs 40 million aggregate limit 35 million deductible remaining offshore platform rig insured customer maintain certain insurance coverage deductibles high 25 million excess insurance purchased coverage amounts limit exposure catastrophic claims assurance coverage respond adequate circumstances retained losses estimated accrued based upon estimates aggregate liability claims incurred using adjusters estimates historical loss experience estimation methods believed reliable nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense related liabilities selfinsure number risks including loss earnings business interruption pension costs obligations pension benefit costs obligations dependent various actuarial assumptions make assumptions relating discount rates expected return plan assets discount rate determined matching projected cash distributions appropriate corporate bond yields yield curve analysis discount rate lowered 432 percent 480 percent september 30 2014 reflect changes market conditions highquality fixedincome investments expected return plan assets determined based historical portfolio results future expectations rates return actual results differ estimated assumptions accumulated amortized estimated future working life plan participants could therefore affect expense recognized obligations future periods september 30 2006 pension plan frozen benefit accruals discontinued result rate compensation increase assumption eliminated future periods anticipate pension expense decrease approximately 13 million 2015 2014 stockbased compensation historically granted stockbased awards key employees nonemployee directors part compensation estimate fair value stock option awards date grant applying blackscholes optionpricing model application valuation model involves assumptions judgmental highly sensitive assumptions include among others expected stock price volatility expected life stock options riskfree interest rate expected volatilities estimated using historical volatility stock based upon expected term option expected term option derived historical data represents period time options estimated outstanding riskfree interest rate periods within estimated life option based us treasury strip rate effect time grant fair value award amortized straightline basis vesting period awards granted employees stockbased awards granted nonemployee directors expensed immediately upon grant fair value restricted stock awards determined based closing price common stock date grant amortize fair value restricted stock awards compensation expense straightline basis vesting period september 30 2014 unrecognized compensation cost related unvested restricted stock 200 million cost expected recognized weightedaverage period 23 years revenue recognition contract drilling revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized term related drilling contract costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs contracts terminated prior specified term early termination payments received us recognized revenues contractual requirements met new accounting standards october 1 2013 adopted accounting standards update asu 201302 comprehensive income asu 201302 amended accounting standards codifications asc 220 comprehensive income superseded replaced asu 201105 presentation comprehensive income asu 201112 comprehensive income standard change current requirements reporting net income comprehensive income financial statements however guidance require entity provide enhanced disclosures present separately component reclassifications accumulated comprehensive income adoption impact amount comprehensive income reported consolidated financial statements may 2014 financial accounting standards board fasb issued asu 201409 revenue contracts customers supersedes virtually existing revenue recognition guidance new standard requires entity recognize revenue transfers promised goods services customers amount reflects consideration entity expects receive exchange goods services update also requires additional disclosure nature amount timing uncertainty revenue cash flows arising customer contracts including significant judgments changes judgments assets recognized costs incurred obtain fulfill contract provisions asu 201409 effective interim annual periods beginning december 15 2016 option using either full retrospective modified retrospective approach adopting new standard currently evaluating alternative transition methods potential effects adoption update financial statements quantitative qualitative disclosures market risk foreign currency exchange rate risk contracts work foreign countries generally provide payment us dollars however argentina paid argentine pesos argentine branch one secondtier subsidiaries remits us dollars us parent converting argentine pesos us dollars argentine foreign exchange market repatriating us dollars future contracts applicable law may require payments made foreign currencies based upon current information believe exposure potential losses currency restrictions devaluation foreign countries immaterial however assurance experience argentina elsewhere devaluation foreign currency foreign exchange restrictions difficulties repatriating us dollars even able negotiate contract provisions designed mitigate risks event future payments foreign currencies inability timely exchange foreign currencies us dollars may incur currency devaluation losses could material adverse impact business financial condition results operations operating country currently considered highly inflationary defined cumulative inflation rates exceeding 100 percent recent threeyear period foreign operations use us dollar functional currency local currency monetary assets liabilities remeasured us dollars gains losses resulting foreign currency transactions included current results operations foreign economy considered highly inflationary would impact consolidated financial statements commodity price risk demand contract drilling services derived exploration production companies spending money explore develop drilling prospects search crude oil natural gas spending driven cash flow financial strength affected trends crude oil natural gas commodity prices crude oil prices determined number factors including supply demand worldwide economic conditions geopolitical factors crude oil natural gas prices historically volatile difficult predict current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels volatility lead many exploration production companies base capital spending much conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices credit capital market risk addition customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets experienced past make difficult customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result customer credit defaults reduced demand drilling services could material adverse effect business financial condition results operations attempt secure favorable prices advanced ordering purchasing drilling rig components materials generally available acceptable prices assurance prices vary significantly future fluctuations market conditions causing increased prices materials supplies could material adverse effect future operating costs interest rate risk interest rate risk exposure results primarily shortterm rates mainly liborbased borrowings commercial banks debt september 30 2014 fixedrate interest obligations current risk due interest rate fluctuation following tables provide information september 30 2014 2013 interest rate risk sensitive instruments interest rate risk september 30 2014 dollars thousands interest rate risk september 30 2013 dollars thousands equity price risk september 30 2014 portfolio securities total fair value 2223 million total fair value portfolio securities 3056 million september 30 2013 make specific plans sell securities rather sell securities based market conditions circumstances securities subject wide variety number marketrelated risks could substantially reduce increase fair value holdings portfolio recorded fair value balance sheet changes unrealized aftertax value reflected equity section balance sheet november 13 2014 total fair value remaining securities decreased approximately 1848 million currently fair value exceeds cost investments continually monitor fair value investments unable predict future market volatility potential impact consolidated financial statements item 7aitem 7 managements discussion analysis results operations financial condition information required item may found pages 10 17 managements discussion analysis results operations financial condition registrants annual report shareholders fiscal 1999 incorporated herein reference item 7a quantitative qualitative disclosures market risk information required item may found following pages managements discussion analysis results operations financial condition registrants annual report shareholders fiscal 1999 incorporated herein reference ii 3 item 8item 7 management’s discussion analysis results operations financial condition information required item may found pages 8 32 company’s annual report caption “management’s discussion analysis results operations financial condition” item 7a nannannannannannannanitem 7a quantitative qualitative disclosures market risk information required item may found following pages companys annual report stockholders fiscal 2002 managements discussion analysis results operations financial condition notes consolidated financial statements incorporated reference item 8item 7a quantitative qualitative disclosures market risk information required item may found following pages company’s annual report management’s discussion analysis results operations financial condition notes consolidated financial statements item 8item 7a quantitative qualitative disclosures market risk information required item may found following pages company’s annual report management’s discussion analysis results operations financial condition notes consolidated financial statements item 8item 7a quantitative qualitative disclosures market risk information required item may found caption risk factors beginning page 6 report incorporated reference following pages companys annual report exhibit 13 form 10k managements discussion analysis financial condition results operations notes consolidated financial statements item 8item 7a quantitative qualitative disclosures market risk information required item may found caption risk factors beginning page 7 report incorporated reference following pages companys annual report exhibit 13 form 10k managements discussion analysis financial condition results operations notes consolidated financial statements item 8item 7a quantitative qualitative disclosures market risk information required item may found caption risk factors beginning page 5 report incorporated reference following pages companys annual report exhibit 13 form 10k managements discussion analysis financial condition results operations notes consolidated financial statements item 8item 7a quantitative qualitative disclosures market risk information required item may found caption risk factors beginning page 6 report incorporated reference following pages annual report exhibit 13 form 10k managements discussion analysis financial condition results operations notes consolidated financial statements item 8item 7a quantitative qualitative disclosures market risk information required item may found caption risk factors beginning page 5 report incorporated reference following pages annual report exhibit 13 form 10k managements discussion analysis financial condition results operations notes consolidated financial statements item 8item 7a quantitative qualitative disclosures market risk information required item may found caption risk factors beginning page report incorporated reference following pages annual report exhibit 13 form 10k managements discussion analysis financial condition results operations notes consolidated financial statements item 8item 7a quantitative qualitative disclosures market risk information required item may found caption risk factors beginning page 6 form 10k incorporated reference following pages annual report exhibit 13 form 10k managements discussion analysis financial condition results operations notes consolidated financial statements item 8item 7a quantitative qualitative disclosures market risk information required item may found item 1a risk factors item 7 managements discussion analysis financial condition results operationsquantitative qualitative disclosures market risk included form 10k item 8item 7a quantitative qualitative disclosures market risk information required item may found item 1a risk factors item 7 managements discussion analysis financial condition results operationsquantitative qualitative disclosures market risk included form 10k item 8item 7a quantitative qualitative disclosures market risk information required item may found item 1a risk factors item 7 managements discussion analysis financial condition results operationsquantitative qualitative disclosures market risk included form 10k item 8item 7a quantitative qualitative disclosures market risk information required item may found item 1a “risk factors” item 7 “management’s discussion analysis financial condition results operationsquantitative qualitative disclosures market risk” included form 10k item 8item 7a quantitative qualitative disclosures market risk foreign currency exchange rate risk drilling contracts foreign countries generally provide payment us dollars however argentina contract denominated us dollar paid argentine pesos argentine branch one secondtier subsidiaries converts argentine pesos us dollars argentine foreign exchange market remits dollars us parent future contracts applicable law may require payments made foreign currencies assurance experience argentina elsewhere devaluation foreign currency foreign exchange restrictions difficulties repatriating us dollars even able negotiate contract provisions designed mitigate risks future may incur currency devaluations foreign exchange restrictions difficulties repatriating us dollars argentina elsewhere could material adverse impact business financial condition results operations september 30 2018 hypothetical decrease value 10 percent would result insignificant decrease value monetary assets liabilities denominated argentine pesos approximately 4595 argentina’s economy currently considered highly inflationary defined cumulative inflation rates exceeding 100 percent recent threeyear period based inflation data published respective governments nonetheless foreign operations use us dollar functional currency local currency monetary assets liabilities remeasured us dollars gains losses resulting foreign currency transactions included current results operations commodity price risk demand contract drilling services derived exploration production companies spending money explore develop drilling prospects search crude oil natural gas spending driven cash flow financial strength affected trends crude oil natural gas commodity prices crude oil prices determined number factors including global supply demand establishment compliance production quotas oil exporting countries worldwide economic conditions geopolitical factors crude oil natural gas prices historically volatile difficult predict degree certainty current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels volatility lead many exploration production companies base capital spending much conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices credit capital market risk customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets experienced past make difficult customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result customer credit defaults reduced demand services could material adverse effect business financial condition results operations similarly may need access capital markets obtain financing ability access capital markets financing could limited among things oil gas prices existing capital structure credit ratings state economy health drilling overall oil gas industry liquidity capital markets many factors affect ability access capital markets outside control assurance given able access capital markets terms acceptable us required could material adverse impact business financial condition results operations attempt secure favorable prices advanced ordering purchasing drilling rig components materials generally available acceptable prices assurance prices vary significantly future fluctuations market conditions causing increased prices materials supplies could material adverse effect future operating costs interest rate risk interest rate risk exposure results primarily shortterm rates mainly liborbased borrowings revolving credit facility outstanding borrowings facility september 30 2018 outstanding debt consisted 500 million senior unsecured note fixed rate 465 percent september 30 2018 average interest rate risk fixedrate debt 500 million estimated 465 percent 2023 comparatively estimated interest rate risk september 30 2017 465 percent 2022 fair value fixedrate debt estimated 5093 million 5290 million fiscal years 2018 2017 respectively equity price risk september 30 2018 portfolio securities total fair value 825 million total fair value portfolio securities 702 million september 30 2017 hypothetical 10 percent decrease market prices securities portfolio september 30 2018 would decrease fair value availableforsale securities 83 million make specific plans sell securities rather sell securities based market conditions circumstances securities subject wide variety number marketrelated risks could substantially reduce increase fair value holdings portfolio recorded fair value balance sheet changes unrealized aftertax value reflected equity section balance sheet unless decline fair value cost basis considered temporary case change recorded earnings november 8 2018 total fair value securities decreased approximately 685 million currently fair value exceeds cost investments continually monitor fair value investments unable predict future market volatility potential impact consolidated financial statements item 8item 7a quantitative qualitative disclosures market risk foreign currency exchange rate risk drilling contracts foreign countries generally provide payment us dollars however argentina contracts denominated us dollar paid argentine pesos argentine branch one secondtier subsidiaries converts argentine pesos us dollars argentine foreign exchange market remits dollars us parent future contracts applicable law may require payments made foreign currencies assurance experience argentina elsewhere devaluation foreign currency foreign exchange restrictions difficulties repatriating us dollars even able negotiate contract provisions designed mitigate risks september 30 2019 hypothetical decrease value 10 percent would result insignificant decrease value monetary assets liabilities denominated argentine pesos approximately 57094 argentina’s economy currently considered highly inflationary defined cumulative inflation rates exceeding 100 percent recent threeyear period based inflation data published respective governments nonetheless foreign operations use us dollar functional currency local currency monetary assets liabilities remeasured us dollars gains losses resulting foreign currency transactions included current results operations commodity price risk demand contract drilling services derived exploration production companies spending money explore develop drilling prospects search crude oil natural gas spending driven cash flow financial strength affected trends crude oil natural gas commodity prices crude oil prices determined number factors including global supply demand establishment compliance production quotas oil exporting countries worldwide economic conditions geopolitical factors crude oil natural gas prices historically volatile difficult predict degree certainty current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels volatility lead many exploration production companies base capital spending much conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices credit capital market risk customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets experienced past make difficult customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result customer credit defaults reduced demand services could material adverse effect business financial condition results operations similarly may need access capital markets obtain financing ability access capital markets financing could limited among things oil gas prices existing capital structure credit ratings state economy health drilling overall oil gas industry liquidity capital markets many factors affect ability access capital markets outside control assurance given able access capital markets terms acceptable us required could material adverse impact business financial condition results operations attempt secure favorable prices advanced ordering purchasing drilling rig components materials generally available acceptable prices assurance prices vary significantly future fluctuations market conditions causing increased prices materials supplies could material adverse effect future operating costs interest rate risk interest rate risk exposure results primarily shortterm rates mainly liborbased borrowings revolving credit facility outstanding borrowings facility september 30 2019 outstanding debt consisted 4871 million senior unsecured note fixed rate 465 percent fair value fixedrate debt estimated 5264 million 5093 million fiscal years 2019 2018 respectively equity price risk september 30 2019 marketable securities total fair value 163 million total fair value marketable securities 825 million september 30 2018 hypothetical 10 percent decrease market price marketable securities september 30 2019 would decrease fair value marketable securities 16 million september 2019 sold remaining 16 million shares valaris previously known ensco rowan plc total proceeds approximately 120 million make specific plans sell securities rather sell securities based market conditions circumstances securities subject wide variety number marketrelated risks could substantially reduce increase fair value holdings november 6 2019 total fair value securities increased approximately 165 million continually monitor fair value investments unable predict future market volatility potential impact consolidated financial statements financial statements supplementary data index consolidated financial statements management’s report internal control financial reporting management helmerich payne inc responsible establishing maintaining adequate internal control financial reporting defined rule 13a15f 15d15f securities exchange act 1934 internal control financial reporting designed supervision chief executive officer chief financial officer provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance accounting principles generally accepted united states america includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures made accordance authorizations management board directors iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate management assessed effectiveness company’s internal control financial reporting september 30 2019 making assessment management used criteria established internal controlintegrated framework 2013 issued committee sponsoring organizations treadway commission based evaluation criteria internal controlintegrated framework 2013 management concluded company maintained effective internal control financial reporting september 30 2019 ernst young llp independent public accounting firm issued attestation report effectiveness company’s internal control financial reporting september 30 2019 stated report appears herein report independent registered public accounting firm board directors shareholders helmerich payne inc opinion financial statements audited accompanying consolidated balance sheets helmerich payne inc company september 30 2019 2018 related consolidated statements operations comprehensive income loss shareholders equity cash flows three years period ended september 30 2019 related notes collectively referred “consolidated financial statements” opinion consolidated financial statements present fairly material respects financial position company september 30 2019 2018 results operations cash flows three years period ended september 30 2019 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states pcaob company’s internal control financial reporting september 30 2019 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 framework report dated november 15 2019 expressed unqualified opinion thereon basis opinion financial statements responsibility company’s management responsibility express opinion company’s financial statements based audits public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement whether due error fraud audits included performing procedures assess risks material misstatement financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation financial statements believe audits provide reasonable basis opinion critical audit matters critical audit matters communicated matters arising current period audit financial statements communicated required communicated audit committee 1 relate accounts disclosures material financial statements 2 involved especially challenging subjective complex judgments communication critical audit matters alter way opinion consolidated financial statements taken whole communicating critical audit matters providing separate opinions critical audit matters accounts disclosures relate selfinsurance accruals description matter companys selfinsurance liability workers’ compensation casualty claims 742 million september 30 2019 described note 2 consolidated financial statements liability based thirdparty actuarial analysis includes estimate incurred reported ibnr claims actuarial analysis considers variety factors including thirdparty adjusters’ estimates historic experience statistical methods commonly used within insurance industry auditing companys reserve selfinsured risks worker’s compensation casualty claims complex required us use actuarial specialists due significant measurement uncertainty associated estimate management’s application significant judgment use various actuarial methods addressed matter audit evaluated design tested operating effectiveness company’s controls workers’ compensation casualty claims accrual process example tested controls management’s determination appropriateness significant assumptions used calculation completeness accuracy data underlying reserve evaluate selfinsurance liability worker’s compensation casualty claims performed audit procedures included among others testing completeness accuracy underlying claims data provided management’s actuary obtaining legal confirmation letters evaluate reserves recorded significant litigated matters furthermore involved actuarial specialists assist evaluation methodologies applied management’s actuary establishing actuarially determined reserve compared company’s assumptions ranges assumptions independently developed actuarial specialists impairment longlived assets description matter fully described note 5 consolidated financial statements company recognized 2243 million charge 2019 following decommissioning certain drilling rigs within domestic international flexrig4 asset groups also 2019 company evaluated domestic international flexrig4 asset groups recoverability ultimately determining net book values recoverable undiscounted future cash flows result impairment asset groups recognized however different assumptions estimates could materially impact managements analysis resulting conclusion auditing companys impairment analysis involved high degree subjectivity determination undiscounted cash flows based assumptions future market economic conditions significant assumptions used company’s undiscounted cash flow estimate included drilling rig utilization period operation net proceeds received upon future saledisposition addressed matter audit obtained understanding evaluated design tested operating effectiveness controls companys process estimate undiscounted cash flows asset groups tested recoverability example tested controls managements assessment appropriateness significant assumptions underlying undiscounted cash flows testing company’s undiscounted cash flows included among procedures evaluating significant assumptions used testing completeness accuracy underlying data example compared projected drilling rig utilization assumption current forecasted industry market information ongoing bid contracting activity compared estimated net proceeds received upon future saledisposition industry ranges market quotes company’s historical experience also compared projected period operation peer averages company’s historical experience market activity furthermore searched evaluated information corroborates contradicts company’s assumptions performed retrospective reviews projected cash flows historical actuals performed sensitivity analysis evaluate change projected cash flows would result changes underlying assumptions report independent registered public accounting firm board directors shareholders helmerich payne inc opinion internal control financial reporting audited helmerich payne inc’s internal control financial reporting september 30 2019 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 framework coso criteria opinion helmerich payne inc company maintained material respects effective internal control financial reporting september 30 2019 based coso criteria also audited accordance standards public company accounting oversight board united states pcaob consolidated balance sheets company september 30 2019 2018 related consolidated statements operations comprehensive income loss shareholders’ equity cash flows three years period ended september 30 2019 related notes report dated november 15 2019 expressed unqualified opinion thereon basis opinion company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion definition limitations internal control financial reporting company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate helmerich payne inc consolidated balance sheets accompanying notes integral part consolidated financial statements helmerich payne inc consolidated statements operations accompanying notes integral part consolidated financial statements helmerich payne inc consolidated statements comprehensive income loss accompanying notes integral part consolidated financial statements helmerich payne inc consolidated statements shareholders’ equity accompanying notes integral part consolidated financial statements helmerich payne inc consolidated statements cash flows accompanying notes integral part consolidated financial statements helmerich payne inc notes consolidated financial statements note 1 nature operations helmerich payne inc “hp” together subsidiaries identified “company” “we” “us” “our” except stated context requires otherwise operating subsidiaries provides performancedriven drilling solutions technologies intended make hydrocarbon recovery safer economical oil gas exploration production companies effective october 1 2018 fourth quarter fiscal year 2019 implemented organizational changes consistent manner chief operating decision maker evaluates performance allocates resources effective october 1 2018 certain operations previously reported “other” within segment disclosures managed presented within new hp technologies reportable segment result beginning reporting first quarter 2019 operations organized following reportable segments us land offshore international land hp technologies additionally fourth quarter fiscal year 2019 migrated flexapp offerings hp technologies business segment activity flexapps previously included us land segment certain corporate activities real estate operations incubator program new research development projects included segment disclosures restated segment changes refer note 17business segments geographic information details hp technologies new reportable segment us land operations primarily located colorado louisiana ohio oklahoma montana new mexico north dakota pennsylvania texas utah west virginia wyoming additionally offshore operations conducted gulf mexico international land operations rigs primarily located four international locations argentina bahrain colombia united arab emirates “uae” also develop operate limited commercial real estate properties real estate investments located exclusively within tulsa oklahoma include shopping center multitenant industrial warehouse properties undeveloped real estate note 2 summary significant accounting policies risks uncertainties basis presentation accompanying consolidated financial statements prepared accordance accounting principles generally accepted united states america “us gaap” classified former venezuelan operation discontinued operation third quarter fiscal year 2010 fully described note 4discontinued operations unless indicated otherwise information notes consolidated financial statements relates continuing operations principles consolidation consolidated financial statements include accounts helmerich payne inc domestic foreign subsidiaries consolidation subsidiary begins company obtains control subsidiary ceases company loses control subsidiary specifically income expenses subsidiary acquired disposed fiscal year included consolidated statement profit loss comprehensive income date company gains control date company ceases control subsidiary significant intercompany accounts transactions eliminated consolidation foreign currencies functional currency together foreign subsidiaries us dollar monetary assets liabilities denominated currencies us dollar translated exchange rates effect end period resulting gains losses recorded statement operations aggregate foreign currency losses 82 million 40 million 71 million fiscal years 2019 2018 2017 respectively included direct operating costs use estimates preparation financial statements conformity us gaap requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period actual results could differ estimates cash equivalents restricted cash equivalents include cash hand demand deposits banks highly liquid investments original maturities three months less cash equivalents shortterm investments subject potential credit risk certain cash accounts carry balances greater federally insured limits restricted cash equivalents 350 million 418 million september 30 2019 2018 respectively total september 30 2019 2018 30 million 113 million respectively related acquisition drilling technology companies described note 3business combinations 20 million fiscal year ends initial capitalization captive insurance company 300 million 285 million respectively represents additional amount management elected restrict purpose potential insurance claims whollyowned captive insurance company restricted amounts primarily invested shortterm money market securities see recently issued accounting updates changes presentation restricted cash effective october 1 2018 result adopting accounting standards update “asu” 201618 statement cash flows topic 230 restricted cash restricted cash equivalents reflected consolidated balance sheets follows inventories materials supplies inventories primarily replacement parts supplies held consumption drilling operations inventories valued lower cost net realizable value cost determined weighted average basis includes cost materials shipping duties labor net realizable value defined estimated selling price ordinary course business less reasonably predictable costs completion disposal transportation reserves excess obsolete inventory 115 million 99 million fiscal years 2019 2018 respectively investments maintain investments equity securities certain publicly traded companies recognize marketable equity securities readily determinable fair values fair value changes values reflected net income adopted asu 201601 october 1 2018 result recognize marketable equity securities readily determinable fair values fair value changes values reflected net income previously recognized changes fair value equity securities comprehensive income consolidated statements comprehensive income loss longer requirement consider whether decline fair value otherthantemporary property plant equipment property plant equipment stated cost less accumulated depreciation substantially property plant equipment depreciated using straightline method based estimated useful lives assets deducting salvage values amount depreciation expense record dependent upon certain assumptions including asset’s estimated useful life rate consumption corresponding salvage value periodically review assumptions may change one assumptions changes assumptions may require us recognize prospective basis increased decreased depreciation expense capitalize interest major projects construction interest capitalized based average interest rate related debt capitalized interest fiscal year 2019 04 million 03 million capitalized interest 2018 2017 respectively review longlived assets impairment whenever events changes circumstances indicate carrying amount asset may recoverable changes could prompt assessment include significant decline revenue cash margin per day extended periods low rig asset group utilization changes market demand specific asset obsolescence completion specific contracts restructuring drilling fleet andor overall general market conditions review longlived assets indicates carrying value assetsasset groups estimated undiscounted future cash flows projected realized use asset eventual disposal impairment charge made required adjust carrying value estimated fair value asset estimated fair value determined based upon either income approach using estimated discounted future cash flows market approach considering factors recent market sales rigs companies sales rigs appraisals factors cost approach utilizing reproduction costs new adjusted asset age condition andor combination multiple approaches cash flows estimated management considering factors prospective market demand margins recent changes rig technology effect rig’s marketability investment required make rig operational suitability rig size make existing platforms competitive dynamics including industry utilization longlived assets held sale recorded lower carrying value fair value less costs sell goodwill intangible assets goodwill represents excess purchase price fair value net assets acquired business combination date acquisition goodwill amortized tested potential impairment reporting unit level minimum annual basis fourth fiscal quarter fiscal year likely carrying value may exceed fair value impairment determined exist impairment charge amount carrying amount exceeds reporting unit’s fair value recognized limited total amount goodwill allocated reporting unit reporting unit level defined operating segment one level operating segment finitelived intangible assets amortized using straightline method period assets contribute cash flows generally estimated 5 20 years evaluated impairment accordance policies valuation longlived assets drilling revenues contract drilling services revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized straightline basis drilling service provided costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs reimbursements fiscal years 2019 2018 2017 3228 million 2747 million 1799 million respectively contracts terminated customers prior expirations fixed terms contractual provisions customarily require early termination amounts paid us revenues early terminated contracts recognized contractual requirements met early termination revenue fiscal years 2019 2018 2017 approximately 113 million 171 million 294 million respectively rent revenues enter leases tenants rental properties consisting primarily retail multitenant warehouse space lease terms tenants occupying space retail centers warehouse buildings generally range three ten years minimum rents recognized straightline basis term related leases overage percentage rents based tenants’ sales volume recoveries tenants property taxes operating expenses recognized operating revenues consolidated statements operations rent revenues follows september 30 2019 minimum future rental income received noncancelable operating leases follows thousands leasehold improvement allowances capitalized amortized lease term september 30 2019 2018 cost accumulated depreciation real estate properties follows income taxes current income tax expense amount income taxes expected payable current fiscal year deferred income taxes computed using liability method provided temporary differences financial basis tax basis assets liabilities provide uncertain tax positions tax positions meet recognition thresholds measurement standards prescribed accounting standards codification “asc” 740 income taxes fully discussed note 8income taxes amounts uncertain tax positions adjusted periods new information becomes available positions effectively settled recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements operations earnings per common share basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock granted expect continue grant employees restricted stock grants contain nonforfeitable rights dividends grants considered participating securities asc 260 earnings per share included grants calculation basic earnings per share stockbased compensation stockbased compensation expense determined using fairvaluebased measurement method awards granted fiscal year ended september 30 2019 new nonqualified stock options granted prospectively fiscal year 2019 replaced stock options performance share units component executives’ longterm equity incentive compensation also eliminated stock options element director compensation program board determined award stockbased compensation directors solely form restricted stock fair value option granted prior years estimated date grant based blackscholes optionspricing model utilizing assumptions riskfree interest rate volatility dividend yield expected remaining term awards assumptions used calculating fair value stockbased payment awards represent management’s best estimates involve inherent uncertainties application management judgment grant date fair value performance share units determined use monte carlo simulation method monte carlo simulation method requires use highly subjective assumptions key assumptions method include price expected volatility stock selfdetermined peer group companies’ peer group stock risk free rate return dividend yields crosscorrelations company peer group stockbased compensation recognized straightline basis requisite service periods stock awards generally vesting period compensation expense recorded component contract drilling services operating expenses selling general administrative expenses consolidated statements operations see note 11stockbased compensation additional discussion stockbased compensation treasury stock treasury stock purchases accounted cost method whereby cost acquired stock recorded treasury stock gains losses subsequent reissuance shares credited charged additional paidin capital using averagecost method stock offered pursuant grant award helmerich payne inc 2016 omnibus incentive plan may authorized treasury shares comprehensive income loss comprehensive income loss refers revenues expenses gains losses included comprehensive income loss excluded net income loss report components comprehensive income loss net tax nature disclose tax effect allocated component consolidated statements comprehensive income loss leases lease office space equipment use operations leases evaluated inception upon subsequent material modification depending lease terms classified either capital leases operating leases appropriate asc 840 leases operating leases contain builtin predetermined rent escalations rent expense recognized straightline basis life lease leasehold improvements capitalized amortized lease term significant capital leases recently issued accounting updates changes us gaap established financial accounting standards board “fasb” form asus fasb asc consider applicability impact asus listed assessed determined either applicable clarifications asus listed following tables provide brief description recent accounting pronouncements analysis effects financial statements adoption asu 201602 leases stated table adopted asu 201602 october 1 2019 additionally elected standard’s available practical expedients upon adoption including package practical expedients allows us reassess expired existing contracts 1 embedded leases 2 lease classification 3 initial direct costs addition expecting elect topic 842 practical expedient available lessors separate lease nonlease components account combined component topic 606 nonlease component predominant element combined component lessor practical expedient limited circumstances lease accounted separately would classified operating lease topic 842 existing contracts require reassessment due practical expedient package elected contracts continue classified financial statements according accounting policies place september 30 2019 new contracts entered contract existence september 30 2019 modified october 1 2019 assessed accordance topic 842 topic 606 applicable analyzing updating data previously collected evaluate impact adoption financial statements implementing system capture increased reporting disclosure requirements currently tentatively estimate lessee assets liabilities increase 100 million upon adoption new lease guidance based upon transition method practical expedients elected believe adoption standard material effect statements operations cash flows cash flows following summary retrospective impact adoption asu 201615 asu 201618 concentration credit risk financial instruments potentially subject us concentrations credit risk consist primarily temporary cash investments shortterm investments trade receivables industry concentration potential impact overall exposure market credit risks either positively negatively customers could affected similar changes economic industry conditions however believe credit risk posed industry concentration offset creditworthiness customer base revenues individual customers constituted 10 percent total revenues follows fiscal year 2019 individual customers constituted 10 percent total revenues place temporary cash investments us established financial institutions invest diversified portfolio highly rated shortterm money market instruments trade receivables primarily established companies oil gas industry may impact credit risk customers may similarly affected prolonged changes economic industry conditions international sales also present various risks including governmental activities may limit disrupt markets restrict movement funds international sales however large international governmentowned national oil companies perform credit evaluations customers typically require collateral support trade receivables provide allowance doubtful accounts necessary cover estimated credit losses allowance based management’s knowledge customer accounts volatility market operations materially affected oil gas prices oil natural gas prices historically volatile difficult predict degree certainty current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining customer’s future spending levels volatility along difficulty predicting future prices lead many exploration production companies base capital spending conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices addition customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets may cause difficulty customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result reduction customer spending demand services reduction spending could material adverse effect operations selfinsurance accrued liability estimated workers’ compensation casualty claims incurred based upon cash reserves plus estimate loss development incurred reported claims estimate based upon historical trends insurance recoveries related liability recorded considered probable selfinsure significant portion expected losses relating workers’ compensation general liability automobile liability generally deductibles range 1 million 5 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events estimates recorded incurred outstanding liabilities workers’ compensation general liability claims incurred reported estimates based adjusters’ estimates historical experience statistical methods commonly used within insurance industry believe reliable also engaged thirdparty actuary perform review domestic casualty losses nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs international land drilling operations international land drilling operations may significantly contribute revenues net operating income assurance able successfully conduct operations failure may adverse effect financial position results operations cash flows also success international land operations subject numerous contingencies beyond management’s control contingencies include general regional economic conditions fluctuations currency exchange rates modified exchange controls changes international regulatory requirements international employment issues risk expropriation real personal property burden complying foreign laws additionally event extended labor strikes occur country experiences significant political economic social instability could experience shortages labor andor material supplies necessary operate drilling rigs thereby potentially causing adverse material effect business financial condition results operations argentina dayrate denominated us dollars paid argentine pesos argentine branch one secondtier subsidiaries remits us dollars us parent converting argentine pesos us dollars argentine foreign exchange market repatriating us dollars argentina also history implementing currency controls restrict conversion repatriation us dollars including controls implemented september 2019 presently effect result currency controls ability remit funds argentine subsidiary us parent limited furthermore argentine government also instituted price controls crude oil diesel gasoline prices instituted exchange rate freeze connection prices argentina’s economy considered highly inflationary defined cumulative inflation rates exceeding 100 percent recent threeyear period based inflation data published respective governments nonetheless foreign subsidiaries use us dollar functional currency local currency monetary assets liabilities remeasured us dollars gains losses resulting foreign currency transactions included current results operations impact local laws future operations certain areas may conducted entities local citizens interests entities including joint ventures hold minority interest pursuant arrangements conduct operations contract local entities believe neither operating entities pursuant arrangements would material adverse effect operations revenues assurance cases able structure restructure operations conform local law administration thereof terms acceptable us although attempt minimize potential impact risks operating one geographical area year ended september 30 2019 approximately 76 percent operating revenues generated international locations contract drilling services business compared 96 percent year ended september 30 2018 year ended september 30 2019 approximately 916 percent operating revenues international locations operations south america compared 960 percent year ended september 30 2018 substantially south american operating revenues argentina colombia future occurrence one international events arising types risks described could material adverse impact business financial condition results operations note 3 business combinations fiscal year 2019 acquisitions august 21 2019 completed acquisition unaffiliated company drillscan energy sas subsidiaries drillscan whollyowned subsidiary company total consideration approximately 327 million includes 177 million contingent consideration fair value total assets acquired liabilities assumed acquisition date 363 million 36 million respectively including goodwill 149 million total assets acquired 191 million allocated identifiable intangible assets drillscan leading provider proprietary drilling engineering software well engineering services training oil gas industry operations drillscan included hp technologies reportable business segment acquisition drillscan accounted business combination accordance fasb asc 805 business combinations requires assets acquired liabilities assumed recorded acquisition date fair values accordance gaap entity allowed reasonable period time exceed one year obtain information necessary identify measure fair value assets acquired liabilities assumed business combination acquisition still within measurement period result acquisition date fair values recorded assets acquired liabilities assumed subject change november 1 2018 completed acquisition unaffiliated company angus jamieson consulting “ajc” whollyowned subsidiary company total consideration approximately 34 million ajc softwarebased training consultancy company based inverness scotland widely recognized industry leader wellbore positioning operations ajc included hp technologies reportable segment acquisition ajc accounted business combination accordance fasb asc 805 business combinations requires assets acquired liabilities assumed recorded acquisition date fair values allocation purchase price includes goodwill 31 million fiscal year 2018 acquisition december 8 2017 completed acquisition “magvar acquisition” unaffiliated company magnetic variation services llc “magvar” whollyowned subsidiary company effective time magvar acquisition magvar shareholders received aggregate cash consideration 479 million net customary closing adjustments certain management members received restricted stock awards covering 213904 shares helmerich payne inc common stock grant date fair value restricted stock 131 million amortized expense threeyear vesting period closing 60 million cash consideration placed escrow released sellers twelve months acquisition closing date amount placed escrow classified restricted cash included prepaid expenses consolidated balance sheet september 30 2018 amounts placed escrow september 30 2018 released sellers year ended september 30 2019 485 million total consideration 287 million allocated identifiable intangible assets 178 million recorded goodwill note 4 discontinued operations current noncurrent liabilities consist municipal income taxes payable social obligations due within country venezuela expenses incurred incountry obligations reported discontinued operations activity fiscal year ended september 30 2019 primarily due remeasurement uncertain tax liabilities result devaluation venezuela bolivar early 2018 venezuelan government announced changed existing dualrate foreign currency exchange system eliminating heavily subsidized foreign exchange rate 10 bolivars per united states dollar relaunched exchange system known dicom venezuela government also established new currency called “sovereign bolivar” determined elimination five zeros old currency dicom floating rate approximately 21028 bolivars per united states dollar september 30 2019 dicom floating rate might reflect barter market exchange rates note 5 property plant equipment property plant equipment september 30 2019 2018 consisted following impairments third quarter fiscal year 2019 companys management performed detailed assessment considering number approaches maximize utilization enhance margins domestic international flexrig4 asset groups june 2019 assessment concluded marketing smaller fleet two asset groups would provide best economic outcome decision made downsize number domestic international flexrig4 drilling rigs marketed customers 71 rigs 20 domestic rigs 10 rigs 8 international rigs utilize major interchangeable components decommissioned drilling rigs within asset groups capital spares remaining rig fleet reduced aggregate net book values flexrig4 asset groups june 30 2019 3178 million 1075 million domestic rigs 557 million 478 million international rigs following downsizing process performed detailed study optimize quantities capital spares drilling support equipment required support future operations rig fleet going forward decisions analysis resulted write excess capital spares drilling support equipment aggregate net book value 2353 million estimated proceeds ultimately received sale disposal based historical experience sales disposals similar assets resulting impairment 2243 million 1950 million net tax 178 per diluted share recorded consolidated statement operations year ended september 30 2019 2243 million total impairment charge recorded 2169 million 1886 million net tax 172 per diluted share 74 million 64 million net tax 006 per diluted share recorded us land international land segment respectively significant assumptions valuation classified level 2 inputs asc topic 820 fair value measurement disclosures due downsizing domestic international flexrig4 asset groups june 30 2019 performed impairment testing two asset groups concluded net book values asset groups recoverable estimated undiscounted cash flows surplus significant assumptions used undiscounted cash flow model include timing awards future drilling contracts operating dayrates operating costs rig reactivation costs drilling rig utilization estimated remaining useful life net proceeds received upon future saledisposition assumptions consistent companys internal forecasts future years although believe assumptions used analysis reasonable appropriate probabilityweighted average expected future undiscounted net cash flows exceed net book value domestic international flexrig4 asset groups june 30 2019 different assumptions estimates could materially impact analysis resulting conclusion fourth quarter fiscal year 2018 ceasing operations ecuador entered sales negotiation respect six conventional rigs within separate international conventional rigs’ asset group net book values 208 million present country pursuant rigs together associated equipment machinery sold third party recycled certain components rigs 85 million net book value subject sale agreement transferred united states utilized flexrigs high activity demand sales transaction completed november 2018 recorded noncash impairment charge within international land segment 92 million 70 million net tax 006 per diluted share included asset impairment charge consolidated statement operations fiscal year ended september 30 2018 result remaining rig within asset group disposed written resulting additional impairment charge 14 million 10 million net tax 001 per diluted share assets recorded fair value based sales agreement classified level 2 within fair value hierarchy furthermore fourth quarter fiscal year 2018 within us land segment management committed plan auction several previously decommissioned rigs fiscal year 2019 result wrote estimated fair values recorded noncash impairment charge 57 million 42 million net tax 004 per diluted share included asset impairment charge consolidated statements operations fiscal year ended september 30 2018 assets recorded fair value based auction price classified level 2 fair value hierarchy depreciation consolidated statements operations 5569 million 5784 million 5844 million includes abandonments 114 million 277 million 426 million fiscal years 2019 2018 2017 respectively fiscal year 2019 shortened estimated useful lives certain components rigs planned conversion resulting increase depreciation expense fiscal year 2019 approximately 47 million decrease depreciation expense fiscal years 2020 2021 2022 2023 2024 08 million 08 million 06 million 03 million 03 million respectively thereafter 05 million gain sale assets gain sales assets 397 million 227 million 206 million fiscal years 2019 2018 2017 respectively gains primarily related customer reimbursement replacement value drill pipe damaged lost drilling operations note 6 goodwill intangible assets goodwill within hp technologies reportable segment following summary changes goodwill thousands intangible assets intangible assets arising business acquisitions consisted following amortization expense consolidated statements operations 58 million 54 million 11 million fiscal years 2019 2018 2017 respectively estimated 70 million next three succeeding fiscal years approximately 64 million fiscal year 2023 approximately 62 million fiscal year 2024 impairments fourth quarter fiscal year 2018 part annual goodwill impairment test performed detailed assessment terravici reporting unit 47 million goodwill allocated determined estimated fair value reporting unit less carrying amount recorded goodwill impairment losses 47 million 35 million net tax 003 per diluted share addition recorded intangible assets impairment loss 09 million 07 million net tax 001 per diluted share impairment losses included asset impairment charge consolidated statements operations fiscal year ended september 30 2018 goodwill impairment analysis performed remaining technology reporting units fourth quarter fiscal year 2018 result impairment charge beginning october 1 2018 goodwill associated technology reporting units combined one reporting unit hp technologies goodwill impairment analysis performed fourth quarter fiscal year 2019 indicated fair value hp technologies reporting unit exceeded carrying value therefore goodwill impairment recognized note 7 debt following unsecured longterm debt outstanding rates maturities shown following table senior notes hpidc 2025 notes march 19 2015 issued 500 million 465 percent unsecured senior notes due 2025 redeemed full september 27 2019 described private exchange offer consent solicitation redemption interest notes payable semiannually march 15 september 15 debt discount amortized interest expense using effective interest method debt issuance costs amortized straightline stated life obligation approximated effective interest method private exchange offer consent solicitation redemption november 19 2018 commenced offer exchange “exchange offer” outstanding hpidc 2025 notes 500 million aggregate principal amount new 465 percent unsecured senior notes due 2025 company “company 2025 notes” registration rights ii cash concurrently exchange offer solicited consents “consent solicitation” adopt certain proposed amendments “proposed amendments” indenture governing hpidc 2025 notes include eliminating substantially restrictive covenants indenture limiting reporting covenant indenture december 20 2018 settled exchange offer pursuant issued approximately 4871 million aggregate principal amount company 2025 notes interest company 2025 notes payable semiannually march 15 september 15 year commencing march 15 2019 debt issuance costs amortized straightline stated life obligation approximates effective interest method terms company 2025 notes governed indenture dated december 20 2018 amended supplemented first supplemental indenture thereto dated december 20 2018 among company hpidc wells fargo bank national association trustee following consummation exchange offer hpidc outstanding approximately 129 million aggregate principal amount hpidc 2025 notes connection consent solicitation requisite number consents adopt proposed amendments received accordingly december 20 2018 hpidc company wells fargo bank national association trustee entered supplemental indenture governing hpidc 2025 notes adopt proposed amendments september 27 2019 redeemed remaining approximately 129 million aggregate principal amount hpidc 2025 notes approximately 146 million including accrued interest prepayment premium simultaneously redemption hpidc 2025 notes hpidc released guarantor company 2025 notes 2018 credit facility defined herein result release hp obligor company 2025 notes 2018 credit facility registered exchange offer february 15 2019 commenced registered exchange offer “registered exchange offer” exchange company 2025 notes new secregistered notes substantially identical terms company 2025 notes except offer issuance new notes registered securities act 1933 amended “securities act” certain transfer restrictions registration rights additional interest provisions relating company 2025 notes apply new notes registered exchange offer expired march 18 2019 approximately 9999 company 2025 notes exchanged company 2025 notes exchanged pursuant registered exchange offer registered securities act state securities laws may offered sold united states absent registration applicable exemption registration requirements transaction subject registration requirements securities act state securities law credit facilities november 13 2018 entered credit agreement among company borrower wells fargo bank national association administrative agent lenders party thereto providing unsecured revolving credit facility “2018 credit facility” originally set mature november 13 2023 pursuant 2018 credit facility amendment entered november 13 2018 among things maturity date extended one year november 13 2024 2018 credit facility 750 million aggregate availability maximum 75 million available use letters credit 2018 credit facility also permits aggregate commitments facility increased 300 million subject satisfaction certain conditions procurement additional commitments new existing lenders 2018 credit facility originally guaranteed hpidc guarantee released simultaneously redemption hpidc 2025 notes release hpidc guarantor company 2025 notes borrowings 2018 credit facility accrue interest spread either london interbank offered rate libor base rate also pay commitment fee unused balance facility borrowing spreads well commitment fees determined based debt rating senior unsecured debt company determined moody’s standard poor’s “sp” spread libor ranges 0875 percent 1500 percent per annum commitment fees range 0075 percent 0200 percent per annum based unsecured debt rating company september 30 2019 spread libor would 1125 percent borrowings outstanding facility commitment fees 0125 percent financial covenant 2018 credit facility requires us maintain total debt total capitalization ratio less equal 50 percent 2018 credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality including limitation priority debt defined credit agreement may exceed 175 percent net worth company september 30 2019 borrowings letters credit outstanding leaving 7500 million available borrow 2018 credit facility connection entering 2018 credit facility terminated 3000 million unsecured credit facility credit agreement dated july 13 2016 among hpidc borrower company guarantor wells fargo bank national association administrative agent lenders party thereto september 30 2019 two outstanding letters credit banks bilateral line credit agreements amounts 255 million 21 million respectively subsequent fiscal year end october 2019 balance 255 million outstanding letter credit reduced 248 million september 30 2019 also 200 million unsecured standalone line credit facility purpose obtaining issuance bid performance bonds well miscellaneous international needs 200 million 115 million letters credit outstanding september 30 2019 applicable agreements unsecured debt contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2019 compliance debt covenants september 30 2019 aggregate maturities longterm debt follows thousands note 8 income taxes income tax provision rate components provision benefit income taxes follows amounts domestic foreign income loss income taxes follows effective income tax rates compared us federal income tax rate follows 1 fiscal year 2017 “other” reflects adjustments nondeductible meals entertainment equity compensation excess officer’s compensation contingent consideration effective tax rates differ us federal statutory rate 210 percent due state foreign income taxes tax effect nondeductible expenditures primarily related certain meals entertainment excess officer’s compensation limited pursuant section 162m irc adjustments contingent consideration related acquisition motive drilling technologies inc deferred taxes deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary valuation allowances provided carrying value net deferred tax assets based management’s judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future components net deferred tax liabilities follows change net deferred tax assets liabilities impacted foreign currency remeasurement september 30 2019 federal state foreign tax net operating loss carryforwards 89 million 145 million 620 million respectively foreign tax credit carryforwards approximately 249 million 201 million reflected deferred tax asset consolidated financial statements prior consideration valuation allowance expire fiscal years 2020 2039 valuation allowance primarily attributable foreign certain state net operating loss carryforwards 169 million 05 million respectively foreign tax credit carryforwards 201 million equity compensation 41 million foreign minimum tax credit carryforwards 19 million likely utilized unrecognized tax benefits recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements operations september 30 2019 2018 accrued interest penalties 21 million 22 million respectively reconciliation change gross unrecognized tax benefits fiscal years ended september 30 2019 2018 follows september 30 2019 2018 liability unrecognized tax benefits includes 153 million 143 million respectively unrecognized tax benefits related discontinued operations recognized would affect effective tax rate remaining unrecognized tax benefits would affect effective tax rate recognized liabilities unrecognized tax benefits related interest penalties included noncurrent liabilities consolidated balance sheets next 12 months cannot predict certainty whether achieve ultimate resolution uncertain tax position associated us international land operations could result increases decreases unrecognized tax benefits however expect increases decreases material effect results operations financial position tax returns file consolidated us federal income tax return well income tax returns various states foreign jurisdictions tax years remain open examination us federal state jurisdictions include fiscal years 2015 2018 exception certain state jurisdictions currently audit tax years remaining open examination foreign jurisdictions include 2003 2019 note 9 shareholders’ equity company authorization board directors repurchase four million common shares calendar year repurchases may made using cash equivalents available sources fiscal 2019 purchased one million common shares aggregate cost 428 million held treasury shares purchases common shares fiscal years ended september 30 2018 2017 accumulated comprehensive income loss components accumulated comprehensive income loss follows 1 disclosed note 2summary significant accounting policies risks uncertainties adopted asu 201601 october 1 2018 standard requires changes fair value equity investments must recognized net income following summary changes accumulated comprehensive income loss net tax component fiscal year ended september 30 2019 1 disclosed note 2summary significant accounting policies risks uncertainties adopted asu 201601 october 1 2018 transition provisions enforced upon adoption require unrealized gains losses october 1 2018 recognized beginning balance equity 2 disclosed note 2summary significant accounting policies risks uncertainties adopted asu 201802 june 30 2019 standard permits reclassification certain income tax effects tax reform act accumulated comprehensive income loss retained earnings note 10 revenue contracts customers impact adoption effective october 1 2018 adopted asu 201409 revenue contracts customers asc 34040 “contracts customers” asc 606 introduced fivestep approach revenue recognition asc 34040 introduced detailed rules contract revenue related costs details new requirements well impact consolidated financial statements described applied asc 606 accordance modified retrospective transitional approach recognizing cumulative effect initially applying revenue standard adjustment opening balance retained earnings period october 1 2018 comparative prior year periods adjusted applying modified retrospective approach elected practical expedients completed contracts described asc 6061065c2 b contract modifications described asc 60610651f4 allowing application revenue standard contracts completed date initial application reflect aggregate effect modifications occur adoption date accordance new standard identifying satisfied unsatisfied performance obligations ii determining transaction price iii allocating transaction price satisfied unsatisfied performance obligations believe impact opening balance retained earnings period october 1 2018 would significantly different elected use practical expedients apart providing extensive disclosures revenue transactions application asc 606 significant impact financial position andor financial performance contract drilling services revenue substantially drilling services performed “daywork” contract basis charge rate per day price determined location depth complexity well drilled operating conditions duration contract competitive forces market contract drilling services represent series distinct daily services substantially pattern transfer customer customers benefit equally throughout service period efforts providing contract drilling services incurred relatively evenly period performance revenue recognized time using timebased input measure provide services customer contracts generally contain renewal extension provisions exercisable option customer prices mutually agreeable us customer contracts terminated customers prior expirations fixed terms contractual provisions customarily require early termination amounts paid us revenues early terminated contracts recognized contractual requirements met year ended september 30 2019 2018 early termination revenue approximately 113 million 171 million respectively also act principal certain reimbursable services auxiliary equipment provided us clients incur costs earn revenues many costs variable dependent upon activity performed day related contract accordingly reimbursements receive outofpocket expenses recorded revenues outofpocket expenses relate recorded operating costs period relate within series distinct time increments revenues recognized net sales taxes applicable drilling contracts also receive payments contractually designated mobilization demobilization drilling rigs equipment client’s drill site revenues associated mobilization demobilization drilling rigs client’s drill site relate distinct good service revenues deferred recognized ratably related contract term drilling services provided demobilization fees expected received upon contract completion estimated contract inception recognized straightline basis contract term amount demobilization revenue ultimately collect dependent upon specific contractual terms include provisions reduced payment demobilization among things contract renewed extended client rig subsequently contracted another client prior termination current contract since revenues associated demobilization activity typically variable period end estimated likely amount constrained likelihood significant reversal probable change expected amount demobilization revenue accounted net cumulative impact change estimate recognized period revenue estimate revised contract costs mobilization costs include certain direct costs incurred mobilization contracted rigs costs relate directly contract enhance resources used satisfying future performance obligations expected recovered costs capitalized incurred recorded current noncurrent contract fulfillment cost assets depending length initial contract term amortized systematic basis consistent pattern transfer goods services asset relates typically includes initial term related drilling contract period longer initial contract term management anticipates customer renew extend contract expect benefit cost mobilizing rig abnormal mobilization costs fulfillment costs incurred excessive resources wasted spoiled materials unproductive labor costs otherwise anticipated contract price expensed incurred september 30 2019 capitalized fulfillment costs 139 million capital modification costs incurred rig modifications upgrades required contract costs considered capital improvements costs capitalized property plant equipment depreciated estimated useful life improvement remaining performance obligations total aggregate transaction price allocated unsatisfied performance obligations commonly referred backlog september 30 2019 approximately 12 billion 09 billion expected recognized fiscal year 2020 approximately 03 billion fiscal year 2021 thereafter amounts include anticipated contract renewals additionally contracts currently contain monthtomonth terms represented backlog one month unsatisfied performance obligations contracts subject cancellation modification election customer however due level capital deployed customers underlying projects materially adversely affected contract cancellations modifications past material longterm contracts related hp technologies segment contract assets liabilities amounts owed customers revenue contracts typically billed monthly basis service provided due within 30 days billing amounts classified accounts receivable consolidated balance sheets certain contracts recognize revenues excess billings referred contract assets within prepaid expenses current assets within consolidated balance sheets certain contracts may entitled receive payments advance satisfying performance obligations contract recognize liability payments excess revenue recognized referred deferred revenue contract liabilities within accrued liabilities noncurrent liabilities consolidated balance sheets contract balances presented net amount contract level following table summarizes balances contract assets liabilities dates indicated note 11 stockbased compensation march 2 2016 helmerich payne inc 2016 omnibus incentive plan “2016 plan” approved stockholders 2016 plan among things authorizes human resources committee board grant nonqualified stock options restricted stock awards performance share units selected employees nonemployee directors restricted stock may granted consideration prior future services purchase price per share stock options may less market price underlying stock date grant stock options expire 10 years grant date awards outstanding helmerich payne inc 2005 longterm incentive plan helmerich payne inc 2010 longterm incentive plan remain subject terms conditions plans fiscal year ended september 30 2019 new nonqualified stock options granted prospectively fiscal year 2019 replaced stock options performance share units component executives’ longterm equity incentive compensation also eliminated stock options element director compensation program board determined award stockbased compensation directors solely form restricted stock fiscal year ended september 30 2019 474775 shares restricted stock awards 145153 performance share units granted 2016 plan summary compensation cost stockbased payment arrangements recognized contract drilling services operating expense selling general administrative expense fiscal years 2019 2018 2017 follows total stockbased compensation expense 75 million recorded contract drilling services operating expense 268 million selling general administrative expense fiscal year 2019 consolidated statements operations stock options vesting requirements stock options determined human resources committee board directors options currently outstanding began vesting one year grant date 25 percent options vesting four consecutive years use blackscholes formula estimate fair value stock options granted employees fair value options amortized compensation expense straightline basis requisite service periods stock awards generally vesting periods 1 riskfree interest rate based us treasury securities expected term option 2 expected volatilities based daily closing price stock based upon historical experience period approximates expected term option 3 dividend yield based current dividend yield 4 expected term options granted represents period time expected outstanding estimate term option granted based historical experience grants exercise based calculations weightedaverage fair value per option granted acquire share common stock 1317 2048 per share fiscal years 2018 2017 respectively following summary reflects stock option activity common stock related information fiscal years 2019 2018 2017 following table summarizes information stock options september 30 2019 shares thousands september 30 2019 weightedaverage remaining life exercisable stock options 447 years aggregate intrinsic value 04 million weightedaverage exercise price 6038 per share number options vested expected vest september 30 2019 755761 aggregate intrinsic value zero weightedaverage exercise price 6242 per share september 30 2019 unrecognized compensation cost related stock options 32 million cost expected recognized weightedaverage period 2 years total intrinsic value options exercised fiscal years 2019 2018 2017 79 million 99 million 131 million respectively grant date fair value shares vested fiscal years 2019 2018 2017 80 million 88 million 67 million respectively restricted stock restricted stock awards consist common stock timevested four years nonforfeitable dividends paid nonvested shares restricted stock recognize compensation expense straightline basis vesting period fair value restricted stock awards determined based closing price shares grant date september 30 2019 349 million total unrecognized compensation cost related unvested restricted stock awards cost expected recognized weightedaverage period 23 years summary status restricted stock awards september 30 2019 changes restricted stock outstanding fiscal years ended september 30 2019 2018 2017 follows 1 number restricted stock awards vested includes shares withheld behalf employees satisfy statutory tax withholding requirements performance share units made awards certain employees subject marketbased performance conditions performance share units subject terms conditions set forth applicable performance share unit award agreements 2016 plan grants performance share units subject vesting period three years “vesting period” dependent achievement certain performance goals performance share unit awards consist two separate components performance share units comprise first component subject threeyear performance cycle performance share units comprise second component divided three separate tranches subject separate oneyear performance cycle within full threeyear performance cycle vesting performance share units generally dependent achievement company’s total shareholder return “tsr” performance goals relative tsr achievement peer group companies “peer group” applicable performance cycle ii continued employment recipient performance share unit award throughout vesting period end vesting period recipients receive dividend equivalents respect number vested performance share units vesting units ranges zero 200 units granted depending company’s tsr relative tsr peer group vesting date grant date fair value performance share units determined use monte carlo simulation method monte carlo simulation method requires use highly subjective assumptions key assumptions method include price expected volatility stock selfdetermined peer groups stock risk free rate return crosscorrelations company peer group valuation model assumes dividends immediately reinvested september 30 2019 47 million unrecognized compensation cost related unvested performance share units cost expected recognized weightedaverage period 19 years summary status performance share units fiscal year ended september 30 2019 presented weightedaverage fair value calculations performance share units granted within fiscal period based following weightedaverage assumptions set forth table 1 riskfree interest rate based us treasury securities expected term performance share units 2 expected volatilities based daily closing price stock based upon historical experience period approximates expected term performance share units note 12 earnings losses per common share asc 260 earnings per share requires companies treat unvested sharebased payment awards nonforfeitable rights dividends dividend equivalents separate class securities calculating earnings per share granted expect continue grant employees restricted stock grants contain nonforfeitable rights dividends grants considered participating securities asc 260 required include grants calculation basic earnings per share calculate basic earnings per share using twoclass method twoclass method computing earnings per share earnings allocation formula determines earnings per share class common stock participating security according dividends declared accumulated participation rights undistributed earnings basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock performance share units twoclass method calculating earnings per share dividends paid portion undistributed net income losses allocated unvested restricted stock grants receive dividends considered participating securities following table sets forth computation basic diluted earnings per share net loss fiscal years 2019 2017 accordingly diluted earnings per share calculation years equivalent basic earnings per share calculation since diluted earnings per share excluded assumed exercise equity awards excluded deemed antidilutive meaning inclusion would reduced reported net loss per share applicable period following average shares attributable outstanding equity awards excluded calculation diluted earnings per share inclusion would antidilutive note 13 fair value measurement financial instruments certain assets liabilities required measured disclosed fair value fair value defined exchange price would received sell asset paid transfer liability exit price principal advantageous market asset liability orderly transaction market participants measurement date use fair value hierarchy established asc 82010 measure fair value prioritize inputs • level 1 quoted prices unadjusted active markets identical assets liabilities reporting entity access measurement date • level 2 observable inputs quoted prices included level 1 quoted prices similar assets liabilities active markets quoted prices similar assets liabilities markets active inputs observable corroborated observable market data • level 3 unobservable inputs supported little market activity significant fair value assets liabilities includes pricing models discounted cash flow methodologies similar techniques use significant unobservable inputs assets held nonqualified supplemental savings plan carried fair value totaled 157 million 162 million september 30 2019 2018 respectively assets comprised mutual funds measured using level 1 inputs shortterm investments include securities classified trading securities realized unrealized gains losses trading securities included income expense consolidated statements operations securities recorded fair value nonfinancial assets intangible assets goodwill property plant equipment recorded fair value acquired business combination impairment charge recognized measured fair value consolidated balance sheets would generally classified within level 2 3 fair value hierarchy majority cash equivalents invested highlyliquid moneymarket mutual funds invested primarily direct indirect obligations us government carrying amount cash equivalents approximates fair value due short maturity investments carrying value current assets accrued liabilities approximated fair value september 30 2019 2018 following table summarizes assets measured fair value presented consolidated balance sheet september 30 2019 financial instruments measured fair value utilizing level 1 inputs include cash equivalents us agency issued debt securities equity securities active markets money market funds classified restricted assets current portion restricted amounts included prepaid expenses noncurrent portion included assets items quoted current market prices readily available september 30 2019 assets measured fair value using level 2 inputs include certificates deposit municipal bonds corporate bonds measured using broker quotations utilize observable market inputs financial instruments measured using level 3 unobservable inputs consist potential earnout payments associated acquisition drillscan ajc fiscal year 2019 motive drilling technologies inc fiscal year 2017 september 30 2019 fair value motive contingent consideration zero fair value potential earnout payments calculated using either monte carlo simulation evaluates numerous potential earnings pay scenarios probability analysis following table presents reconciliation changes fair value financial assets liabilities classified level 3 fair value measurements fair value hierarchy indicated periods 1 settlements represent earnout payments earned paid period following table provides quantitative information thousands level 3 unobservable inputs september 30 2019 1 weighted average payment amounts probabilities level 3 unobservable inputs associated contingent consideration valued using probability analysis weighted relative undiscounted fair value payment amounts probability payment amounts respectively significant unobservable inputs subject change based changes economic market conditions use significant unobservable inputs creates uncertainty measurement fair value reporting date significant unobservable inputs used fair value measurement contingent consideration using monte carlo simulation discount rate ii revenue volatility iii riskfree rate significant increases decreases discount rate riskfree rate isolation would result significantly lower higher fair value measurement significant changes revenue volatility isolation would result significantly lower higher fair value measurement significant unobservable inputs used fair value measurement contingent consideration using probability analysis discount rate ii payment amounts iii probabilities significant increases decreases discount rate isolation would result significantly lower higher fair value measurement contrary significant increases decreases payment amounts probabilities isolation would result significantly higher lower fair value measurement possible us predict effect future economic market conditions estimated fair values following information presents supplemental fair value information longterm fixedrate debt september 30 2019 2018 fair value 4871 million fixedrate debt based broker quotes september 30 2019 notes classified within level 2 fair value hierarchy actively traded markets adopted asu 201601 october 1 2018 result recognize marketable equity securities readily determinable fair values fair value changes values reflected net income previously recognized changes fair value equity securities comprehensive income consolidated statements comprehensive income loss longer requirement consider whether decline fair value otherthantemporary estimated fair value investments reflected consolidated balance sheets investments based level 1 inputs september 2019 sold remaining 16 million shares valaris previously known ensco rowan plc total proceeds approximately 120 million note 14 employee benefit plans maintain domestic noncontributory defined benefit pension plan covering certain us employees meet certain age service requirements july 2003 revised helmerich payne inc employee retirement plan “pension plan” close pension plan new participants effective october 1 2003 reduce benefit accruals current participants september 30 2006 time benefit accruals discontinued pension plan frozen following table provides reconciliation changes pension benefit obligations fair value pension plan assets twoyear period ended september 30 2019 statement funded status september 30 2019 2018 amounts recognized consolidated balance sheets september 30 2019 2018 follows thousands amounts recognized accumulated comprehensive income loss september 30 2019 2018 yet reflected net periodic benefit cost follows thousands amount recognized accumulated comprehensive income loss yet reflected periodic benefit cost expected amortized next year’s periodic benefit cost net actuarial loss 27 million weighted average assumptions used pension calculations follows mortality table issued society actuaries october 2018 used september 30 2019 pension calculation make contributions pension plan fiscal year 2019 fiscal year 2020 expect minimum contributions required law needed however may make contributions fiscal year 2020 needed fund unexpected distributions lieu liquidating pension assets components net periodic pension expense benefit follows record settlement expense benefit payments exceed total annual service interest costs following table reflects expected benefits paid pension plan next five fiscal years aggregate five years thereafter thousands included pension plan unfunded supplemental executive retirement plan investment strategy asset allocation investment policy strategies established longterm view mind investment strategy intended help pay cost pension plan providing adequate security meet benefits promised pension plan maintain diversified asset mix minimize risk material loss portfolio value might occur devaluation single investment determining appropriate asset mix financial strength ability fund potential shortfalls considered pension plan assets invested portfolios diversified publicmarket equity securities fixed income securities pension plan directly hold securities company expected longterm rate return pension plan assets based historical projected rates return current planned asset classes pension plan’s investment portfolio analyzing historical experience future expectations return volatility various asset classes target allocation 2020 asset allocation pension plan end fiscal years 2019 2018 asset category follows plan assets fair value pension plan assets september 30 2019 2018 summarized level within fair value hierarchy described note 13fair value measurement financial instruments follows pension plan’s financial assets utilizing level 1 inputs valued based quoted prices active markets identical securities pension plan’s level 2 financial assets include domestic common stock pension plan’s assets utilizing level 3 inputs consist oil gas properties fair value oil gas properties determined wells fargo bank na based upon actual revenue received previous twelvemonth period experience similar assets following table sets forth summary changes fair value pension plan’s level 3 assets fiscal years ended september 30 2019 2018 defined contribution plan substantially employees us payroll may elect participate 401kthrift plan contributing portion earnings contribute amount equal 100 percent first five percent participant’s compensation subject certain limitations annual expense incurred defined contribution plan 305 million 266 million 166 million fiscal years 2019 2018 2017 respectively note 15 supplemental balance sheet information following reflects activity reserve bad debt fiscal years 2019 2018 2017 accounts receivable prepaid expenses current assets accrued liabilities longterm liabilities september 30 2019 2018 consist following note 16 commitments contingencies purchase commitments equipment parts supplies ordered advance promote efficient construction capital improvement progress september 30 2019 purchase commitments equipment parts supplies approximately 137 million guarantee arrangements normal course business enter agreements financial institutions provide letters credit surety bonds connection certain commitments entered us contingently liable financial institutions respect letters credit bonds agreed indemnify financial institutions payments made respect letters credit bonds none offbalance sheet arrangements either likely material effect consolidated financial statements lease obligations september 30 2019 leasing corporate office headquarters near downtown tulsa oklahoma also lease office space equipment use operations future minimum rental payments required operating leases initial remaining noncancelable lease terms excess year september 30 2019 thousands follows total rent expense 155 million 137 million 140 million fiscal years 2019 2018 2017 respectively future minimum lease payments tulsa corporate office material portion amounts shown table lease agreement commenced may 30 2003 subsequently amended recently march 12 2018 agreement expire january 31 2025 however two threeyear renewal options contingencies party legal proceedings regulatory actions time including number cases currently pending maintain insurance certain business risks subject certain deductibles exception matters discussed none legal actions expected material adverse effect financial condition cash flows results operations ordinary course business contingencies arise resulting existing condition situation set circumstances involving uncertainty realization possible gain loss contingency account gain contingencies accordance provisions asc 450 contingencies therefore record gain contingencies recognize income realized property equipment venezuelan subsidiary seized venezuelan government june 30 2010 hpidc whollyowned subsidiary parent company venezuelan subsidiary lawsuit pending united states district court district columbia bolivarian republic venezuela petroleos de venezuela sa pdvsa petroleo sa seeking damages taking venezuelan drilling business violation international law exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery contingent gains recognized consolidated financial statements fiscal years ended september 30 2019 2018 2017 january 2018 employee hpidc suffered personal injury subsequently brought lawsuit operator hp pursuant terms drilling contract hpidc operator hpidc indemnified operator lawsuit subject certain limitations hp settled matter behalf operator 210 million settlement amount paid company settlement paid year ended september 30 2019 believe meritorious defenses matter determined settlement reasonable alternative uncertainty expense associated jury trial october 2017 employee hpidc suffered personal injury subsequently brought lawsuit operator pursuant terms drilling contract hpidc operator hpidc indemnified operator lawsuit subject certain limitations settlement discussions related lawsuit remain ongoing september 30 2019 accrued 95 million lawsuit although assurance given believe based experiences date taking account established reserves insurance ultimate resolution items material adverse impact financial condition cash flows results operations note 17 business segments geographic information description business global contract drilling services company based tulsa oklahoma operations major us onshore basins well south america middle east contract drilling services operations consist mainly contracting companyowned drilling equipment primarily large oil gas exploration companies recognized industry leader drilling well technological innovation effective october 1 2018 fourth quarter fiscal year 2019 implemented organizational changes consistent manner chief operating decision maker evaluates performance allocates resources effective october 1 2018 technology reporting units previously reported “other” within segment disclosures managed presented within new hp technologies reportable segment result beginning reporting first quarter fiscal year 2019 operations organized following reportable business segments us land offshore international land hp technologies additionally fourth quarter fiscal year 2019 migrated flexapp offerings hp technologies segment activity flexapps previously included us land segment real estate operations incubator program new research development projects included segment disclosures restated practicable segment changes consolidated revenues expenses reflect elimination intercompany transactions september 30 2019 contract drilling services business includes following reportable operating segments • us land • offshore • international land • hp technologies reportable operating segment strategic business unit managed separately consolidated revenues expenses reflect elimination material intercompany transactions includes additional nonreportable operating segments revenues included “other” primarily consist rental income segment performance evaluate segment performance based income loss continuing operations segment operating income taxes includes • revenues external internal customers • direct operating costs • depreciation amortization • allocated general administrative costs • asset impairment charges excludes corporate costs depreciation income asset sales corporate income expense corporate assets general administrative costs allocated segments based primarily specific identification extent identification practical methods believe reasonable reflection utilization services provided 1 prior period information restated reflect change operating segments structure 2 prior period information restated reflect transfer flexapp revenue related costs us land hp technologies certain flexapp revenue separately priced drilling contracts recorded us land segment impracticable retrospectively quantify restated 1 prior period information restated reflect change operating segments structure 2 prior period information restated reflect transfer flexapp revenues related costs us land hp technologies certain flexapp revenue separately priced drilling contract recorded us land segment impracticable retrospectively quantify restated following table reconciles segment operating income loss income continuing operations income taxes reported consolidated statements operations following table reconciles segment total assets total assets reported consolidated balance sheets following table presents revenues external customers longlived assets country based location service provided note 18 selected quarterly financial data unaudited 1 sum earnings per share four quarters may equal total earnings per share fiscal year due changes average number common shares outstanding first quarter fiscal year 2019 net income includes aftertax gain sale assets approximately 42 million 004 per share diluted basis second quarter fiscal year 2019 net income includes aftertax gain sale assets 89 million 008 per share diluted basis third quarter fiscal year 2019 net loss includes aftertax gain sale assets 77 million 007 per share diluted basis aftertax loss asset impairments approximately 1732 million 158 per share diluted basis fourth quarter fiscal year 2019 net income includes aftertax gain sale assets 98 million 009 per share diluted basis 1 sum earnings per share four quarters may equal total earnings per share year due changes average number common shares outstanding first quarter fiscal year 2018 net income includes tax benefit approximately 5021 million 459 per share diluted basis aftertax gain sale assets 42 million 004 per share diluted basis second quarter fiscal year 2018 net loss includes aftertax gain sale assets 38 million 004 per share diluted basis third quarter fiscal year 2018 net loss includes aftertax gain sale assets 31 million 002 per share diluted basis fourth quarter fiscal year 2018 net income includes aftertax gain sale assets 55 million 005 per share diluted basis aftertax loss asset impairments approximately 172 million 016 per share diluted basis note 19 subsequent events november 13 2019 entered first amendment 2018 credit facility among company borrower wells fargo bank national association administrative agent lenders party thereto “2018 credit facility amendment” amongst things 2018 credit facility amendment extended maturity date 2018 credit facility one year november 13 2024 ii deleted certain negative covenants iii refreshed number permissible extensions maturity date require consent extending lenders item 9 changes disagreements accountants accounting financial disclosure none item 9a controls procedures evaluation disclosure controls procedures management participation chief executive officer chief financial officer evaluated effectiveness disclosure controls procedures end period covered report based evaluation chief executive officer chief financial officer concluded disclosure controls procedures end period covered report designed effective reasonable assurance level information required disclosed us periodic sec filings recorded processed summarized reported within time periods specific sec’s rules regulations forms communicated management believe controls system matter well designed operated cannot provide absolute assurance objectives controls system met evaluation controls provide absolute assurance control issues instances fraud within company detected b management’s report internal control financial reporting copy management’s report internal control financial reporting included item 8item 7a quantitative qualitative disclosures market risk financial position exposed variety risks including foreign currency exchange risk commodity price risk credit capital market risk interest rate risk equity price risk seen increase risks related uncertainties increased volatility oil gas prices financial markets result covid19 pandemic foreign currency exchange rate risk drilling contracts foreign countries generally provide payment us dollars historically argentina contracts denominated us dollar paid argentine pesos currently receiving customer payments us dollars likely receive future payments argentine pesos past argentine branch one secondtier subsidiaries remits us dollars us parent converting argentine pesos us dollars argentine foreign exchange market repatriating us dollars future contracts applicable law may require payments made foreign currencies assurance experience argentina elsewhere devaluation foreign currency foreign exchange restrictions difficulties repatriating us dollars even able negotiate contract provisions designed mitigate risks september 30 2020 hypothetical decrease value 10 percent would result insignificant decrease value monetary assets liabilities denominated argentine pesos approximately 22 million argentina’s economy currently considered highly inflationary defined cumulative inflation rates exceeding 100 percent recent threeyear period based inflation data published respective governments nonetheless foreign operations use us dollar functional currency local currency monetary assets liabilities remeasured us dollars gains losses resulting foreign currency transactions included current results operations commodity price risk demand drilling services solutions derived exploration production companies spending money explore develop drilling prospects search crude oil natural gas spending driven cash flow financial strength affected trends crude oil natural gas commodity prices crude oil prices determined number factors including global supply demand establishment compliance production quotas oil exporting countries worldwide economic conditions geopolitical factors crude oil natural gas prices historically volatile difficult predict degree certainty current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels volatility lead many exploration production companies base capital spending much conservative estimates commodity prices result demand drilling services solutions always purely function movement commodity prices credit capital market risk customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets experienced past make difficult customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result customer credit defaults reduced demand services could material adverse effect business financial condition results operations similarly may need access capital markets obtain financing ability access capital markets financing could limited among things oil gas prices existing capital structure credit ratings state economy health drilling overall oil gas industry liquidity capital markets many factors affect ability access capital markets outside control assurance given able access capital markets terms acceptable us required could material adverse impact business financial condition results operations attempt secure favorable prices advanced ordering purchasing drilling rig components materials generally available acceptable prices assurance prices vary significantly future fluctuations market conditions causing increased prices materials supplies could material adverse effect future operating costs interest rate risk interest rate risk exposure results primarily shortterm rates mainly liborbased borrowings revolving credit facility outstanding borrowings facility september 30 2020 outstanding debt consisted 4871 million face amount senior unsecured notes fixed rate 465 percent fair value fixedrate debt estimated 5345 million 5264 million fiscal years 2020 2019 respectively equity price risk september 30 2020 marketable equity securities total fair value 73 million total fair value marketable securities 163 million september 30 2019 hypothetical 10 percent decrease market price marketable equity securities september 30 2020 would decrease fair value 07 million make specific plans sell securities rather sell securities based market conditions circumstances securities subject wide variety number marketrelated risks could substantially reduce increase fair value holdings november 12 2020 total fair value marketable securities increased approximately 81 million continually monitor fair value investments unable predict future market volatility potential impact consolidated financial statements item 8item 7a quantitative qualitative disclosures market risk information required item may found item 1a risk factors item 7 managements discussion analysis financial condition results operationsquantitative qualitative disclosures market risk included form 10k item 8nanitem 7a quantitative qualitative disclosures market risk information required item may found caption “risk factors” beginning page 7 report following pages company’s annual report management’s discussion analysis results operations financial condition notes consolidated financial statements item 8 item 8 financial statements supplementary data information required item may found pages 17 30 registrants annual report shareholders fiscal 1994 incorporated herein reference item 9item 8 financial statements supplementary data information required item may found pages 17 30 registrants annual report shareholders fiscal 1995 incorporated herein reference item 9item 8 financial statements supplementary data information required item may found pages 17 30 registrants annual report shareholders fiscal 1996 incorporated herein reference item 9item 8 financial statements supplementary data information required item may found pages 16 30 registrants annual report shareholders fiscal 1997 incorporated herein reference item 9item 8 financial statements supplementary data information required item may found pages 19 34 registrants annual report shareholders fiscal 1998 incorporated herein reference item 9item 8 financial statements supplementary data information required item may found pages 18 34 registrants annual report shareholders fiscal 2000 incorporated herein reference item 9item 8 financial statements supplementary data information required item may found pages 18 34 registrants annual report shareholders fiscal 2001 incorporated herein reference item 9item 8 financial statements supplementary data information required item may found pages 40 67 companys annual report stockholders fiscal 2002 incorporated herein reference item 9item 8 financial statements supplementary data information required item may found pages 35 61 company’s annual report item 9item 8 financial statements supplementary data information required item may found pages 40 67 company’s annual report item 9item 8 financial statements supplementary data information required item may found incorporated reference pages companys annual report exhibit 13 form 10k item 9item 8 financial statements supplementary data information required item may found incorporated reference pages 41 77 companys annual report exhibit 13 form 10k item 9item 8 financial statements supplementary data information required item may found incorporated reference pages 44 82 companys annual report exhibit 13 form 10k item 9item 8 financial statements supplementary data information required item may found incorporated reference pages 43 81 annual report exhibit 13 form 10k item 9item 8 financial statements supplementary data information required item may found incorporated reference pages 43 83 annual report exhibit 13 form 10k item 9item 8 financial statements supplementary data information required item may found incorporated reference pages 38 76 annual report exhibit 13 form 10k item 9item 8 financial statements supplementary data information required item may found incorporated reference pages 19 56 annual report exhibit 13 form 10k item 9item 8 financial statements supplementary data index consolidated financial statements page report independent registered public accounting firm consolidated statements income years ended september 30 2013 2012 2011 consolidated statements comprehensive income years ended september 30 2013 2012 2011 consolidated balance sheets september 30 2013 2012 consolidated statements shareholders equity years ended september 30 2013 2012 2011 consolidated statements cash flows years ended september 30 2013 2012 2011 notes consolidated financial statements report independent registered public accounting firm helmerich payne inc board directors shareholders helmerich payne inc audited accompanying consolidated balance sheets helmerich payne inc september 30 2013 2012 related consolidated statements income comprehensive income shareholders equity cash flows three years period ended september 30 2013 financial statements responsibility companys management responsibility express opinion financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position helmerich payne inc september 30 2013 2012 consolidated results operations cash flows three years period ended september 30 2013 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states helmerich payne incs internal control financial reporting september 30 2013 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 1992 framework report dated november 27 2013 expressed unqualified opinion thereon ernst young llp tulsa oklahoma november 27 2013 consolidated statements income helmerich payne inc accompanying notes integral part statements consolidated statements comprehensive income helmerich payne inc accompanying notes integral part statements consolidated balance sheets helmerich payne inc accompanying notes integral part statements consolidated balance sheets continued helmerich payne inc accompanying notes integral part statements consolidated statements shareholders equity helmerich payne inc accompanying notes integral part statements consolidated statements cash flows helmerich payne inc accompanying notes integral part statements notes consolidated financial statements helmerich payne inc note 1 summary significant accounting policies principles consolidation consolidated financial statements include accounts helmerich payne inc whollyowned subsidiaries fiscal years foreign operations end august 31 facilitate reporting consolidated results significant intervening events materially affected financial statements basis presentation classified former venezuelan operation operating segment within international land segment discontinued operation third quarter fiscal 2010 fully described note 2 unless indicated otherwise information notes consolidated financial statements relates continuing operations foreign currencies functional currency foreign operations us dollar nonmonetary assets liabilities translated historical rates monetary assets liabilities translated exchange rates effect end period income statement accounts translated average rates year gains losses remeasurement foreign currency financial statements foreign currency translations us dollars included direct operating costs included direct operating costs aggregate foreign currency remeasurement transaction gains 07 million 03 million fiscal 2013 2012 respectively losses totalling 12 million fiscal 2011 use estimates preparation financial statements conformity accounting principles generally accepted united states america gaap requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period actual results could differ estimates recently adopted accounting standards october 1 2012 adopted accounting standards update asu 201104 fair value measurement topic 820 amendments achieve common fair value measurement disclosure requirements us gaap ifrss asu 201104 intended create consistency us gaap international financial reporting standards ifrs definition fair value guidance measure fair value disclose fair value measurements adoption provisions material impact consolidated financial statements october 1 2012 adopted asu 201105 comprehensive income topic 220 presentation comprehensive income asu 201105 issued increase prominence comprehensive income oci financial statements presentation oci shown separate statement applied retrospectively adoption impact amount oci reported consolidated financial statements notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued cash equivalents cash equivalents consist investments shortterm highly liquid securities original maturities three months less carrying values assets approximate fair values primarily utilize cash management system series separate accounts consisting lockbox accounts receiving cash concentration accounts several zerobalance disbursement accounts funding payroll accounts payable result cash management system checks issued presented banks payment may create negative book cash balances restricted cash equivalents restricted cash equivalents 257 million 310 million september 30 2013 2012 respectively cash restricted purpose potential insurance claims whollyowned captive insurance company total september 30 2013 20 million initial capitalization captive company management elected restrict additional 237 million restricted amounts primarily invested shortterm money market securities restricted cash equivalents reflected balance sheet follows inventories supplies inventories supplies primarily replacement parts supplies held use drilling operations inventories supplies valued lower cost moving average actual market value investments maintain investments equity securities certain publicly traded companies cost securities used determining realized gains losses based average cost basis security sold regularly review investment securities impairment based criteria include extent investments carrying value exceeds related fair value duration market decline financial strength specific prospects issuer security unrealized losses temporary recognized earnings property plant equipment property plant equipment stated cost less accumulated depreciation substantially property plant equipment depreciated using straightline method based estimated useful lives assets contract drilling equipment 415 years real estate buildings equipment 1045 years 223 years depreciation consolidated statements income includes abandonments 91 million 164 million 49 million fiscal 2013 2012 2011 notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued respectively cost maintenance repairs charged direct operating cost betterments refurbishments capitalized lease office space equipment use operations leases evaluated inception subsequent material modification depending lease terms classified either capital leases operating leases appropriate accounting standards codification asc 840 leases significant capital leases capitalization interest capitalize interest major projects construction interest capitalized based average interest rate related debt capitalized interest fiscal 2013 2012 2011 88 million 129 million 82 million respectively valuation longlived assets review longlived assets impairment whenever events changes circumstances indicate carrying amount asset may recoverable changes could prompt assessment include significant decline revenue cash margin per day extended periods low rig utilization changes market demand specific asset obsolescence completion specific contracts andor overall general market conditions review longlived assets indicates carrying value certain assets estimated undiscounted future cash flows impairment charge made adjust carrying value estimated fair value asset fair value drilling rigs determined based upon estimated discounted future cash flows estimated fair market value available cash flows estimated management considering factors prospective market demand recent changes rig technology effect rigs marketability cash investment required make rig marketable suitability rig size make existing platforms competitive dynamics including industry utilization fair value estimated applicable considering factors recent market sales rigs companies sales rigs appraisals factors selfinsurance accruals accrued liability estimated workers compensation casualty claims incurred liability benefits former inactive employees employment retirement material drilling revenues contract drilling revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized straightline basis term related drilling contract costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs reimbursements fiscal 2013 2012 2011 3325 million 3297 million 2510 million respectively contracts terminated prior notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued specified term early termination payments received us recognized revenues contractual requirements met rent revenues enter leases tenants rental properties consisting primarily retail multitenant warehouse space lease terms tenants occupying space retail centers warehouse buildings generally range three ten years minimum rents recognized straightline basis term related leases overage percentage rents based tenants sales volume recoveries tenants property taxes operating expenses recognized operating revenues consolidated statements income rent revenues follows september 30 2013 minimum future rental income received noncancelable operating leases follows leasehold improvement allowances capitalized amortized lease term september 30 2013 2012 cost accumulated depreciation real estate properties follows notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued income taxes current income tax expense amount income taxes expected payable current year deferred income taxes computed using liability method provided temporary differences financial basis tax basis assets liabilities provide uncertain tax positions tax positions meet recognition thresholds measurement standards prescribed asc 740 income taxes fully discussed note 4 amounts uncertain tax positions adjusted periods new information becomes available positions effectively settled recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements income earnings per share basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock stockbased compensation record compensation expense associated stock options accordance asc 718 compensationstock compensation expense determined using fairvaluebased measurement method awards granted computing impact fair value option estimated date grant based blackscholes optionspricing model utilizing certain assumptions risk free interest rate volatility dividend yield expected remaining term awards assumptions used calculating fair value sharebased payment awards represent managements best estimates involve inherent uncertainties application management judgment stockbased compensation recognized straightline basis requisite service periods stock awards generally vesting period compensation expense related stock options recorded component general administrative expenses consolidated statements income treasury stock treasury stock purchases accounted cost method whereby cost acquired stock recorded treasury stock gains losses subsequent reissuance shares credited charged additional paidin capital using averagecost method new accounting standards february 2013 financial accounting standards board fasb issued asu 20132 comprehensive income asu amends asc 220 comprehensive income supersedes replaces asu 201105 presentation comprehensive income asu 201112 comprehensive income require reclassification adjustments comprehensive income presented either financial statements notes financial statements standard change notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued current requirements reporting net income comprehensive income financial statements however guidance require entity provide enhanced disclosures present separately component reclassifications accumulated comprehensive income amendments asu effective prospectively reporting periods beginning december 15 2012 believe adoption guidance material impact consolidated financial statements note 2 discontinued operations june 30 2010 official gazette venezuela published decree venezuelan president hugo chavez authorized forceful acquisition eleven rigs owned venezuelan subsidiary decree also authorized seizure personal real property improvements used venezuelan subsidiary drilling operations seizing assets became effective june 30 2010 met criteria established recognition discontinued operations accounting standards presentation financial statements therefore operations venezuelan subsidiary operating segment previously within international land segment classified discontinued operations consolidated financial statements summarized operating results discontinued operations follows income discontinued operations fiscal 2013 2012 attributable proceeds arbitration fully described note 13 net expenses incurred incountry obligations significant categories assets liabilities discontinued operations follows current assets consist restricted cash meet remaining incountry current obligations liabilities consist municipal income taxes payable social obligations due within country venezuela notes consolidated financial statements continued helmerich payne inc note 3 debt september 30 2013 2012 80 million 195 million respectively unsecured longterm debt outstanding rates maturities shown following table intermediate unsecured debt outstanding september 30 2013 matures august 15 2014 carries interest rate 656 percent paid semiannually terms require maintain ratio debt total capitalization less 55 percent debt held various entities 120 million senior unsecured fixedrate notes outstanding september 30 2013 mature period july 2014 july 2016 interest notes paid semiannually based annual rate 610 percent annual principal repayments 40 million due july 2014 july 2016 complied financial covenants require us maintain funded leverage ratio less 55 percent interest coverage ratio defined less 250 100 300 million unsecured revolving credit facility mature may 25 2017 credit facility 100 million available use letters credit anticipate majority borrowings facility accrue interest spread london interbank offered rate libor also pay commitment fee based unused balance facility borrowing spreads well commitment fees determined according scale based ratio total debt total capitalization spread libor ranges 1125 percent 175 percent per annum commitment fees range 15 percent 35 percent per annum based debt total capitalization september 30 2013 spread libor commitment fees would 1125 percent 15 percent respectively financial covenants facility require us maintain funded leverage ratio defined less 50 percent interest coverage ratio defined less 300 100 credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2013 borrowings two letters credit outstanding amount 272 million two outstanding letters credit replaced two collateral trusts terminated first quarter fiscal 2013 upon termination amount totaling 261 million returned us september 30 2013 2728 million available borrow 300 million unsecured credit facility subsequent notes consolidated financial statements continued helmerich payne inc note 3 debt continued september 30 2013 issued third letter credit facility amount 35 million reduced amount available borrow 2693 million september 30 2013 two letters credit outstanding totaling 12 million issued support international operations letters credit issued separately 300 million credit facility reduce available borrowing capacity discussed previous paragraph applicable agreements unsecured debt described note 3 contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2013 compliance debt covenants september 30 2013 aggregate maturities longterm debt follows thousands note 4 income taxes components provision income taxes follows notes consolidated financial statements continued helmerich payne inc note 4 income taxes continued amounts domestic foreign income taxes follows deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary allowances provided carrying value net deferred tax assets based managements judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future components net deferred tax liabilities follows change net deferred tax assets liabilities impacted foreign currency remeasurement september 30 2013 state foreign net operating loss carryforwards income tax purposes 156 million 355 million respectively foreign tax credit carryforwards approximately 452 million 414 million reflected deferred tax asset consolidated financial statements prior consideration valuation allowance expire notes consolidated financial statements continued helmerich payne inc note 4 income taxes continued fiscal 2014 2023 valuation allowance primarily attributable state foreign net operating loss carryforwards 12 million 110 million respectively foreign tax credit carryforwards 374 million likely utilized effective income tax rates compared us federal income tax rate follows recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements income september 30 2013 2012 accrued interest penalties 52 million 61 million respectively reconciliation change gross unrecognized tax benefits fiscal year ended september 30 2013 2012 follows september 30 2013 september 30 2012 liability unrecognized tax benefits would affect effective tax rate recognized liabilities unrecognized tax benefits related interest penalties included noncurrent liabilities consolidated balance sheets next 12 months cannot predict certainty whether achieve ultimate resolution uncertain tax position associated international operations could result increases decreases unrecognized tax benefits however believe reasonably possible reserve uncertain tax positions may increase approximately 76 million 102 million next 12 months due international matter file consolidated us federal income tax return well income tax returns various states foreign jurisdictions tax years remain open examination us federal state jurisdictions include fiscal 2009 2012 audits foreign jurisdictions generally complete fiscal 2001 notes consolidated financial statements continued helmerich payne inc note 5 shareholders equity september 30 2013 106716970 outstanding preferred stock purchase rights pursuant terms rights agreement dated january 8 1996 amended amendment 1 dated december 8 2005 adjusted twoforone stock splits fiscal 1998 fiscal 2006 long rights separately transferable onehalf right attaches share common stock terms rights agreement right entitles holder thereof purchase one full unit consisting one onethousandth share series junior participating preferred stock preferred stock without par value price 250 per unit exercise price number units preferred stock issuable exercise rights subject adjustment certain cases prevent dilution rights attached common stock certificates exercisable transferable apart common stock ten business days person acquires 15 percent outstanding common stock ten business days following commencement tender offer exchange offer would result person owning 15 percent outstanding common stock event holder right acquiring person shall right receive upon exercise right common stock company value equal two times exercise price right event acquired merger certain business combination transactions including one surviving corporation 50 percent assets earning power sold transferred holder right shall right receive upon exercise right common stock acquiring company value equal two times exercise price right rights redeemable certain circumstances 001 per right expire unless earlier redeemed january 31 2016 company authorization board directors repurchase four million common shares calendar year repurchases may made using cash equivalents available sources fiscal 2012 purchased 1747819 common shares aggregate cost 776 million held treasury shares purchases common shares fiscal 2013 note 6 stockbased compensation march 2 2011 2010 longterm incentive plan 2010 plan approved stockholders 2010 plan among things authorizes board directors grant nonqualified stock options restricted stock awards stock appreciation rights selected employees nonemployee directors restricted stock may granted consideration prior future services purchase price per share stock options may less market price underlying stock date grant stock options expire 10 years grant date right satisfy option exercises treasury shares authorized unissued shares 364624 nonqualified stock options 307100 shares restricted stock awards granted 2010 plan fiscal 2013 awards outstanding 2005 longterm incentive plan 2005 plan one prior equity plan remain subject terms conditions plans notes consolidated financial statements continued helmerich payne inc note 6 stockbased compensation continued summary compensation cost stockbased payment arrangements recognized general administrative expense fiscal 2013 2012 2011 follows benefits tax deductions excess recognized compensation cost 98 million 33 million 125 million reported financing cash flow consolidated statements cash flows fiscal 2013 2012 2011 respectively stock options vesting requirements stock options determined human resources committee board directors options currently outstanding began vesting one year grant date 25 percent options vesting four consecutive years use blackscholes formula estimate fair value stock options granted employees fair value options amortized compensation expense straightline basis requisite service periods stock awards generally vesting periods weightedaverage fair value calculations options granted within fiscal period based following weightedaverage assumptions set forth table options granted prior periods based assumptions prevailing date grant riskfree interest rate riskfree interest rate based us treasury securities expected term option expected volatility rate expected volatilities based daily closing price stock based upon historical experience period approximates expected term option expected dividend yield dividend yield based current dividend yield expected term expected term options granted represents period time expected outstanding estimate expected term options granted based historical experience grants exercises based calculations weightedaverage fair value per option granted acquire share common stock 2380 2770 2220 per share fiscal 2013 2012 2011 respectively notes consolidated financial statements continued helmerich payne inc note 6 stockbased compensation continued following summary reflects stock option activity common stock related information fiscal 2013 2012 2011 shares thousands following table summarizes information stock options september 30 2013 shares thousands september 30 2013 weightedaverage remaining life exercisable stock options 39 years aggregate intrinsic value 1240 million weightedaverage exercise price 2848 per share number options vested expected vest september 30 2013 3973663 aggregate intrinsic value 1386 million weightedaverage exercise price 3407 per share september 30 2013 unrecognized compensation cost related stock options 93 million cost expected recognized weightedaverage period 24 years total intrinsic value options exercised fiscal 2013 2012 2011 404 million 120 million 505 million respectively grant date fair value shares vested fiscal 2013 2012 2011 93 million 81 million 79 million respectively notes consolidated financial statements continued helmerich payne inc note 6 stockbased compensation continued restricted stock restricted stock awards consist common stock timevested three six years recognize compensation expense straightline basis vesting period fair value restricted stock awards 2010 plan determined based closing price shares grant date september 30 2013 175 million total unrecognized compensation cost related unvested restricted stock awards cost expected recognized weightedaverage period 27 years summary status restricted stock awards september 30 2013 changes restricted stock outstanding fiscal years ended september 30 2013 2012 2011 follows share amounts thousands 1the number restricted stock awards vested includes shares withheld behalf employees satisfy statutory tax withholding requirements note 7 earnings per share asc 260 earnings per share requires companies treat unvested sharebased payment awards nonforfeitable rights dividend equivalents separate class securities calculating earnings per share granted expect continue grant employees restricted stock grants contain nonforfeitable rights dividends grants considered participating securities asc 260 required include grants calculation basic earnings per share calculate basic earnings per share using twoclass method twoclass method computing earnings per share earnings allocation formula determines earnings per share class common stock participating security according dividends declared accumulated participation rights undistributed earnings basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock notes consolidated financial statements continued helmerich payne inc note 7 earnings per share continued following table sets forth computation basic diluted earnings per share notes consolidated financial statements continued helmerich payne inc note 7 earnings per share continued following shares attributable outstanding equity awards excluded calculation diluted earnings per share inclusion would antidilutive note 8 financial instruments fair value measurement estimated fair value availableforsale securities primarily based market quotes following summary availableforsale securities excludes investments limited partnerships carried cost assets held nonqualified supplemental savings plan ongoing basis evaluate marketable equity securities determine decline fair value cost otherthantemporary decline fair value cost determined otherthantemporary impairment charge recorded new cost basis established review several factors determine whether loss otherthantemporary factors include limited length time security unrealized loss position ii extent fair value less cost iii financial condition near term prospects issuer iv intent ability hold security period time sufficient allow anticipated recovery fair value cost securities used determining realized gains losses based average cost basis security sold year ended september 30 2013 marketable equity availableforsale securities fair value date sale 2141 million sold gross realized gain sales availableforsale securities totaled 1534 million sales marketable equity availableforsale securities fiscal years 2012 2011 fiscal 2013 sold shares three limited partnerships primarily invested international equities carried cost 94 million realizing gain 88 million included gain sale investment securities consolidated statements income fiscal 2011 sold investment limited partnership carried cost approximately 30 million fair value approximately 39 million date sale gross realized gain approximately 09 million included consolidated statements income investments limited partnerships carried cost approximately 94 million september 30 2012 estimated fair value limited partnerships 180 million september 30 2012 longer investments limited partnerships notes consolidated financial statements continued helmerich payne inc note 8 financial instruments fair value measurement continued assets held nonqualified supplemental savings plan carried fair market value totaled 105 million 82 million september 30 2013 2012 respectively majority cash equivalents invested highlyliquid moneymarket mutual funds invested primarily direct indirect obligations us government carrying amount cash equivalents approximates fair value due short maturity investments carrying value assets accrued liabilities approximated fair value september 30 2013 2012 asc 820 defines fair value price would received sell asset paid transfer liability orderly transaction market participants measurement date asc 820 establishes fair value hierarchy prioritize inputs used valuation techniques three levels follows •level 1observable inputs reflect quoted prices active markets identical assets liabilities active markets •level 2inputs level 1 observable either directly indirectly quoted prices similar assets liabilities quoted prices markets active inputs observable corroborated observable market data substantially full term assets liabilities •level 3valuations based inputs unobservable corroborated market data september 30 2013 financial assets utilizing level 1 inputs include cash equivalents equity securities active markets money market funds elected classify restricted assets included current assets also included cash denominated foreign currency elected classify restricted included current assets discontinued operations limited remaining liabilities discontinued operations items quoted current market prices readily available september 30 2013 level 2 inputs include bank certificate deposit included current assets currently financial instruments utilizing level 3 inputs notes consolidated financial statements continued helmerich payne inc note 8 financial instruments fair value measurement continued following table summarizes assets measured fair value recurring basis presented consolidated balance sheets september 30 2013 following information presents supplemental fair value information longterm fixedrate debt september 30 2013 september 30 2012 fair value fixedrate debt estimated using discounted cash flows rates reflecting current interest rates similar maturities plus credit spread estimated using outstanding market information debt instruments similar credit profile us debt valued using level 2 input note 9 employee benefit plans maintain domestic noncontributory defined benefit pension plan covering certain us employees meet certain age service requirements july 2003 revised helmerich payne inc employee retirement plan pension plan close pension plan new participants effective october 1 2003 reduce benefit accruals current participants september 30 2006 time benefit accruals discontinued pension plan frozen notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued following table provides reconciliation changes pension benefit obligations fair value pension plan assets twoyear period ended september 30 2013 statement funded status september 30 2013 2012 amounts recognized consolidated balance sheets follows thousands amounts recognized accumulated comprehensive income september 30 2013 2012 yet reflected net periodic benefit cost follows thousands amount recognized accumulated comprehensive income yet reflected periodic benefit cost expected amortized next years periodic benefit cost net actuarial loss 09 million notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued weighted average assumptions used pension calculations follows contributed 21 million pension plan fiscal 2013 fund distributions lieu liquidating pension assets estimate contributing least 01 million fiscal 2014 meet minimum contribution required law may make additional contributions fiscal 2014 needed fund unexpected distributions components net periodic pension expense benefit follows following table reflects expected benefits paid pension plan next five fiscal years aggregate five years thereafter thousands included pension plan unfunded supplemental executive retirement plan investment strategy asset allocation investment policy strategies established longterm view mind investment strategy intended help pay cost plan providing adequate security meet benefits promised plan maintain diversified asset mix minimize risk material loss portfolio value might occur devaluation single investment determining appropriate asset mix financial strength ability fund potential shortfalls considered plan assets invested portfolios diversified publicmarket equity securities fixed income securities plan directly hold securities company notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued expected longterm rate return plan assets based historical projected rates return current planned asset classes plans investment portfolio analyzing historical experience future expectations return volatility various asset classes target allocation 2014 asset allocation pension plan end fiscal 2013 2012 asset category follows plan assets fair value plan assets september 30 2013 2012 summarized level within fair value hierarchy described note 8 follows notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued plans financial assets utilizing level 1 inputs valued based quoted prices active markets identical securities plan assets utilizing level 2 plans assets utilizing level 3 inputs consist oil gas properties fair value oil gas properties determined wells fargo bank na based upon actual revenue received previous twelvemonth period experience similar assets following table sets forth summary changes fair value plans level 3 assets years ended september 30 2013 2012 defined contribution plan substantially employees united states payroll may elect participate 401kthrift plan contributing portion earnings contribute amount equal 100 percent first five percent participants compensation subject certain limitations annual expense incurred defined contribution plan 283 million 267 million 210 million fiscal 2013 2012 2011 respectively notes consolidated financial statements continued helmerich payne inc note 10 supplemental balance sheet information following reflects activity reserve bad debt 2013 2012 2011 prepaid expenses current assets accrued liabilities longterm liabilities september 30 consist following notes consolidated financial statements continued helmerich payne inc note 11 supplemental cash flow information capital expenditures consolidated statements cash flows years ended september 30 2013 2012 2011 include additions incurred paid end year following table reconciles total capital expenditures incurred total capital expenditures consolidated statements cash flows note 12 risk factors concentration credit financial instruments potentially subject us concentrations credit risk consist primarily temporary cash investments shortterm investments trade receivables place temporary cash investments us established financial institutions invest diversified portfolio highly rated shortterm money market instruments trade receivables primarily established companies oil gas industry may impact credit risk customers may similarly affected prolonged changes economic industry conditions international sales also present various risks including governmental activities may limit disrupt markets restrict movement funds international sales however large international governmentowned national oil companies perform ongoing credit evaluations customers typically require collateral support trade receivables provide allowance doubtful accounts necessary cover estimated credit losses allowance based managements knowledge customer accounts except disclosed note 2 discontinued operations significant credit losses experienced recent history volatility market operations materially affected oil gas prices oil natural gas prices historically volatile difficult predict current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining customers future spending levels volatility along difficulty predicting future prices lead many exploration production companies base notes consolidated financial statements continued helmerich payne inc note 12 risk factors continued capital spending much conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices addition customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets may cause difficulty customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result reduction customer spending demand drilling services reduction spending could material adverse effect operations selfinsurance selfinsure significant portion expected losses relating workers compensation general liability automobile liability generally deductibles range 1 million 3 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events estimates recorded incurred outstanding liabilities workers compensation general liability claims incurred reported estimates based adjusters estimates historic experience statistical methods believe reliable nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs whollyowned captive insurance company finances significant portion physical damage risk companyowned drilling rigs well international casualty deductibles international drilling operations international drilling operations may significantly contribute revenues net operating income assurance able successfully conduct operations failure may adverse effect financial position results operations cash flows also success international operations subject numerous contingencies beyond managements control contingencies include general regional economic conditions fluctuations currency exchange rates modified exchange controls changes international regulatory requirements international employment issues risk expropriation real personal property burden complying foreign laws additionally event extended labor strikes occur country experiences significant political economic social instability could experience shortages labor andor material supplies necessary operate drilling rigs thereby potentially causing adverse material effect business financial condition results operations operating country currently considered highly inflationary defined cumulative inflation rates exceeding 100 percent recent threeyear period foreign subsidiaries use us dollar functional currency local currency monetary assets remeasured us dollars gains losses resulting foreign currency transactions included current results operations foreign economy considered highly inflationary would impact consolidated financial statements notes consolidated financial statements continued helmerich payne inc note 13 commitments contingencies purchase obligations fiscal 2013 announced agreements build operate five new flexrigs us one 3000 horsepower ac drive rig international location subsequent september 30 2013 announced agreements build operate 13 new flexrigs us november 14 2013 nine new flexrigs one new ac drive rig customer commitments remained construction rig construction cost included construction progress transferred contract drilling equipment rig placed field service equipment parts supplies ordered advance promote efficient construction progress september 30 2013 purchase orders outstanding approximately 796 million purchase drilling equipment leases september 30 2013 leasing approximately 176000 square feet office space near downtown tulsa oklahoma also lease office space equipment use operations operating leases contain builtin predetermined rent escalations rent expense recognized straightline basis life lease leasehold improvements capitalized amortized lease term future minimum rental payments required operating leases initial remaining noncancelable lease terms excess year september 30 2013 follows total rent expense 99 million 85 million 58 million fiscal 2013 2012 2011 respectively contingencies various legal actions majority arise ordinary course business pending maintain insurance certain business risks subject certain deductibles none legal actions expected material adverse effect financial condition cash flows results operations contingently liable sureties respect bonds issued sureties connection certain commitments entered us normal course business agreed indemnify sureties payments made respect bonds ordinary course business contingencies arise resulting existing condition situation set circumstances involving uncertainty realization possible gain contingency account gain contingencies accordance provisions asc 450 notes consolidated financial statements continued helmerich payne inc note 13 commitments contingencies continued contingencies therefore record gain contingencies recognize income realized discussed note 2 discontinued operations property equipment venezuelan subsidiary seized venezuelan government june 30 2010 whollyowned subsidiaries helmerich payne international drilling co helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 bolivarian republic venezuela petroleos de venezuela sa pdvsa petroleo sa petroleo subsidiaries seek damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery gain contingencies recognized consolidated financial statements third quarter fiscal 2013 fourth fiscal quarter 2012 settled arbitration disputes third parties affiliated venezuelan government pdvsa petroleo related seizure property venezuela proceeds 150 million 75 million received recorded discontinued operations fiscal 2013 2012 respectively november 8 2013 united states district court eastern district louisiana approved previously disclosed october 30 2013 plea agreement wholly owned subsidiary helmerich payne international drilling co united states department justice united states attorneys office eastern district louisiana doj courts approval plea agreement resolved dojs investigation certain choke manifold testing irregularities occurred 2010 one helmerich payne international drilling cos offshore platform rigs gulf mexico november 2013 paid 54 million monetary penalty made 10 million organizational community service payment included accrued liabilities september 30 2013 consolidated balance sheets operating costs excluding depreciation september 30 2013 consolidated statements income note 14 segment information operate principally contract drilling industry contract drilling business includes following reportable operating segments us land offshore international land contract drilling operations consist mainly contracting companyowned drilling equipment primarily large oil gas exploration companies provide information different types business activities operate included offshore international land along us land reportable operating segment separate reportable operating segments additionally reportable operating segment strategic business unit managed separately primary international areas operation include colombia ecuador argentina tunisia bahrain uae south american countries includes additional nonreportable operating segments revenues included consist primarily rental income consolidated revenues expenses reflect elimination material intercompany transactions evaluate segment performance based income loss operations segment operating income taxes includes •revenues external internal customers •direct operating costs notes consolidated financial statements continued helmerich payne inc note 14 segment information continued •depreciation •allocated general administrative costs excludes corporate costs depreciation income asset sales corporate income expense general administrative costs allocated segments based primarily specific identification extent identification practical methods believe reasonable reflection utilization services provided segment operating income segments nongaap financial measure performance excludes certain general administrative expenses corporate depreciation income asset sales corporate income expense consider segment operating income important supplemental measure operating performance presenting trends core businesses use measure facilitate periodtoperiod comparisons operating performance reportable segments aggregate eliminating items affect comparability periods believe segment operating income useful investors provides means evaluate operating performance segments ongoing basis using criteria used internal decision makers additionally highlights operating trends aids analytical comparisons however segment operating income limitations used alternative operating income loss performance measure determined accordance gaap excludes certain costs may affect operating performance future periods notes consolidated financial statements continued helmerich payne inc note 14 segment information continued summarized financial information reportable segments continuing operations years ended september 30 2013 2012 2011 shown following table notes consolidated financial statements continued helmerich payne inc note 14 segment information continued following table reconciles segment operating income continuing operations income taxes reported consolidated statements income following table presents revenues external customers longlived assets country based location service provided longlived assets comprised property plant equipment notes consolidated financial statements continued helmerich payne inc note 14 segment information continued revenues one customer accounted approximately 108 percent 57 percent 26 percent total operating revenues years ended september 30 2013 2012 2011 respectively revenues another customer accounted approximately 105 percent 96 percent 115 percent total operating revenues years ended september 30 2013 2012 2011 respectively collectively receivables customers approximately 1016 million 1099 million september 30 2013 2012 respectively note 15 selected quarterly financial data unaudited sum earnings per share four quarters may equal total earnings per share year due changes average number common shares outstanding first quarter fiscal 2013 net income includes aftertax gain sale assets 34 million 003 per share diluted basis aftertax gain sale investment securities 55 million 005 per share diluted basis second quarter fiscal 2013 net income includes aftertax gain sale assets 34 million 003 per share diluted basis third quarter fiscal 2013 net income includes aftertax gain sale assets 26 million 002 per share diluted basis aftertax gain sale investment securities 924 million 086 per share diluted basis notes consolidated financial statements continued helmerich payne inc note 15 selected quarterly financial data unaudited continued fourth quarter fiscal 2013 net income includes aftertax gain sale assets 28 million 003 per share diluted basis first quarter fiscal 2012 net income includes aftertax gain sale assets 30 million 003 per share diluted basis second quarter fiscal 2012 net income includes aftertax gain sale assets 49 million 005 per share diluted basis third quarter fiscal 2012 net income includes aftertax gain sale assets 13 million 001 per share diluted basis fourth quarter fiscal 2012 net income includes aftertax gain sale assets 30 million 003 per share diluted basis item 9item 8 financial statements supplementary data index consolidated financial statements page report independent registered public accounting firm consolidated statements income years ended september 30 2015 2014 2013 consolidated statements comprehensive income years ended september 30 2015 2014 2013 consolidated balance sheets september 30 2015 2014 consolidated statements shareholders equity years ended september 30 2015 2014 2013 consolidated statements cash flows years ended september 30 2015 2014 2013 notes consolidated financial statements report independent registered public accounting firm helmerich payne inc board directors shareholders helmerich payne inc audited accompanying consolidated balance sheets helmerich payne inc september 30 2015 2014 related consolidated statements income comprehensive income shareholders equity cash flows three years period ended september 30 2015 financial statements responsibility companys management responsibility express opinion financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position helmerich payne inc september 30 2015 2014 consolidated results operations cash flows three years period ended september 30 2015 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states helmerich payne incs internal control financial reporting september 30 2015 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 framework report dated november 25 2015 expressed unqualified opinion thereon sernst young llp tulsa oklahoma november 25 2015 consolidated statements income helmerich payne inc accompanying notes integral part statements consolidated statements comprehensive income helmerich payne inc accompanying notes integral part statements consolidated balance sheets helmerich payne inc accompanying notes integral part statements consolidated balance sheets continued helmerich payne inc accompanying notes integral part statements consolidated statements shareholders equity helmerich payne inc accompanying notes integral part statements consolidated statements cash flows helmerich payne inc accompanying notes integral part statements notes consolidated financial statements helmerich payne inc note 1 summary significant accounting policies principles consolidation consolidated financial statements include accounts helmerich payne inc whollyowned subsidiaries fiscal years foreign operations end august 31 facilitate reporting consolidated results significant intervening events materially affected financial statements basis presentation classified former venezuelan operation discontinued operation third quarter fiscal 2010 fully described note 2 unless indicated otherwise information notes consolidated financial statements relates continuing operations foreign currencies functional currency foreign operations us dollar nonmonetary assets liabilities translated historical rates monetary assets liabilities translated exchange rates effect end period income statement accounts translated average rates year gains losses remeasurement foreign currency financial statements foreign currency translations us dollars included direct operating costs included direct operating costs aggregate foreign currency remeasurement transaction gain 28 million fiscal 2015 transaction loss 08 million fiscal 2014 transaction gain 07 million fiscal 2013 use estimates preparation financial statements conformity accounting principles generally accepted united states america gaap requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period actual results could differ estimates recently adopted accounting standards april 2015 financial accounting standards board fasb issued accounting standards update asu 201503 interestimputation interest subtopic 83530 simplifying presentation debt issuance costs asu 201503 amends fasb accounting standards codifications asc require debt issuance cost presented balance sheet direct deduction carrying amount related liability prior amendment debt issuance costs reported balance sheet asset amended guidance effective financial statements issued fiscal years beginning december 15 2015 however elected early adopt effective january 1 2015 election requires retrospective application represents change accounting principle asu provides debt issuance costs similar debt discounts notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued effect reduce proceeds borrowing result adoption september 30 2014 consolidated balance sheet restated follows amortization debt discount debt issuance costs reclassified accompanying consolidated statements cash flow september 30 2014 2013 conform current year presentation amortization previously included change assets cash equivalents cash equivalents consist investments shortterm highly liquid securities original maturities three months less carrying values assets approximate fair values primarily utilize cash management system series separate accounts consisting lockbox accounts receiving cash concentration accounts several zerobalance disbursement accounts funding payroll accounts payable result cash management system checks issued presented banks payment may create negative book cash balances restricted cash equivalents restricted cash equivalents 320 million 302 million september 30 2015 2014 respectively cash restricted purpose potential insurance claims whollyowned captive insurance company total september 30 2015 20 million initial capitalization captive company management elected restrict additional 300 million restricted amounts primarily invested shortterm money market securities notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued restricted cash equivalents reflected balance sheet follows inventories supplies inventories supplies primarily replacement parts supplies held use drilling operations inventories supplies valued lower cost moving average actual market value investments maintain investments equity securities certain publicly traded companies cost securities used determining realized gains losses based average cost basis security sold regularly review investment securities impairment based criteria include extent investments carrying value exceeds related fair value duration market decline financial strength specific prospects issuer security unrealized losses temporary recognized earnings property plant equipment property plant equipment stated cost less accumulated depreciation substantially property plant equipment depreciated using straightline method based estimated useful lives assets contract drilling equipment 415 years real estate buildings equipment 1045 years 223 years depreciation consolidated statements income includes abandonments 436 million 230 million 91 million fiscal 2015 2014 2013 respectively fiscal 2015 2014 decommissioned 23 nine idle rigs respectively cost maintenance repairs charged direct operating cost betterments refurbishments capitalized lease office space equipment use operations leases evaluated inception subsequent material modification depending lease terms classified either capital leases operating leases appropriate asc 840 leases significant capital leases capitalization interest capitalize interest major projects construction interest capitalized based average interest rate related debt capitalized interest fiscal 2015 2014 2013 70 million 77 million 88 million respectively notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued valuation longlived assets review longlived assets impairment whenever events changes circumstances indicate carrying amount asset may recoverable changes could prompt assessment include significant decline revenue cash margin per day extended periods low rig utilization changes market demand specific asset obsolescence completion specific contracts andor overall general market conditions review longlived assets indicates carrying value certain assets estimated undiscounted future cash flows impairment charge made adjust carrying value estimated fair value asset fair value drilling rigs determined based upon income approach using estimated discounted future cash flows market approach available cash flows estimated management considering factors prospective market demand recent changes rig technology effect rigs marketability cash investment required make rig marketable suitability rig size make existing platforms competitive dynamics including industry utilization fair value estimated applicable considering factors recent market sales rigs companies sales rigs appraisals factors beginning first fiscal quarter year domestic international oil prices declined significantly decline pricing resulted lower demand drilling services result performed impairment evaluation longlived drilling assets accordance asc 360 property plant equipment order estimate future undiscounted cash flows use eventual disposal developed probability weighted cash flow projections rig fleets significant assumptions used analysis expected margin per day utilization expected value upon disposal believe assumptions estimates used impairment analysis including development probability weighted cash flow projections reasonable appropriate however different assumptions estimates could materially impact analysis resulting conclusions cases evaluation resulted 392 million impairment charges reduce carrying value seven scr land rigs within international land segment estimated fair value 206 million based discounted cash flow analysis discounted cash flow analysis consisted creating projected cash flows market participant would reasonably develop applying appropriate risk adjusted rate additional impairments identified rigs domestic international offshore fleets selfinsurance accruals accrued liability estimated workers compensation casualty claims incurred drilling revenues contract drilling revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized straightline basis term related drilling contract costs incurred relocate rigs drilling equipment areas contract notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs reimbursements fiscal 2015 2014 2013 3022 million 3289 million 3325 million respectively contracts terminated prior specified term early termination payments received us recognized revenues contractual requirements met rent revenues enter leases tenants rental properties consisting primarily retail multitenant warehouse space lease terms tenants occupying space retail centers warehouse buildings generally range three ten years minimum rents recognized straightline basis term related leases overage percentage rents based tenants sales volume recoveries tenants property taxes operating expenses recognized operating revenues consolidated statements income rent revenues follows september 30 2015 minimum future rental income received noncancelable operating leases follows leasehold improvement allowances capitalized amortized lease term september 30 2015 2014 cost accumulated depreciation real estate properties follows notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued income taxes current income tax expense amount income taxes expected payable current year deferred income taxes computed using liability method provided temporary differences financial basis tax basis assets liabilities provide uncertain tax positions tax positions meet recognition thresholds measurement standards prescribed asc 740 income taxes fully discussed note 4 amounts uncertain tax positions adjusted periods new information becomes available positions effectively settled recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements income earnings per share basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock stockbased compensation record compensation expense associated stock options accordance asc 718 compensationstock compensation expense determined using fairvaluebased measurement method awards granted computing impact fair value option estimated date grant based blackscholes optionspricing model utilizing certain assumptions risk free interest rate volatility dividend yield expected remaining term awards assumptions used calculating fair value sharebased payment awards represent managements best estimates involve inherent uncertainties application management judgment stockbased compensation recognized straightline basis requisite service periods stock awards generally vesting period compensation expense related stock options recorded component general administrative expenses consolidated statements income treasury stock treasury stock purchases accounted cost method whereby cost acquired stock recorded treasury stock gains losses subsequent reissuance shares credited charged additional paidin capital using averagecost method comprehensive income loss comprehensive income loss refers revenues expenses gains losses included comprehensive income loss excluded net income loss report components comprehensive income loss net tax nature disclose tax effect allocated component consolidated statements comprehensive income notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued new accounting standards april 2014 fasb issued asu 201408 reporting discontinued operations disclosures disposals components entity amendments asu 201408 change criteria reporting discontinued operations enhancing disclosures area new guidance disposals representing strategic shift operations presented discontinued operations strategic shifts major effect organizations operations financial results addition new guidance requires expanded disclosures discontinued operations provide financial statement users information assets liabilities income expenses discontinued operations pronouncement effective fiscal years beginning december 15 2014 interim periods within years adoption pronouncement expected material impact financial statements may 2014 fasb issued asu 201409 revenue contracts customers supersedes virtually existing revenue recognition guidance new standard requires entity recognize revenue transfers promised goods services customers amount reflects consideration entity expects receive exchange goods services update also requires additional disclosure nature amount timing uncertainty revenue cash flows arising customer contracts including significant judgments changes judgments assets recognized costs incurred obtain fulfill contract provisions asu 201409 effective interim annual periods beginning december 15 2017 option using either full retrospective modified retrospective approach adopting new standard currently evaluating alternative transition methods potential effects adoption update financial statements july 2015 fasb issued asu 201511 inventory topic 330 simplifying measurement inventory update simplifies subsequent measurement inventory replaces current lower cost market test lower cost net realizable value test net realizable value defined estimated selling prices ordinary course business less reasonably predictable costs completion disposal transportation new standard applied prospectively effective annual reporting periods beginning december 15 2016 interim periods within annual periods early adoption permitted expect adoption standard material impact financial statements note 2 discontinued operations current assets discontinued operations consist restricted cash meet remaining current obligations country venezuela current noncurrent liabilities consist municipal income taxes payable social obligations due within country venezuela expenses incurred incountry obligations reported discontinued operations included fiscal 2013 proceeds arbitration fully described note 13 notes consolidated financial statements continued helmerich payne inc note 3 debt september 30 2015 2014 500 million 40 million respectively unsecured longterm debt outstanding rates maturities shown following table 40 million senior unsecured fixedrate notes outstanding september 30 2015 mature july 2016 interest notes paid semiannually based annual rate 610 percent final annual principal repayment 40 million due july 2016 complied financial covenants require us maintain funded leverage ratio less 55 percent interest coverage ratio defined less 250 100 march 19 2015 issued 500 million 465 percent 10year unsecured senior notes net proceeds discount issuance cost used general corporate purposes including capital expenditures associated rig construction program interest payable semiannually march 15 september 15 year commencing september 15 2015 debt discount amortized interest expense using effective interest method debt issuance costs amortized straightline stated life obligation approximates effective yield method 300 million unsecured revolving credit facility mature may 25 2017 credit facility 100 million available use letters credit majority borrowings facility would accrue interest spread london interbank offered rate libor also pay commitment fee based unused balance facility borrowing spreads well commitment fees determined according scale based ratio total debt total capitalization spread libor ranges 1125 percent 175 percent per annum commitment fees range 15 percent 35 percent per annum based debt total capitalization september 30 2015 spread libor commitment fees would 1125 percent 15 percent respectively financial covenants facility require us maintain funded leverage ratio defined less 50 percent interest coverage ratio defined less 300 100 credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2015 borrowings notes consolidated financial statements continued helmerich payne inc note 3 debt continued three letters credit outstanding amount 482 million september 30 2015 2518 million available borrow 300 million unsecured credit facility subsequent september 30 2015 reduced outstanding letters credit 79 million increased available borrowing capacity 2597 september 30 2015 two letters credit outstanding totaling 12 million issued support international operations letters credit issued separately 300 million credit facility reduce available borrowing capacity discussed previous paragraph applicable agreements unsecured debt contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2015 compliance debt covenants september 30 2015 aggregate maturities longterm debt follows thousands note 4 income taxes components provision income taxes follows notes consolidated financial statements continued helmerich payne inc note 4 income taxes continued amounts domestic foreign income taxes follows deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary allowances provided carrying value net deferred tax assets based managements judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future components net deferred tax liabilities follows change net deferred tax assets liabilities impacted foreign currency remeasurement september 30 2015 state foreign net operating loss carryforwards income tax purposes 62 million 207 million respectively foreign tax credit carryforwards approximately 594 million 486 million reflected deferred tax asset consolidated financial statements prior consideration valuation allowance expire notes consolidated financial statements continued helmerich payne inc note 4 income taxes continued fiscal 2016 2025 valuation allowance primarily attributable state foreign net operating loss carryforwards 05 million 66 million respectively foreign tax credit carryforwards 486 million likely utilized effective income tax rates compared us federal income tax rate follows effective tax rates differ us federal statutory rate 350 percent primarily due state foreign income taxes tax benefit internal revenue code section 199 deduction domestic production activities effective tax rate twelve months ended september 30 2015 also impacted december 2014 tax law change resulted reduction fiscal 2014 internal revenue code section 199 deduction domestic production activities addition effective tax rate twelve months ended september 30 2015 impacted reduction deferred state income tax rate recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements income september 30 2015 2014 accrued interest penalties 111 million 64 million respectively reconciliation change gross unrecognized tax benefits fiscal year ended september 30 2015 2014 follows september 30 2015 september 30 2014 liability unrecognized tax benefits includes 29 million year unrecognized tax benefits related discontinued operations notes consolidated financial statements continued helmerich payne inc note 4 income taxes continued recognized would affect effective tax rate remaining unrecognized tax benefits would affect effective tax rate recognized liabilities unrecognized tax benefits related interest penalties included noncurrent liabilities consolidated balance sheets next 12 months cannot predict certainty whether achieve ultimate resolution uncertain tax position associated us international operations could result increases decreases unrecognized tax benefits however expect increases decreases material effect results operations financial position provided uncertain tax positions 67 million including interest penalties twelve months ended september 30 2015 related previous disclosure possible increase reserve uncertain tax positions approximately 84 million 110 million due international tax matters file consolidated us federal income tax return well income tax returns various states foreign jurisdictions tax years remain open examination us federal state jurisdictions include fiscal 2011 2014 exception certain state jurisdictions currently audit audits foreign jurisdictions generally complete fiscal 2002 september 13 2013 irs issued final regulations providing guidance treatment amounts paid acquire produce improve tangible property proposed regulations providing guidance dispositions property implementation date regulations tax years beginning january 1 2014 estimated effect regulations included determination taxable income fiscal year end 2015 tax provision implementation regulations significant impact overall tax provision note 5 shareholders equity september 30 2015 107767915 outstanding preferred stock purchase rights pursuant terms rights agreement dated january 8 1996 amended amendment 1 dated december 8 2005 adjusted twoforone stock splits fiscal 1998 fiscal 2006 long rights separately transferable onehalf right attaches share common stock terms rights agreement right entitles holder thereof purchase one full unit consisting one onethousandth share series junior participating preferred stock preferred stock without par value price 250 per unit exercise price number units preferred stock issuable exercise rights subject adjustment certain cases prevent dilution rights attached common stock certificates exercisable transferable apart common stock ten business days person acquires 15 percent outstanding common stock ten business days following commencement tender offer exchange offer would result person owning 15 percent outstanding common stock event holder right acquiring person shall right receive upon exercise right common stock company value equal two times exercise price right event acquired merger certain business combination transactions including one surviving corporation 50 percent assets earning power sold transferred holder right shall right receive upon exercise right common stock acquiring company value equal two times exercise price right rights notes consolidated financial statements continued helmerich payne inc note 5 shareholders equity continued redeemable certain circumstances 001 per right expire unless earlier redeemed january 31 2016 company authorization board directors repurchase four million common shares calendar year repurchases may made using cash equivalents available sources fiscal 2015 purchased 810097 common shares aggregate cost 597 million held treasury shares purchases common shares fiscal 2013 fiscal 2014 accumulated comprehensive income components accumulated comprehensive income loss follows following summary changes accumulated comprehensive income loss net tax component year ended september 30 2015 notes consolidated financial statements continued helmerich payne inc note 5 shareholders equity continued following provides detail accumulated comprehensive income loss components reclassified consolidated statement income years ended september 30 2015 2014 note 6 stockbased compensation march 2 2011 2010 longterm incentive plan 2010 plan approved stockholders 2010 plan among things authorizes human resources committee board directors grant nonqualified stock options restricted stock awards stock appreciation rights selected employees nonemployee directors restricted stock may granted consideration prior future services purchase price per share stock options may less market price underlying stock date grant stock options expire 10 years grant date right satisfy option exercises treasury shares authorized unissued shares 419585 nonqualified stock options 275250 shares restricted stock awards granted 2010 plan fiscal 2015 awards outstanding 2005 longterm incentive plan 2005 plan one prior equity plan remain subject terms conditions plans summary compensation cost stockbased payment arrangements recognized general administrative expense fiscal 2015 2014 2013 follows notes consolidated financial statements continued helmerich payne inc note 6 stockbased compensation continued benefits tax deductions excess recognized compensation cost 38 million 266 million 98 million reported financing cash flow consolidated statements cash flows fiscal 2015 2014 2013 respectively stock options vesting requirements stock options determined human resources committee board directors options currently outstanding began vesting one year grant date 25 percent options vesting four consecutive years use blackscholes formula estimate fair value stock options granted employees fair value options amortized compensation expense straightline basis requisite service periods stock awards generally vesting periods weightedaverage fair value calculations options granted within fiscal period based following weightedaverage assumptions set forth table options granted prior periods based assumptions prevailing date grant riskfree interest rate riskfree interest rate based us treasury securities expected term option expected volatility rate expected volatilities based daily closing price stock based upon historical experience period approximates expected term option expected dividend yield dividend yield based current dividend yield expected term expected term options granted represents period time expected outstanding estimate expected term options granted based historical experience grants exercises based calculations weightedaverage fair value per option granted acquire share common stock 1639 2944 2380 per share fiscal 2015 2014 2013 respectively notes consolidated financial statements continued helmerich payne inc note 6 stockbased compensation continued following summary reflects stock option activity common stock related information fiscal 2015 2014 2013 shares thousands following table summarizes information stock options september 30 2015 shares thousands september 30 2015 weightedaverage remaining life exercisable stock options 42 years aggregate intrinsic value 205 million weightedaverage exercise price 4162 per share number options vested expected vest september 30 2015 2768897 aggregate intrinsic value 205 million weightedaverage exercise price 4846 per share september 30 2015 unrecognized compensation cost related stock options 53 million cost expected recognized weightedaverage period 24 years total intrinsic value options exercised fiscal 2015 2014 2013 107 million 1009 million 404 million respectively grant date fair value shares vested fiscal 2015 2014 2013 81 million 88 million 93 million respectively restricted stock restricted stock awards consist common stock timevested three six years recognize compensation expense straightline basis vesting period fair value restricted stock awards 2010 plan determined based closing price shares grant date september 30 2015 212 million total unrecognized compensation notes consolidated financial statements continued helmerich payne inc note 6 stockbased compensation continued cost related unvested restricted stock awards cost expected recognized weightedaverage period 22 years summary status restricted stock awards september 30 2015 changes restricted stock outstanding fiscal years ended september 30 2015 2014 2013 follows shares thousands 1the number restricted stock awards vested includes shares withheld behalf employees satisfy statutory tax withholding requirements note 7 earnings per share asc 260 earnings per share requires companies treat unvested sharebased payment awards nonforfeitable rights dividend equivalents separate class securities calculating earnings per share granted expect continue grant employees restricted stock grants contain nonforfeitable rights dividends grants considered participating securities asc 260 required include grants calculation basic earnings per share calculate basic earnings per share using twoclass method twoclass method computing earnings per share earnings allocation formula determines earnings per share class common stock participating security according dividends declared accumulated participation rights undistributed earnings basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock notes consolidated financial statements continued helmerich payne inc note 7 earnings per share continued following table sets forth computation basic diluted earnings per share notes consolidated financial statements continued helmerich payne inc note 7 earnings per share continued following shares attributable outstanding equity awards excluded calculation diluted earnings per share inclusion would antidilutive note 8 financial instruments fair value measurement estimated fair value availableforsale securities primarily based market quotes following summary availableforsale securities excludes assets held nonqualified supplemental savings plan ongoing basis evaluate marketable equity securities determine decline fair value cost otherthantemporary decline fair value cost determined otherthantemporary impairment charge recorded new cost basis established review several factors determine whether loss otherthantemporary factors include limited length time security unrealized loss position ii extent fair value less cost iii financial condition near term prospects issuer iv intent ability hold security period time sufficient allow anticipated recovery fair value cost securities used determining realized gains losses based average cost basis security sold considering factors outlined including limited time related security unrealized loss position impairment considered otherthantemporary september 30 2015 fiscal 2015 sell marketable equity availableforsale securities fiscal 2014 marketable equity availableforsale securities fair value date sales 492 million sold gross realized gain sales availableforsale securities totaled 452 million year ended september 30 2013 marketable equity availableforsale securities fair value date sale 2141 million sold gross realized gain sales availableforsale securities totaled 1534 million gains availableforsale securities included gain sale investment securities consolidated statements income fiscal 2013 sold shares three limited partnerships primarily invested international equities carried cost 94 million realizing gain 88 million included gain sale investment securities consolidated statements income longer investments limited partnerships notes consolidated financial statements continued helmerich payne inc note 8 financial instruments fair value measurement continued assets held nonqualified supplemental savings plan carried fair value totaled 129 million 143 million september 30 2015 2014 respectively assets comprised mutual funds measured using level 1 inputs shortterm investments include securities classified trading securities realized unrealized gains losses trading securities included income expense consolidated statements income securities recorded fair value majority cash equivalents invested highlyliquid moneymarket mutual funds invested primarily direct indirect obligations us government carrying amount cash equivalents approximates fair value due short maturity investments carrying value assets accrued liabilities approximated fair value september 30 2015 2014 asc 820 defines fair value price would received sell asset paid transfer liability orderly transaction market participants measurement date asc 820 establishes fair value hierarchy prioritize inputs used valuation techniques three levels follows • level 1observable inputs reflect quoted prices active markets identical assets liabilities active markets • level 2inputs level 1 observable either directly indirectly quoted prices similar assets liabilities quoted prices markets active inputs observable corroborated observable market data substantially full term assets liabilities • level 3valuations based inputs unobservable corroborated market data september 30 2015 financial assets utilizing level 1 inputs include cash equivalents equity securities active markets us treasury securities money market funds elected classify restricted assets included current assets also included cash denominated foreign currency elected classify restricted included current assets discontinued operations limited remaining liabilities discontinued operations items quoted current market prices readily available september 30 2015 level 2 inputs include us agency issued debt securities corporate bonds measured using broker quotations utilize observable market inputs also included level 2 inputs bank certificate deposits included shortterm investments current assets currently financial instruments utilizing level 3 inputs notes consolidated financial statements continued helmerich payne inc note 8 financial instruments fair value measurement continued following table summarizes assets measured fair value recurring basis presented consolidated balance sheets september 30 2015 following information presents supplemental fair value information longterm fixedrate debt september 30 2015 september 30 2014 fair value september 30 2015 40 million fixedrate debt estimated using discounted cash flows rates reflecting current interest rates similar maturities plus credit spread estimated using outstanding market information debt instruments similar credit profile us debt valued using level 2 input fair value 500 million fixedrate debt based broker quotes september 30 2015 notes classified within level 2 actively traded markets note 9 employee benefit plans maintain domestic noncontributory defined benefit pension plan covering certain us employees meet certain age service requirements july 2003 revised helmerich payne inc employee retirement plan pension plan close pension plan new participants effective october 1 2003 reduce benefit accruals current participants september 30 2006 time benefit accruals discontinued pension plan frozen notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued following table provides reconciliation changes pension benefit obligations fair value pension plan assets twoyear period ended september 30 2015 statement funded status september 30 2015 2014 amounts recognized consolidated balance sheets september 30 2015 2014 follows thousands amounts recognized accumulated comprehensive income september 30 2015 2014 yet reflected net periodic benefit cost follows thousands amount recognized accumulated comprehensive income yet reflected periodic benefit cost expected amortized next years periodic benefit cost net actuarial loss 20 million notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued weighted average assumptions used pension calculations follows mortality table issued society actuaries october 2015 used september 30 2015 pension calculation new mortality information reflects improved life expectancies projected mortality improvements contributed 22 million pension plan fiscal 2015 fund distributions lieu liquidating pension assets fiscal 2016 expect minimum contributions required law needed however may make contributions fiscal 2016 needed fund unexpected distributions components net periodic pension expense benefit follows record settlement expense benefit payments exceed total annual service interest costs following table reflects expected benefits paid pension plan next five fiscal years aggregate five years thereafter thousands included pension plan unfunded supplemental executive retirement plan investment strategy asset allocation investment policy strategies established longterm view mind investment strategy intended help pay cost plan providing adequate security meet benefits promised plan maintain diversified asset mix minimize risk material loss portfolio value might occur devaluation single investment notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued determining appropriate asset mix financial strength ability fund potential shortfalls considered plan assets invested portfolios diversified publicmarket equity securities fixed income securities plan directly hold securities company expected longterm rate return plan assets based historical projected rates return current planned asset classes plans investment portfolio analyzing historical experience future expectations return volatility various asset classes target allocation 2016 asset allocation pension plan end fiscal 2015 2014 asset category follows plan assets fair value plan assets september 30 2015 2014 summarized level within fair value hierarchy described note 8 follows notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued plans financial assets utilizing level 1 inputs valued based quoted prices active markets identical securities plan assets utilizing level 2 plans assets utilizing level 3 inputs consist oil gas properties fair value oil gas properties determined wells fargo bank na based upon actual revenue received previous twelvemonth period experience similar assets following table sets forth summary changes fair value plans level 3 assets years ended september 30 2015 2014 defined contribution plan substantially employees united states payroll may elect participate 401kthrift plan contributing portion earnings contribute amount equal 100 percent first five percent participants compensation subject certain limitations annual expense incurred defined contribution plan 248 million 323 million 283 million fiscal 2015 2014 2013 respectively notes consolidated financial statements continued helmerich payne inc note 10 supplemental balance sheet information following reflects activity reserve bad debt 2015 2014 2013 prepaid expenses current assets accrued liabilities longterm liabilities september 30 consist following notes consolidated financial statements continued helmerich payne inc note 11 supplemental cash flow information capital expenditures consolidated statements cash flows years ended september 30 2015 2014 2013 include additions incurred paid end year following table reconciles total capital expenditures incurred total capital expenditures consolidated statements cash flows note 12 risk factors concentration credit financial instruments potentially subject us concentrations credit risk consist primarily temporary cash investments shortterm investments trade receivables place temporary cash investments us established financial institutions invest diversified portfolio highly rated shortterm money market instruments trade receivables primarily established companies oil gas industry may impact credit risk customers may similarly affected prolonged changes economic industry conditions international sales also present various risks including governmental activities may limit disrupt markets restrict movement funds international sales however large international governmentowned national oil companies perform ongoing credit evaluations customers typically require collateral support trade receivables provide allowance doubtful accounts necessary cover estimated credit losses allowance based managements knowledge customer accounts volatility market operations materially affected oil gas prices oil natural gas prices historically volatile difficult predict degree certainty current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining customers future spending levels notes consolidated financial statements continued helmerich payne inc note 12 risk factors continued volatility along difficulty predicting future prices lead many exploration production companies base capital spending much conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices addition customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets may cause difficulty customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result reduction customer spending demand drilling services reduction spending could material adverse effect operations selfinsurance selfinsure significant portion expected losses relating workers compensation general liability automobile liability generally deductibles range 1 million 3 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events estimates recorded incurred outstanding liabilities workers compensation general liability claims incurred reported estimates based adjusters estimates historic experience statistical methods believe reliable nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs whollyowned captive insurance company finances significant portion physical damage risk companyowned drilling rigs well international casualty deductibles international drilling operations international drilling operations may significantly contribute revenues net operating income assurance able successfully conduct operations failure may adverse effect financial position results operations cash flows also success international operations subject numerous contingencies beyond managements control contingencies include general regional economic conditions fluctuations currency exchange rates modified exchange controls changes international regulatory requirements international employment issues risk expropriation real personal property burden complying foreign laws additionally event extended labor strikes occur country experiences significant political economic social instability could experience shortages labor andor material supplies necessary operate drilling rigs thereby potentially causing adverse material effect business financial condition results operations operating country currently considered highly inflationary defined cumulative inflation rates exceeding 100 percent recent threeyear period based inflation data published respective governments regardless foreign subsidiaries use us dollar functional currency local currency monetary assets remeasured notes consolidated financial statements continued helmerich payne inc note 12 risk factors continued us dollars gains losses resulting foreign currency transactions included current results operations impact local laws future operations certain areas may conducted entities local citizens interests entities including joint ventures hold minority interest pursuant arrangements conduct operations contract local entities believe neither operating entities pursuant arrangements would material adverse effect operations revenues assurance cases able structure restructure operations conform local law administration thereof terms acceptable us note 13 commitments contingencies purchase obligations fiscal 2015 announced agreements build operate six new flexrigs us november 12 2015 six new flexrigs customer commitments remained construction rig construction cost included construction progress transferred contract drilling equipment rig placed field service equipment parts supplies ordered advance promote efficient construction progress september 30 2015 purchase orders outstanding approximately 811 million purchase drilling equipment leases september 30 2015 leasing approximately 215600 square feet office space near downtown tulsa oklahoma also lease office space equipment use operations operating leases contain builtin predetermined rent escalations rent expense recognized straightline basis life lease leasehold improvements capitalized amortized lease term future minimum rental payments required operating leases initial remaining noncancelable lease terms excess year september 30 2015 follows total rent expense 136 million 121 million 99 million fiscal 2015 2014 2013 respectively notes consolidated financial statements continued helmerich payne inc note 13 commitments contingencies continued contingencies various legal actions majority arise ordinary course business pending maintain insurance certain business risks subject certain deductibles none legal actions expected material adverse effect financial condition cash flows results operations contingently liable sureties respect bonds issued sureties connection certain commitments entered us normal course business agreed indemnify sureties payments made respect bonds ordinary course business contingencies arise resulting existing condition situation set circumstances involving uncertainty realization possible gain contingency account gain contingencies accordance provisions asc 450 contingencies therefore record gain contingencies recognize income realized property equipment venezuelan subsidiary seized venezuelan government june 30 2010 whollyowned subsidiaries helmerich payne international drilling co helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 bolivarian republic venezuela petroleos de venezuela sa pdvsa petroleo sa petroleo subsidiaries seek damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery gain contingencies recognized consolidated financial statements third quarter fiscal 2013 fourth fiscal quarter 2012 settled arbitration disputes third parties affiliated venezuelan government pdvsa petroleo related seizure property venezuela proceeds 150 million 75 million received recorded discontinued operations fiscal 2013 2012 respectively november 8 2013 united states district court eastern district louisiana approved previously disclosed october 30 2013 plea agreement wholly owned subsidiary helmerich payne international drilling co united states department justice united states attorneys office eastern district louisiana doj courts approval plea agreement resolved dojs investigation certain choke manifold testing irregularities occurred 2010 one helmerich payne international drilling cos offshore platform rigs gulf mexico engaged discussions inspector generals office department interior regarding events subject dojs investigation although presently believe outcome discussions material adverse effect company cannot estimate amount potential loss provide assurances timing eventual outcome discussions note 14 segment information operate principally contract drilling industry contract drilling business includes following reportable operating segments us land offshore international land contract drilling operations consist mainly contracting companyowned drilling equipment primarily large oil gas exploration companies provide information different types business notes consolidated financial statements continued helmerich payne inc note 14 segment information continued activities operate included offshore international land along us land reportable operating segment separate reportable operating segments additionally reportable operating segment strategic business unit managed separately primary international areas operation include colombia ecuador argentina bahrain uae south american middle eastern countries includes additional nonreportable operating segments revenues included consist primarily rental income consolidated revenues expenses reflect elimination material intercompany transactions evaluate segment performance based income loss operations segment operating income taxes includes • revenues external internal customers • direct operating costs • depreciation • allocated general administrative costs excludes corporate costs depreciation income asset sales corporate income expense general administrative costs allocated segments based primarily specific identification extent identification practical methods believe reasonable reflection utilization services provided segment operating income segments nongaap financial measure performance excludes certain general administrative expenses corporate depreciation income asset sales corporate income expense consider segment operating income important supplemental measure operating performance presenting trends core businesses use measure facilitate periodtoperiod comparisons operating performance reportable segments aggregate eliminating items affect comparability periods believe segment operating income useful investors provides means evaluate operating performance segments ongoing basis using criteria used internal decision makers additionally highlights operating trends aids analytical comparisons however segment operating income limitations used alternative operating income loss performance measure determined accordance gaap excludes certain costs may affect operating performance future periods notes consolidated financial statements continued helmerich payne inc note 14 segment information continued summarized financial information reportable segments continuing operations years ended september 30 2015 2014 2013 shown following table notes consolidated financial statements continued helmerich payne inc note 14 segment information continued following table reconciles segment operating income continuing operations income taxes reported consolidated statements income following table presents revenues external customers longlived assets country based location service provided longlived assets comprised property plant equipment notes consolidated financial statements continued helmerich payne inc note 14 segment information continued revenues one customer accounted approximately 106 percent 73 percent 108 percent total operating revenues years ended september 30 2015 2014 2013 respectively revenues another customer accounted approximately 98 percent 107 percent 95 percent total operating revenues years ended september 30 2015 2014 2013 respectively collectively receivables customers approximately 1169 million 1214 million september 30 2015 2014 respectively note 15 guarantor nonguarantor financial information march 2015 helmerich payne international drilling co issuer 100 percent owned subsidiary helmerich payne inc parent guarantor issued senior unsecured notes aggregate principal amount 5000 million notes fully unconditionally guaranteed parent subsidiaries parent currently guarantee notes subject certain provisions subsidiary guarantees certain debt issuer parent subsidiary provide guarantee obligation notes connection notes providing following condensed consolidating financial information accordance securities exchange commission disclosure requirements entity consolidating financial information follows accounting policies described consolidated financial statements condensed consolidating financial information issuer helmerich payne international drilling co parent guarantor helmerich payne inc shown tables notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating statements income thousands condensed consolidating statements comprehensive income thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating statements income thousands condensed consolidating statements comprehensive income thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating statements income thousands condensed consolidating statements comprehensive income thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating balance sheets thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating balance sheets continued thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating statements cash flows thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating statements cash flows continued thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating statements cash flows continued thousands notes consolidated financial statements continued helmerich payne inc note 16 selected quarterly financial data unaudited sum earnings per share four quarters may equal total earnings per share year due changes average number common shares outstanding first quarter fiscal 2015 net income includes aftertax gain sale assets 25 million 002 per share diluted basis second quarter fiscal 2015 net income includes aftertax gain sale assets 19 million 002 per share diluted basis aftertax abandonment charge primarily related decommission 17 scr powered flexrigs approximately 75 million 005 per share diluted basis third quarter fiscal 2015 net income includes aftertax gain sale assets 13 million 001 per share diluted basis fourth quarter fiscal 2015 net income includes aftertax gain sale assets 17 million 002 per share diluted basis fourth quarter fiscal 2015 net income includes aftertax impairment charge approximately 249 million 023 per share diluted basis aftertax abandonment charge primarily due decommission six scr powered land rigs used drilling equipment approximately 191 million 018 per share diluted basis notes consolidated financial statements continued helmerich payne inc note 16 selected quarterly financial data unaudited continued first quarter fiscal 2014 net income includes aftertax gain sale assets 37 million 003 per share diluted basis second quarter fiscal 2014 net income includes aftertax gain sale assets 27 million 002 per share diluted basis aftertax gain sale investment securities 129 million 012 per share diluted basis third quarter fiscal 2014 net income includes aftertax gain sale assets 14 million 001 per share diluted basis aftertax gain sale investment securities 149 million 013 per share diluted basis fourth quarter fiscal 2014 net income includes aftertax gain sale assets 50 million 005 per share diluted basis item 9item 8 financial statements supplementary data index consolidated financial statements report independent registered public accounting firm helmerich payne inc board directors shareholders helmerich payne inc audited accompanying consolidated balance sheets helmerich payne inc september 30 2016 2015 related consolidated statements operations comprehensive income loss shareholders equity cash flows three years period ended september 30 2016 financial statements responsibility companys management responsibility express opinion financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position helmerich payne inc september 30 2016 2015 consolidated results operations cash flows three years period ended september 30 2016 conformity us generally accepted accounting principles discussed note 1 consolidated financial statements company elected change method accounting eliminate onemonth lag previously used consolidate foreign operations 2016 also audited accordance standards public company accounting oversight board united states helmerich payne incs internal control financial reporting september 30 2016 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 framework report dated november 23 2016 expressed unqualified opinion thereon sernst young llp tulsa oklahoma november 23 2016 consolidated statements operations helmerich payne inc accompanying notes integral part statements consolidated statements comprehensive income loss helmerich payne inc accompanying notes integral part statements consolidated balance sheets helmerich payne inc accompanying notes integral part statements consolidated balance sheets continued helmerich payne inc accompanying notes integral part statements consolidated statements shareholders equity helmerich payne inc accompanying notes integral part statements consolidated statements cash flows helmerich payne inc accompanying notes integral part statements notes consolidated financial statements helmerich payne inc note 1 summary significant accounting policies principles consolidation consolidated financial statements include accounts helmerich payne inc whollyowned subsidiaries prior october 1 2015 financial reporting purposes fiscal years foreign operations ended august 31 facilitate reporting consolidated results resulting onemonth reporting lag compared remainder company starting october 1 2015 reporting yearend foreign operations changed august 31 september 30 previously existing onemonth reporting lag eliminated longer required achieve timely consolidation due investments technology erp systems personnel enhance financial statement close process believe change preferable financial information operating segments reported based periodend improves overall financial reporting investors providing current information available accordance accounting standards codification asc 81010502 change difference parent subsidiary fiscal yearends elimination previously existing reporting lag considered voluntary change accounting principle accordance asc 2501050 change accounting principle voluntary changes accounting principles reported retrospective application new principle prior financial statement periods presented accordingly financial statements periods prior fiscal 2016 changed reflect periodspecific effects applying accounting principle change resulted cumulative effect accounting change 23 million net income tax effect retained earnings october 1 2013 net loss continuing operations fiscal 2016 would approximately 14 million higher absent accounting change impact change accounting principle eliminate onemonth lag foreign subsidiaries summarized significant items accounts minimally impacted notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued basis presentation classified former venezuelan operation discontinued operation third quarter fiscal 2010 fully described note 2 unless indicated otherwise information notes consolidated financial statements relates continuing operations foreign currencies functional currency foreign operations us dollar nonmonetary assets liabilities translated historical rates monetary assets liabilities translated exchange rates effect end period income statement accounts translated average rates period presented foreign currency gains losses remeasurement foreign currency financial statements foreign currency translations us dollars included direct operating costs included direct operating costs aggregate foreign currency loss 93 million fiscal 2016 transaction gain 16 million fiscal 2015 transaction loss 04 million fiscal 2014 use estimates preparation financial statements conformity accounting principles generally accepted united states america gaap requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period actual results could differ estimates recently adopted accounting standards november 2015 financial accounting standards board fasb issued accounting standards update asu 201517 income taxes topic 740 balance sheet classification deferred taxes requiring deferred tax assets liabilities classified noncurrent balance sheet instead separating deferred taxes current noncurrent amounts guidance effective financial statements issued annual periods beginning december 15 2016 however elected early adopt effective october 1 2015 prospectively result adoption longer deferred income taxes current asset consolidated balance sheet prior year balances retrospectively adjusted cash equivalents cash equivalents consist investments shortterm highly liquid securities original maturities three months less carrying values assets approximate fair values primarily utilize cash management system series separate accounts consisting lockbox accounts receiving cash concentration accounts several zerobalance disbursement accounts notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued funding payroll accounts payable result cash management system checks issued presented banks payment may create negative book cash balances restricted cash equivalents restricted cash equivalents 296 million 320 million september 30 2016 2015 respectively cash restricted purpose potential insurance claims whollyowned captive insurance company total september 30 2016 20 million initial capitalization captive company management elected restrict additional 276 million restricted amounts primarily invested shortterm money market securities restricted cash equivalents reflected balance sheet follows inventories supplies inventories supplies primarily replacement parts supplies held use drilling operations inventories supplies valued lower weighted average cost market value investments maintain investments equity securities certain publicly traded companies cost securities used determining realized gains losses based average cost basis security sold regularly review investment securities impairment based criteria include extent investments carrying value exceeds related fair value duration market decline financial strength specific prospects issuer security unrealized losses temporary recognized earnings property plant equipment property plant equipment stated cost less accumulated depreciation substantially property plant equipment depreciated using straightline method based estimated useful lives assets contract drilling equipment 415 years real estate buildings equipment 1045 years 223 years depreciation consolidated statements operations includes abandonments 393 million 436 million 230 million fiscal 2016 2015 2014 respectively fiscal 2016 abandoned used drilling equipment removed service 2015 2014 decommissioned 23 idle rigs 9 rigs respectively cost maintenance repairs charged direct operating cost betterments refurbishments capitalized lease office space equipment use operations leases evaluated inception subsequent material modification depending lease terms classified either capital notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued leases operating leases appropriate asc 840 leases significant capital leases capitalization interest capitalize interest major projects construction interest capitalized based average interest rate related debt capitalized interest fiscal 2016 2015 2014 28 million 70 million 77 million respectively valuation longlived assets review longlived assets impairment whenever events changes circumstances indicate carrying amount asset may recoverable changes could prompt assessment include significant decline revenue cash margin per day extended periods low rig utilization changes market demand specific asset obsolescence completion specific contracts andor overall general market conditions review longlived assets indicates carrying value certain assets estimated undiscounted future cash flows impairment charge made adjust carrying value estimated fair value asset fair value drilling rigs determined based upon income approach using estimated discounted future cash flows market approach available cash flows estimated management considering factors prospective market demand recent changes rig technology effect rigs marketability cash investment required make rig marketable suitability rig size make existing platforms competitive dynamics including industry utilization longlived assets held sale recorded lower carrying value fair value less costs sell fair value estimated applicable considering factors recent market sales rigs companies sales rigs appraisals factors beginning first fiscal quarter fiscal 2015 continuing fiscal 2016 domestic international oil prices declined significantly decline pricing resulted lower demand drilling services result performed impairment evaluation longlived drilling assets accordance asc 360 property plant equipment order estimate future undiscounted cash flows use eventual disposal developed probability weighted cash flow projections rig fleets significant assumptions used analysis expected margin per day utilization expected value upon disposal believe assumptions estimates used impairment analysis including development probability weighted cash flow projections reasonable appropriate however different assumptions estimates could materially impact analysis resulting conclusions cases fiscal 2016 recorded asset impairment charge us land segment 63 million reduce carrying value rig related equipment classified held sale estimated fair values based expected sales prices rig equipment rigs decommissioned service prior fiscal years written estimated recoverable value time decommissioning fiscal 2016 began actively marketing equipment believe equipment disposed year additional impairments identified rigs rig related equipment domestic international offshore fleets fiscal 2015 valuation longlived assets resulted 392 million impairment charges reduce carrying value seven scr land rigs within international land segment notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued estimated fair value 206 million based discounted cash flow analysis discounted cash flow analysis consisted creating projected cash flows market participant would reasonably develop applying appropriate risk adjusted rate six rigs along rig related assets classified held sale september 30 2016 plan sell assets current condition probable sale occur within one year selfinsurance accruals accrued liability estimated workers compensation casualty claims incurred based upon case reserves plus estimate loss development incurred reported claims estimate based upon historical trends insurance recoveries related liability recorded considered probable drilling revenues contract drilling revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized straightline basis term related drilling contract costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs reimbursements fiscal 2016 2015 2014 1259 million 3022 million 3267 million respectively contracts terminated customers prior expirations fixed terms contractual provisions customarily require early termination amounts paid us revenues early terminated contracts recognized contractual requirements met early termination revenue fiscal 2016 2015 2014 approximately 2190 million 2223 million 117 million respectively rent revenues enter leases tenants rental properties consisting primarily retail multitenant warehouse space lease terms tenants occupying space retail centers warehouse buildings generally range three ten years minimum rents recognized straightline basis term related leases overage percentage rents based tenants sales volume recoveries tenants property taxes operating expenses recognized operating revenues consolidated statements operations rent revenues follows notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued september 30 2016 minimum future rental income received noncancelable operating leases follows leasehold improvement allowances capitalized amortized lease term september 30 2016 2015 cost accumulated depreciation real estate properties follows income taxes current income tax expense amount income taxes expected payable current year deferred income taxes computed using liability method provided temporary differences financial basis tax basis assets liabilities provide uncertain tax positions tax positions meet recognition thresholds measurement standards prescribed asc 740 income taxes fully discussed note 4 amounts uncertain tax positions adjusted periods new information becomes available positions effectively settled recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements operations earnings per share basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued stockbased compensation stockbased compensation expense determined using fairvaluebased measurement method awards granted computing impact fair value option estimated date grant based blackscholes optionspricing model utilizing certain assumptions risk free interest rate volatility dividend yield expected remaining term awards assumptions used calculating fair value stockbased payment awards represent managements best estimates involve inherent uncertainties application management judgment stockbased compensation recognized straightline basis requisite service periods stock awards generally vesting period compensation expense related stock options recorded component general administrative expenses consolidated statements operations treasury stock treasury stock purchases accounted cost method whereby cost acquired stock recorded treasury stock gains losses subsequent reissuance shares credited charged additional paidin capital using averagecost method comprehensive income loss comprehensive income loss refers revenues expenses gains losses included comprehensive income loss excluded net income loss report components comprehensive income loss net tax nature disclose tax effect allocated component consolidated statements comprehensive income loss new accounting standards may 2014 fasb issued asu 201409 revenue contracts customers supersedes virtually existing revenue recognition guidance may 2016 accounting guidance issued clarify yet effective revenue recognition guidance issued may 2014 additional guidance change core principle revenue recognition guidance issued fasb may 2014 rather provides clarification accounting collections sales taxes well recognition revenue associated contract modifications ii noncash consideration iii based collectability consideration customer asu provides full retrospective modified retrospective use cumulative effect method period adoption yet determined adoption method employ july 2015 fasb extended effective date standard interim annual periods beginning december 15 2017 currently evaluating potential effects adoption update consolidated financial statements july 2015 fasb issued asu 201511 inventory topic 330 simplifying measurement inventory update simplifies subsequent measurement inventory replaces current lower cost market test lower cost net realizable value test net realizable value defined estimated selling prices ordinary course business less reasonably predictable costs completion disposal transportation new standard applied prospectively effective annual reporting periods beginning december 15 2016 interim periods within notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued annual periods early adoption permitted expect adoption standard material impact consolidated financial statements january 2016 fasb issued asu 201601 financial instrumentsoverall subtopic 82510 recognition measurement financial assets financial liabilities standard requires entities measure equity investments result consolidation accounted equity method fair value recognize changes fair value net income provisions asu 201601 effective interim annual periods starting december 15 2017 adoption cumulativeeffect adjustment beginning retained earnings recorded adopt standard october 1 2018 subsequent adoption changes fair value availableforsale investments recognized net income effect subject stock market fluctuations february 2016 fasb issued asu 201602 leases topic 842 asu 201602 require organizations lease assetsreferred lesseesto recognize balance sheet assets liabilities rights obligations created leases asu 201602 lessee required recognize assets liabilities leases lease terms 12 months lessor accounting remains substantially similar current gaap addition disclosures leasing activities expanded include qualitative along specific quantitative information public entities asu 201602 effective fiscal years beginning december 15 2018 including interim periods within fiscal years asu 201602 mandates modified retrospective transition method currently evaluating potential impact adopting guidance consolidated financial statements march 2016 fasb issued asu 201609 compensationstock compensation topic 718 improvements employee sharebased payment accounting asu 201609 simplifies several aspects accounting sharebased payment transactions including income tax consequences classification awards either equity liabilities classification statement cash flows public entities asu 201609 effective fiscal years beginning december 15 2016 interim periods within fiscal years early adoption permitted currently evaluating potential impact adopting guidance consolidated financial statements june 2016 fasb issued asu 201613 financial instrumentscredit losses asu sets forth current expected credit loss cecl model requires companies measure expected credit losses financial instruments held reporting date based historical experience current conditions reasonable supportable forecasts replaces existing incurred loss model applicable measurement credit losses financial assets measured amortized cost applies offbalance sheet credit exposures standard effective interim annual periods beginning december 15 2019 currently assessing impact standard consolidated financial statements disclosures august 2016 fasb issued asu 201615 classification certain cash receipts cash payments consensus emerging issues task force asu intended reduce diversity practice presentation classification certain cash receipts cash payments providing guidance eight specific cash flow issues asu effective interim annual periods beginning december 15 2017 early adoption permitted including adoption interim period currently assessing impact standard consolidated statement cash flows notes consolidated financial statements continued helmerich payne inc note 2 discontinued operations current assets discontinued operations consist restricted cash meet remaining current obligations within country venezuela current noncurrent liabilities consist municipal income taxes payable social obligations due within country venezuela expenses incurred incountry obligations reported discontinued operations march 2016 venezuelan government implemented previously announced plans new foreign currency exchange system implementation system resulted reported loss discontinued operations 38 million fiscal 2016 corresponds companys former operations venezuela note 3 debt september 30 2016 2015 following unsecured longterm debt outstanding rates maturities shown following table 40 million senior unsecured fixedrate notes outstanding matured july 2016 final annual principal repayment 40 million along interest paid cash hand july 2016 march 19 2015 issued 500 million 465 percent 10year unsecured senior notes net proceeds discount issuance cost used general corporate purposes including capital expenditures associated rig construction program interest payable semiannually march 15 september 15 debt discount amortized interest expense using effective interest method debt issuance costs amortized straightline stated life obligation approximates effective interest method july 13 2016 terminated previous 300 million unsecured revolving credit facility borrowings 403 million letters credit transferred new 300 million unsecured revolving credit facility mature july 13 2021 new facility 75 million available use letters credit majority borrowings facility would accrue interest spread london interbank offered rate libor also pay commitment fee based unused balance facility borrowing spreads well commitment fees determined according scale based ratio total debt total capitalization spread libor ranges 1125 percent 175 percent per annum commitment fees range notes consolidated financial statements continued helmerich payne inc note 3 debt continued 15 percent 30 percent per annum based debt total capitalization september 30 2016 spread libor commitment fees would 1125 percent 15 percent respectively one financial covenant facility requires us maintain funded leverage ratio defined less 50 percent credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality including limitation priority debt defined agreement may exceed 175 net worth company september 30 2016 borrowings three letters credit outstanding amount 388 million september 30 2016 2612 available borrow 300 million unsecured credit facility subsequent september 30 2016 another letter credit issued 15 million lowering amount available borrow 2597 million addition letters credit mentioned preceding paragraph september 30 2016 two letters credit outstanding totaling 12 million issued support international operations additional letters credit issued separately 300 million credit facility discussed preceding paragraph reduce available borrowing capacity facility applicable agreements unsecured debt contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2016 compliance debt covenants september 30 2016 aggregate maturities longterm debt follows thousands notes consolidated financial statements continued helmerich payne inc note 4 income taxes components provision income taxes follows amounts domestic foreign income loss taxes follows deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary allowances provided carrying value net deferred tax assets based managements judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future notes consolidated financial statements continued helmerich payne inc note 4 income taxes continued components net deferred tax liabilities follows change net deferred tax assets liabilities impacted foreign currency remeasurement september 30 2016 state foreign net operating loss carryforwards income tax purposes 116 million 940 million respectively foreign tax credit carryforwards approximately 503 million 393 million reflected deferred tax asset consolidated financial statements prior consideration valuation allowance expire fiscal 2017 2024 valuation allowance primarily attributable state foreign net operating loss carryforwards 10 million 311 million respectively foreign tax credit carryforwards 393 million likely utilized effective income tax rates compared us federal income tax rate follows notes consolidated financial statements continued helmerich payne inc note 4 income taxes continued effective tax rates differ us federal statutory rate 350 percent primarily due state foreign income taxes tax benefit internal revenue code section 199 deduction domestic production activities effective tax rate twelve months ended september 30 2016 significantly impacted reduced earnings taxes conjunction december 2015 tax law change resulted reduction fiscal 2015 internal revenue code section 199 deduction domestic production activities recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements operations september 30 2016 2015 accrued interest penalties 68 million 111 million respectively reconciliation change gross unrecognized tax benefits fiscal years ended september 30 2016 2015 follows september 30 2016 september 30 2015 liability unrecognized tax benefits includes 38 million 29 million respectively unrecognized tax benefits related discontinued operations recognized would affect effective tax rate remaining unrecognized tax benefits would affect effective tax rate recognized liabilities unrecognized tax benefits related interest penalties included noncurrent liabilities consolidated balance sheets next 12 months cannot predict certainty whether achieve ultimate resolution uncertain tax position associated us international operations could result increases decreases unrecognized tax benefits however expect increases decreases material effect results operations financial position file consolidated us federal income tax return well income tax returns various states foreign jurisdictions tax years remain open examination us federal state jurisdictions include fiscal 2012 2015 exception certain state jurisdictions currently audit audits foreign jurisdictions generally complete fiscal 2003 september 13 2013 irs issued final regulations providing guidance treatment amounts paid acquire produce improve tangible property proposed regulations providing guidance dispositions property implementation date regulations tax years beginning january 1 2014 estimated effect regulations included fiscal year end 2015 2016 tax provision implementation regulations significant impact overall tax provision notes consolidated financial statements continued helmerich payne inc note 5 shareholders equity company authorization board directors repurchase four million common shares calendar year repurchases may made using cash equivalents available sources fiscal 2015 purchased 810097 common shares aggregate cost 597 million held treasury shares purchases common shares fiscal years 2016 2014 accumulated comprehensive income loss components accumulated comprehensive income loss follows following summary changes accumulated comprehensive income loss net tax component year ended september 30 2016 notes consolidated financial statements continued helmerich payne inc note 5 shareholders equity continued following provides detail accumulated comprehensive income loss components reclassified consolidated statement operations years ended september 30 2016 2015 note 6 stockbased compensation march 2 2016 helmerich payne inc 2016 omnibus incentive plan 2016 plan approved stockholders 2016 plan among things authorizes human resources committee board grant nonqualified stock options restricted stock awards selected employees nonemployee directors restricted stock may granted consideration prior future services purchase price per share stock options may less market price underlying stock date grant stock options expire 10 years grant date awards outstanding helmerich payne inc 2005 longterm incentive plan 2005 plan helmerich payne inc 2010 longterm incentive plan 2010 plan remain subject terms conditions plans november 30 2015 876379 nonqualified stock options 294575 shares restricted stock awards granted 2010 plan fiscal 2016 effective march 2 2016 commonstock based awards made 2010 plan summary compensation cost stockbased payment arrangements recognized general administrative expense fiscal 2016 2015 2014 follows notes consolidated financial statements continued helmerich payne inc note 6 stockbased compensation continued benefits tax deductions excess recognized compensation cost 09 million 38 million 266 million reported financing cash flow consolidated statements cash flows fiscal 2016 2015 2014 respectively stock options vesting requirements stock options determined human resources committee board directors options currently outstanding began vesting one year grant date 25 percent options vesting four consecutive years use blackscholes formula estimate fair value stock options granted employees fair value options amortized compensation expense straightline basis requisite service periods stock awards generally vesting periods weightedaverage fair value calculations options granted within fiscal period based following weightedaverage assumptions set forth table options granted prior periods based assumptions prevailing date grant riskfree interest rate riskfree interest rate based us treasury securities expected term option expected volatility rate expected volatilities based daily closing price stock based upon historical experience period approximates expected term option expected dividend yield dividend yield based current dividend yield expected term expected term options granted represents period time expected outstanding estimate expected term options granted based historical experience grants exercises based calculations weightedaverage fair value per option granted acquire share common stock 1312 1639 2944 per share fiscal 2016 2015 2014 respectively notes consolidated financial statements continued helmerich payne inc note 6 stockbased compensation continued following summary reflects stock option activity common stock related information fiscal 2016 2015 2014 shares thousands following table summarizes information stock options september 30 2016 shares thousands september 30 2016 weightedaverage remaining life exercisable stock options 43 years aggregate intrinsic value 479 million weightedaverage exercise price 4666 per share number options vested expected vest september 30 2016 3284246 aggregate intrinsic value 548 million weightedaverage exercise price 5169 per share september 30 2016 unrecognized compensation cost related stock options 66 million cost expected recognized weightedaverage period 27 years total intrinsic value options exercised fiscal 2016 2015 2014 63 million 107 million 1009 million respectively grant date fair value shares vested fiscal 2016 2015 2014 96 million 81 million 88 million respectively restricted stock restricted stock awards consist common stock timevested three six years recognize compensation expense straightline basis vesting period fair value restricted stock awards 2010 plan determined based closing price shares grant date september 30 2016 192 million total unrecognized compensation notes consolidated financial statements continued helmerich payne inc note 6 stockbased compensation continued cost related unvested restricted stock awards cost expected recognized weightedaverage period 21 years summary status restricted stock awards september 30 2016 changes restricted stock outstanding fiscal years ended september 30 2016 2015 2014 follows shares thousands 1the number restricted stock awards vested includes shares withheld behalf employees satisfy statutory tax withholding requirements note 7 earnings per share asc 260 earnings per share requires companies treat unvested sharebased payment awards nonforfeitable rights dividend equivalents separate class securities calculating earnings per share granted expect continue grant employees restricted stock grants contain nonforfeitable rights dividends grants considered participating securities asc 260 required include grants calculation basic earnings per share calculate basic earnings per share using twoclass method twoclass method computing earnings per share earnings allocation formula determines earnings per share class common stock participating security according dividends declared accumulated participation rights undistributed earnings basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock notes consolidated financial statements continued helmerich payne inc note 7 earnings per share continued following table sets forth computation basic diluted earnings per share net loss fiscal 2016 accordingly diluted earnings per share calculation fiscal 2016 equivalent basic earnings per share calculation since diluted earnings per share excluded assumed exercise equity awards excluded deemed notes consolidated financial statements continued helmerich payne inc note 7 earnings per share continued antidilutive meaning inclusion would reduced reported net loss per share applicable period following shares attributable outstanding equity awards excluded calculation diluted earnings per share inclusion would antidilutive note 8 financial instruments fair value measurement estimated fair value availableforsale securities primarily based market quotes following summary availableforsale securities excludes assets held nonqualified supplemental savings plan ongoing basis evaluate marketable equity securities determine decline fair value cost otherthantemporary decline fair value cost determined otherthantemporary impairment charge recorded new cost basis established review several factors determine whether loss otherthantemporary factors include limited length time security unrealized loss position ii extent fair value less cost iii financial condition nearterm prospects issuer iv intent ability hold security period time sufficient allow anticipated recovery fair value cost securities used determining realized gains losses based average cost basis security sold one securities unrealized loss position 30 days september 30 2015 dropped cost december 2015 continued loss position fiscal 2016 security represents company offshore drilling industry severely impacted downturn energy sector fourth quarter fiscal 2016 determined loss otherthantemporary result recognized 260 million otherthantemporary impairment charge fiscal 2016 fiscal 2015 sell marketable equity availableforsale securities fiscal 2014 marketable equity availableforsale securities fair value date sales 492 million sold gross realized gain sales availableforsale securities totaled 452 million gains availableforsale securities included gain sale investment securities consolidated statements operations notes consolidated financial statements continued helmerich payne inc note 8 financial instruments fair value measurement continued assets held nonqualified supplemental savings plan carried fair value totaled 134 million 129 million september 30 2016 2015 respectively assets comprised mutual funds measured using level 1 inputs shortterm investments include securities classified trading securities realized unrealized gains losses trading securities included income expense consolidated statements operations securities recorded fair value majority cash equivalents invested highlyliquid moneymarket mutual funds invested primarily direct indirect obligations us government carrying amount cash equivalents approximates fair value due short maturity investments carrying value assets accrued liabilities approximated fair value september 30 2016 2015 fair value defined exchange price would received sell asset paid transfer liability exit price principal advantageous market asset liability orderly transaction market participants measurement date use fair value hierarchy established asc 82010 measure fair value prioritize inputs • level 1quoted prices unadjusted active markets identical assets liabilities reporting entity access measurement date • level 2observable inputs quoted prices included level 1 quoted prices similar assets liabilities active markets quoted prices similar assets liabilities markets active inputs observable corroborated observable market data • level 3unobservable inputs supported little market activity significant fair value assets liabilities includes pricing models discounted cash flow methodologies similar techniques use significant unobservable inputs september 30 2016 financial instruments utilizing level 1 inputs include cash equivalents equity securities active markets money market funds elected classify restricted assets included current assets also included cash denominated foreign currency elected classify restricted used settle remaining liabilities discontinued operations items quoted current market prices readily available september 30 2016 level 2 inputs include us agency issued debt securities corporate bonds measured using broker quotations utilize observable market inputs also included level 2 inputs bank certificate deposits included shortterm investments current assets notes consolidated financial statements continued helmerich payne inc note 8 financial instruments fair value measurement continued following table summarizes assets measured fair value presented consolidated condensed balance sheet september 30 2016 1represents book value september 30 2016 decommissioned rigs rig related equipment written estimated recoverable amounts september 30 2016 assets included assets held sale consolidated balance sheet september 30 2016 following information presents supplemental fair value information longterm fixedrate debt september 30 2016 september 30 2015 fair value 500 million fixedrate debt based broker quotes september 30 2016 notes classified within level 2 actively traded markets notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans maintain domestic noncontributory defined benefit pension plan covering certain us employees meet certain age service requirements july 2003 revised helmerich payne inc employee retirement plan pension plan close pension plan new participants effective october 1 2003 reduce benefit accruals current participants september 30 2006 time benefit accruals discontinued pension plan frozen following table provides reconciliation changes pension benefit obligations fair value pension plan assets twoyear period ended september 30 2016 statement funded status september 30 2016 2015 amounts recognized consolidated balance sheets september 30 2016 2015 follows thousands amounts recognized accumulated comprehensive income september 30 2016 2015 yet reflected net periodic benefit cost follows thousands amount recognized accumulated comprehensive income yet reflected periodic benefit cost expected amortized next years periodic benefit cost net actuarial loss 23 million notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued weighted average assumptions used pension calculations follows mortality table issued society actuaries october 2016 used september 30 2016 pension calculation new mortality information reflects improved life expectancies projected mortality improvements make contributions pension plan fiscal 2016 fiscal 2017 expect minimum contributions required law needed however may make contributions fiscal 2017 needed fund unexpected distributions lieu liquidating pension assets components net periodic pension expense benefit follows record settlement expense benefit payments exceed total annual service interest costs following table reflects expected benefits paid pension plan next five fiscal years aggregate five years thereafter thousands included pension plan unfunded supplemental executive retirement plan investment strategy asset allocation investment policy strategies established longterm view mind investment strategy intended help pay cost plan providing adequate security meet benefits promised pension plan maintain diversified asset mix minimize risk material loss portfolio value might occur devaluation single investment determining appropriate asset mix financial strength ability fund potential shortfalls considered pension plan assets invested portfolios diversified notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued publicmarket equity securities fixed income securities pension plan directly hold securities company expected longterm rate return pension plan assets based historical projected rates return current planned asset classes pension plans investment portfolio analyzing historical experience future expectations return volatility various asset classes target allocation 2017 asset allocation pension plan end fiscal 2016 2015 asset category follows plan assets fair value pension plan assets september 30 2016 2015 summarized level within fair value hierarchy described note 8 follows notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued pension plans financial assets utilizing level 1 inputs valued based quoted prices active markets identical securities plan assets utilizing level 2 pension plans assets utilizing level 3 inputs consist oil gas properties fair value oil gas properties determined wells fargo bank na based upon actual revenue received previous twelvemonth period experience similar assets following table sets forth summary changes fair value pension plans level 3 assets years ended september 30 2016 2015 defined contribution plan substantially employees united states payroll may elect participate 401kthrift plan contributing portion earnings contribute amount equal 100 percent first five percent participants compensation subject certain limitations annual expense incurred defined contribution plan 216 million 248 million 323 million fiscal 2016 2015 2014 respectively fiscal 2016 determined employee workforce reductions started 2015 continued 2016 due reduced drilling activity resulted partial plan termination 401kthrift plan affected participants fully vested accounts result partial plan termination status recorded additional employer contributions totaling 63 million general administrative expense notes consolidated financial statements continued helmerich payne inc note 10 supplemental balance sheet information following reflects activity reserve bad debt 2016 2015 2014 notes consolidated financial statements continued helmerich payne inc note 10 supplemental balance sheet information continued accounts receivable prepaid expenses current assets accrued liabilities longterm liabilities september 30 consist following notes consolidated financial statements continued helmerich payne inc note 11 supplemental cash flow information capital expenditures consolidated statements cash flows years ended september 30 2016 2015 2014 include additions incurred paid end year following table reconciles total capital expenditures incurred total capital expenditures consolidated statements cash flows note 12 risk factors concentration credit financial instruments potentially subject us concentrations credit risk consist primarily temporary cash investments shortterm investments trade receivables place temporary cash investments us established financial institutions invest diversified portfolio highly rated shortterm money market instruments trade receivables primarily established companies oil gas industry may impact credit risk customers may similarly affected prolonged changes economic industry conditions international sales also present various risks including governmental activities may limit disrupt markets restrict movement funds international sales however large international governmentowned national oil companies perform ongoing credit evaluations customers typically require collateral support trade receivables provide allowance doubtful accounts necessary cover estimated credit losses allowance based managements knowledge customer accounts volatility market operations materially affected oil gas prices oil natural gas prices historically volatile difficult predict degree certainty current energy prices important contributors positive cash flow customers expectations future prices notes consolidated financial statements continued helmerich payne inc note 12 risk factors continued price volatility generally important determining customers future spending levels volatility along difficulty predicting future prices lead many exploration production companies base capital spending much conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices addition customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets may cause difficulty customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result reduction customer spending demand drilling services reduction spending could material adverse effect operations selfinsurance selfinsure significant portion expected losses relating workers compensation general liability automobile liability generally deductibles range 1 million 3 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events estimates recorded incurred outstanding liabilities workers compensation general liability claims incurred reported estimates based adjusters estimates historic experience statistical methods believe reliable nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs whollyowned captive insurance company finances significant portion physical damage risk companyowned drilling rigs well international casualty deductibles international drilling operations international drilling operations may significantly contribute revenues net operating income assurance able successfully conduct operations failure may adverse effect financial position results operations cash flows also success international operations subject numerous contingencies beyond managements control contingencies include general regional economic conditions fluctuations currency exchange rates modified exchange controls changes international regulatory requirements international employment issues risk expropriation real personal property burden complying foreign laws additionally event extended labor strikes occur country experiences significant political economic social instability could experience shortages labor andor material supplies necessary operate drilling rigs thereby potentially causing adverse material effect business financial condition results operations estimates published sources indicate argentina highly inflationary country defined cumulative inflation rates exceeding 100 percent recent threeyear period based inflation data published respective governments regardless foreign operations use us dollar functional currency local currency monetary assets liabilities notes consolidated financial statements continued helmerich payne inc note 12 risk factors continued remeasured us dollars gains losses resulting foreign currency transactions included current results operations impact local laws future operations certain areas may conducted entities local citizens interests entities including joint ventures hold minority interest pursuant arrangements conduct operations contract local entities believe neither operating entities pursuant arrangements would material adverse effect operations revenues assurance cases able structure restructure operations conform local law administration thereof terms acceptable us note 13 commitments contingencies purchase obligations equipment parts supplies ordered advance promote efficient construction capital improvement progress september 30 2016 purchase commitments equipment parts supplies approximately 440 million leases september 30 2016 leasing approximately 219700 square feet office space near downtown tulsa oklahoma also lease office space equipment use operations operating leases contain builtin predetermined rent escalations rent expense recognized straightline basis life lease leasehold improvements capitalized amortized lease term future minimum rental payments required operating leases initial remaining noncancelable lease terms excess year september 30 2016 follows total rent expense 135 million 136 million 121 million fiscal 2016 2015 2014 respectively contingencies various legal actions majority arise ordinary course business pending maintain insurance certain business risks subject certain deductibles exception matters discussed independently addressed herein none legal actions expected material adverse effect financial condition cash flows results operations notes consolidated financial statements continued helmerich payne inc note 13 commitments contingencies continued contingently liable sureties respect bonds issued sureties connection certain commitments entered us normal course business agreed indemnify sureties payments made respect bonds ordinary course business contingencies arise resulting existing condition situation set circumstances involving uncertainty realization possible gain contingency account gain contingencies accordance provisions asc 450 contingencies therefore record gain contingencies recognize income realized property equipment venezuelan subsidiary seized venezuelan government june 30 2010 whollyowned subsidiaries helmerich payne international drilling co helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 bolivarian republic venezuela petroleos de venezuela sa pdvsa petroleo sa petroleo subsidiaries seek damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery gain contingencies recognized consolidated financial statements november 8 2013 united states district court eastern district louisiana approved previously disclosed october 30 2013 plea agreement wholly owned subsidiary helmerich payne international drilling co united states department justice united states attorneys office eastern district louisiana doj courts approval plea agreement resolved dojs investigation certain choke manifold testing irregularities occurred 2010 one helmerich payne international drilling cos offshore platform rigs gulf mexico engaged discussions inspector generals office department interior regarding events subject dojs investigation provide assurance timing eventual outcome discussions unable determine amount penalty may assessed effect terms may required administrative agreement doj however presently believe outcome discussions material adverse effect us april 28 2015 joshua keel employee helmerich payne international drilling co hpidc filed petition 152nd judicial court harris county texas cause 201524531 us customer several subcontractors customer suit arose injuries keel sustained accident occurred working hpidc rig 223 new mexico july 2014 keel alleged defendants negligent per se acted recklessly intentionally andor utterly wanton disregard rights safety plaintiff seeking damages well excess 100 million pursuant terms drilling contract hpidc customer hpidc indemnified codefendants lawsuit subject certain reservations september 14 2016 parties keel litigation entered global settlement agreement approved court october 14 2016 total settlement amount 72 million paid company insurers behalf defendants pursuant industry standard contractual indemnification obligations taking account amounts paid companys various insurers 188 million recorded operating cost us land segment september 30 2016 recorded consolidated balance sheet 720 million accrued liability 502 million accounts receivable insurance recoveries settlement payment due december 24 2016 notes consolidated financial statements continued helmerich payne inc note 14 segment information operate principally contract drilling industry contract drilling business includes following reportable operating segments us land offshore international land contract drilling operations consist mainly contracting companyowned drilling equipment primarily large oil gas exploration companies provide information different types business activities operate included offshore international land along us land reportable operating segment separate reportable operating segments additionally reportable operating segment strategic business unit managed separately primary international areas operation include colombia ecuador argentina bahrain uae south american middle eastern countries includes additional nonreportable operating segments revenues included consist primarily rental income consolidated revenues expenses reflect elimination material intercompany transactions evaluate segment performance based income loss operations segment operating income taxes includes • revenues external internal customers • direct operating costs • depreciation • allocated general administrative costs excludes corporate costs depreciation income asset sales corporate income expense general administrative costs allocated segments based primarily specific identification extent identification practical methods believe reasonable reflection utilization services provided segment operating income segments nongaap financial measure performance excludes certain general administrative expenses corporate depreciation income asset sales corporate income expense consider segment operating income important supplemental measure operating performance presenting trends core businesses use measure facilitate periodtoperiod comparisons operating performance reportable segments aggregate eliminating items affect comparability periods believe segment operating income useful investors provides means evaluate operating performance segments ongoing basis using criteria used internal decision makers additionally highlights operating trends aids analytical comparisons however segment operating income limitations used alternative operating income loss performance measure determined accordance gaap excludes certain costs may affect operating performance future periods notes consolidated financial statements continued helmerich payne inc note 14 segment information continued summarized financial information reportable segments continuing operations years ended september 30 2016 2015 2014 shown following table notes consolidated financial statements continued helmerich payne inc note 14 segment information continued following table reconciles segment operating income loss income continuing operations income taxes reported consolidated statements operations following table presents revenues external customers longlived assets country based location service provided longlived assets comprised property plant equipment notes consolidated financial statements continued helmerich payne inc note 14 segment information continued revenues one customer accounted approximately 119 percent 101 percent 107 percent total operating revenues years ended september 30 2016 2015 2014 respectively revenues another customer accounted approximately 94 percent 46 percent 29 percent total operating revenues years ended september 30 2016 2015 2014 respectively collectively receivables customers approximately 495 million 1013 million september 30 2016 2015 respectively note 15 guarantor nonguarantor financial information march 2015 helmerich payne international drilling co issuer 100 percent owned subsidiary helmerich payne inc parent guarantor issued senior unsecured notes aggregate principal amount 5000 million notes fully unconditionally guaranteed parent subsidiaries parent currently guarantee notes subject certain provisions subsidiary guarantees certain debt issuer parent subsidiary provide guarantee obligation notes connection notes providing following condensed consolidating financial information accordance securities exchange commission disclosure requirements entity consolidating financial information follows accounting policies described consolidated financial statements condensed consolidating financial information issuer helmerich payne international drilling co parent guarantor helmerich payne inc shown tables notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating statements operations thousands condensed consolidating statements comprehensive income loss thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating statements income thousands condensed consolidating statements comprehensive income thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating statements income thousands condensed consolidating statements comprehensive income thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating balance sheets thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating balance sheets continued thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating statements cash flows thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating statements cash flows continued thousands notes consolidated financial statements continued helmerich payne inc note 15 guarantor nonguarantor financial information continued condensed consolidating statements cash flows continued thousands notes consolidated financial statements continued helmerich payne inc note 16 selected quarterly financial data unaudited 1the fourth quarter fiscal 2015 adjusted change accounting principle eliminate onemonth lag foreign subsidiaries described note 1 financial statements impact fourth quarter increase net loss 64 million increase diluted loss per common share 006 impact first second third quarters fiscal 2015 previously disclosed form 10q filings fiscal 2016 sum earnings per share four quarters may equal total earnings per share year due changes average number common shares outstanding first quarter fiscal 2016 net income includes aftertax gain sale assets 29 million 003 per share diluted basis aftertax loss related currency exchange losses approximately 54 million 005 per share diluted basis second quarter fiscal 2016 net income includes aftertax gain sale assets 15 million 001 per share diluted basis third quarter fiscal 2016 net loss includes aftertax impairment charge primarily related used drilling equipment approximately 29 million 003 per share diluted basis fourth quarter fiscal 2016 net loss includes aftertax gain sale assets 14 million 001 per share diluted basis notes consolidated financial statements continued helmerich payne inc note 16 selected quarterly financial data unaudited continued fourth quarter fiscal 2016 net loss includes aftertax loss otherthantemporary impairment availableforsale securities 159 million 015 loss per share diluted basis fourth quarter fiscal 2016 net loss includes aftertax loss litigation settlement 120 million 011 loss per share diluted basis first quarter fiscal 2015 net income includes aftertax gain sale assets 26 million 002 per share diluted basis second quarter fiscal 2015 net income includes aftertax gain sale assets 18 million 002 per share diluted basis aftertax abandonment charge primarily related decommission 17 scr powered flexrigs approximately 67 million 006 per share diluted basis third quarter fiscal 2015 net income includes aftertax gain sale assets 11 million 001 per share diluted basis fourth quarter fiscal 2015 net income includes aftertax gain sale assets 19 million 002 per share diluted basis adjusted item 9item 8 financial statements supplementary data index consolidated financial statements page report independent registered public accounting firm consolidated statements operations years ended september 30 2017 2016 2015 consolidated statements comprehensive income loss years ended september 30 2017 2016 2015 consolidated balance sheets september 30 2017 2016 consolidated statements shareholders’ equity years ended september 30 2017 2016 2015 consolidated statements cash flows years ended september 30 2017 2016 2015 notes consolidated financial statements report independent registered public accounting firm board directors shareholders helmerich payne inc audited accompanying consolidated balance sheets helmerich payne inc september 30 2017 2016 related consolidated statements operations comprehensive income loss shareholders’ equity cash flows three years period ended september 30 2017 financial statements responsibility company’s management responsibility express opinion financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position helmerich payne inc september 30 2017 2016 consolidated results operations cash flows three years period ended september 30 2017 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states helmerich payne inc’s internal control financial reporting september 30 2017 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 framework report dated november 22 2017 expressed unqualified opinion thereon sernst young llp tulsa oklahoma november 22 2017 consolidated statements operations helmerich payne inc accompanying notes integral part statements consolidated statements comprehensive income loss helmerich payne inc accompanying notes integral part statements consolidated balance sheets helmerich payne inc accompanying notes integral part statements consolidated balance sheets continued helmerich payne inc accompanying notes integral part statements consolidated statements shareholders’ equity helmerich payne inc accompanying notes integral part statements consolidated statements cash flows helmerich payne inc accompanying notes integral part statements notes consolidated financial statements helmerich payne inc note 1 summary significant accounting policies principles consolidation consolidated financial statements include accounts helmerich payne inc whollyowned subsidiaries basis presentation classified former venezuelan operation discontinued operation third quarter fiscal 2010 fully described note 3 unless indicated otherwise information notes consolidated financial statements relates continuing operations foreign currencies functional currency foreign operations us dollar nonmonetary assets liabilities translated historical rates monetary assets liabilities translated exchange rates effect end period income statement accounts translated average rates period presented aggregate foreign currency gains losses remeasurement foreign currency financial statements foreign currency translations us dollars included direct operating costs total losses 71 93 million fiscal 2017 2016 respectively transaction gain 16 million fiscal 2015 use estimates preparation financial statements conformity accounting principles generally accepted united states america “gaap” requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period actual results could differ estimates recently adopted accounting standards january 2017 financial accounting standards board “fasb” issued accounting standards update “asu” 201704 intangiblesgoodwill topic 350 objective asu simplify entity required test goodwill impairment eliminating step 2 goodwill impairment test step 2 measures goodwill impairment loss comparing implied fair value reporting unit’s goodwill carrying amount goodwill instead asu entity perform annual interim goodwill impairment test comparing fair value reporting unit carrying amount entity recognize impairment charge amount carrying amount exceeds reporting unit’s fair value however loss recognized exceed total amount goodwill allocated reporting unit additionally entity consider income tax effects tax deductible goodwill carrying amount reporting unit measuring goodwill impairment loss applicable permitted early adopted guidance effective june 30 2017 impact consolidated financial statements august 2014 fasb issued asu 201415 presentation financial statements going concern subtopic 20540 disclosure uncertainties entity’s ability continue going concern guidance provides principles definitions management intended reduce diversity timing content disclosures provided footnotes standard management required evaluate annual interim reporting period whether probable entity able meet obligations become due within one year date financial statements issued available issued applicable adopted asu 201415 required september 30 2017 impact consolidated financial statements cash equivalents cash equivalents consist investments shortterm highly liquid securities original maturities three months less carrying values assets approximate fair values utilize cash management system series separate accounts consisting lockbox accounts receiving cash concentration accounts several “zerobalance” disbursement accounts funding payroll accounts payable restricted cash equivalents restricted cash equivalents 391 million 296 million september 30 2017 2016 respectively total september 30 2017 94 million related motive acquisition described note 2 20 million initial capitalization captive insurance company 277 million represents additional amount management elected restrict purpose potential insurance claims whollyowned captive insurance company restricted amounts primarily invested shortterm money market securities restricted cash equivalents reflected balance sheet follows inventories primarily replacement parts supplies held use drilling operations inventories valued lower weighted average cost market value investments maintain investments equity securities certain publicly traded companies cost securities used determining realized gains losses based average cost basis security sold regularly review investment securities impairment based criteria include extent investment’s carrying value exceeds related fair value duration market decline financial strength specific prospects issuer security unrealized losses temporary recognized earnings property plant equipment property plant equipment stated cost less accumulated depreciation substantially property plant equipment depreciated using straightline method based estimated useful lives assets contract drilling equipment 415 years real estate buildings equipment 1045 years 223 years depreciation consolidated statements operations includes abandonments 426 million 393 million 436 million fiscal 2017 2016 2015 respectively fiscal 2017 upgrades fleet meet customer demands additional capabilities resulted abandonment older rig components fiscal 2016 abandoned used drilling equipment removed service fiscal 2015 decommissioned 23 idle rigs cost maintenance repairs charged direct operating cost betterments refurbishments capitalized lease office space equipment use operations leases evaluated inception upon subsequent material modification depending lease terms classified either capital leases operating leases appropriate accounting standards codification “asc” 840 leases significant capital leases capitalization interest capitalize interest major projects construction interest capitalized based average interest rate related debt capitalized interest fiscal 2017 2016 2015 03 million 28 million 70 million respectively valuation longlived assets review longlived assets impairment whenever events changes circumstances indicate carrying amount asset may recoverable changes could prompt assessment include significant decline revenue cash margin per day extended periods low rig utilization changes market demand specific asset obsolescence completion specific contracts andor overall general market conditions review longlived assets indicates carrying value certain assets estimated undiscounted future cash flows impairment charge made required adjust carrying value estimated fair value asset fair value drilling rigs determined based upon either income approach using estimated discounted future cash flows market approach cash flows estimated management considering factors prospective market demand recent changes rig technology effect rig’s marketability cash investment required make rig marketable suitability rig size make existing platforms competitive dynamics including industry utilization longlived assets held sale recorded lower carrying value fair value less costs sell fair value estimated applicable considering factors recent market sales rigs companies sales rigs appraisals factors beginning first fiscal quarter fiscal 2015 continuing fiscal 2016 domestic international oil prices declined significantly since largely stabilized lower levels decline pricing resulted lower demand drilling services asset group impairment indicator present performed impairment evaluation accordance asc 360 property plant equipment estimating future undiscounted cash flows use eventual disposal asset group using probability weighted scenarios significant assumptions used analysis expected margin per day utilization expected value upon disposal believe assumptions estimates used impairment analysis including development probability weighted cash flow projections reasonable appropriate however different assumptions estimates could materially impact analysis resulting conclusions cases fiscal 2016 recorded asset impairment charge us land segment 63 million reduce carrying value rig related equipment classified held sale estimated fair values based expected sales prices assets originally classified held sale intent selling international location outlook us trade policies targeted international location subsequently shifted causing sale negotiations stall thus second quarter fiscal 2017 determined equipment longer met held sale criteria reclassified property plant equipment impact results operations decision rig equipment rigs decommissioned service prior fiscal years written estimated recoverable value time decommissioning recorded carrying value lower estimated fair value fiscal 2015 valuation longlived assets resulted 392 million impairment charges reduce carrying value seven scr land rigs within international land segment estimated fair value 206 million based discounted cash flow analysis discounted cash flow analysis consisted creating projected cash flows market participant would reasonably develop applying appropriate risk adjusted rate six rigs along rig related assets classified held sale september 30 2016 assets originally classified held sale latin american drilling market appeared trending upward marketing efforts continued buyer interest diminished due latin american market remaining flat terms rig counts oil prices since point market remained flat terms rig counts oil prices third quarter fiscal 2017 determined equipment longer met held sale criteria reclassified property plant equipment 2017 results operations reflect 22 million depreciation catchup adjustment result decision equipment recorded carrying value lower estimated fair value goodwill intangible assets goodwill represents excess cost fair value net assets acquired business combination goodwill amortized tested potential impairment reporting unit level minimum annual basis indications potential impairment exist impairment determined exist impairment charge amount carrying amount exceeds reporting unit’s fair value recognized limited total amount goodwill allocated reporting unit reporting unit level defined operating segment one level operating segment goodwill within nonreportable business segment assess goodwill impairment fourth fiscal quarter assessment fiscal 2017 2016 2015 result impairment charge following summary changes goodwill thousands intangible assets indefinite lives tested impairment least annually fourth fiscal quarter events occur circumstances change would indicate value asset may impaired impairment measured difference fair value asset carrying value finitelived intangible assets amortized using straightline method period assets contribute cash flows generally estimated 15 years evaluated impairment accordance policies valuation longlived assets impairment intangible assets recorded fiscal 2017 2016 2015 following summary finitelived indefinitelived intangible assets goodwill september 30 amortization expense 11 million year ended september 30 2017 estimated 34 million next five fiscal years selfinsurance accruals accrued liability estimated worker’s compensation casualty claims incurred based upon case reserves plus estimate loss development incurred reported claims estimate based upon historical trends insurance recoveries related liability recorded considered probable drilling revenues contract drilling revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized straightline basis term related drilling contract costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs reimbursements fiscal 2017 2016 2015 1799 million 1259 million 3022 million respectively contracts terminated customers prior expirations fixed terms contractual provisions customarily require early termination amounts paid us revenues early terminated contracts recognized contractual requirements met early termination revenue fiscal 2017 2016 2015 approximately 294 million 2190 million 2223 million respectively rent revenues enter leases tenants rental properties consisting primarily retail multitenant warehouse space lease terms tenants occupying space retail centers warehouse buildings generally range three ten years minimum rents recognized straightline basis term related leases overage percentage rents based tenants’ sales volume recoveries tenants property taxes operating expenses recognized operating revenues consolidated statements operations rent revenues follows september 30 2017 minimum future rental income received noncancelable operating leases follows leasehold improvement allowances capitalized amortized lease term september 30 2017 2016 cost accumulated depreciation real estate properties follows income taxes current income tax expense amount income taxes expected payable current year deferred income taxes computed using liability method provided temporary differences financial basis tax basis assets liabilities provide uncertain tax positions tax positions meet recognition thresholds measurement standards prescribed asc 740 income taxes fully discussed note 5 amounts uncertain tax positions adjusted periods new information becomes available positions effectively settled recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements operations earnings per share basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock stockbased compensation stockbased compensation expense determined using fairvaluebased measurement method awards granted computing impact fair value option estimated date grant based blackscholes optionspricing model utilizing assumptions risk free interest rate volatility dividend yield expected remaining term awards assumptions used calculating fair value stockbased payment awards represent management’s best estimates involve inherent uncertainties application management judgment stockbased compensation recognized straightline basis requisite service periods stock awards generally vesting period compensation expense related stock options recorded component general administrative expenses consolidated statements operations treasury stock treasury stock purchases accounted cost method whereby cost acquired stock recorded treasury stock gains losses subsequent reissuance shares credited charged additional paidin capital using averagecost method comprehensive income loss comprehensive income loss refers revenues expenses gains losses included comprehensive income loss excluded net income loss report components comprehensive income loss net tax nature disclose tax effect allocated component consolidated statements comprehensive income loss new accounting standards yet adopted may 2014 fasb issued asu 201409 revenue contracts customers supersedes virtually existing revenue recognition guidance throughout 2016 early 2017 additional accounting guidance issued clarify yet effective revenue recognition guidance issued may 2014 asu provides full retrospective modified retrospective use cumulative effect method period adoption 2017 established implementation team began detailed analysis contracts place retrospective period currently evaluating changes business processes systems controls support recognition disclosure new standard upon adoption new revenue standard drilling revenue associated drilling contracts disaggregated lease component service component requirements asu effective interim annual periods beginning december 15 2017 fiscal 2017 performed initial assessment impact asu 201409 assistance outside consultant assessment based bottomsup approach analyzed existing contracts current accounting policies practices identify potential differences would result applying requirements new standard contracts fiscal 2018 implement appropriate changes business processes systems controls support recognition disclosure new standard findings progress toward implementation standard periodically reported management currently expect impact adopting asu 201409 material total net revenues operation income loss consolidated balance sheet performance obligations determine revenue recognized materially changed new standard thus revenue associated majority contracts continue recognized control products transferred customer adopt standard october 1 2018 based evaluation date anticipate using modified retrospective method however still process finalizing documentation assessment impact standard financial results related disclosures anticipate additional disclosures future filings related planned adoption standard july 2015 fasb issued asu 201511 inventory topic 330 simplifying measurement inventory update simplifies subsequent measurement inventory replaces current lower cost market test lower cost net realizable value test net realizable value defined estimated selling prices ordinary course business less reasonably predictable costs completion disposal transportation new standard applied prospectively effective annual reporting periods beginning december 15 2016 interim periods within annual periods early adoption permitted adopt asu 201511 october 1 2017 expect adoption standard material impact consolidated financial statements january 2016 fasb issued asu 201601 financial instruments overall subtopic 82510 recognition measurement financial assets financial liabilities standard requires entities measure equity investments result consolidation accounted equity method fair value recognize changes fair value net income provisions asu 201601 effective interim annual periods starting december 15 2017 adoption cumulativeeffect adjustment beginning retained earnings recorded adopt standard october 1 2018 subsequent adoption changes fair value availableforsale investments recognized net income effect subject stock market fluctuations february 2016 fasb issued asu 201602 leases topic 842 asu 201602 require organizations lease assets referred “lessees” recognize balance sheet assets liabilities rights obligations created leases asu 201602 lessee required recognize assets liabilities leases lease terms 12 months lessor accounting remains substantially similar current gaap addition disclosures leasing activities expanded include qualitative along specific quantitative information public entities asu 201602 effective fiscal years beginning december 15 2018 including interim periods within fiscal years asu 201602 mandates modified retrospective transition method option use certain practical expedients since portion contract drilling revenue subject new leasing guidance expect adopt new lease guidance utilizing modified retrospective method adoption first quarter fiscal 2019 concurrently asu 201409 currently evaluating changes business processes systems controls support recognition disclosure new standard findings periodically reported management performed scoping preliminary assessment impact new standard lessor expect adoption new standard apply drilling contracts result expect lease component service component revenues derived drilling contracts lessee standard primarily impact us situations lease real estate equipment recognize rightofuse asset corresponding lease liability consolidated balance sheet currently evaluating potential impact adopting guidance consolidated financial statements march 2016 fasb issued asu 201609 compensation stock compensation topic 718 improvements employee sharebased payment accounting asu 201609 simplifies several aspects accounting sharebased payment transactions including income tax consequences classification awards either equity liabilities classification statement cash flows public entities asu 201609 effective fiscal years beginning december 15 2016 interim periods within fiscal years adopt asu 201609 october 1 2017 expect adoption guidance material impact consolidated financial statements june 2016 fasb issued asu 201613 financial instruments credit losses asu sets forth “current expected credit loss” cecl model requires companies measure expected credit losses financial instruments held reporting date based historical experience current conditions reasonable supportable forecasts replaces existing incurred loss model applicable measurement credit losses financial assets measured amortized cost applies offbalance sheet credit exposures standard effective interim annual periods beginning december 15 2019 currently assessing impact standard consolidated financial statements disclosures august 2016 fasb issued asu 201615 classification certain cash receipts cash payments consensus emerging issues task force asu intended reduce diversity practice presentation classification certain cash receipts cash payments providing guidance eight specific cash flow issues asu effective interim annual periods beginning december 15 2017 early adoption permitted including adoption interim period currently assessing impact standard consolidated statement cash flows november 2016 fasb issued asu 201618 statement cash flows restricted cash asu requires amounts generally described restricted cash restricted cash equivalents included cash equivalents reconciling total beginning ending amounts periods shown statement cash flows asu effective interim annual periods beginning december 31 2017 early adoption permitted including adoption interim period adopt guidance beginning october 1 2018 applied retrospectively periods presented adoption expected material impact consolidated financial position cash flows march 2017 fasb issued asu 201707 compensation retirement benefits topic 715 improving presentation net periodic pension cost net periodic postretirement benefit cost asu 201707 change employers sponsor defined benefit pension andor postretirement benefit plans present net periodic benefit cost income statement employers present service cost component net periodic benefit cost income statement line items employee compensation costs arising services rendered period employers present components net periodic benefit cost separately line items includes service cost outside subtotal operating income one presented standard effective public business entities annual periods interim periods beginning december 15 2017 including interim periods within periods early adoption permitted expect new guidance material impact financial condition results operation evaluated new accounting standards effect may impact financial statements believe new accounting standards issued might material impact financial position results operations note 2 business combinations june 2 2017 completed merger transaction “motive merger” pursuant unaffiliated drilling technology company motive drilling technologies inc delaware corporation “motive” merged wholly owned subsidiary spring merger sub inc delaware corporation motive survived transaction wholly owned subsidiary company operations motive included nonreportable business segments effective time motive merger motive shareholders received aggregate cash consideration 743 million net customary closing adjustments may receive additional 250 million potential earnout payments based future performance closing 94 million cash consideration placed escrow onehalf released seller twelve eighteen month anniversaries merger completion date transaction costs related motive merger incurred fiscal 2017 32 million recorded consolidated statement operations within general administrative expense line item recorded revenue 33 million net loss 22 million related motive merger fiscal 2017 motive proprietary bit guidance system algorithmdriven system considers total economic consequences directional drilling decisions proven consistently lower drilling costs efficient drilling increase hydrocarbon production smoother wellbores accurate well placement given strong longstanding technology innovation focus believe technology continue advance provide benefits industry motive merger accounted business combination accordance asc 805 business combinations requires assets acquired liabilities assumed recorded acquisition date fair values following table summarizes purchase price allocation fair values assets acquired liabilities assumed separately identifiable intangible assets acquisition date thousands fair value contingent consideration 145 million june 2 2017 149 million september 30 2017 calculated using monte carlo simulation evaluates numerous potential earnings pay scenarios considered level 3 measurement fair value hierarchy developed technology intangible asset amortized straightline basis estimated 15year life fiscal 2017 recorded 11 million amortization related developed technology expect annual amortization approximately 34 million developed technology intangible asset valued using income approach considering estimated discounted future cash flows expected realized life asset considered level 3 measurement fair value hierarchy goodwill represents residual purchase price paid consists largely synergies economies scale expected drilling technology providing efficient drilling directional drilling services first mover advantage obtained acquisition expected future developments resulting assembled workforce goodwill reported segment allocated reporting unit goodwill subject amortization evaluated least annually impairment frequently impairment indicators present developed technology goodwill deductible income tax purposes associated deferred tax liability recorded regards developed technology following unaudited pro forma combined financial information provided fiscal 2017 fiscal 2016 though motive merger completed october 1 2015 pro forma combined results operations prepared adjusting historical results include historical results motive reflect pro forma adjustments based available information certain assumptions believe reasonable including application appropriate income tax motive pretax loss additionally pro forma earnings fiscal 2017 adjusted exclude 21 million aftertax transaction costs unaudited pro forma combined financial information provided illustrative purposes necessarily indicative actual results would achieved combined company periods presented may achieved combined company future results may vary significantly results reflected pro forma financial information note 3 discontinued operations current assets discontinued operations consist restricted cash meet remaining current obligations within country venezuela current noncurrent liabilities consist municipal income taxes payable social obligations due within country venezuela expenses incurred incountry obligations reported discontinued operations march 2016 venezuelan government implemented previously announced plans new foreign currency exchange system implementation system resulted reported loss discontinued operations 38 million fiscal 2016 corresponds company’s former operations venezuela note 4 debt september 30 2017 2016 following unsecured longterm debt outstanding rates maturities shown following table march 19 2015 issued 500 million 465 percent 10year unsecured senior notes interest payable semiannually march 15 september 15 debt discount amortized interest expense using effective interest method debt issuance costs amortized straightline stated life obligation approximates effective interest method 300 million unsecured revolving credit facility mature july 13 2021 credit facility 75 million available use letters credit majority borrowings facility would accrue interest spread london interbank offered rate libor also pay commitment fee based unused balance facility borrowing spreads well commitment fees determined according scale based ratio total debt total capitalization spread libor ranges 1125 percent 175 percent per annum commitment fees range 15 percent 30 percent per annum based debt total capitalization september 30 2017 spread libor commitment fees would 1125 percent 15 percent respectively one financial covenant facility requires us maintain funded leverage ratio defined less 50 percent credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality including limitation priority debt defined agreement may exceed 175 net worth company september 30 2017 borrowings three letters credit outstanding amount 388 million september 30 2017 2612 million available borrow 300 million unsecured credit facility subsequent september 30 2017 company increased one three letters credit 05 million reduced availability facility 2607 million subsequent september 30 2017 company entered 12 million unsecured standalone line credit facility purposed issuance bid performance bonds needed international operations company currently two bonds issued line total value approximately 54 million applicable agreements unsecured debt contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2017 compliance debt covenants september 30 2017 aggregate maturities longterm debt follows thousands note 5 income taxes components provision benefit income taxes follows amounts domestic foreign income loss income taxes follows deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary allowances provided carrying value net deferred tax assets based management’s judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future components net deferred tax liabilities follows change net deferred tax assets liabilities impacted foreign currency remeasurement september 30 2017 federal state foreign net operating loss carryforwards income tax purposes 126 million 299 million 778 million respectively foreign tax credit carryforwards approximately 349 million 302 million reflected deferred tax asset consolidated financial statements prior consideration valuation allowance expire fiscal 2018 2037 valuation allowance primarily attributable state foreign net operating loss carryforwards 20 million 254 million respectively foreign tax credit carryforwards 302 million foreign minimum tax credit carryforwards 06 million likely utilized federal net operating loss carryforward 126 million federal tax credit carryforward 03 million resulted acquisition motive closed third quarter fiscal 2017 acquisition represented ownership change internal revenue code section 382 subject annual limitation tax attributes begin expire 2034 likely utilized fiscal year ended september 30 2017 company estimating federal net operating loss income tax purposes approximately 1251 million time company anticipating carrying back federal net operating loss fiscal year ended september 30 2015 recorded estimated income tax receivable 398 million company filing federal income tax return fiscal year ended september 30 2017 decide whether carryback carryforward net operating loss effective income tax rates compared us federal income tax rate follows effective tax rates differ us federal statutory rate 350 percent primarily due state foreign income taxes effective tax rate twelve months ended september 30 2017 also impacted reduction benefit carryback federal net operating loss generated fiscal year ended september 30 2017 resulting reduction internal revenue code section 199 deduction carryback year recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements operations september 30 2017 2016 accrued interest penalties 28 million 68 million respectively reconciliation change gross unrecognized tax benefits fiscal years ended september 30 2017 2016 follows september 30 2017 2016 liability unrecognized tax benefits includes 37 million 38 million respectively unrecognized tax benefits related discontinued operations recognized would affect effective tax rate remaining unrecognized tax benefits would affect effective tax rate recognized liabilities unrecognized tax benefits related interest penalties included noncurrent liabilities consolidated balance sheets next 12 months cannot predict certainty whether achieve ultimate resolution uncertain tax position associated us international operations could result increases decreases unrecognized tax benefits however expect increases decreases material effect results operations financial position file consolidated us federal income tax return well income tax returns various states foreign jurisdictions tax years remain open examination us federal state jurisdictions include fiscal 2013 2016 exception certain state jurisdictions currently audit tax years remaining open examination foreign jurisdictions include 2003 2017 note 6 shareholders’ equity company authorization board directors repurchase four million common shares calendar year repurchases may made using cash equivalents available sources fiscal 2015 purchased 810097 common shares aggregate cost 597 million held treasury shares purchases common shares fiscal years 2017 2016 accumulated comprehensive income loss components accumulated comprehensive income loss follows following summary changes accumulated comprehensive income loss net tax component year ended september 30 2017 following provides detail accumulated comprehensive income loss components reclassified consolidated statements operations years ended september 30 2017 2016 note 7 stockbased compensation march 2 2016 helmerich payne inc 2016 omnibus incentive plan “2016 plan” approved stockholders 2016 plan among things authorizes human resources committee board grant nonqualified stock options restricted stock awards selected employees nonemployee directors restricted stock may granted consideration prior future services purchase price per share stock options may less market price underlying stock date grant stock options expire 10 years grant date awards outstanding helmerich payne inc 2005 longterm incentive plan helmerich payne inc 2010 longterm incentive plan “2010 plan” remain subject terms conditions plans 396007 nonqualified stock options 292112 shares restricted stock awards granted 2016 plan fiscal 2017 summary compensation cost stockbased payment arrangements recognized general administrative expense fiscal 2017 2016 2015 follows benefits tax deductions excess recognized compensation cost 44 million 09 million 38 million reported financing cash flow consolidated statements cash flows fiscal 2017 2016 2015 respectively stock options vesting requirements stock options determined human resources committee board directors options currently outstanding began vesting one year grant date 25 percent options vesting four consecutive years use blackscholes formula estimate fair value stock options granted employees fair value options amortized compensation expense straightline basis requisite service periods stock awards generally vesting periods weightedaverage fair value calculations options granted within fiscal period based following weightedaverage assumptions set forth table options granted prior periods based assumptions prevailing date grant riskfree interest rate riskfree interest rate based us treasury securities expected term option expected volatility rate expected volatilities based daily closing price stock based upon historical experience period approximates expected term option expected dividend yield dividend yield based current dividend yield expected term expected term options granted represents period time expected outstanding estimate expected term options granted based historical experience grants exercises based calculations weightedaverage fair value per option granted acquire share common stock 2048 1312 1639 per share fiscal 2017 2016 2015 respectively following summary reflects stock option activity common stock related information fiscal 2017 2016 2015 shares thousands following table summarizes information stock options september 30 2017 shares thousands september 30 2017 weightedaverage remaining life exercisable stock options 42 years aggregate intrinsic value 161 million weightedaverage exercise price 5087 per share number options vested expected vest september 30 2017 3224548 aggregate intrinsic value 162 million weightedaverage exercise price 5619 per share september 30 2017 unrecognized compensation cost related stock options 66 million cost expected recognized weightedaverage period 22 years total intrinsic value options exercised fiscal 2017 2016 2015 131 million 63 million 107 million respectively grant date fair value shares vested fiscal 2017 2016 2015 67 million 96 million 81 million respectively restricted stock restricted stock awards consist common stock timevested three six years recognize compensation expense straightline basis vesting period fair value restricted stock awards 2016 plan determined based closing price shares grant date september 30 2017 214 million total unrecognized compensation cost related unvested restricted stock awards cost expected recognized weightedaverage period 22 years summary status restricted stock awards september 30 2017 changes restricted stock outstanding fiscal years ended september 30 2017 2016 2015 follows shares thousands 1 number restricted stock awards vested includes shares withheld behalf employees satisfy statutory tax withholding requirements note 8 earnings per share asc 260 earnings per share requires companies treat unvested sharebased payment awards nonforfeitable rights dividend equivalents separate class securities calculating earnings per share granted expect continue grant employees restricted stock grants contain nonforfeitable rights dividends grants considered participating securities asc 260 required include grants calculation basic earnings per share calculate basic earnings per share using twoclass method twoclass method computing earnings per share earnings allocation formula determines earnings per share class common stock participating security according dividends declared accumulated participation rights undistributed earnings basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock following table sets forth computation basic diluted earnings per share net loss fiscal 2017 2016 accordingly diluted earnings per share calculation years equivalent basic earnings per share calculation since diluted earnings per share excluded assumed exercise equity awards excluded deemed antidilutive meaning inclusion would reduced reported net loss per share applicable period following shares attributable outstanding equity awards excluded calculation diluted earnings per share inclusion would antidilutive note 9 financial instruments fair value measurement estimated fair value availableforsale securities primarily based market quotes following summary availableforsale securities excludes assets held nonqualified supplemental savings plan ongoing basis evaluate marketable equity securities determine decline fair value cost otherthantemporary decline fair value cost determined otherthantemporary impairment charge recorded new cost basis established review several factors determine whether loss otherthantemporary factors include limited length time security unrealized loss position ii extent fair value less cost iii financial condition nearterm prospects issuer iv intent ability hold security period time sufficient allow anticipated recovery fair value cost securities used determining realized gains losses based average cost basis security sold fourth quarter fiscal 2016 recognized 260 million otherthantemporary impairment charge one securities impairment charges recognized fiscal 2017 fiscal 2015 realized gains losses sales availableforsale securities fiscal 2017 2016 2015 assets held nonqualified supplemental savings plan carried fair value totaled 139 million 134 million september 30 2017 2016 respectively assets comprised mutual funds measured using level 1 inputs shortterm investments include securities classified trading securities realized unrealized gains losses trading securities included income expense consolidated statements operations securities recorded fair value majority cash equivalents invested highlyliquid moneymarket mutual funds invested primarily direct indirect obligations us government carrying amount cash equivalents approximates fair value due short maturity investments carrying value current assets accrued liabilities approximated fair value september 30 2017 2016 fair value defined exchange price would received sell asset paid transfer liability exit price principal advantageous market asset liability orderly transaction market participants measurement date use fair value hierarchy established asc 82010 measure fair value prioritize inputs · level 1 quoted prices unadjusted active markets identical assets liabilities reporting entity access measurement date · level 2 observable inputs quoted prices included level 1 quoted prices similar assets liabilities active markets quoted prices similar assets liabilities markets active inputs observable corroborated observable market data · level 3 unobservable inputs supported little market activity significant fair value assets liabilities includes pricing models discounted cash flow methodologies similar techniques use significant unobservable inputs september 30 2017 financial instruments utilizing level 1 inputs include cash equivalents equity securities active markets money market funds elected classify restricted assets included current assets also included cash denominated foreign currency elected classify restricted used settle remaining liabilities discontinued operations items quoted current market prices readily available september 30 2017 level 2 inputs include us agency issued debt securities municipal bonds corporate bonds measured using broker quotations utilize observable market inputs also included level 2 inputs bank certificates deposit included shortterm investments current assets financial instruments measured using level 3 inputs consist potential earnout payments associated motive acquisition valuation techniques used determining fair value potential earnout payments described note 2 following table summarizes assets measured fair value presented consolidated balance sheet september 30 2017 following information presents supplemental fair value information longterm fixedrate debt september 30 2017 september 30 2016 fair value 500 million fixedrate debt based broker quotes september 30 2017 notes classified within level 2 fair value hierarchy actively traded markets note 10 employee benefit plans maintain domestic noncontributory defined benefit pension plan covering certain us employees meet certain age service requirements july 2003 revised helmerich payne inc employee retirement plan “pension plan” close pension plan new participants effective october 1 2003 reduce benefit accruals current participants september 30 2006 time benefit accruals discontinued pension plan frozen following table provides reconciliation changes pension benefit obligations fair value pension plan assets twoyear period ended september 30 2017 statement funded status september 30 2017 2016 amounts recognized consolidated balance sheets september 30 2017 2016 follows thousands amounts recognized accumulated comprehensive income loss september 30 2017 2016 yet reflected net periodic benefit cost follows thousands amount recognized accumulated comprehensive income loss yet reflected periodic benefit cost expected amortized next year’s periodic benefit cost net actuarial loss 18 million weighted average assumptions used pension calculations follows mortality table issued society actuaries october 2017 used september 30 2017 pension calculation new mortality information reflects improved life expectancies projected mortality improvements make contributions pension plan fiscal 2017 fiscal 2018 expect minimum contributions required law needed however may make contributions fiscal 2018 needed fund unexpected distributions lieu liquidating pension assets components net periodic pension expense benefit follows record settlement expense benefit payments exceed total annual service interest costs following table reflects expected benefits paid pension plan next five fiscal years aggregate five years thereafter thousands included pension plan unfunded supplemental executive retirement plan investment strategy asset allocation investment policy strategies established longterm view mind investment strategy intended help pay cost pension plan providing adequate security meet benefits promised pension plan maintain diversified asset mix minimize risk material loss portfolio value might occur devaluation single investment determining appropriate asset mix financial strength ability fund potential shortfalls considered pension plan assets invested portfolios diversified publicmarket equity securities fixed income securities pension plan directly hold securities company expected longterm rate return pension plan assets based historical projected rates return current planned asset classes pension plan’s investment portfolio analyzing historical experience future expectations return volatility various asset classes target allocation 2018 asset allocation pension plan end fiscal 2017 2016 asset category follows plan assets fair value pension plan assets september 30 2017 2016 summarized level within fair value hierarchy described note 9 follows pension plan’s financial assets utilizing level 1 inputs valued based quoted prices active markets identical securities plan assets utilizing level 2 pension plan’s assets utilizing level 3 inputs consist oil gas properties fair value oil gas properties determined wells fargo bank na based upon actual revenue received previous twelvemonth period experience similar assets following table sets forth summary changes fair value pension plan’s level 3 assets years ended september 30 2017 2016 defined contribution plan substantially employees united states payroll may elect participate 401kthrift plan contributing portion earnings contribute amount equal 100 percent first five percent participant’s compensation subject certain limitations annual expense incurred defined contribution plan 166 million 216 million 248 million fiscal 2017 2016 2015 respectively fiscal 2016 determined employee workforce reductions started 2015 continued 2016 due reduced drilling activity resulted partial plan termination 401kthrift plan partial plan terminations result affected participants becoming fully vested company contributions actual earnings thereon termination date result partial plan termination status accrued additional employer contributions totaling 63 million general administrative expense fiscal 2016 note 11 supplemental balance sheet information following reflects activity reserve bad debt 2017 2016 2015 accounts receivable prepaid expenses current assets accrued liabilities longterm liabilities september 30 consist following note 12 supplemental cash flow information capital expenditures consolidated statements cash flows years ended september 30 2017 2016 2015 include additions incurred paid end year following table reconciles total capital expenditures incurred total capital expenditures consolidated statements cash flows note 13 risk factors concentration credit financial instruments potentially subject us concentrations credit risk consist primarily temporary cash investments shortterm investments trade receivables place temporary cash investments us established financial institutions invest diversified portfolio highly rated shortterm money market instruments trade receivables primarily established companies oil gas industry may impact credit risk customers may similarly affected prolonged changes economic industry conditions international sales also present various risks including governmental activities may limit disrupt markets restrict movement funds international sales however large international governmentowned national oil companies perform credit evaluations customers typically require collateral support trade receivables provide allowance doubtful accounts necessary cover estimated credit losses allowance based management’s knowledge customer accounts volatility market operations materially affected oil gas prices oil natural gas prices historically volatile difficult predict degree certainty current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining customer’s future spending levels volatility along difficulty predicting future prices lead many exploration production companies base capital spending much conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices addition customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets may cause difficulty customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result reduction customer spending demand drilling services reduction spending could material adverse effect operations selfinsurance selfinsure significant portion expected losses relating worker’s compensation general liability automobile liability generally deductibles range 1 million 5 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events estimates recorded incurred outstanding liabilities worker’s compensation general liability claims incurred reported estimates based adjusters’ estimates historic experience statistical methods believe reliable nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs whollyowned captive insurance company finances significant portion physical damage risk companyowned drilling rigs well international casualty deductibles international drilling operations international drilling operations may significantly contribute revenues net operating income assurance able successfully conduct operations failure may adverse effect financial position results operations cash flows also success international operations subject numerous contingencies beyond management’s control contingencies include general regional economic conditions fluctuations currency exchange rates modified exchange controls changes international regulatory requirements international employment issues risk expropriation real personal property burden complying foreign laws additionally event extended labor strikes occur country experiences significant political economic social instability could experience shortages labor andor material supplies necessary operate drilling rigs thereby potentially causing adverse material effect business financial condition results operations estimates published sources indicate argentina highly inflationary country defined cumulative inflation rates exceeding 100 percent recent threeyear period based inflation data published respective governments regardless foreign subsidiaries use us dollar functional currency local currency monetary assets remeasured us dollars gains losses resulting foreign currency transactions included current results operations impact local laws future operations certain areas may conducted entities local citizens interests entities including joint ventures hold minority interest pursuant arrangements conduct operations contract local entities believe neither operating entities pursuant arrangements would material adverse effect operations revenues assurance cases able structure restructure operations conform local law administration thereof terms acceptable us note 14 commitments contingencies purchase obligations equipment parts supplies ordered advance promote efficient construction capital improvement progress september 30 2017 purchase commitments equipment parts supplies approximately 562 million leases september 30 2017 leasing approximately 221021 square feet office space near downtown tulsa oklahoma also lease office space equipment use operations operating leases contain builtin predetermined rent escalations rent expense recognized straightline basis life lease leasehold improvements capitalized amortized lease term future minimum rental payments required operating leases initial remaining noncancelable lease terms excess year september 30 2017 follows total rent expense 140 million 135 million 136 million fiscal 2017 2016 2015 respectively contingencies various legal actions majority arise ordinary course business pending maintain insurance certain business risks subject certain deductibles exception matters discussed none legal actions expected material adverse effect financial condition cash flows results operations contingently liable sureties respect bonds issued sureties connection certain commitments entered us normal course business agreed indemnify sureties payments made respect bonds ordinary course business contingencies arise resulting existing condition situation set circumstances involving uncertainty realization possible gain contingency account gain contingencies accordance provisions asc 450 contingencies therefore record gain contingencies recognize income realized property equipment venezuelan subsidiary seized venezuelan government june 30 2010 whollyowned subsidiaries helmerich payne international drilling co “hpidc” helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 bolivarian republic venezuela petroleos de venezuela sa “pdvsa” pdvsa petroleo sa “petroleo” subsidiaries seek damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery gain contingencies recognized consolidated financial statements november 8 2013 united states district court eastern district louisiana approved previously disclosed october 30 2013 plea agreement wholly owned subsidiary hpidc united states department justice united states attorney’s office eastern district louisiana “doj” court’s approval plea agreement resolved doj’s investigation certain choke manifold testing irregularities occurred 2010 one hpidcs offshore platform rigs gulf mexico also engaged discussions inspector general’s office department interior “doi” regarding events subject doj’s investigation although presently anticipate action doi matter provide assurance timing eventual outcome doi’s consideration matter april 28 2015 joshua keel employee hpidc filed petition 152nd judicial court harris county texas cause 201524531 us customer several subcontractors customer suit arose injuries keel sustained accident occurred working hpidc rig 223 new mexico july 2014 keel alleged defendants negligent per se acted recklessly intentionally andor utterly wanton disregard rights safety plaintiff sought damages well excess 100 million pursuant terms drilling contract hpidc customer hpidc indemnified codefendants lawsuit september 14 2016 parties keel litigation entered global settlement agreement approved court october 14 2016 total settlement amount 72 million accrued september 30 2016 paid company insurers behalf defendants december 2016 pursuant industry standard contractual indemnification obligations note 15 segment information operate principally contract drilling industry contract drilling operations consist mainly contracting companyowned drilling equipment primarily large oil gas exploration companies contract drilling business includes following reportable operating segments us land offshore international land reportable operating segment strategic business unit managed separately primary international areas operation include argentina bahrain colombia uae south american middle eastern countries includes additional nonreportable operating segments revenues included consist rental income well technology services provided directional drilling process consolidated revenues expenses reflect elimination material intercompany transactions evaluate segment performance based income loss continuing operations segment operating income taxes includes · revenues external internal customers · direct operating costs · depreciation · allocated general administrative costs excludes corporate costs depreciation income asset sales corporate income expense general administrative costs allocated segments based primarily specific identification extent identification practical methods believe reasonable reflection utilization services provided segment operating income segments nongaap financial measure performance excludes certain general administrative expenses corporate depreciation income asset sales corporate income expense consider segment operating income important supplemental measure operating performance presenting trends core businesses use measure facilitate periodtoperiod comparisons operating performance reportable segments aggregate eliminating items affect comparability periods believe segment operating income useful investors provides means evaluate operating performance segments ongoing basis using criteria used internal decision makers additionally highlights operating trends aids analytical comparisons however segment operating income limitations used alternative operating income loss performance measure determined accordance gaap excludes certain costs may affect operating performance future periods summarized financial information reportable segments continuing operations years ended september 30 2017 2016 2015 shown following table following table reconciles segment operating income loss income continuing operations income taxes reported consolidated statements operations following table presents revenues external customers longlived assets country based location service provided longlived assets comprised property plant equipment revenues one customer accounted approximately 9 percent 8 percent 6 percent total operating revenues years ended september 30 2017 2016 2015 respectively revenues another customer accounted approximately 9 percent 9 percent 5 percent total operating revenues years ended september 30 2017 2016 2015 respectively collectively receivables customers 590 million 581 million september 30 2017 2016 respectively note 16 guarantor nonguarantor financial information march 2015 helmerich payne international drilling co “the issuer” 100 percent owned subsidiary helmerich payne inc “parent” “the guarantor” issued senior unsecured notes aggregate principal amount 5000 million notes fully unconditionally guaranteed parent subsidiaries parent currently guarantee notes subject certain provisions subsidiary guarantees certain debt issuer parent subsidiary provide guarantee obligation notes connection notes providing following condensed consolidating financial information accordance securities exchange commission disclosure requirements entity consolidating financial information follows accounting policies described consolidated financial statements condensed consolidating financial information issuer helmerich payne international drilling co parent guarantor helmerich payne inc shown tables condensed consolidating statements operations thousands condensed consolidating statements comprehensive income loss thousands condensed consolidating statements operations thousands condensed consolidating statements comprehensive income loss thousands condensed consolidating statements income thousands condensed consolidating statements comprehensive income thousands condensed consolidating balance sheets thousands condensed consolidating balance sheets thousands condensed consolidating statements cash flows thousands condensed consolidating statements cash flows thousands condensed consolidating statements cash flows thousands note 17 selected quarterly financial data unaudited thousands except per share amounts sum earnings per share four quarters may equal total earnings per share year due changes average number common shares outstanding first quarter fiscal 2017 net loss includes aftertax gain sale assets 06 million 001 per share diluted basis second quarter fiscal 2017 net loss includes aftertax gain sale assets 101 million 009 per share diluted basis third quarter fiscal 2017 net loss includes aftertax gain sale assets 13 million 001 per share diluted basis fourth quarter fiscal 2017 net loss includes aftertax gain sale assets 23 million 002 per share diluted basis first quarter fiscal 2016 net income includes aftertax gain sale assets 29 million 003 per share diluted basis aftertax loss related currency exchange losses approximately 54 million 005 per share diluted basis second quarter fiscal 2016 net income includes aftertax gain sale assets 15 million 001 per share diluted basis third quarter fiscal 2016 net loss includes aftertax impairment charge primarily related used drilling equipment approximately 29 million 003 per share diluted basis fourth quarter fiscal 2016 net loss includes aftertax gain sale assets 14 million 001 per share diluted basis fourth quarter fiscal 2016 net loss includes aftertax loss otherthantemporary impairment availableforsale securities 159 million 015 loss per share diluted basis fourth quarter fiscal 2016 net loss includes aftertax loss litigation settlement 120 million 011 loss per share diluted basis item 9item 8 financial statements supplementary data index consolidated financial statements management’s report internal control financial reporting management helmerich payne inc responsible establishing maintaining adequate internal control financial reporting defined rule 13a15f 15d15f securities exchange act 1934 internal control financial reporting designed supervision chief executive officer chief financial officer provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance accounting principles generally accepted united states america includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures made accordance authorizations management board directors iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate management assessed effectiveness company’s internal control financial reporting september 30 2018 making assessment management used criteria established internal controlintegrated framework 2013 issued committee sponsoring organizations treadway commission based evaluation criteria internal controlintegrated framework 2013 management concluded company maintained effective internal control financial reporting september 30 2018 ernst young llp independent public accounting firm issued attestation report effectiveness company’s internal control financial reporting september 30 2018 stated report appears herein report independent registered public accounting firm board directors shareholders helmerich payne inc opinion financial statements audited accompanying consolidated balance sheets helmerich payne inc company september 30 2018 2017 related consolidated statements operations comprehensive income loss shareholders equity cash flows three years period ended september 30 2018 related notes collectively referred “consolidated financial statements” opinion consolidated financial statements present fairly material respects financial position company september 30 2018 2017 results operations cash flows three years period ended september 30 2018 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states pcaob company’s internal control financial reporting september 30 2018 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 framework report dated november 16 2018 expressed unqualified opinion thereon basis opinion financial statements responsibility company’s management responsibility express opinion company’s financial statements based audits public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement whether due error fraud audits include performing procedures assess risks material misstatement financial statements whether due error fraud performing procedures respond risks procedures include examining test basis evidence regarding amounts disclosures financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation financial statements believe audits provide reasonable basis opinion sernst young llp served company’s auditor since 1994 tulsa oklahoma november 16 2018 report independent registered public accounting firm board directors shareholders helmerich payne inc opinion internal control financial reporting audited helmerich payne inc’s internal control financial reporting september 30 2018 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 framework coso criteria opinion helmerich payne inc company maintained material respects effective internal control financial reporting september 30 2018 based coso criteria also audited accordance standards public company accounting oversight board united states pcaob consolidated balance sheets september 30 2018 2017 related consolidated statements operations comprehensive income loss shareholders’ equity cash flows three years period ended september 30 2018 related notes report dated november 16 2018 expressed unqualified opinion thereon basis opinion company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion definition limitations internal control financial reporting company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate ernst young llp tulsa oklahoma november 16 2018 helmerich payne inc consolidated balance sheets accompanying notes integral part consolidated financial statements helmerich payne inc consolidated statements operations accompanying notes integral part consolidated financial statements helmerich payne inc consolidated statements comprehensive income loss accompanying notes integral part consolidated financial statements helmerich payne inc consolidated statements shareholders’ equity accompanying notes integral part consolidated financial statement helmerich payne inc consolidated statements cash flows accompanying notes integral part consolidated financial statements helmerich payne inc notes consolidated financial statements note 1 nature operations helmerich payne inc together subsidiaries identified “company” “we” “us” “our” except stated context requires otherwise operating subsidiaries provides performancedriven drilling services technologies intended make hydrocarbon recovery safer economical oil gas exploration production companies global contract drilling business composed three reportable business segments us land offshore international land fiscal year ended september 30 2018 us land operations primarily located colorado louisiana ohio oklahoma new mexico north dakota pennsylvania texas utah west virginia wyoming offshore operations conducted gulf mexico international land operations rigs located five international locations fiscal year 2018 argentina bahrain colombia ecuador united arab emirates “uae” additionally focus research development technology designed improve efficiency accuracy drilling operations also develop operate limited commercial real estate properties real estate investments located exclusively within tulsa oklahoma include shopping center multitenant industrial warehouse properties undeveloped real estate note 2 summary significant accounting policies risks uncertainties basis presentation accompanying consolidated financial statements prepared accordance accounting principles generally accepted united states america “us gaap” classified former venezuelan operation discontinued operation third quarter fiscal year 2010 fully described note 4discontinued operations unless indicated otherwise information notes consolidated financial statements relates continuing operations principles consolidation consolidated financial statements include accounts helmerich payne inc domestic foreign subsidiaries consolidation subsidiary begins company obtains control subsidiary ceases company loses control subsidiary specifically income expenses subsidiary acquired disposed fiscal year included consolidated statement profit loss comprehensive income date company gains control date company ceases control subsidiary significant intercompany accounts transactions eliminated consolidation foreign currencies functional currency together foreign subsidiaries us dollar monetary assets liabilities denominated currencies us dollar translated exchange rates effect end period resulting gains losses recorded statement operations aggregate foreign currency losses 40 million 71 million 93 million fiscal years 2018 2017 2016 respectively included direct operating costs use estimates preparation financial statements conformity us gaap requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period actual results could differ estimates cash equivalents restricted cash equivalents include cash hand demand deposits banks highly liquid investments original maturities three months less cash equivalents shortterm investments subject potential credit risk certain cash accounts carry balances greater federally insured limits restricted cash equivalents 418 million 391 million september 30 2018 2017 respectively total september 30 2018 2017 113 million 94 million respectively related acquisition drilling technology companies described note 3business combinations 20 million year ends initial capitalization captive insurance company 285 million 277 million respectively represents additional amount management elected restrict purpose potential insurance claims whollyowned captive insurance company restricted amounts primarily invested shortterm money market securities see note 2 changes presentation restricted cash effective october 1 2018 restricted cash equivalents reflected balance sheet follows inventories materials supplies inventories primarily replacement parts supplies held consumption drilling operations inventories valued lower cost net realizable value cost determined weighted average basis includes cost materials shipping duties labor manufacturing overhead net realizable value defined estimated selling price ordinary course business less reasonably predictable costs completion disposal transportation reserves fiscal years 2018 2017 59 percent 63 percent respectively balance provide nonrecoverable inventory costs reserves excess obsolete inventory 99 million 92 million fiscal years 2018 2017 respectively investments maintain investments equity securities certain publicly traded companies cost securities used determining realized gains losses based average cost basis security purchased regularly review investment securities impairment based criteria include extent investment’s carrying value exceeds related fair value duration market decline financial strength specific prospects issuer security unrealized gains recognized comprehensive income unrealized losses temporary recognized earnings see note 2 changes accounting investments effective october 1 2018 property plant equipment property plant equipment stated cost less accumulated depreciation substantially property plant equipment depreciated using straightline method based estimated useful lives assets deducting residual values amount depreciation expense record dependent upon certain assumptions including asset’s estimated useful life rate consumption corresponding salvage value periodically review assumptions may change one assumptions changes assumptions may require us recognize prospective basis increased decreased depreciation expense capitalize interest major projects construction interest capitalized based average interest rate related debt capitalized interest fiscal years 2018 2017 2016 04 million 03 million 28 million respectively review longlived assets impairment whenever events changes circumstances indicate carrying amount asset may recoverable changes could prompt assessment include significant decline revenue cash margin per day extended periods low rig asset group utilization changes market demand specific asset obsolescence completion specific contracts andor overall general market conditions review longlived assets indicates carrying value assetsasset groups estimated undiscounted future cash flows projected realized use asset eventual disposal impairment charge made required adjust carrying value estimated fair value asset estimated fair value determined based upon either income approach using estimated discounted future cash flows market approach fair value estimated applicable considering factors recent market sales rigs companies sales rigs appraisals factors cash flows estimated management considering factors prospective market demand margins recent changes rig technology effect rig’s marketability investment required make rig operational suitability rig size make existing platforms competitive dynamics including industry utilization longlived assets held sale recorded lower carrying value fair value less costs sell goodwill intangible assets goodwill represents excess purchase price fair value net assets acquired business combination date acquisition goodwill indefinitelife intangibles amortized tested potential impairment reporting unit level minimum annual basis fourth fiscal quarter fiscal year indications potential impairment exist impairment determined exist impairment charge amount carrying amount exceeds reporting unit’s fair value recognized limited total amount goodwill allocated reporting unit reporting unit level defined operating segment one level operating segment finitelived intangible assets amortized using straightline method period assets contribute cash flows generally estimated 15 years evaluated impairment accordance policies valuation longlived assets drilling revenues contract drilling revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment certain contracts mobilization payments received direct costs incurred mobilization deferred recognized straightline basis term related drilling contract costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs reimbursements fiscal years 2018 2017 2016 2747 million 1799 million 1259 million respectively contracts terminated customers prior expirations fixed terms contractual provisions customarily require early termination amounts paid us revenues early terminated contracts recognized contractual requirements met early termination revenue fiscal years 2018 2017 2016 approximately 171 million 294 million 2190 million respectively rent revenues enter leases tenants rental properties consisting primarily retail multitenant warehouse space lease terms tenants occupying space retail centers warehouse buildings generally range three ten years minimum rents recognized straightline basis term related leases overage percentage rents based tenants’ sales volume recoveries tenants property taxes operating expenses recognized operating revenues consolidated statements operations rent revenues follows september 30 2018 minimum future rental income received noncancelable operating leases follows leasehold improvement allowances capitalized amortized lease term september 30 2018 2017 cost accumulated depreciation real estate properties follows income taxes current income tax expense amount income taxes expected payable current fiscal year deferred income taxes computed using liability method provided temporary differences financial basis tax basis assets liabilities provide uncertain tax positions tax positions meet recognition thresholds measurement standards prescribed accounting standards codification “asc” 740 income taxes fully discussed note 8income taxes amounts uncertain tax positions adjusted periods new information becomes available positions effectively settled recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements operations earnings per common share basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock granted expect continue grant employees restricted stock grants contain nonforfeitable rights dividends grants considered participating securities asc 260 earnings per share included grants calculation basic earnings per share calculate basic earnings per share using twoclass method stockbased compensation stockbased compensation expense determined using fairvaluebased measurement method awards granted computing impact fair value option estimated date grant based blackscholes optionspricing model utilizing assumptions risk free interest rate volatility dividend yield expected remaining term awards assumptions used calculating fair value stockbased payment awards represent management’s best estimates involve inherent uncertainties application management judgment stockbased compensation recognized straightline basis requisite service periods stock awards generally vesting period compensation expense related stock options recorded component general administrative expenses consolidated statements operations treasury stock treasury stock purchases accounted cost method whereby cost acquired stock recorded treasury stock gains losses subsequent reissuance shares credited charged additional paidin capital using averagecost method comprehensive income loss comprehensive income loss refers revenues expenses gains losses included comprehensive income loss excluded net income loss report components comprehensive income loss net tax nature disclose tax effect allocated component consolidated statements comprehensive income loss leases lease office space equipment use operations leases evaluated inception upon subsequent material modification depending lease terms classified either capital leases operating leases appropriate asc 840 leases operating leases contain builtin predetermined rent escalations rent expense recognized straightline basis life lease leasehold improvements capitalized amortized lease term significant capital leases recently issued accounting updates changes us gaap established financial accounting standards board “fasb” form accounting standard updates “asus” fasb asc consider applicability impact asus listed assessed determined either applicable clarifications asus listed following tables provide brief description recent accounting pronouncements analysis effects financial statements concentration credit risk financial instruments potentially subject us concentrations credit risk consist primarily temporary cash investments shortterm investments trade receivables industry concentration potential impact overall exposure market credit risks either positively negatively customers could affected similar changes economic industry conditions however believe credit risk posed industry concentration offset creditworthiness customer base revenues individual customers related us land segment constituted 10 percent total revenues follows addition certain customers make significant portion accounts receivable september 30 2018 indicated table place temporary cash investments us established financial institutions invest diversified portfolio highly rated shortterm money market instruments trade receivables primarily established companies oil gas industry may impact credit risk customers may similarly affected prolonged changes economic industry conditions international sales also present various risks including governmental activities may limit disrupt markets restrict movement funds international sales however large international governmentowned national oil companies perform credit evaluations customers typically require collateral support trade receivables provide allowance doubtful accounts necessary cover estimated credit losses allowance based management’s knowledge customer accounts volatility market operations materially affected oil gas prices oil natural gas prices historically volatile difficult predict degree certainty current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining customer’s future spending levels volatility along difficulty predicting future prices lead many exploration production companies base capital spending conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices addition customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets may cause difficulty customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result reduction customer spending demand services reduction spending could material adverse effect operations selfinsurance accrued liability estimated workers’ compensation casualty claims incurred based upon cash reserves plus estimate loss development incurred reported claims estimate based upon historical trends insurance recoveries related liability recorded considered probable selfinsure significant portion expected losses relating workers’ compensation general liability automobile liability generally deductibles range 1 million 5 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events estimates recorded incurred outstanding liabilities workers’ compensation general liability claims incurred reported estimates based adjusters’ estimates historic experience statistical methods believe reliable also engaged actuary perform review domestic casualty losses nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs international land drilling operations international land drilling operations may significantly contribute revenues net operating income assurance able successfully conduct operations failure may adverse effect financial position results operations cash flows also success international land operations subject numerous contingencies beyond management’s control contingencies include general regional economic conditions fluctuations currency exchange rates modified exchange controls changes international regulatory requirements international employment issues risk expropriation real personal property burden complying foreign laws additionally event extended labor strikes occur country experiences significant political economic social instability could experience shortages labor andor material supplies necessary operate drilling rigs thereby potentially causing adverse material effect business financial condition results operations argentina dayrate denominated us dollars paid argentine pesos argentine branch one secondtier subsidiaries remits us dollars us parent converting argentine pesos us dollars argentine foreign exchange market repatriating us dollars argentina history implementing currency controls restrict conversion repatriation us dollars controls place argentina past fiscal year argentina’s economy considered highly inflationary defined cumulative inflation rates exceeding 100 percent recent threeyear period based inflation data published respective governments nonetheless foreign subsidiaries use us dollar functional currency local currency monetary assets liabilities remeasured us dollars gains losses resulting foreign currency transactions included current results operations impact local laws future operations certain areas may conducted entities local citizens interests entities including joint ventures hold minority interest pursuant arrangements conduct operations contract local entities believe neither operating entities pursuant arrangements would material adverse effect operations revenues assurance cases able structure restructure operations conform local law administration thereof terms acceptable us note 3 business combinations fiscal year 2018 acquisitions december 8 2017 completed acquisition “magvar acquisition” unaffiliated company magnetic variation services llc “magvar” whollyowned subsidiary company operations magvar included nonreportable business segments effective time magvar acquisition magvar shareholders received aggregate cash consideration 479 million net customary closing adjustments certain management members received restricted stock awards covering 213904 shares helmerich payne inc common stock grant date fair value restricted stock 131 million amortized expense three year vesting period closing 60 million cash consideration placed escrow released sellers twelve months acquisition closing date amount placed escrow classified restricted cash included prepaid expenses consolidated balance sheet september 30 2018 transaction costs related magvar acquisition incurred fiscal year ended september 30 2018 approximately 12 million recorded consolidated statements operations within general administrative expense recorded revenue 116 million net loss 30 million related magvar fiscal year ended september 30 2018 comprehensive 3d geomagnetic reference modeling magvar provides measurement drilling “mwd” survey corrections identifying quantifying mwd tool measurement errors realtime greatly improving directional drilling performance wellbore placement magvar technology successfully deployed onshore offshore fields north america south america europe africa australia asia magvar acquisition accounted business combination accordance asc 805 business combinations requires assets acquired liabilities assumed recorded acquisition date fair values following table summarizes purchase price fair values assets acquired liabilities assumed acquisition date thousands intangible assets acquired consist developed technology trade name customer relationships intangible assets amortized straightline method estimated useful lives ranging five 20 years methodologies used valuing intangible assets include multiperiod excess earnings method developed technology without method customer relationships relieffromroyalty method trade name excess purchase price total net identifiable assets recorded goodwill factors comprising goodwill include synergies expected expanded service capabilities well value assembled workforce goodwill reported within nonreportable business segments allocated magvar reporting unit goodwill subject amortization evaluated least annually impairment fourth quarter fiscal year frequently impairment indicators present intangible assets goodwill amortized straightline 15 years income tax purposes following unaudited pro forma combined financial information provided fiscal year ended september 30 2018 2017 though magvar acquisition completed october 1 2016 pro forma combined results operations prepared adjusting historical results include historical results magvar reflect pro forma adjustments based available information certain assumptions believe reasonable including application appropriate income tax magvar’s pretax loss additionally pro forma earnings fiscal year ended september 30 2018 adjusted exclude 05 million aftertax transaction costs unaudited pro forma combined financial information provided illustrative purposes necessarily indicative actual results would achieved combined company periods presented may achieved combined company future results may vary significantly results reflected pro forma financial information fiscal year 2017 acquisitions june 2 2017 completed merger transaction “motive merger” pursuant unaffiliated drilling technology company motive drilling technologies inc delaware corporation “motive” merged whollyowned subsidiary spring merger sub inc delaware corporation motive survived transaction whollyowned subsidiary company operations motive included within nonreportable business segments effective time motive merger motive shareholders received aggregate cash consideration 743 million net customary closing adjustments may receive additional 250 million potential earnout payments based future performance closing 94 million cash consideration placed escrow onehalf released seller twelve eighteen month anniversaries merger completion date transaction costs related motive merger incurred fiscal year 2017 32 million recorded consolidated statement operations within general administrative expense line item recorded revenue 129 million 33 million net loss 201 million 22 million related motive fiscal years ended september 30 2018 2017 respectively motive proprietary bit guidance system™ algorithmdriven system considers total economic consequences directional drilling decisions designed consistently lower drilling costs efficient drilling increase hydrocarbon production smoother wellbores accurate well placement given strong longstanding technology innovation focus believe technology continue advance provide benefits industry motive merger accounted business combination accordance asc 805 business combinations requires assets acquired liabilities assumed recorded acquisition date fair values following table summarizes purchase price allocation fair values assets acquired liabilities assumed separately identifiable intangible assets acquisition date thousands contingent consideration paid fiscal year 2018 106 million fair value contingent consideration 112 million 149 million september 30 2018 2017 respectively calculated using monte carlo simulation evaluates numerous potential earnings pay scenarios considered level 3 measurement fair value hierarchy change fair value contingent consideration 69 million 04 million fiscal year ended september 30 2018 2017 respectively recorded expenses applicable revenues consolidated statement operations developed technology intangible asset amortized straightline basis estimated 15year life developed technology intangible asset valued using income approach considering estimated discounted future cash flows expected realized life asset considered level 3 measurement fair value hierarchy goodwill represents residual purchase price paid consists largely synergies economies scale expected drilling technology providing efficient drilling directional drilling services first mover advantage obtained acquisition expected future developments resulting assembled workforce goodwill reported within nonreportable business segments allocated motive reporting unit goodwill subject amortization evaluated least annually impairment fourth quarter fiscal year frequently impairment indicators present developed technology goodwill deductible income tax purposes associated deferred tax liability recorded regards developed technology note 4 discontinued operations current noncurrent liabilities consist municipal income taxes payable social obligations due within country venezuela expenses incurred incountry obligations reported discontinued operations activity fiscal year ended september 30 2018 due remeasurement uncertain tax liabilities result devaluation venezuela bolivar early 2018 venezuelan government announced changed existing dualrate foreign currency exchange system eliminating heavily subsidized foreign exchange rate 10 bolivars per us dollar relaunched exchange system known dicom venezuela government also established new currency called “sovereign bolivar” determined elimination five zeros old currency dicom floating rate approximately 62 bolivars per us dollar september 30 2018 dicom floating rate might reflect barter market exchange rates note 5 property plant equipment property plant equipment september 30 2018 2017 consisted following thousands impairments consistent policy evaluate drilling rigs related equipment impairment whenever events changes circumstances indicate carrying value assets may exceed estimated undiscounted future net cash flows evaluation among things includes review external market factors assessment future marketability specific rigs’ asset group given continued low utilization within international flexrig4 asset group two domestic international conventional rigs’ asset groups together continued delivery new capable rigs considered economic factors indicators asset groups may potentially impaired september 30 2018 performed impairment testing international flexrig4 asset group aggregate net book value 630 million concluded net book value drilling rigs’ asset group recoverable estimated undiscounted cash flows surplus significant assumptions used undiscounted cash flow model include timing awards future drilling contracts oil prices operating dayrates operating costs rig reactivation costs drilling rig utilization revenue efficiency estimated remaining economic useful life net proceeds received upon future saledisposition assumptions consistent company’s internal budgets forecasts future years significant assumptions classified level 3 inputs asc topic 820 fair value measurement disclosures based upon unobservable inputs primarily rely management assumptions forecasts although believe assumptions used analysis reasonable appropriate asset group weighted average expected future undiscounted net cash flows exceeds net book value asset group fiscal year 2018 yearend impairment evaluation different assumptions estimates could materially impact analysis resulting conclusion september 30 2018 engaged third party independent accounting firm performed market valuation utilizing market approach two domestic international conventional rigs’ asset groups aggregate net book values 90 million 152 million respectively concluded fair values two asset groups exceed net book values approximately 64 percent 141 percent respectively impairment recorded significant assumptions valuation exercise classified level 2 level 3 inputs asc topic 820 fair value measurement disclosures fourth quarter fiscal year 2018 ceasing operations ecuador entered sales negotiation respect six conventional rigs within separate international conventional rigs’ asset group net book values 208 million present country pursuant rigs together associated equipment machinery would sold third party recycled certain components rigs 85 million net book value subject sale agreement transferred united states utilized flexrigs high activity demand sales transaction completed november 2018 recorded noncash impairment charge within international land segment 92 million 70 million net tax 006 per diluted share included asset impairment charge consolidated statement operations fiscal year ended september 30 2018 result remaining rig within asset group disposed written resulting additional impairment charge 14 million 10 million net tax 001 per diluted share assets recorded fair value based sales agreement classified level 2 within fair value hierarchy furthermore fourth quarter fiscal year 2018 within us land segment management committed plan auction several previously decommissioned rigs fiscal year 2019 result wrote estimated fair values recorded noncash impairment charge 57 million 42 million net tax 004 per diluted share included asset impairment charge consolidated statements operations fiscal year ended september 30 2018 assets recorded fair value based auction price classified level 2 fair value hierarchy fiscal year 2016 recorded asset impairment charge us land segment 63 million reduce carrying value rig related equipment classified held sale estimated fair values based expected sales prices depreciation consolidated statements operations 5838 million 5855 million 5986 million includes abandonments 277 million 426 million 393 million fiscal years 2018 2017 2016 respectively 2018 shortened estimated useful lives certain components rigs planned conversion total net book value 37 million resulting increase depreciation expense 2018 approximately 97 million also increase depreciation expense next three months approximately 09 million decrease depreciation expense fiscal years 2019 2020 2021 2022 2023 23 million 23 million 22 million 13 million 04 million respectively thereafter 10 million gain sale assets gain sales assets 227 million 206 million fiscal years 2018 2017 respectively gains primarily related drill pipe damaged lost drilling operations note 6 goodwill intangible assets goodwill within nonreportable operating segments following summary changes goodwill thousands intangible assets intangible assets arising business acquisitions consisted following amortization expense 54 million 11 million fiscal years 2018 2017 respectively estimated 58 million next four succeeding fiscal years approximately 51 million fiscal year 2023 impairments fourth quarter fiscal year 2018 part annual goodwill impairment test performed detailed assessment terravici reporting unit 47 million goodwill allocated determined estimated fair value reporting unit less carrying amount recorded goodwill impairment losses 47 million 35 million net tax 003 per diluted share addition recorded intangible assets impairment loss 09 million 07 million net tax 001 per diluted share impairment losses included asset impairment charge consolidated statements operations fiscal year ended september 30 2018 goodwill impairment analysis performed remaining technology reporting units fourth quarter fiscal years 2018 2017 result impairment charges note 7 debt following unsecured longterm debt outstanding rates maturities shown following table march 19 2015 issued 500 million 465 percent 10year unsecured senior notes interest payable semiannually march 15 september 15 debt discount amortized interest expense using effective interest method debt issuance costs amortized straightline stated life obligation approximates effective interest method july 13 2016 entered 300 million unsecured revolving credit facility “2016 credit facility” maturity date july 13 2021 2016 credit facility maximum 75 million available use letters credit majority borrowings facility would accrue interest spread london interbank offered rate “libor” also paid commitment fee based unused balance facility borrowing spreads well commitment fees determined according company’s credit rating spread libor ranged 1125 percent 175 percent per annum commitment fees ranged 015 percent 030 percent per annum based debt total capitalization september 30 2018 spread libor commitment fees would 1125 percent 015 percent respectively financial covenant facility required us maintain total debt total capitalization ratio less 50 percent 2016 credit facility contained additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality including limitation priority debt defined agreement could exceed 175 percent net worth company september 30 2018 company borrowings line three letters credit outstanding amount 393 million two letters credit amount 293 million support selfinsured losses company’s high deductible casualty insurance programs remaining 100 million letter credit supports operating line credit bank argentina result september 30 2018 2607 million available borrow 2016 credit facility subsequent september 30 2018 company decreased one three letters credit 13 million increased availability facility 2620 million subsequent fiscal yearend november 13 2018 entered 750 million unsecured revolving credit facility “2018 credit facility” connection entering 2018 credit facility terminated 2016 credit facility see note 19subsequent events consolidated financial statements information 2018 credit facility september 30 2018 12 million unsecured standalone line credit purposed issuance bid performance bonds needed international land operations september 30 2018 outstanding obligations facility applicable agreements unsecured debt contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2018 compliance debt covenants september 30 2018 aggregate maturities longterm debt follows thousands note 8 income taxes impact tax reform december 22 2017 president united states signed law tax reform act among number substantial changes current us federal income tax rules tax reform act decreases marginal us corporate income tax rate 35 percent 21 percent provides bonus depreciation allow full expensing qualified property year placed service limits deductibility certain expenditures significantly changes us taxation certain foreign operations operation law apply blended us statutory federal income tax rate 245 percent fiscal year 2018 result tax reform act required revalue deferred tax assets liabilities 35 percent 21 percent revaluation resulted recognition tax benefit approximately 5021 million included component income tax expense continuing operations consolidated statements operations december 22 2017 staff accounting bulletin 118 sab 118 issued address application us gaap situations registrant necessary information available prepared analyzed including computations reasonable detail complete accounting certain income tax effects tax reform act accordance sab 118 recorded best estimate impact tax reform act fiscal year end income tax provision accordance understanding tax reform act guidance available date filing although believe substantially completed accounting certain income tax effects tax reform act extent internal revenue service us treasury issues additional guidance sab 118 measurement period company promptly evaluate whether additional adjustments required income tax provision rate components provision benefit income taxes follows amounts domestic foreign income loss income taxes follows effective income tax rates compared us federal income tax rate follows 1 fiscal years 2017 2016 “other” reflects adjustments nondeductible meals entertainment equity compensation officer’s compensation contingent consideration effective tax rates differ us federal statutory rate 245 percent blended fiscal year 2018 due state foreign income taxes change federal income tax rate tax reform act tax effect nondeductible expenses primarily related certain meals entertainment officer’s compensation limited pursuant section 162m code adjustments contingent consideration related motive merger deferred taxes deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary valuation allowances provided carrying value net deferred tax assets based management’s judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future components net deferred tax liabilities follows change net deferred tax assets liabilities impacted foreign currency remeasurement september 30 2018 federal state foreign tax net operating loss carryforwards 508 million 312 million 837 million respectively foreign tax credit carryforwards approximately 249 million 201 million reflected deferred tax asset consolidated financial statements prior consideration valuation allowance expire fiscal years 2019 2038 valuation allowance primarily attributable foreign certain state net operating loss carryforwards 228 million 05 million respectively foreign tax credit carryforwards 201 million equity compensation 23 million foreign minimum tax credit carryforwards 25 million likely utilized unrecognized tax benefits recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements operations september 30 2018 2017 accrued interest penalties 22 million 28 million respectively reconciliation change gross unrecognized tax benefits fiscal years ended september 30 2018 2017 follows september 30 2018 2017 liability unrecognized tax benefits includes 143 million 37 million respectively unrecognized tax benefits related discontinued operations recognized would affect effective tax rate remaining unrecognized tax benefits would affect effective tax rate recognized liabilities unrecognized tax benefits related interest penalties included noncurrent liabilities consolidated balance sheets next 12 months cannot predict certainty whether achieve ultimate resolution uncertain tax position associated us international land operations could result increases decreases unrecognized tax benefits however expect increases decreases material effect results operations financial position tax returns file consolidated us federal income tax return well income tax returns various states foreign jurisdictions tax years remain open examination us federal state jurisdictions include fiscal years 2014 2017 exception certain state jurisdictions currently audit tax years remaining open examination foreign jurisdictions include 2003 2017 note 9 shareholders’ equity company authorization board directors repurchase four million common shares calendar year repurchases may made using cash equivalents available sources purchases common shares fiscal years ended september 30 2018 2017 2016 accumulated comprehensive income loss components accumulated comprehensive income loss follows following summary changes accumulated comprehensive income loss net tax component fiscal year ended september 30 2018 following provides detail accumulated comprehensive income loss components reclassified consolidated statements operations fiscal years ended september 30 2018 2017 2016 note 10 stockbased compensation march 2 2016 helmerich payne inc 2016 omnibus incentive plan “2016 plan” approved stockholders 2016 plan among things authorizes human resources committee board grant nonqualified stock options restricted stock awards selected employees nonemployee directors restricted stock may granted consideration prior future services purchase price per share stock options may less market price underlying stock date grant stock options expire 10 years grant date awards outstanding helmerich payne inc 2005 longterm incentive plan helmerich payne inc 2010 longterm incentive plan collectively “2010 plan” remain subject terms conditions plans fiscal year ended september 30 2018 693873 nonqualified stock options 411977 shares restricted stock awards granted 2016 plan additional 213904 restricted stock grants awarded outside 2016 plan summary compensation cost stockbased payment arrangements recognized general administrative expense fiscal years 2018 2017 2016 follows stock options vesting requirements stock options determined human resources committee board directors options currently outstanding began vesting one year grant date 25 percent options vesting four consecutive years use blackscholes formula estimate fair value stock options granted employees fair value options amortized compensation expense straightline basis requisite service periods stock awards generally vesting periods weightedaverage fair value calculations options granted within fiscal period based following weightedaverage assumptions set forth table options granted prior periods based assumptions prevailing date grant 1 riskfree interest rate based us treasury securities expected term option 2 expected volatilities based daily closing price stock based upon historical experience period approximates expected term option 3 dividend yield based current dividend yield 4 expected term options granted represents period time expect outstanding estimate term option granted based historical experience grants exercise based calculations weightedaverage fair value per option granted acquire share common stock 1317 2048 1312 per share fiscal years 2018 2017 2016 respectively following summary reflects stock option activity common stock related information fiscal years 2018 2017 2016 shares thousands following table summarizes information stock options september 30 2018 shares thousands september 30 2018 weightedaverage remaining life exercisable stock options 436 years aggregate intrinsic value 309 million weightedaverage exercise price 5631 per share number options vested expected vest september 30 2018 1306087 aggregate intrinsic value 106 million weightedaverage exercise price 6249 per share september 30 2018 unrecognized compensation cost related stock options 73 million cost expected recognized weightedaverage period 23 years total intrinsic value options exercised fiscal years 2018 2017 2016 99 million 131 million 63 million respectively grant date fair value shares vested fiscal years 2018 2017 2016 88 million 67 million 96 million respectively restricted stock restricted stock awards consist common stock timevested three six years recognize compensation expense straightline basis vesting period fair value restricted stock awards determined based closing price shares grant date september 30 2018 344 million total unrecognized compensation cost related unvested restricted stock awards cost expected recognized weightedaverage period 24 years summary status restricted stock awards september 30 2018 changes restricted stock outstanding fiscal years ended september 30 2018 2017 2016 follows shares thousands 1 number restricted stock awards vested includes shares withheld behalf employees satisfy statutory tax withholding requirements note 11 earnings losses per common share following table sets forth computation basic diluted earnings per share net loss fiscal years 2017 2016 accordingly diluted earnings per share calculation years equivalent basic earnings per share calculation since diluted earnings per share excluded assumed exercise equity awards excluded deemed antidilutive meaning inclusion would reduced reported net loss per share applicable period following shares attributable outstanding equity awards excluded calculation diluted earnings per share inclusion would antidilutive note 12 fair value measurement financial instruments certain assets liabilities required measured disclosed fair value fair value defined exchange price would received sell asset paid transfer liability exit price principal advantageous market asset liability orderly transaction market participants measurement date use fair value hierarchy established asc 82010 measure fair value prioritize inputs · level 1 quoted prices unadjusted active markets identical assets liabilities reporting entity access measurement date · level 2 observable inputs quoted prices included level 1 quoted prices similar assets liabilities active markets quoted prices similar assets liabilities markets active inputs observable corroborated observable market data · level 3 unobservable inputs supported little market activity significant fair value assets liabilities includes pricing models discounted cash flow methodologies similar techniques use significant unobservable inputs assets held nonqualified supplemental savings plan carried fair value totaled 162 million 139 million september 30 2018 2017 respectively assets comprised mutual funds measured using level 1 inputs shortterm investments include securities classified trading securities realized unrealized gains losses trading securities included income expense consolidated statements operations securities recorded fair value nonfinancial assets intangible assets goodwill property plant equipment recorded fair value acquired business combination impairment charge recognized measured fair value consolidated balance sheets would generally classified within level 2 3 fair value hierarchy refer note 3business combinations note 5property plant equipment note 6goodwill intangible assets details fair value measurements majority cash equivalents invested highlyliquid moneymarket mutual funds invested primarily direct indirect obligations us government carrying amount cash equivalents approximates fair value due short maturity investments carrying value current assets accrued liabilities approximated fair value september 30 2018 2017 following table summarizes assets measured fair value presented consolidated balance sheet september 30 2018 september 30 2018 financial instruments measured fair value utilizing level 1 inputs include cash equivalents us agency issued debt securities equity securities active markets money market funds classified restricted assets current portion restricted amounts included prepaid expenses noncurrent portion included assets items quoted current market prices readily available september 30 2018 assets measured fair value using level 2 inputs include certificates deposit municipal bonds corporate bonds measured using broker quotations utilize observable market inputs financial instruments measured using level 3 inputs consist potential earnout payments associated acquisition motive fiscal year 2017 valuation techniques used determining fair value potential earnout payments use monte carlo simulation evaluates numerous potential earnings pay scenarios following table presents reconciliation changes fair value financial assets liabilities classified level 3 fair value measurements fair value hierarchy indicated periods 1 settlements represent earnout payments earned paid period following information presents supplemental fair value information longterm fixedrate debt september 30 2018 september 30 2017 fair value 500 million fixedrate debt based broker quotes september 30 2018 notes classified within level 2 fair value hierarchy actively traded markets ongoing basis evaluate marketable equity securities determine decline fair value cost otherthantemporary decline fair value cost determined otherthantemporary impairment charge recorded new cost basis established review several factors determine whether loss otherthantemporary factors include limited length time security unrealized loss position ii extent fair value less cost iii financial condition nearterm prospects issuer iv intent ability hold security period time sufficient allow anticipated recovery fair value securities sold cost securities used determining realized gains losses based average cost basis security sold estimated fair value availableforsale securities reflected consolidated balance sheets investments based level 1 inputs following summary availableforsale securities excludes assets held nonqualified supplemental savings plan note 13 employee benefit plans maintain domestic noncontributory defined benefit pension plan covering certain us employees meet certain age service requirements july 2003 revised helmerich payne inc employee retirement plan “pension plan” close pension plan new participants effective october 1 2003 reduce benefit accruals current participants september 30 2006 time benefit accruals discontinued pension plan frozen following table provides reconciliation changes pension benefit obligations fair value pension plan assets twoyear period ended september 30 2017 statement funded status september 30 2018 2017 amounts recognized consolidated balance sheets september 30 2018 2017 follows thousands amounts recognized accumulated comprehensive income loss september 30 2018 2017 yet reflected net periodic benefit cost follows thousands amount recognized accumulated comprehensive income loss yet reflected periodic benefit cost expected amortized next year’s periodic benefit cost net actuarial loss 12 million weighted average assumptions used pension calculations follows mortality table issued society actuaries october 2018 used september 30 2018 pension calculation new mortality information reflects improved life expectancies projected mortality improvements make contributions pension plan fiscal year 2018 fiscal year 2019 expect minimum contributions required law needed however may make contributions fiscal year 2019 needed fund unexpected distributions lieu liquidating pension assets components net periodic pension expense benefit follows record settlement expense benefit payments exceed total annual service interest costs following table reflects expected benefits paid pension plan next five fiscal years aggregate five years thereafter thousands included pension plan unfunded supplemental executive retirement plan investment strategy asset allocation investment policy strategies established longterm view mind investment strategy intended help pay cost pension plan providing adequate security meet benefits promised pension plan maintain diversified asset mix minimize risk material loss portfolio value might occur devaluation single investment determining appropriate asset mix financial strength ability fund potential shortfalls considered pension plan assets invested portfolios diversified publicmarket equity securities fixed income securities pension plan directly hold securities company expected longterm rate return pension plan assets based historical projected rates return current planned asset classes pension plan’s investment portfolio analyzing historical experience future expectations return volatility various asset classes target allocation 2019 asset allocation pension plan end fiscal years 2018 2017 asset category follows plan assets fair value pension plan assets september 30 2018 2017 summarized level within fair value hierarchy described note 12fair value measurement financial instruments follows pension plan’s financial assets utilizing level 1 inputs valued based quoted prices active markets identical securities pension plan’s level 2 financial assets include foreign common stock pension plan’s assets utilizing level 3 inputs consist oil gas properties fair value oil gas properties determined wells fargo bank na based upon actual revenue received previous twelvemonth period experience similar assets following table sets forth summary changes fair value pension plan’s level 3 assets fiscal years ended september 30 2018 2017 defined contribution plan substantially employees us payroll may elect participate 401kthrift plan contributing portion earnings contribute amount equal 100 percent first five percent participant’s compensation subject certain limitations annual expense incurred defined contribution plan 266 million 166 million 216 million fiscal years 2018 2017 2016 respectively fiscal year 2016 determined employee workforce reductions started 2015 continued 2016 due reduced drilling activity resulted partial plan termination 401kthrift plan partial plan terminations result affected participants becoming fully vested company contributions actual earnings thereon termination date result partial plan termination status accrued additional employer contributions totaling 63 million general administrative expense fiscal year 2016 note 14 supplemental balance sheet information following reflects activity reserve bad debt fiscal years 2018 2017 2016 accounts receivable prepaid expenses current assets accrued liabilities longterm liabilities september 30 2018 2017 consist following note 15 commitments contingencies purchase commitments equipment parts supplies ordered advance promote efficient construction capital improvement progress september 30 2018 purchase commitments equipment parts supplies approximately 1104 million guarantee arrangements normal course business enter agreements financial institutions provide letters credit surety bonds connection certain commitments entered us contingently liable financial institutions respect letters credit bonds agreed indemnify financial institutions payments made respect letters credit bonds none balance sheet arrangements either likely material effect consolidated financial statements lease obligations september 30 2018 leasing corporate office headquarters near downtown tulsa oklahoma also lease office space equipment use operations future minimum rental payments required operating leases initial remaining noncancelable lease terms excess year september 30 2018 follows total rent expense 137 million 140 million 135 million fiscal years 2018 2017 2016 respectively future minimum lease payments tulsa corporate office material portion amounts shown table lease agreement commenced may 30 2003 subsequently amended recently august 25 2017 agreement expire january 31 2025 however two fiveyear renewal options contingencies party legal proceedings regulatory actions time including number cases currently pending maintain insurance certain business risks subject certain deductibles exception matters discussed none legal actions expected material adverse effect financial condition cash flows results operations ordinary course business contingencies arise resulting existing condition situation set circumstances involving uncertainty realization possible gain contingency account gain contingencies accordance provisions asc 450 contingencies therefore record gain contingencies recognize income realized property equipment venezuelan subsidiary seized venezuelan government june 30 2010 whollyowned subsidiaries helmerich payne international drilling co “hpidc” helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 bolivarian republic venezuela petroleos de venezuela sa “pdvsa” pdvsa petroleo sa “petroleo” subsidiaries seek damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery contingent gains recognized consolidated financial statements fiscal years ended september 30 2018 2017 2016 note 16 business segments geographic information description business global contract drilling company based tulsa oklahoma operations major us onshore basins well south america middle east contract drilling operations consist mainly contracting companyowned drilling equipment primarily large oil gas exploration companies recognized industry leader drilling well technological innovation september 30 2018 contract drilling business includes following reportable operating segments · us land · offshore · international land reportable operating segment strategic business unit managed separately consolidated revenues expenses reflect elimination material intercompany transactions includes additional nonreportable operating segments revenues included “other” consist revenue drilling technology services well rental income segment performance evaluate segment performance based income loss continuing operations segment operating income taxes includes · revenues external internal customers · direct operating costs · depreciation · allocated general administrative costs excludes acquisition related costs corporate costs depreciation income asset sales corporate income expense general administrative costs allocated segments based primarily specific identification extent identification practical methods believe reasonable reflection utilization services provided following table reconciles segment operating income loss income continuing operations income taxes reported consolidated statements operations following table presents revenues external customers longlived assets country based location service provided note 17 guarantor nonguarantor financial information march 2015 helmerich payne international drilling co “the issuer” 100 percent owned subsidiary helmerich payne inc “parent” “the guarantor” issued senior unsecured notes aggregate principal amount 5000 million notes fully unconditionally guaranteed parent subsidiaries parent currently guarantee notes subject certain provisions subsidiary guarantees certain debt issuer parent subsidiary provide guarantee obligation notes connection notes providing following condensed consolidating financial information accordance securities exchange commission disclosure requirements separate financial statements issuer required filed entity consolidating financial information follows accounting policies described consolidated financial statements condensed consolidating financial information issuer helmerich payne international drilling co parent guarantor helmerich payne inc shown tables condensed consolidating balance sheets condensed consolidating statements operations condensed consolidating statements comprehensive income loss condensed consolidating statements cash flows note 18 selected quarterly financial data unaudited thousands except per share amounts 1 sum earnings per share four quarters may equal total earnings per share fiscal year due changes average number common shares outstanding first quarter fiscal year 2018 net income includes tax benefit approximately 5021 million 459 per share diluted basis aftertax gain sale assets 42 million 004 per share diluted basis second quarter fiscal year 2018 net loss includes aftertax gain sale assets 38 million 004 per share diluted basis third quarter fiscal year 2018 net loss includes aftertax gain sale assets 31 million 002 per share diluted basis fourth quarter fiscal year 2018 net loss includes aftertax gain sale assets 55 million 005 per share diluted basis aftertax loss asset impairments approximately 172 million 016 per share diluted basis 1 sum earnings per share four quarters may equal total earnings per share year due changes average number common shares outstanding first quarter fiscal year 2017 net loss includes aftertax gain sale assets 06 million 001 per share diluted basis second quarter fiscal year 2017 net loss includes aftertax gain sale assets 101 million 009 per share diluted basis third quarter fiscal year 2017 net loss includes aftertax gain sale assets 13 million 001 per share diluted basis fourth quarter fiscal year 2017 net loss includes aftertax gain sale assets 23 million 002 per share diluted basis note 19 subsequent events november 13 2018 entered 2018 credit facility mature november 13 2023 2018 credit facility 750 million aggregate availability maximum 75 million available use letters credit 2018 credit facility also permits aggregate commitments facility increased 300 million subject satisfaction certain conditions procurement additional commitments new existing lenders 2018 credit facility currently guaranteed whollyowned direct subsidiary hpidc guarantee subject release following certain events set forth 2018 credit facility borrowings 2018 credit facility accrue interest spread either london interbank offered rate libor base rate also pay commitment fee based unused balance facility borrowing spreads well commitment fees determined based debt rating senior unsecured debt company hpidc determined moody’s sp spread libor ranges 0875 percent 1500 percent per annum commitment fees range 0075 percent 0200 percent per annum based unsecured debt rating hpidc september 30 2018 spread libor would 1125 percent commitment fees would 0125 percent financial covenant 2018 credit facility requires us maintain total debt total capitalization ratio less 50 percent 2018 credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality including limitation priority debt defined credit agreement may exceed 175 percent net worth company closing borrowings three letters credit outstanding amount 380 million 7120 million available borrow 2018 credit facility connection entering 2018 credit facility terminated 300 million unsecured credit facility credit agreement dated july 13 2016 among hpidc borrower company guarantor wells fargo national association administrative agent lenders party thereto item 9nanitem 8 financial statements supplementary data index consolidated financial statements management’s report internal control financial reporting management helmerich payne inc responsible establishing maintaining adequate internal control financial reporting defined rule 13a15f 15d15f securities exchange act 1934 internal control financial reporting designed supervision chief executive officer chief financial officer provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance accounting principles generally accepted united states america includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures made accordance authorizations management board directors iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate management assessed effectiveness company’s internal control financial reporting september 30 2020 making assessment management used criteria established internal controlintegrated framework 2013 issued committee sponsoring organizations treadway commission based evaluation criteria internal controlintegrated framework 2013 management concluded company maintained effective internal control financial reporting september 30 2020 ernst young llp independent registered public accounting firm issued attestation report effectiveness company’s internal control financial reporting september 30 2020 stated report appears herein report independent registered public accounting firm board directors shareholders helmerich payne inc opinion financial statements audited accompanying consolidated balance sheets helmerich payne inc company september 30 2020 2019 related consolidated statements operations comprehensive income loss shareholders equity cash flows three years period ended september 30 2020 related notes collectively referred “consolidated financial statements” opinion consolidated financial statements present fairly material respects financial position company september 30 2020 2019 results operations cash flows three years period ended september 30 2020 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states pcaob company’s internal control financial reporting september 30 2020 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 framework report dated november 20 2020 expressed unqualified opinion thereon basis opinion financial statements responsibility company’s management responsibility express opinion company’s financial statements based audits public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement whether due error fraud audits included performing procedures assess risks material misstatement financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation financial statements believe audits provide reasonable basis opinion critical audit matters critical audit matters communicated matters arising current period audit financial statements communicated required communicated audit committee 1 relate accounts disclosures material financial statements 2 involved especially challenging subjective complex judgments communication critical audit matters alter way opinion consolidated financial statements taken whole communicating critical audit matters providing separate opinions critical audit matters accounts disclosures relate selfinsurance accruals description matter companys selfinsurance liability workers’ compensation casualty claims 738 million september 30 2020 described note 2 consolidated financial statements liability based thirdparty actuarial analysis includes estimate incurred reported claims actuarial analysis considers variety factors including thirdparty adjusters’ estimates historic experience statistical methods commonly used within insurance industry auditing companys reserve selfinsured risks worker’s compensation casualty claims complex required us use actuarial specialists due significant measurement uncertainty associated estimate management’s application significant judgment use various actuarial methods addressed matter audit evaluated design tested operating effectiveness company’s controls workers’ compensation casualty claims accrual process example tested controls management’s determination appropriateness significant assumptions used calculation completeness accuracy data underlying reserve evaluate selfinsurance liability worker’s compensation casualty claims performed audit procedures included among others testing completeness accuracy underlying claims data provided management’s actuary obtaining legal confirmation letters evaluate reserves recorded significant litigated matters additionally involved actuarial specialists assist evaluation methodologies applied management’s actuary establishing actuarially determined reserve compared company’s assumptions ranges assumptions independently developed actuarial specialists impairment longlived assets description matter fully described note 5 consolidated financial statements company recognized 4414 million impairment charge 2020 due projected low utilization domestic nonsuper spec international asset groups auditing companys impairment analysis involved high degree subjectivity determination undiscounted cash flows based assumptions future market economic conditions significant assumptions used company’s undiscounted cash flow estimate included drilling rig utilization net proceeds received upon future saledisposition addressed matter audit obtained understanding evaluated design tested operating effectiveness controls companys process estimate undiscounted cash flows asset groups tested recoverability example tested controls managements assessment appropriateness significant assumptions underlying undiscounted cash flows testing company’s undiscounted cash flows included among procedures evaluating significant assumptions used testing completeness accuracy underlying data example compared projected drilling rig utilization assumption current forecasted industry market information ongoing bid contracting activity compared estimated net proceeds received upon future saledisposition industry ranges market quotes company’s historical experience also compared company’s historical experience market activity peer averages furthermore searched evaluated information corroborates contradicts company’s assumptions performed retrospective reviews projected cash flows historical actuals performed sensitivity analysis evaluate change projected cash flows would result changes underlying assumptions valuation goodwill finitelived intangibles description matter fully described note 7 consolidated financial statements 2020 company performed goodwill finitelived intangible impairment analyses resulting 383 million goodwill impairment charge auditing company’s impairment analyses complex highly judgmental due significant estimation required determine estimated future cash flows particular fair value estimate sensitive significant assumptions changes utilization discount rate terminal value affected expectations future market economic conditions addressed matter audit obtained understanding evaluated design tested operating effectiveness controls company’s goodwill finitelived intangibles impairment review process including controls management’s review significant assumptions described example evaluated controls company’s forecasting process used develop estimated future cash flows also tested controls management’s review data used valuation models significant assumptions estimation utilization discount rate terminal value test estimated cash flows applicable reporting unit finitelived intangibles performed audit procedures included among others assessing methodologies testing significant assumptions discussed underlying data used company analyses compared projected cash flows available industry market forecast information involved valuation specialists assist testing discount rate assessed historical accuracy management’s estimates performed sensitivity analyses significant assumptions evaluate changes fair value reporting unit finitelived intangibles would result changes assumptions finitelived intangibles also assessed whether assumptions used consistent used goodwill impairment review process report independent registered public accounting firm board directors shareholders helmerich payne inc opinion internal control financial reporting audited helmerich payne inc’s internal control financial reporting september 30 2020 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 framework coso criteria opinion helmerich payne inc company maintained material respects effective internal control financial reporting september 30 2020 based coso criteria also audited accordance standards public company accounting oversight board united states pcaob consolidated balance sheets company september 30 2020 2019 related consolidated statements operations comprehensive income loss shareholders’ equity cash flows three years period ended september 30 2020 related notes report dated november 20 2020 expressed unqualified opinion thereon basis opinion company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion definition limitations internal control financial reporting company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate helmerich payne inc consolidated balance sheets accompanying notes integral part consolidated financial statements helmerich payne inc consolidated statements operations accompanying notes integral part consolidated financial statements helmerich payne inc consolidated statements comprehensive income loss accompanying notes integral part consolidated financial statements helmerich payne inc consolidated statements shareholders’ equity accompanying notes integral part consolidated financial statements helmerich payne inc consolidated statements cash flows accompanying notes integral part consolidated financial statements helmerich payne inc notes consolidated financial statements note 1 nature operations helmerich payne inc “hp” together subsidiaries identified “company” “we” “us” “our” except stated context requires otherwise operating subsidiaries provides performancedriven drilling solutions technologies intended make hydrocarbon recovery safer economical oil gas exploration production companies third quarter fiscal year 2020 restructured operations see note 19restructuring charges accommodate scale industry downturn reorganize operations align new marketing management strategies consistent manner chief operating decision maker evaluates performance allocates resources operations previously reported within former us land hp technologies operating reportable segments managed presented within north america solutions reportable segment result beginning third quarter fiscal year 2020 drilling services operations organized following reportable operating business segments north america solutions offshore gulf mexico international solutions segment disclosures recast segment changes real estate operations incubator program new research development projects whollyowned captive insurance companies included refer note 18business segments geographic information details reportable segments north america solutions operations primarily located colorado ohio oklahoma new mexico north dakota pennsylvania texas west virginia wyoming additionally offshore gulf mexico operations conducted louisiana us federal waters gulf mexico international solutions operations rigs primarily located four international locations argentina bahrain colombia united arab emirates also develop operate limited commercial real estate properties real estate investments located exclusively within tulsa oklahoma include shopping center undeveloped real estate dispositions december 2019 closed sale whollyowned subsidiary helmerich payne international drilling co hpidc terravici drilling solutions inc terravici result sale 100 terravicis outstanding capital stock transferred purchaser exchange approximately 151 million resulting total gain sale terravici approximately 150 million prior sale terravici component north america solutions operating segment transaction represent strategic shift operations significant effect operations financial results going forward note 2 summary significant accounting policies risks uncertainties basis presentation accompanying consolidated financial statements prepared accordance accounting principles generally accepted united states america “us gaap” classified former venezuelan operation discontinued operation third quarter fiscal year 2010 fully described note 4discontinued operations unless indicated otherwise information notes consolidated financial statements relates continuing operations principles consolidation consolidated financial statements include accounts helmerich payne inc domestic foreign subsidiaries consolidation subsidiary begins company obtains control subsidiary ceases company loses control subsidiary specifically income expenses subsidiary acquired disposed fiscal year included consolidated statement operations comprehensive income loss date company gains control date company ceases control subsidiary significant intercompany accounts transactions eliminated consolidation covid19 opec production impacts outbreak novel strain coronavirus “covid19” development pandemic resulted significant global economic disruption including north america many geographic areas operate customers located suppliers vendors operate actions taken prevent spread covid19 governmental authorities around world including imposing mandatory closures nonessential business facilities seeking voluntary closures facilities imposing restrictions advisories respect travel business operations public gatherings interactions significantly reduced global economic activity thereby resulting lower demand crude oil particular travel restrictions certain countries operate including closure borders travel country resulted inability effectively staff rotate personnel thereby operate certain rigs could lead inability fulfill contractual obligations contracts customers governmental authorities also implemented multistep policies goal reopening various sectors economy however certain jurisdictions began reopening return restrictions face increases new covid19 cases jurisdictions continuing reopen nearly completed reopening process despite increases covid19 cases covid19 outbreak may significantly worsen upcoming months may cause governmental authorities reconsider restrictions business social activities event governmental authorities increase restrictions reopening economy may curtailed experienced expect continue experience resulting disruptions business operations restrictions significantly impacted may continue impact many sectors economy addition perceived risk infection health risk associated covid19 illness many individuals across globe continue alter behaviors consumers policies companies around world resulting many effects intended governmental authorities stop spread covid19 selfimposed voluntary social distancing quarantining remote work policies complying local governmental jurisdiction policies procedures operations reside cases policies procedures stringent foreign operations north america operations resulted complete suspension certain period time drilling operations least one foreign jurisdiction addition customer one foreign jurisdiction claimed force majeure resulting zero chargeable revenues suspension period early march 2020 increase crude oil supply resulting production escalations organization petroleum exporting countries oil producing nations “opec” combined decrease crude oil demand stemming global response uncertainties surrounding covid19 pandemic resulted sharp decline crude oil prices consequently seen significant decrease customer 2020 capital budgets corresponding dramatic decline demand land rigs april 2020 opec finalized agreement cut oil production 97 million barrels per day may june 2020 june 6 2020 opec agreed extend production cuts end july 2020 july 15 2020 opec agreed ease production cuts 97 million barrels per day 77 million barrels per day august december 2020 despite production cuts prices oil gas market remained depressed oversupply lack demand market persist oil natural gas prices expected continue volatile result nearterm production instability ongoing covid19 outbreak changes oil natural gas inventories industry demand global national economic performance reported events could continue adverse impact numerous aspects business financial condition results operations ultimate extent impact covid19 prolonged excess oil supply business financial condition results operations depend largely future developments including duration spread covid19 outbreak within united states parts world operate related impact oil gas industry impact governmental actions designed prevent spread covid19 development availability effective treatments vaccines highly uncertain cannot predicted certainty time financial perspective believe company operationally financially well positioned continue operating even protracted disruption caused covid19 oil oversupply low oil prices september 30 2020 company cash equivalents shortterm investments 5772 million 2018 credit facility defined within note 8debt 7500 million aggregate availability maximum 750 million available use letters credit september 30 2020 borrowings letters credit outstanding leaving 7500 million available borrow 2018 credit facility currently anticipate need draw 2018 credit facility furthermore company 2025 notes defined within note 8debt mature march 19 2025 foreign currencies functional currency together foreign subsidiaries us dollar monetary assets liabilities denominated currencies us dollar translated exchange rates effect end period resulting gains losses recorded statement operations aggregate foreign currency losses 88 million 82 million 40 million fiscal years 2020 2019 2018 respectively included drilling services operating expenses use estimates preparation financial statements conformity us gaap requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period actual results could differ estimates cash equivalents restricted cash equivalents include cash hand demand deposits banks highly liquid investments original maturities three months less cash equivalents shortterm investments subject potential credit risk certain cash accounts carry balances greater federally insured limits restricted cash equivalents 489 million 350 million september 30 2020 2019 respectively total september 30 2020 2019 36 million 30 million respectively related acquisition drilling technology companies described note 3business combinations 20 million fiscal year ends initial capitalization captive insurance company 431 million 300 million respectively represents additional amount management elected restrict purpose potential insurance claims whollyowned captive insurance company restricted amounts primarily invested shortterm money market securities restricted cash equivalents reflected consolidated balance sheets follows accounts receivable accounts receivable represents valid claims customers services rendered net allowances doubtful accounts perform credit evaluations customers typically require collateral support trade receivables provide allowance doubtful accounts necessary cover estimated credit losses outstanding customer receivables reviewed regularly possible nonpayment indicators allowances doubtful accounts recorded based upon management’s estimate collectability balance sheet date refer note 16supplemental balance sheet information inventories materials supplies inventories primarily replacement parts supplies held consumption drilling operations inventories valued lower cost net realizable value cost determined weighted average basis includes cost materials shipping duties labor net realizable value defined estimated selling price ordinary course business less reasonably predictable costs completion disposal transportation reserves excess obsolete inventory 365 million 115 million fiscal years 2020 2019 respectively investments maintain investments equity securities certain publicly traded companies recognize marketable equity securities readily determinable fair values fair value changes values reflected net income property plant equipment property plant equipment stated cost less accumulated depreciation substantially property plant equipment depreciated using straightline method based estimated useful lives assets deducting salvage values amount depreciation expense record dependent upon certain assumptions including asset’s estimated useful life rate consumption corresponding salvage value periodically review assumptions may change one assumptions changes assumptions may require us recognize prospective basis increased decreased depreciation expense capitalize interest major projects construction interest capitalized based average interest rate related debt capitalized interest fiscal years 2020 2019 04 million capitalized interest fiscal year 2018 review longlived assets impairment whenever events changes circumstances indicate carrying amount asset may recoverable changes could prompt assessment include significant decline revenue cash margin per day extended periods low rig asset group utilization changes market demand specific asset obsolescence completion specific contracts restructuring drilling fleet andor overall general market conditions review longlived assets indicates carrying value assetsasset groups estimated undiscounted future cash flows projected realized use asset eventual disposal impairment charge made required adjust carrying value estimated fair value asset estimated fair value determined based upon either income approach using estimated discounted future cash flows market approach considering factors recent market sales rigs companies sales rigs appraisals factors cost approach utilizing reproduction costs new adjusted asset age condition andor combination multiple approaches cash flows estimated management considering factors prospective market demand margins recent changes rig technology effect rig’s marketability investment required make rig operational suitability rig size make existing platforms competitive dynamics including industry utilization longlived assets held sale recorded lower carrying value fair value less costs sell goodwill intangible assets goodwill represents excess purchase price fair value assets acquired liabilities assumed business combination date acquisition goodwill amortized tested potential impairment reporting unit level minimum annual basis fourth fiscal quarter fiscal year likely carrying value may exceed fair value impairment determined exist impairment charge amount carrying amount exceeds reporting unit’s fair value recognized limited total amount goodwill allocated reporting unit reporting unit level defined operating segment one level operating segment finitelived intangible assets amortized using straightline method period assets contribute cash flows generally estimated 5 20 years evaluated impairment accordance policies valuation longlived assets drilling revenues drilling services revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized straightline basis drilling service provided costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs reimbursements fiscal years 2020 2019 2018 2120 million 3228 million 2747 million respectively contracts terminated customers prior expirations fixed terms contractual provisions customarily require early termination amounts paid us revenues early terminated contracts recognized contractual requirements met early termination revenue fiscal years 2020 2019 2018 approximately 734 million 113 million 171 million respectively rent revenues enter leases tenants rental properties consisting primarily retail multitenant warehouse space lease terms tenants occupying space retail centers warehouse buildings generally range three ten years minimum rents recognized straightline basis term related leases overage percentage rents based tenants’ sales volume recoveries tenants property taxes operating expenses recognized operating revenues consolidated statements operations fiscal year ended september 30 2020 closed sale portion real estate investment portfolio including six industrial sites see note 5property plant equipment additional details rent revenues follows september 30 2020 minimum future rental income received noncancelable operating leases follows thousands leasehold improvement allowances capitalized amortized lease term september 30 2020 2019 cost accumulated depreciation real estate properties follows income taxes current income tax expense amount income taxes expected payable current fiscal year deferred income taxes computed using liability method provided temporary differences financial basis tax basis assets liabilities take tax positions tax returns time may ultimately allowed relevant taxing authority take positions evaluate likelihood sustaining positions determine amount tax benefit arising positions recognized financial statements recognize uncertain tax positions believe greater 50 percent likelihood sustained tax benefits recognized us recorded liability unrecognized tax benefits represents potential future obligation various taxing authorities tax positions sustained see note 9income taxes amounts uncertain tax positions adjusted periods new information becomes available positions effectively settled recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements operations earnings per common share basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock performance share units granted expect continue grant employees restricted stock grants contain nonforfeitable rights dividends grants considered participating securities accounting standards codification asc 260 earnings per share included grants calculation basic earnings per share stockbased compensation stockbased compensation expense determined using fairvaluebased measurement method awards granted beginning fiscal year 2019 replaced stock options performance share units component executives’ longterm equity incentive compensation also eliminated stock options element nonemployee director compensation program board directors board determined award stockbased compensation nonemployee directors solely form restricted stock fair value option granted prior fiscal year 2019 estimated date grant based blackscholes optionspricing model utilizing assumptions riskfree interest rate volatility dividend yield expected remaining term awards assumptions used calculating fair value stockbased payment awards represented management’s best estimates involve inherent uncertainties application managements judgment grant date fair value performance share units determined use monte carlo simulation method monte carlo simulation method requires use highly subjective assumptions key assumptions method include price expected volatility stock selfdetermined peer group companies’ peer group stock risk free rate return dividend yields crosscorrelations company peer group stockbased compensation recognized straightline basis requisite service periods stock awards generally vesting period compensation expense recorded component drilling services operating expenses research development expenses selling general administrative expenses consolidated statements operations see note 12stockbased compensation additional discussion stockbased compensation treasury stock treasury stock purchases accounted cost method whereby cost acquired stock recorded treasury stock gains losses subsequent reissuance shares credited charged additional paidin capital using averagecost method treasury stock may issued helmerich payne inc 2020 omnibus incentive plan comprehensive income loss comprehensive income loss refers revenues expenses gains losses included comprehensive income loss excluded net income loss report components comprehensive income loss net tax nature disclose tax effect allocated component consolidated statements comprehensive income loss leases lease various offices warehouses equipment vehicles rental contracts typically made fixed periods one 15 years may extension options lease terms negotiated individual basis contain wide range different terms conditions lease agreements impose covenants leased assets may used security borrowing purposes end fiscal year 2019 leases property plant equipment classified either capital operating leases payments made operating leases net incentives received lessor charged income statement straightline basis period lease “levelized lease cost” beginning october 1 2019 leases recognized rightofuse asset corresponding liability within accrued liabilities noncurrent liabilities date leased asset available use company lease payment allocated liability finance cost finance cost recognized lease period produce constant periodic rate interest remaining balance liability period rightofuse asset depreciated shorter assets useful life lease term straightline basis finance type leases difference levelized lease cost finance cost operating leases assets liabilities arising lease initially measured present value basis lease liabilities include net present value following lease payments • fixed payments including insubstance fixed payments less lease incentives receivable • variable lease payments based index rate • amounts expected payable lessee residual value guarantees • exercise price purchase option lessee reasonably certain exercise option • payments penalties terminating lease term reflects lessee exercising option lease payments discounted using interest rate implicit lease rate cannot determined lessee’s incremental borrowing rate used rate lessee would pay borrow funds necessary obtain asset similar value similar economic environment similar terms conditions rightofuse assets measured cost comprised following • amount initial measurement lease liability • lease payments made commencement date less lease incentives received • initial direct costs • asset retirement obligations related lease applicable payments associated shortterm leases lowvalue assets recognized straightline basis expense profit loss shortterm leases lease term 12 months less lowvalue assets comprised itequipment office furniture determining lease term management considers facts circumstances create economic incentive exercise extension option exercise termination option extension options periods termination options included lease term lease reasonably certain extended terminated assessment reviewed significant event significant change circumstances occurs within control lessee refer note 6leases additional information regarding leases recently issued accounting updates changes us gaap established financial accounting standards board “fasb” form accounting standards updates asus fasb asc consider applicability impact asus listed assessed determined either applicable clarifications asus listed immaterial already adopted company following table provides brief description recent accounting pronouncements analysis effects financial statements concentration credit risk financial instruments potentially subject us concentrations credit risk consist primarily temporary cash investments shortterm investments trade receivables industry concentration potential impact overall exposure market credit risks either positively negatively customers could affected similar changes economic industry conditions however believe credit risk posed industry concentration offset creditworthiness customer base revenues individual customers within north america solutions segment constituted 10 percent total revenues follows fiscal years 2020 2019 individual customers constituted 10 percent total revenues place temporary cash investments united states established financial institutions invest diversified portfolio highly rated shortterm money market instruments trade receivables primarily established companies oil gas industry may impact credit risk customers may similarly affected prolonged changes economic industry conditions international sales also present various risks including governmental activities may limit disrupt markets restrict movement funds international sales however large international governmentowned national oil companies volatility market operations materially affected oil gas prices oil natural gas prices historically volatile difficult predict degree certainty current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining customer’s future spending levels volatility along difficulty predicting future prices lead many exploration production companies base capital spending conservative estimates commodity prices result demand drilling services always purely function movement commodity prices addition customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets may cause difficulty customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result reduction customer spending demand services reduction spending could material adverse effect operations selfinsurance accrued liability estimated workers’ compensation casualty claims incurred based upon cash reserves plus estimate loss development incurred reported claims estimate based upon historical trends insurance recoveries related liability recorded considered probable selfinsure significant portion expected losses relating workers’ compensation general liability automobile liability generally deductibles range 1 million 10 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events estimates recorded incurred outstanding liabilities workers’ compensation general liability claims incurred reported estimates based adjusters’ estimates historical experience statistical methods commonly used within insurance industry believe reliable also engaged thirdparty actuary perform review domestic casualty losses well losses captive insurance companies nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs october 1 2019 elected utilize captive insure deductibles workers’ compensation general liability automobile liability insurance programs casualty claims occurring prior october 1 2019 remain recorded within operating segments future adjustments claims continue reflected within operating segments reserves legacy claims occurring prior october 1 2019 remain liabilities operating segments resolved changes reserves reflected segment earnings occur continue utilize captive finance risk loss equipment rig property assets company captive maintain excess property casualty reinsurance programs thirdparty insurers effort limit financial impact significant events covered programs operating subsidiaries paying premiums captive typically monthly basis estimated losses based external actuarial analysis premiums currently held restricted account resulting transfer risk operating subsidiaries captive actuarial estimated underwriting expenses fiscal year ended september 30 2020 approximately 164 million recorded within drilling services operating expenses consolidated statement operations intercompany premium revenues expenses fiscal year ended september 30 2020 amounted 369 million eliminated upon consolidation intercompany insurance premiums reflected segment operating expenses within north america solutions offshore gulf mexico international solutions reportable operating segments reflected intersegment sales within company selfinsures employee health plan exposures excess employee deductibles starting second quarter fiscal year 2020 captive insurer issued stoploss program reimburse companys health plan claims exceed 50000 program also reviewed end policy year outside actuary one hundred percent stoploss premium set aside captive reserves stoploss program material impact consolidated basis international solutions drilling risks international solutions drilling operations may significantly contribute revenues net operating income assurance able successfully conduct operations failure may adverse effect financial position results operations cash flows also success international solutions operations subject numerous contingencies beyond management’s control contingencies include general regional economic conditions fluctuations currency exchange rates modified exchange controls changes international regulatory requirements international employment issues risk expropriation real personal property burden complying foreign laws additionally event extended labor strikes occur country experiences significant political economic social instability could experience shortages labor andor material supplies necessary operate drilling rigs thereby potentially causing adverse material effect business financial condition results operations many countries operate implemented measures response covid19 pandemic measures including imposing mandatory closures nonessential business facilities seeking voluntary closures facilities imposing restrictions advisories respect travel business operations public gatherings interactions significantly reduced global economic activity thereby resulting lower demand crude oil particular travel restrictions certain countries operate including closure borders travel country resulted inability effectively staff rotate personnel thereby operate certain rigs could lead inability fulfill contractual obligations contracts customers also experienced certain risks related argentine operations argentina dayrate denominated us dollars paid argentine pesos argentine branch one secondtier subsidiaries remits us dollars us parent converting argentine pesos us dollars argentine foreign exchange market repatriating us dollars argentina also history implementing currency controls restrict conversion repatriation us dollars including controls implemented september 2019 september 2020 argentina implemented additional currency controls effort preserve argentinas us dollar reserves result currency controls ability remit funds argentine subsidiary us parent limited past argentine government also instituted price controls crude oil diesel gasoline prices instituted exchange rate freeze connection prices price controls exchange rate freeze could instituted future addition march 2020 argentine government introduced labor regulations prohibit employee dismissals suspensions without cause lack reduction work due force majeure subject certain exceptions may result payment compensation suspended employees andor increased severance costs company prohibitions resulted significant challenges argentine operations fiscal year 2020 remains uncertain long effect additional concerns regarding argentinas debt burden notwithstanding argentinas recent restructuring deal international bondholders august 2020 argentina attempts manage substantial sovereign debt issues concerns could negatively impact argentinas economy adversely affect argentine operations argentina’s economy considered highly inflationary defined cumulative inflation rates exceeding 100 percent recent threeyear period based inflation data published respective governments nonetheless foreign subsidiaries use us dollar functional currency local currency monetary assets liabilities remeasured us dollars gains losses resulting foreign currency transactions included current results operations impact local laws future operations certain areas may conducted entities local citizens interests entities including joint ventures hold minority interest pursuant arrangements conduct operations contract local entities believe neither operating entities pursuant arrangements would material adverse effect operations revenues assurance cases able structure restructure operations conform local law administration thereof terms acceptable us although attempt minimize potential impact risks operating one geographical area fiscal year ended september 30 2020 approximately 83 percent operating revenues generated international locations drilling services business compared 76 percent fiscal year ended september 30 2019 fiscal year ended september 30 2020 approximately 616 percent operating revenues international locations operations south america compared 916 percent fiscal year ended september 30 2019 substantially south american operating revenues argentina colombia future occurrence one international events arising types risks described could material adverse impact business financial condition results operations note 3 business combinations fiscal year 2019 acquisitions august 21 2019 completed acquisition unaffiliated company drillscan energy sas subsidiaries drillscan® whollyowned subsidiary company total consideration approximately 327 million includes 177 million contingent consideration fair value total assets acquired liabilities assumed acquisition date 363 million 36 million respectively including goodwill 149 million total assets acquired 191 million allocated identifiable intangible assets drillscan® leading provider proprietary drilling engineering software well engineering services training oil gas industry operations drillscan® included north america solutions reportable segment acquisition drillscan® accounted business combination accordance fasb asc 805 business combinations requires assets acquired liabilities assumed recorded acquisition date fair values accordance gaap entity allowed reasonable period time exceed one year obtain information necessary identify measure fair value assets acquired liabilities assumed business combination second quarter fiscal year 2020 result new information identified related acquisition drillscan® acquisition date fair value contingent consideration goodwill increased approximately 12 million acquisitions measurement period closed quarter ended june 30 2020 result purchase price accounting finalized november 1 2018 completed acquisition unaffiliated company angus jamieson consulting “ajc” whollyowned subsidiary company total consideration approximately 34 million ajc softwarebased training consultancy company based inverness scotland widely recognized industry leader wellbore positioning operations ajc included north america solutions reportable segment acquisition ajc accounted business combination accordance fasb asc 805 business combinations requires assets acquired liabilities assumed recorded acquisition date fair values allocation purchase price included goodwill 31 million note 4 discontinued operations current noncurrent liabilities discontinued operations consist municipal income taxes payable social obligations due within country venezuela expenses incurred incountry obligations reported discontinued operations within consolidated statements operations activity fiscal year ended september 30 2020 primarily due remeasurement uncertain tax liabilities result devaluation venezuela bolivar early 2018 venezuelan government announced changed existing dualrate foreign currency exchange system eliminating heavily subsidized foreign exchange rate 10 bolivars per united states dollar relaunched exchange system known dicom venezuela government also established new currency called “sovereign bolivar” determined elimination five zeros old currency dicom floating rate approximately 436677 21028 62 bolivars per united states dollar september 30 2020 2019 2018 respectively dicom floating rate might reflect barter market exchange rates note 5 property plant equipment property plant equipment september 30 2020 2019 consisted following 1 included construction progress costs projects progress upgrade refurbish certain rigs existing fleet additionally include capital maintenance purchaseorders openin process various projects completed costs classified appropriate useful life category impairments fiscal year 2020 consistent policy evaluate drilling rigs related equipment impairment whenever events changes circumstances indicate carrying value assets may exceed estimated undiscounted future net cash flows evaluation among things includes review external market factors assessment future marketability specific rigs’ asset group second quarter fiscal year 2020 several significant economic events took place severely impacted current demand drilling services including significant drop crude oil prices caused opecs price war coupled decrease demand due covid19 pandemic maintain competitive edge challenging market company’s management introduced new strategy focused operating various types highly capable upgraded rigs phasing older less capable fleet resulted grouping superspec rigs legacy domestic flexrig® 3 asset group flexrig® 5 asset group creating new domestic superspec flexrig® asset group combining legacy domestic conventional asset group flexrig® 4 asset group flexrig® 3 nonsuperspec rigs one asset group domestic nonsuperspec asset group given current projected low utilization domestic nonsuperspec asset group international asset groups considered economic factors indicators asset groups may impaired result indicators performed impairment testing march 31 2020 domestic non superspec international conventional flexrig® 3 flexrig® 4 asset groups aggregate net book value 6058 million concluded net book value asset group recoverable estimated undiscounted cash flows recorded noncash impairment charge 4414 million consolidated statement operations fiscal year ended september 30 2020 4414 million total impairment charge recorded 2924 million 1490 million recorded north america solutions international solutions segments respectively impairments recognized fiscal year 2020 impairment measured amount net book value asset group exceeds fair value significant assumptions used undiscounted cash flow model include timing awards future drilling contracts drilling rig utilization estimated remaining useful life net proceeds received upon future saledisposition assumptions classified level 3 inputs asc topic 820 fair value measurement disclosures based upon unobservable inputs primarily rely management assumptions forecasts determining fair value asset group utilized combination income market approaches significant assumptions valuation based market participant classified level 2 level 3 inputs asc topic 820 fair value measurement disclosures march 31 2020 company also recorded additional noncash impairment charge related inprogress drilling equipment rotational inventory 449 million 386 million respectively aggregate book values 684 million 386 million respectively consolidated statement operations fiscal year ended september 30 2020 835 million total impairment charge recorded inprogress drilling equipment rotational inventory 758 million 77 million recorded north america solutions international solutions segments respectively impairment fiscal year 2019 third quarter fiscal year 2019 companys management performed detailed assessment considering number approaches maximize utilization enhance margins domestic international flexrig® 4 asset groups june 2019 assessment concluded marketing smaller fleet two asset groups would provide best economic outcome decision made downsize number domestic international flexrig® 4 drilling rigs marketed customers 71 rigs 20 domestic rigs 10 rigs 8 international rigs utilize major interchangeable components decommissioned drilling rigs within asset groups capital spares remaining rig fleet reduced aggregate net book values flexrig® 4 asset groups june 30 2019 3178 million 1075 million domestic rigs 557 million 478 million international rigs following downsizing process performed detailed study optimize quantities capital spares drilling support equipment required support future operations rig fleet going forward decisions analysis resulted write excess capital spares drilling support equipment aggregate net book value 2353 million estimated proceeds ultimately received sale disposal based historical experience sales disposals similar assets resulting impairment 2243 million recorded consolidated statement operations fiscal year ended september 30 2019 2243 million total impairment charge recorded 2169 million 74 million recorded north america solutions international solutions segments respectively significant assumptions valuation classified level 2 inputs asc topic 820 fair value measurement disclosures due downsizing domestic international flexrig® 4 asset groups june 30 2019 performed impairment testing two asset groups concluded net book values asset groups recoverable estimated undiscounted cash flows surplus significant assumptions used undiscounted cash flow model include timing awards future drilling contracts operating dayrates operating costs rig reactivation costs drilling rig utilization estimated remaining useful life net proceeds received upon future saledisposition assumptions consistent companys internal forecasts future years although believe assumptions used analysis reasonable appropriate probabilityweighted average expected future undiscounted net cash flows exceed net book value domestic international flexrig® 4 asset groups june 30 2019 different assumptions estimates could materially impact analysis resulting conclusion impairments fiscal year 2018 fourth quarter fiscal year 2018 ceasing operations ecuador entered sales negotiation respect six conventional rigs within separate international conventional rigs’ asset group net book values 208 million present country pursuant rigs together associated equipment machinery sold third party recycled certain components rigs 85 million net book value subject sale agreement transferred united states utilized flexrig® drilling rigs high activity demand sales transaction completed november 2018 recorded noncash impairment charge within international solutions segment 92 million included asset impairment charge consolidated statement operations fiscal year ended september 30 2018 result remaining rig within asset group disposed written resulting additional impairment charge 14 million assets recorded fair value based sales agreement classified level 2 within fair value hierarchy furthermore fourth quarter fiscal year 2018 within north america solutions segment management committed plan auction several previously decommissioned rigs fiscal year 2019 result wrote estimated fair values recorded noncash impairment charge 57 million included asset impairment charge consolidated statements operations fiscal year ended september 30 2018 assets recorded fair value based auction price classified level 2 fair value hierarchy decommissioning crude oil market imbalance global phenomenon acutely impacted us market result storage limitations last two quarters fiscal year 2020 abruptness overall size decrease demand refined products gasoline diesel created abundance supply products caused inventory levels crude oil related refined products become greatly elevated reaching high end storage capabilities greatly reduced need cases entirely eliminated ability refineries use crude oil feedstock exploration production ep companies customers may limited opportunities offload production even selling price could low uneconomical prices consequently ep companies chosen shutin stop production complete additional wells drilled andor drill wells market imbalance corrects economical resume production drilling wells fiscal year ended september 30 2020 decommissioned two rigs 35 rigs legacy domestic conventional asset group flexrig® 3 asset group respectively decommissioned rigs impaired march 31 2020 depreciation consolidated statements operations 4747 million 5569 million 5784 million includes abandonments 40 million 114 million 277 million fiscal years 2020 2019 2018 respectively gain sale assets gain sale assets 468 million 397 million 227 million fiscal years 2020 2019 2018 respectively gains related customer reimbursement replacement value drill pipe damaged lost drilling operations additionally fiscal year ended september 30 2020 closed sale portion real estate investment portfolio including six industrial sites total consideration net selling related expenses 407 million aggregate net book value 135 million resulting gain 272 million included within gain sale assets consolidated statement operations note 6 leases asc 842 adoption october 1 2019 adopted asc 842 retrospectively cumulativeeffect adjustment without restating comparative periods 2019 2018 fiscal years permitted specific transitional provisions asc 842 reclassifications adjustments arising new leasing rules therefore recognized opening balance sheet october 1 2019 upon adoption asc 842 recognized lease liabilities relation leases previously classified operating leases principles asc 840 liabilities measured present value remaining lease payments discounted using lessee’s incremental borrowing rate october 1 2019 contracts provide implicit rate weighted average lessee’s incremental borrowing rate applied operating lease liabilities october 1 2019 approximately 29 change accounting policy affected following items balance sheet october 1 2019 september 30 2020 segment assets liabilities increased september 30 2019 result change accounting policy reportable segments affected change policy applying asc 842 first time used following practical expedients permitted topic • use single discount rate portfolio leases reasonably similar characteristics • reassess whether contract contains lease date initial application instead contracts entered transition date relied assessment applied asc 840 prior adoption date • option reassess initial direct cost existing leases • use hindsight determining lease term contract contains options extend terminate lease made accounting policy election recognize rightofuse asset corresponding liability leases term 12 months less leases lowvalue additionally asc 842 provides lessors practical expedient class underlying asset separate lease nonlease components account combined component asc 606 nonlease component predominant element combined component lessor practical expedient limited circumstances lease accounted separately would classified operating lease asc 842 respect drilling service contracts commenced amended fiscal year ended september 30 2020 concluded drilling contracts contain lease component nonlease component predominant element combined component contracts elected apply practical expedient separate lease nonlease components account combined component asc 606 therefore expect change revenue recognition patterns disclosures result adoption asc 842 lease position 1 future minimal rental payments exclude optional extensions exercised probable exercised future probable extensions included operating lease liability balance recognized rightofuse assets relate following types assets rightofuse assets measured amount equal lease liability adjusted amount prepaid accrued lease payments recognized balance sheet september 30 2019 lease costs following table presents certain information related lease costs operating leases lease terms discount rates table presents certain information related weighted average remaining lease terms weighted average discount rates operating leases september 30 2020 lease obligations future minimum rental payments required operating leases initial remaining noncancelable lease terms excess one year september 30 2020 thousands follows 1 future minimal rental payments exclude optional extensions exercised probable exercised future probable extensions included operating lease liability balance total rent expense 186 million 155 million 137 million fiscal years ended september 30 2020 2019 2018 respectively future minimum lease payments tulsa corporate office tulsa industrial facility represent material portion amounts shown table lease agreement tulsa corporate office commenced may 30 2003 subsequently amended recently march 12 2018 agreement expire january 31 2025 however two fiveyear renewal options recognized part rightofuse assets lease liabilities lease agreement tulsa industrial facility perform maintenance assembly flexrig® components commenced december 21 2018 expire june 30 2025 however two twoyear renewal options recognized part rightofuse assets lease liabilities note 7 goodwill intangible assets goodwill represents excess purchase price fair values assets acquired liabilities assumed business combination date acquisition goodwill amortized tested potential impairment reporting unit level minimum annual basis indications potential impairment exist goodwill within north america solutions reportable segment following summary changes goodwill thousands second quarter fiscal year 2020 result new information identified related acquisition drillscan® acquisition date fair value contingent consideration goodwill increased approximately 12 million intangible assets finitelived intangible assets amortized using straightline method period assets contribute cash flows evaluated impairment accordance policies valuation longlived assets intangible assets within north america solutions reportable segment intangible assets consisted following amortization expense consolidated statements operations 72 million 58 million 54 million fiscal years 2020 2019 2018 respectively estimated 72 million next two succeeding fiscal years approximately 65 million fiscal year 2023 approximately 64 million fiscal years 2024 2025 impairment fiscal year 2020 consistent policy test goodwill annually impairment fourth quarter fiscal year frequently indicators goodwill might impaired due market conditions described note 5property plant equipment second quarter fiscal year 2020 concluded goodwill intangible assets might impaired tested hp technologies reporting unit goodwill balance allocated intangible assets recorded recoverability resulted goodwill noncash impairment charge 383 million recorded consolidated statement operations fiscal year ended september 30 2020 recoverable amount hp technologies reporting unit determined based fair value calculation uses cash flow projections based companys financial projections presented board covering fiveyear period discount rate 14 percent cash flows beyond fiveyear period extrapolated using fifthyear data implied growth factor reporting unit level defined operating segment one level operating segment recoverable amount intangible assets tested impairment within hp technologies reporting unit determined based undiscounted cash flow projections using companys financial projections presented board covering fiveyear period extrapolated remaining weighted average useful lives intangible assets significant assumptions used cash flow model include timing awarded future contracts commercial pricing terms utilization discount rate terminal value assumptions classified level 3 inputs asc topic 820 fair value measurement disclosures based upon unobservable inputs primarily rely management assumptions forecasts although believe assumptions used analysis probabilityweighted average expected future cash flows reasonable appropriate different assumptions estimates could materially impact analysis resulting conclusion impairment fiscal year 2018 fourth quarter fiscal year 2018 part annual goodwill impairment test performed detailed assessment terravici reporting unit 47 million goodwill allocated determined estimated fair value reporting unit less carrying amount recorded goodwill impairment losses 47 million addition recorded intangible assets impairment loss 09 million impairment losses included asset impairment charge consolidated statements operations fiscal year ended september 30 2018 goodwill impairment analysis performed remaining technology reporting units fourth quarter fiscal year 2018 result impairment charge note 8 debt following unsecured longterm debt outstanding maturities shown following table senior notes hpidc 2025 notes march 19 2015 subsidiary hpidc issued 5000 million 465 percent unsecured senior notes due 2025 hpidc 2025 notes redeemed full september 27 2019 described exchange offer consent solicitation redemption interest hpidc 2025 notes payable semiannually march 15 september 15 debt discount amortized interest expense using effective interest method debt issuance costs amortized straightline stated life obligation approximated effective interest method exchange offer consent solicitation redemption december 20 2018 settled offer exchange “exchange offer” outstanding hpidc 2025 notes 5000 million aggregate principal amount new 465 percent unsecured senior notes due 2025 company “company 2025 notes” registration rights ii cash pursuant issued approximately 4871 million aggregate principal amount company 2025 notes interest company 2025 notes payable semiannually march 15 september 15 year commencing march 15 2019 debt issuance costs amortized straightline stated life obligation approximates effective interest method following consummation exchange offer hpidc outstanding approximately 129 million aggregate principal amount hpidc 2025 notes december 20 2018 hpidc company wells fargo bank national association trustee entered supplemental indenture governing hpidc 2025 notes adopt certain proposed amendments pursuant consent solicitation conducted concurrently exchange offer september 27 2019 redeemed remaining approximately 129 million aggregate principal amount hpidc 2025 notes approximately 146 million including accrued interest prepayment premium simultaneously redemption hpidc 2025 notes hpidc released guarantor company 2025 notes 2018 credit facility result release hp obligor company 2025 notes 2018 credit facility credit facilities november 13 2018 entered credit agreement among company borrower wells fargo bank national association administrative agent lenders party thereto amended november 13 2019 providing unsecured revolving credit facility “2018 credit facility” set mature november 13 2024 2018 credit facility 7500 million aggregate availability maximum 750 million available use letters credit 2018 credit facility also permits aggregate commitments facility increased 3000 million subject satisfaction certain conditions procurement additional commitments new existing lenders borrowings 2018 credit facility accrue interest spread either london interbank offered rate libor base rate also pay commitment fee unused balance facility borrowing spreads well commitment fees determined based debt rating senior unsecured debt company determined moody’s standard poor’s spread libor ranges 0875 percent 1500 percent per annum commitment fees range 0075 percent 0200 percent per annum based unsecured debt rating company september 30 2020 spread libor would 1125 percent borrowings outstanding 2018 credit facility commitment fees 0125 percent financial covenant 2018 credit facility requires us maintain total debt total capitalization ratio less equal 50 percent 2018 credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality including limitation priority debt defined credit agreement may exceed 175 percent net worth company september 30 2020 borrowings letters credit outstanding leaving 7500 million available borrow 2018 credit facility september 30 2020 two separate outstanding letters credit banks amounts 248 million 21 million september 30 2020 also 200 million unsecured standalone line credit facility purpose obtaining issuance international letters credit bank guarantees performance bonds 200 million 43 million financial guarantees outstanding september 30 2020 subsequent september 30 2020 26 million financial guarantees expired applicable agreements unsecured debt contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2020 compliance debt covenants september 30 2020 aggregate maturities longterm debt follows thousands note 9 income taxes income tax benefit rate components benefit income taxes follows amounts domestic foreign income loss income taxes follows effective income tax rates compared us federal income tax rate follows effective tax rates differ us federal statutory rate 210 percent due state foreign income taxes tax effect nondeductible expenditures deferred taxes deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary valuation allowances provided carrying value net deferred tax assets based management’s judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future components net deferred tax liabilities follows change net deferred tax assets liabilities impacted foreign currency remeasurement september 30 2020 federal state foreign tax net operating loss carryforwards 73 million 257 million 399 million respectively foreign tax credit carryforwards approximately 239 million 191 million reflected deferred tax asset consolidated financial statements prior consideration valuation allowance expire fiscal years 2021 2040 valuation allowance primarily attributable foreign net operating loss carryforwards 113 million foreign tax credit carryforwards 191 million equity compensation 49 million foreign minimum tax credit carryforwards 14 million likely utilized unrecognized tax benefits recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements operations september 30 2020 2019 accrued interest penalties 28 million 21 million respectively reconciliation change gross unrecognized tax benefits fiscal years ended september 30 2020 2019 follows september 30 2020 2019 liability unrecognized tax benefits includes 130 million 153 million respectively unrecognized tax benefits related discontinued operations recognized would affect effective tax rate remaining unrecognized tax benefits would affect effective tax rate recognized liabilities unrecognized tax benefits related interest penalties included noncurrent liabilities consolidated balance sheets next 12 months cannot predict certainty whether achieve ultimate resolution uncertain tax position associated us international operations could result increases decreases unrecognized tax benefits however expect increases decreases material effect results operations financial position tax returns file consolidated us federal income tax return well income tax returns various states foreign jurisdictions tax years remain open examination us federal state jurisdictions include fiscal years 2016 2019 exception certain state jurisdictions currently audit tax years remaining open examination foreign jurisdictions include 2003 2019 note 10 shareholders’ equity company evergreen authorization board repurchase four million common shares calendar year repurchases may made using cash equivalents available sources fiscal year ended september 30 2020 purchased 15 million common shares aggregate cost 285 million held treasury shares purchased 10 million common shares aggregate cost 428 million held treasury shares fiscal year ended september 30 2019 purchases common shares fiscal year ended september 30 2018 september 30 2020 declared 2098 million cash dividends cash dividend 025 per share declared september 9 2020 shareholders record november 13 2020 payable december 1 2020 result recorded dividend payable 272 million consolidated balance sheets september 30 2020 accumulated comprehensive income loss components accumulated comprehensive income loss follows 1 adopted asu 201601 october 1 2018 standard requires changes fair value equity investments must recognized net income following summary changes accumulated comprehensive loss net tax component fiscal year ended september 30 2020 note 11 revenue contracts customers drilling services revenue majority drilling services performed “daywork” contract basis charge rate per day price determined location depth complexity well drilled operating conditions duration contract competitive forces market drilling services including technology solutions represent series distinct daily services substantially pattern transfer customer customers benefit equally throughout service period efforts providing drilling services incurred relatively evenly period performance revenue recognized time using timebased input measure provide services customer contracts generally contain renewal extension provisions exercisable option customer prices mutually agreeable us customer contracts terminated customers prior expirations fixed terms contractual provisions customarily require early termination amounts paid us revenues early terminated contracts recognized contractual requirements met fiscal years ended september 30 2020 2019 2018 early termination revenue associated term contracts approximately 734 million 113 million 171 million respectively fiscal years ended september 30 2020 2019 2018 notification fee revenue related welltowell contracts approximately 29 million 12 million 02 million respectively also act principal certain reimbursable services auxiliary equipment provided us clients incur costs earn revenues many costs variable dependent upon activity performed day related contract accordingly reimbursements receive outofpocket expenses recorded revenues outofpocket expenses relate recorded operating costs period relate within series distinct time increments revenues recognized net sales taxes applicable drilling contracts also receive payments contractually designated mobilization demobilization drilling rigs equipment client’s drill site revenues associated mobilization demobilization drilling rigs client’s drill site relate distinct good service revenues deferred recognized ratably related contract term drilling services provided demobilization fees expected received upon contract completion estimated contract inception recognized straightline basis contract term amount demobilization revenue ultimately collect dependent upon specific contractual terms include provisions reduced payment demobilization among things contract renewed extended client rig subsequently contracted another client prior termination current contract since revenues associated demobilization activity typically variable period end estimated likely amount constrained likelihood significant reversal probable change expected amount demobilization revenue accounted net cumulative impact change estimate recognized period revenue estimate revised contract costs mobilization costs include certain direct costs incurred mobilization contracted rigs costs relate directly contract enhance resources used satisfying future performance obligations expected recovered costs capitalized incurred recorded current noncurrent contract fulfillment cost assets depending length initial contract term amortized systematic basis consistent pattern transfer goods services asset relates typically includes initial term related drilling contract period longer initial contract term management anticipates customer renew extend contract expect benefit cost mobilizing rig abnormal mobilization costs fulfillment costs incurred excessive resources wasted spoiled materials unproductive labor costs otherwise anticipated contract price expensed incurred september 30 2020 2019 capitalized fulfillment costs 62 million 139 million respectively capital modification costs incurred rig modifications upgrades required contract costs considered capital improvements costs capitalized property plant equipment depreciated estimated useful life improvement remaining performance obligations total aggregate transaction price allocated unsatisfied performance obligations commonly referred backlog september 30 2020 approximately 6701 million 4467 million expected recognized fiscal year 2021 approximately 2234 million fiscal year 2022 thereafter amounts include anticipated contract renewals additionally contracts currently contain monthtomonth terms represented backlog one month unsatisfied performance obligations contracts subject cancellation modification election customer however due level capital deployed customers underlying projects materially adversely affected contract cancellations modifications past however impact covid19 pandemic inherently uncertain result company unable reasonably estimate duration ultimate impacts pandemic including effect may contractual obligations customers contract assets liabilities amounts owed customers revenue contracts typically billed monthly basis service provided due within 30 days billing amounts classified accounts receivable consolidated balance sheets certain contracts recognize revenues excess billings referred contract assets within prepaid expenses current assets within consolidated balance sheets certain contracts may entitled receive payments advance satisfying performance obligations contract recognize liability payments excess revenue recognized referred deferred revenue contract liabilities within accrued liabilities noncurrent liabilities consolidated balance sheets contract balances presented net amount contract level following table summarizes balances contract assets liabilities dates indicated note 12 stockbased compensation march 3 2020 helmerich payne inc 2020 omnibus incentive plan “2020 plan” approved stockholders 2020 plan replaces stockholderapproved helmerich payne inc 2016 omnibus incentive plan 2016 plan 2020 plan stock cashbased incentive plan among things authorizes board human resources committee board grant executive officers employees nonemployee directors stock options stock appreciation rights restricted shares restricted share units including performance share units share bonuses sharebased awards cash awards restricted stock may granted consideration prior future services purchase price per share stock options may less market price underlying stock date grant stock options expire ten years grant date awards outstanding helmerich payne inc 2005 longterm incentive plan helmerich payne inc 2010 longterm incentive plan 2016 plan remain subject terms conditions plans beginning fiscal year 2019 replaced stock options performance share units component executives longterm equity incentive compensation result stock options granted fiscal years ended september 30 2020 2019 also eliminated stock options element nonemployee director compensation program board determined award stockbased compensation nonemployee directors solely form restricted stock fiscal year ended september 30 2020 727009 shares restricted stock awards 258857 performance share units granted 2016 plan 54118 shares restricted stock awards granted 2020 plan summary compensation cost stockbased payment arrangements recognized drilling services operating expense research development expense selling general administrative expense fiscal years 2020 2019 2018 follows total stockbased compensation expense 91 million recorded drilling services operating expense 08 million recorded research development expense 299 million selling general administrative expense 35 million recorded restructuring charges year ended september 30 2020 consolidated statements operations stock options vesting requirements stock options determined human resources committee board options currently outstanding began vesting one year grant date 25 percent options vesting four consecutive years use blackscholes formula estimate fair value stock options granted employees fair value options amortized compensation expense straightline basis requisite service periods stock awards generally vesting periods 1 riskfree interest rate based us treasury securities expected term option 2 expected volatilities based daily closing price stock based upon historical experience period approximates expected term option 3 dividend yield based current dividend yield 4 expected term options granted represents period time expected outstanding estimate term option granted based historical experience grants exercise based calculations weightedaverage fair value per option granted acquire share common stock 1317 per share fiscal year 2018 following summary reflects stock option activity common stock related information fiscal years 2020 2019 2018 following table summarizes information stock options september 30 2020 shares thousands september 30 2020 weightedaverage remaining life exercisable stock options 416 years aggregate intrinsic value zero weightedaverage exercise price 6238 per share number options vested expected vest september 30 2020 347093 aggregate intrinsic value zero weightedaverage exercise price 6263 per share september 30 2020 unrecognized compensation cost related stock options 12 million cost expected recognized weightedaverage period 122 years total intrinsic value options exercised fiscal years 2020 2019 2018 03 million 79 million 99 million respectively grant date fair value shares vested fiscal years 2020 2019 2018 60 million 80 million 88 million respectively restricted stock restricted stock awards consist common stock timevested four years nonforfeitable dividends paid nonvested shares restricted stock recognize compensation expense straightline basis vesting period fair value restricted stock awards determined based closing price shares grant date september 30 2020 314 million total unrecognized compensation cost related unvested restricted stock awards cost expected recognized weightedaverage period 24 years summary status restricted stock awards september 30 2020 changes restricted stock outstanding fiscal years ended september 30 2020 2019 2018 follows 1 number restricted stock awards granted includes phantom shares confer benefits owning company stock without actual ownership transfer shares 20616 phantom shares granted fiscal year 2020 2 number restricted stock awards vested includes shares withheld behalf employees satisfy statutory tax withholding requirements performance share units made awards certain employees subject marketbased performance conditions performance share units subject terms conditions set forth applicable performance share unit award agreements 2016 plan grants performance share units subject vesting period three years “vesting period” dependent achievement certain performance goals performance share unit awards consist two separate components performance share units comprise first component subject threeyear performance cycle performance share units comprise second component divided three separate tranches subject separate oneyear performance cycle within full threeyear performance cycle vesting performance share units generally dependent achievement company’s total shareholder return “tsr” performance goals relative tsr achievement peer group companies “peer group” applicable performance cycle ii continued employment recipient performance share unit award throughout vesting period end vesting period recipients receive dividend equivalents respect number vested performance share units vesting units ranges zero 200 percent units granted depending company’s tsr relative tsr peer group vesting date grant date fair value performance share units determined use monte carlo simulation method monte carlo simulation method requires use highly subjective assumptions key assumptions method include price expected volatility stock selfdetermined peer group companies stock risk free rate return crosscorrelations company peer group companies valuation model assumes dividends immediately reinvested september 30 2020 66 million unrecognized compensation cost related unvested performance share units cost expected recognized weightedaverage period 19 years summary status performance share units september 30 2020 changes nonvested performance share units outstanding fiscal year ended september 30 2020 presented weightedaverage fair value calculations performance share units granted within fiscal period based following weightedaverage assumptions set forth table 1 riskfree interest rate based us treasury securities expected term performance share units 2 expected volatilities based daily closing price stock based upon historical experience period approximates expected term performance share units note 13 earnings losses per common share asc 260 earnings per share requires companies treat unvested sharebased payment awards nonforfeitable rights dividends dividend equivalents separate class securities calculating earnings per share granted expect continue grant employees restricted stock grants contain nonforfeitable rights dividends grants considered participating securities asc 260 required include grants calculation basic earnings per share calculate basic earnings per share using twoclass method twoclass method computing earnings per share earnings allocation formula determines earnings per share class common stock participating security according dividends declared accumulated participation rights undistributed earnings basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock performance share units twoclass method calculating earnings per share dividends paid portion undistributed net income losses allocated unvested restricted stock grants receive dividends considered participating securities following table sets forth computation basic diluted earnings per share net loss fiscal years 2020 2019 accordingly diluted earnings per share calculation years equivalent basic earnings per share calculation since diluted earnings per share excluded assumed exercise equity awards excluded deemed antidilutive meaning inclusion would reduced reported net loss per share applicable period following potentially dilutive average shares attributable outstanding equity awards excluded calculation diluted earnings losses per share inclusion would antidilutive note 14 fair value measurement financial instruments certain assets liabilities required measured disclosed fair value fair value defined exchange price would received sell asset paid transfer liability exit price principal advantageous market asset liability orderly transaction market participants measurement date use fair value hierarchy established asc 82010 measure fair value prioritize inputs • level 1 quoted prices unadjusted active markets identical assets liabilities reporting entity access measurement date • level 2 observable inputs quoted prices included level 1 quoted prices similar assets liabilities active markets quoted prices similar assets liabilities markets active inputs observable corroborated observable market data • level 3 unobservable inputs supported little market activity significant fair value assets liabilities includes pricing models discounted cash flow methodologies similar techniques use significant unobservable inputs assets held nonqualified supplemental savings plan carried fair value totaled 198 million 157 million september 30 2020 2019 respectively assets comprised mutual funds measured using level 1 inputs shortterm investments include securities classified trading securities realized unrealized gains losses trading securities included income expense consolidated statements operations securities recorded fair value nonfinancial assets intangible assets goodwill property plant equipment recorded fair value acquired business combination impairment charge recognized measured fair value consolidated balance sheets would generally classified within level 2 3 fair value hierarchy majority cash equivalents invested highlyliquid moneymarket mutual funds invested primarily direct indirect obligations us government federally insured deposit accounts carrying amount cash equivalents approximates fair value due short maturity investments carrying value current assets accrued liabilities approximated fair value september 30 2020 2019 following table summarizes assets liabilities measured fair value presented consolidated balance sheet september 30 2020 financial instruments measured fair value utilizing level 1 inputs include cash equivalents us agency issued debt securities equity securities active markets money market funds classified restricted assets current portion restricted amounts included prepaid expenses noncurrent portion included assets items quoted current market prices readily available september 30 2020 assets measured fair value using level 2 inputs include certificates deposit municipal bonds corporate bonds measured using broker quotations utilize observable market inputs financial instruments measured using level 3 unobservable inputs primarily consist potential earnout payments primarily associated business acquisitions fiscal year 2019 following table presents reconciliation changes fair value financial liabilities classified level 3 fair value measurements fair value hierarchy fiscal years 2020 2019 1 settlements represent earnout payments earned paid period following table provides quantitative information thousands level 3 unobservable inputs related financial liabilities september 30 2020 1 weighted average payment amounts probabilities level 3 unobservable inputs associated contingent consideration valued using probability analysis weighted relative undiscounted fair value payment amounts probability payment amounts respectively significant unobservable inputs subject change based changes economic market conditions use significant unobservable inputs creates uncertainty measurement fair value reporting date significant unobservable inputs used fair value measurement contingent consideration using monte carlo simulation discount rate ii revenue volatility iii riskfree rate significant increases decreases discount rate riskfree rate isolation would result significantly lower higher fair value measurement significant changes revenue volatility isolation would result significantly lower higher fair value measurement significant unobservable inputs used fair value measurement contingent consideration using probability analysis discount rate ii payment amounts iii probabilities significant increases decreases discount rate isolation would result significantly lower higher fair value measurement significant increases decreases payment amounts probabilities isolation would result significantly higher lower fair value measurement possible us predict effect future economic market conditions estimated fair values following information presents supplemental fair value information longterm fixedrate debt september 30 2020 2019 fair value 5345 million fixedrate debt based broker quotes september 30 2020 notes classified within level 2 fair value hierarchy actively traded markets estimated fair value investments reflected consolidated balance sheets investments primarily based level 1 inputs result change fair value investments recorded loss 87 million fiscal year ended september 30 2020 september 2019 sold remaining 16 million shares valaris previously known ensco rowan plc total proceeds approximately 120 million note 15 employee benefit plans maintain domestic noncontributory defined benefit pension plan covering certain us employees meet certain age service requirements july 2003 revised helmerich payne inc employee retirement plan “pension plan” close pension plan new participants effective october 1 2003 reduce benefit accruals current participants september 30 2006 time benefit accruals discontinued pension plan frozen following table provides reconciliation changes pension benefit obligations fair value pension plan assets twoyear period ended september 30 2020 statement funded status september 30 2020 2019 amounts recognized consolidated balance sheets september 30 2020 2019 follows thousands amounts recognized accumulated comprehensive income loss september 30 2020 2019 yet reflected net periodic benefit cost follows thousands amount recognized accumulated comprehensive income loss yet reflected periodic benefit cost expected amortized next year’s periodic benefit cost net actuarial loss 24 million weighted average assumptions used pension calculations follows mortality table issued society actuaries october 2019 used september 30 2020 pension calculation make contributions pension plan fiscal year 2020 fiscal year 2021 expect minimum contributions required law needed however may make contributions fiscal year 2021 needed fund unexpected distributions lieu liquidating pension assets components net periodic pension expense follows record settlement expense benefit payments exceed total annual interest costs following table reflects expected benefits paid pension plan next five fiscal years aggregate five years thereafter thousands included pension plan unfunded supplemental executive retirement plan investment strategy asset allocation investment policy strategies established longterm view mind investment strategy intended help pay cost pension plan providing adequate security meet benefits promised pension plan maintain diversified asset mix minimize risk material loss portfolio value might occur devaluation single investment determining appropriate asset mix financial strength ability fund potential shortfalls considered pension plan assets invested portfolios diversified publicmarket equity securities fixed income securities pension plan directly hold securities company expected longterm rate return pension plan assets based historical projected rates return current planned asset classes pension plan’s investment portfolio analyzing historical experience future expectations return volatility various asset classes target allocation 2021 asset allocation pension plan end fiscal years 2020 2019 asset category follows plan assets fair value pension plan assets september 30 2020 2019 summarized level within fair value hierarchy described note 14fair value measurement financial instruments follows september 30 2020 2019 pension plan’s financial assets utilizing level 1 inputs valued based quoted prices active markets identical securities september 30 2019 pension plan’s level 2 financial assets include domestic common stock september 30 2020 2019 pension plan’s assets utilizing level 3 inputs consist oil gas properties fair value oil gas properties determined wells fargo bank na based upon actual revenue received previous twelvemonth period experience similar assets following table sets forth summary changes fair value pension plan’s level 3 assets fiscal years ended september 30 2020 2019 defined contribution plan substantially employees us payroll may elect participate 401kthrift plan contributing portion earnings contribute amount equal 100 percent first five percent participant’s compensation subject certain limitations annual expense incurred defined contribution plan 238 million 305 million 266 million fiscal years 2020 2019 2018 respectively note 16 supplemental balance sheet information following reflects activity reserve bad debt fiscal years 2020 2019 2018 accounts receivable prepaid expenses current assets accrued liabilities longterm liabilities september 30 2020 2019 consist following 1 deferral related provisions within coronavirus aid relief economic security act passed march 27 2020 allows deferral employer share social security tax note 17 commitments contingencies purchase commitments equipment parts supplies ordered advance promote efficient construction capital improvement progress september 30 2020 purchase commitments equipment parts supplies approximately 27 million lease obligations refer note 6leases additional information lease obligations guarantee arrangements contingently liable sureties respect bonds issued sureties connection certain commitments entered us normal course business agreed indemnify sureties payments made respect bonds contingencies ordinary course business contingencies arise resulting existing condition situation set circumstances involving uncertainty realization possible gain loss contingency account gain contingencies accordance provisions asc 450 contingencies therefore record gain contingencies recognize income realized property equipment venezuelan subsidiary seized venezuelan government june 30 2010 whollyowned subsidiaries hpidc helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 bolivarian republic venezuela petroleos de venezuela sa pdvsa petroleo sa seeking damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery january 2018 employee hpidc suffered personal injury subsequently brought lawsuit operator hp pursuant terms drilling contract hpidc operator hpidc indemnified operator lawsuit subject certain limitations hp settled matter behalf operator 210 million settlement amount paid company settlement paid fiscal year ended september 30 2019 believe meritorious defenses matter determined settlement reasonable alternative uncertainty expense associated jury trial october 2017 employee hpidc suffered personal injury subsequently brought lawsuit operator pursuant terms drilling contract hpidc operator hpidc indemnified operator lawsuit subject certain limitations settlement agreement reached operator september 30 2019 accrued 95 million lawsuit subsequently paid fiscal year ended september 30 2020 company subsidiaries parties various pending legal actions arising ordinary course business maintain insurance certain business risks subject certain deductibles although assurance given believe based experiences date taking account established reserves insurance ultimate resolution items material adverse impact financial condition cash flows results operations determine loss probable occurring reasonably estimable accrue undiscounted liability contingencies based best estimate using information available time estimated loss range potential outcomes better estimate within range accrue amount low end range disclose contingencies adverse outcome may material judgment management conclude matter otherwise disclosed note 18 business segments geographic information description business performancedriven drilling solutions technologies company based tulsa oklahoma operations major us onshore basins well south america middle east drilling operations consist mainly contracting companyowned drilling equipment primarily large oil gas exploration companies believe recognized industry leader drilling well technological innovation third quarter fiscal year 2020 part restructuring efforts see note 19restructuring charges consistent manner chief operating decision maker evaluates performance allocates resources implemented organizational changes moving productbased offering rig separate technology package integrated solutionbased approach combining proprietary rig technology automation software digital expertise rig operations previously reported within former us land hp technologies operating reportable segments managed presented within north america solutions reportable segment result beginning third quarter fiscal year 2020 drilling services operations organized following reportable operating business segments north america solutions offshore gulf mexico international solutions prior period segment disclosures recast segment changes real estate operations incubator program new research development projects whollyowned captive insurance companies included consolidated revenues expenses reflect elimination intercompany transactions reportable operating segment strategic business unit managed separately consolidated revenues expenses reflect elimination material intercompany transactions includes additional nonreportable operating segments external revenues included primarily consist rental income segment performance evaluate segment performance based income loss continuing operations segment operating income loss income taxes includes • revenues external internal customers • direct operating costs • depreciation amortization • allocated general administrative costs • asset impairment charges • restructuring charges excludes gain sale assets corporate selling general administrative costs corporate depreciation corporate restructuring charges general administrative costs allocated segments based primarily specific identification extent identification practical methods believe reasonable reflection utilization services provided summarized financial information reportable segments fiscal years ended september 30 2020 2019 2018 shown following tables 1 operations previously reported within hp technologies reportable segment managed presented within north america solutions reportable segment 1 operations previously reported within hp technologies reportable segment managed presented within north america solutions reportable segment following table reconciles segment operating income loss per tables income loss continuing operations income taxes reported consolidated statements operations following table reconciles segment total assets total assets reported consolidated balance sheets 1 assets segment exclude investments subsidiaries intersegment activity 2 operations previously reported within hp technologies reportable segment managed presented within north america solutions reportable segment following table presents revenues external customers country based location service provided following table presents property plant equipment country based location service provided note 19 restructuring charges beginning third quarter fiscal year 2020 implemented cost controls began evaluating measures respond combination weakened commodity prices uncertainties related covid19 pandemic resulting market volatility restructured operations accommodate scale industry downturn reorganize operations align new marketing management strategies commenced number restructuring efforts result evaluation included among things reduction capital allocation plans changes organizational structure reduction staffing levels costs incurred september 30 2020 connection restructuring comprised onetime severance benefits employees voluntarily involuntarily terminated benefits related forfeitures costs related modification stockbased compensation awards following table summarizes companys restructuring charges incurred fiscal year ended september 30 2020 following table summarizes companys accrual restructuring charges fiscal year ended september 30 2020 expenses recorded within restructuring charges consolidated statements operations fiscal year ended september 30 2020 related liability recorded within accounts payable consolidated balance sheets september 30 2020 note 20 selected quarterly financial data unaudited 1 sum earnings per share four quarters may equal total earnings per share fiscal year due changes average number common shares outstanding 1 sum earnings per share four quarters may equal total earnings per share year due changes average number common shares outstanding item 9item 8 financial statements supplementary data index consolidated financial statements report independent registered public accounting firm helmerich payne inc board directors shareholders helmerich payne inc audited accompanying consolidated balance sheets helmerich payne inc september 30 2014 2013 related consolidated statements income comprehensive income shareholders equity cash flows three years period ended september 30 2014 financial statements responsibility companys management responsibility express opinion financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position helmerich payne inc september 30 2014 2013 consolidated results operations cash flows three years period ended september 30 2014 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states helmerich payne incs internal control financial reporting september 30 2014 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 1992 framework report dated november 26 2014 expressed unqualified opinion thereon sernst young llp tulsa oklahoma november 26 2014 consolidated statements income helmerich payne inc accompanying notes integral part statements consolidated statements comprehensive income helmerich payne inc accompanying notes integral part statements consolidated balance sheets helmerich payne inc accompanying notes integral part statements consolidated balance sheets continued helmerich payne inc accompanying notes integral part statements consolidated statements shareholders equity helmerich payne inc accompanying notes integral part statements consolidated statements cash flows helmerich payne inc accompanying notes integral part statements notes consolidated financial statements helmerich payne inc note 1 summary significant accounting policies principles consolidation consolidated financial statements include accounts helmerich payne inc whollyowned subsidiaries fiscal years foreign operations end august 31 facilitate reporting consolidated results significant intervening events materially affected financial statements basis presentation classified former venezuelan operation discontinued operation third quarter fiscal 2010 fully described note 2 unless indicated otherwise information notes consolidated financial statements relates continuing operations foreign currencies functional currency foreign operations us dollar nonmonetary assets liabilities translated historical rates monetary assets liabilities translated exchange rates effect end period income statement accounts translated average rates year gains losses remeasurement foreign currency financial statements foreign currency translations us dollars included direct operating costs included direct operating costs aggregate foreign currency remeasurement transaction loss 08 million fiscal 2014 transaction gains 07 million 03 million fiscal 2013 2012 respectively use estimates preparation financial statements conformity accounting principles generally accepted united states america gaap requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period actual results could differ estimates recently adopted accounting standards october 2013 adopted accounting standards update asu 201302 comprehensive income asu 201302 amended accounting standards codification asc 220 comprehensive income superseded replaced asu 201105 presentation comprehensive income asu 201112 comprehensive income standard change current requirements reporting net income comprehensive income financial statements however guidance require entity provide enhanced disclosures present separately component reclassifications accumulated comprehensive income adoption impact amount comprehensive income reported consolidated financial statements cash equivalents cash equivalents consist investments shortterm highly liquid securities original maturities three months less carrying values assets approximate fair values primarily utilize cash management system series separate accounts consisting lockbox accounts receiving cash concentration accounts several zerobalance disbursement accounts notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued funding payroll accounts payable result cash management system checks issued presented banks payment may create negative book cash balances restricted cash equivalents restricted cash equivalents 302 million 257 million september 30 2014 2013 respectively cash restricted purpose potential insurance claims whollyowned captive insurance company total september 30 2014 20 million initial capitalization captive company management elected restrict additional 282 million restricted amounts primarily invested shortterm money market securities restricted cash equivalents reflected balance sheet follows inventories supplies inventories supplies primarily replacement parts supplies held use drilling operations inventories supplies valued lower cost moving average actual market value investments maintain investments equity securities certain publicly traded companies cost securities used determining realized gains losses based average cost basis security sold regularly review investment securities impairment based criteria include extent investments carrying value exceeds related fair value duration market decline financial strength specific prospects issuer security unrealized losses temporary recognized earnings property plant equipment property plant equipment stated cost less accumulated depreciation substantially property plant equipment depreciated using straightline method based estimated useful lives assets contract drilling equipment 415 years real estate buildings equipment 1045 years 223 years depreciation consolidated statements income includes abandonments 230 million 91 million 164 million fiscal 2014 2013 2012 respectively effective september 30 2014 decommissioned nine idle conventional rigs cost maintenance repairs charged direct operating cost betterments refurbishments capitalized lease office space equipment use operations leases evaluated inception subsequent material modification depending lease terms classified either capital notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued leases operating leases appropriate asc 840 leases significant capital leases capitalization interest capitalize interest major projects construction interest capitalized based average interest rate related debt capitalized interest fiscal 2014 2013 2012 77 million 88 million 129 million respectively valuation longlived assets review longlived assets impairment whenever events changes circumstances indicate carrying amount asset may recoverable changes could prompt assessment include significant decline revenue cash margin per day extended periods low rig utilization changes market demand specific asset obsolescence completion specific contracts andor overall general market conditions review longlived assets indicates carrying value certain assets estimated undiscounted future cash flows impairment charge made adjust carrying value estimated fair value asset fair value drilling rigs determined based upon estimated discounted future cash flows estimated fair market value available cash flows estimated management considering factors prospective market demand recent changes rig technology effect rigs marketability cash investment required make rig marketable suitability rig size make existing platforms competitive dynamics including industry utilization fair value estimated applicable considering factors recent market sales rigs companies sales rigs appraisals factors selfinsurance accruals accrued liability estimated workers compensation casualty claims incurred drilling revenues contract drilling revenues comprised daywork drilling contracts related revenues expenses recognized services performed collection reasonably assured certain contracts receive payments contractually designated mobilization rigs drilling equipment mobilization payments received direct costs incurred mobilization deferred recognized straightline basis term related drilling contract costs incurred relocate rigs drilling equipment areas contract secured expensed incurred reimbursements received outofpocket expenses recorded revenues direct costs reimbursements fiscal 2014 2013 2012 3289 million 3325 million 3297 million respectively contracts terminated prior specified term early termination payments received us recognized revenues contractual requirements met notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued rent revenues enter leases tenants rental properties consisting primarily retail multitenant warehouse space lease terms tenants occupying space retail centers warehouse buildings generally range three ten years minimum rents recognized straightline basis term related leases overage percentage rents based tenants sales volume recoveries tenants property taxes operating expenses recognized operating revenues consolidated statements income rent revenues follows september 30 2014 minimum future rental income received noncancelable operating leases follows leasehold improvement allowances capitalized amortized lease term september 30 2014 2013 cost accumulated depreciation real estate properties follows income taxes current income tax expense amount income taxes expected payable current year deferred income taxes computed using liability method provided temporary differences financial basis tax basis assets liabilities notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued provide uncertain tax positions tax positions meet recognition thresholds measurement standards prescribed asc 740 income taxes fully discussed note 4 amounts uncertain tax positions adjusted periods new information becomes available positions effectively settled recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements income earnings per share basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock stockbased compensation record compensation expense associated stock options accordance asc 718 compensationstock compensation expense determined using fairvaluebased measurement method awards granted computing impact fair value option estimated date grant based blackscholes optionspricing model utilizing certain assumptions risk free interest rate volatility dividend yield expected remaining term awards assumptions used calculating fair value sharebased payment awards represent managements best estimates involve inherent uncertainties application management judgment stockbased compensation recognized straightline basis requisite service periods stock awards generally vesting period compensation expense related stock options recorded component general administrative expenses consolidated statements income treasury stock treasury stock purchases accounted cost method whereby cost acquired stock recorded treasury stock gains losses subsequent reissuance shares credited charged additional paidin capital using averagecost method comprehensive income loss comprehensive income loss refers revenues expenses gains losses included comprehensive income loss excluded net income loss report components comprehensive income loss net tax nature disclose tax effect allocated component consolidated statements comprehensive income new accounting standards may 2014 financial accounting standards board fasb issued asu 201409 revenue contracts customers supersedes virtually existing revenue recognition guidance new standard requires entity recognize revenue transfers promised goods services customers amount reflects consideration entity expects receive notes consolidated financial statements continued helmerich payne inc note 1 summary significant accounting policies continued exchange goods services update also requires additional disclosure nature amount timing uncertainty revenue cash flows arising customer contracts including significant judgments changes judgments assets recognized costs incurred obtain fulfill contract provisions asu 201409 effective interim annual periods beginning december 15 2016 option using either full retrospective modified retrospective approach adopting new standard currently evaluating alternative transition methods potential effects adoption update financial statements note 2 discontinued operations current assets discontinued operations consist restricted cash meet remaining current obligations within country venezuela current noncurrent liabilities consist municipal income taxes payable social obligations due venezuela expenses incurred incountry obligations reported discontinued operations included fiscal 2013 2012 proceeds arbitration fully described note 13 note 3 debt september 30 2014 2013 40 million 80 million respectively unsecured longterm debt outstanding rates maturities shown following table intermediate unsecured debt outstanding september 30 2013 matured august 15 2014 paid full 80 million senior unsecured fixedrate notes outstanding september 30 2014 mature period july 2015 july 2016 interest notes paid semiannually based annual rate 610 percent annual principal repayments 40 million due july 2015 july 2016 complied financial covenants require us maintain funded leverage ratio less 55 percent interest coverage ratio defined less 250 100 300 million unsecured revolving credit facility mature may 25 2017 credit facility 100 million available use letters credit majority borrowings facility would accrue interest spread london interbank offered rate libor also pay commitment fee based unused balance facility borrowing spreads well notes consolidated financial statements continued helmerich payne inc note 3 debt continued commitment fees determined according scale based ratio total debt total capitalization spread libor ranges 1125 percent 175 percent per annum commitment fees range 15 percent 35 percent per annum based debt total capitalization september 30 2014 spread libor commitment fees would 1125 percent 15 percent respectively financial covenants facility require us maintain funded leverage ratio defined less 50 percent interest coverage ratio defined less 300 100 credit facility contains additional terms conditions restrictions covenants believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2014 borrowings three letters credit outstanding amount 342 million september 30 2014 2658 million available borrow 300 million unsecured credit facility september 30 2014 two letters credit outstanding totaling 12 million issued support international operations letters credit issued separately 300 million credit facility reduce available borrowing capacity discussed previous paragraph applicable agreements unsecured debt described note 3 contain additional terms conditions restrictions believe usual customary unsecured debt arrangements companies similar size credit quality september 30 2014 compliance debt covenants september 30 2014 aggregate maturities longterm debt follows thousands note 4 income taxes components provision income taxes follows notes consolidated financial statements continued helmerich payne inc note 4 income taxes continued amounts domestic foreign income taxes follows deferred income taxes provided temporary differences financial reporting basis tax basis assets liabilities recoverability tax assets evaluated necessary allowances provided carrying value net deferred tax assets based managements judgments using certain estimates assumptions able generate sufficient future taxable income certain tax jurisdictions realize benefits assets estimates related assumptions change future additional valuation allowances may recorded deferred tax assets resulting additional income tax expense future components net deferred tax liabilities follows change net deferred tax assets liabilities impacted foreign currency remeasurement september 30 2014 state foreign net operating loss carryforwards income tax purposes 74 million 246 million respectively foreign tax credit carryforwards approximately 499 million 392 million reflected deferred tax asset consolidated financial statements prior consideration valuation allowance expire notes consolidated financial statements continued helmerich payne inc note 4 income taxes continued fiscal 2015 2024 valuation allowance primarily attributable state foreign net operating loss carryforwards 05 million 79 million respectively foreign tax credit carryforwards 392 million likely utilized effective income tax rates compared us federal income tax rate follows recognize accrued interest related unrecognized tax benefits interest expense penalties expense consolidated statements income september 30 2014 2013 accrued interest penalties 64 million 52 million respectively reconciliation change gross unrecognized tax benefits fiscal year ended september 30 2014 2013 follows september 30 2014 september 30 2013 liability unrecognized tax benefits includes 29 million 01 million respectively unrecognized tax benefits related discontinued operations recognized would affect effective tax rate remaining unrecognized tax benefit would affect effective tax rate recognized liabilities unrecognized tax benefits related interest penalties included noncurrent liabilities consolidated balance sheets next 12 months cannot predict certainty whether achieve ultimate resolution uncertain tax position associated international operations could result increases decreases unrecognized tax benefits however believe reasonably possible reserve uncertain tax positions may increase approximately 86 million 112 million notes consolidated financial statements continued helmerich payne inc note 4 income taxes continued next 12 months due international matter provided uncertain tax positions 35 million related discontinued operations twelve months ended september 30 2014 file consolidated us federal income tax return well income tax returns various states foreign jurisdictions tax years remain open examination us federal state jurisdictions include fiscal 2010 2013 exception jurisdictions currently audit audits foreign jurisdictions generally complete fiscal 2001 september 13 2013 irs issued final regulations providing guidance treatment amounts paid acquire produce improve tangible property proposed regulations providing guidance dispositions property implementation date regulations tax years beginning january 1 2014 changes tax treatment elected us required regulations generally effective prospectively however implementation many regulations provisions require calculation cumulative effect changes prior years expected amount included determination taxable income fiscal 2015 possibly fouryear period beginning fiscal 2015 since changes affect timing deducting expenditures tax purposes impact implementation reflected amount income taxes payable receivable cash flows operations deferred taxes beginning fiscal 2015 net tax provision effect time estimate impact implementing regulations immaterial deferred tax balances years presented note 5 shareholders equity september 30 2014 108232284 outstanding preferred stock purchase rights pursuant terms rights agreement dated january 8 1996 amended amendment 1 dated december 8 2005 adjusted twoforone stock splits fiscal 1998 fiscal 2006 long rights separately transferable onehalf right attaches share common stock terms rights agreement right entitles holder thereof purchase one full unit consisting one onethousandth share series junior participating preferred stock preferred stock without par value price 250 per unit exercise price number units preferred stock issuable exercise rights subject adjustment certain cases prevent dilution rights attached common stock certificates exercisable transferable apart common stock ten business days person acquires 15 percent outstanding common stock ten business days following commencement tender offer exchange offer would result person owning 15 percent outstanding common stock event holder right acquiring person shall right receive upon exercise right common stock company value equal two times exercise price right event acquired merger certain business combination transactions including one surviving corporation 50 percent assets earning power sold transferred holder right shall right receive upon exercise right common stock acquiring company value equal two times exercise price right rights redeemable certain circumstances 001 per right expire unless earlier redeemed january 31 2016 company authorization board directors repurchase four million common shares calendar year repurchases may made using cash notes consolidated financial statements continued helmerich payne inc note 5 shareholders equity continued equivalents available sources fiscal 2012 purchased 1747819 common shares aggregate cost 776 million held treasury shares purchases common shares fiscal 2013 fiscal 2014 subsequent september 30 2014 purchased 414992 common shares aggregate cost 323 million held treasury shares accumulated comprehensive income components accumulated comprehensive income follows following summary changes accumulated comprehensive income loss net tax component year ended september 30 2014 notes consolidated financial statements continued helmerich payne inc note 5 shareholders equity continued following provides detail accumulated comprehensive income loss components reclassified consolidated statement income year ended september 30 2014 note 6 stockbased compensation march 2 2011 2010 longterm incentive plan 2010 plan approved stockholders 2010 plan among things authorizes human resources committee board directors grant nonqualified stock options restricted stock awards stock appreciation rights selected employees nonemployee directors restricted stock may granted consideration prior future services purchase price per share stock options may less market price underlying stock date grant stock options expire 10 years grant date right satisfy option exercises treasury shares authorized unissued shares 261438 nonqualified stock options 230375 shares restricted stock awards granted 2010 plan fiscal 2014 awards outstanding 2005 longterm incentive plan 2005 plan one prior equity plan remain subject terms conditions plans summary compensation cost stockbased payment arrangements recognized general administrative expense fiscal 2014 2013 2012 follows notes consolidated financial statements continued helmerich payne inc note 6 stockbased compensation continued benefits tax deductions excess recognized compensation cost 266 million 98 million 33 million reported financing cash flow consolidated statements cash flows fiscal 2014 2013 2012 respectively stock options vesting requirements stock options determined human resources committee board directors options currently outstanding began vesting one year grant date 25 percent options vesting four consecutive years use blackscholes formula estimate fair value stock options granted employees fair value options amortized compensation expense straightline basis requisite service periods stock awards generally vesting periods weightedaverage fair value calculations options granted within fiscal period based following weightedaverage assumptions set forth table options granted prior periods based assumptions prevailing date grant riskfree interest rate riskfree interest rate based us treasury securities expected term option expected volatility rate expected volatilities based daily closing price stock based upon historical experience period approximates expected term option expected dividend yield dividend yield based current dividend yield expected term expected term options granted represents period time expected outstanding estimate expected term options granted based historical experience grants exercises based calculations weightedaverage fair value per option granted acquire share common stock 2944 2380 2775 per share fiscal 2014 2013 2012 respectively notes consolidated financial statements continued helmerich payne inc note 6 stockbased compensation continued following summary reflects stock option activity common stock related information fiscal 2014 2013 2012 shares thousands following table summarizes information stock options september 30 2014 shares thousands september 30 2014 weightedaverage remaining life exercisable stock options 42 years aggregate intrinsic value 1167 million weightedaverage exercise price 3593 per share number options vested expected vest september 30 2014 2623688 aggregate intrinsic value 1428 million weightedaverage exercise price 4343 per share september 30 2014 unrecognized compensation cost related stock options 76 million cost expected recognized weightedaverage period 23 years total intrinsic value options exercised fiscal 2014 2013 2012 1009 million 404 million 120 million respectively grant date fair value shares vested fiscal 2014 2013 2012 88 million 93 million 81 million respectively restricted stock restricted stock awards consist common stock timevested three six years recognize compensation expense straightline basis vesting period fair value restricted stock awards 2010 plan determined based closing price shares grant date september 30 2014 200 million total unrecognized compensation notes consolidated financial statements continued helmerich payne inc note 6 stockbased compensation continued cost related unvested restricted stock awards cost expected recognized weightedaverage period 23 years summary status restricted stock awards september 30 2014 changes restricted stock outstanding fiscal years ended september 30 2014 2013 2012 follows shares thousands 1the number restricted stock awards vested includes shares withheld behalf employees satisfy statutory tax withholding requirements note 7 earnings per share asc 260 earnings per share requires companies treat unvested sharebased payment awards nonforfeitable rights dividend equivalents separate class securities calculating earnings per share granted expect continue grant employees restricted stock grants contain nonforfeitable rights dividends grants considered participating securities asc 260 required include grants calculation basic earnings per share calculate basic earnings per share using twoclass method twoclass method computing earnings per share earnings allocation formula determines earnings per share class common stock participating security according dividends declared accumulated participation rights undistributed earnings basic earnings per share computed utilizing twoclass method calculated based weightedaverage number common shares outstanding periods presented diluted earnings per share computed using weightedaverage number common equivalent shares outstanding periods utilizing twoclass method stock options nonvested restricted stock notes consolidated financial statements continued helmerich payne inc note 7 earnings per share continued following table sets forth computation basic diluted earnings per share notes consolidated financial statements continued helmerich payne inc note 7 earnings per share continued following shares attributable outstanding equity awards excluded calculation diluted earnings per share inclusion would antidilutive note 8 financial instruments fair value measurement estimated fair value availableforsale securities primarily based market quotes following summary availableforsale securities excludes assets held nonqualified supplemental savings plan ongoing basis evaluate marketable equity securities determine decline fair value cost otherthantemporary decline fair value cost determined otherthantemporary impairment charge recorded new cost basis established review several factors determine whether loss otherthantemporary factors include limited length time security unrealized loss position ii extent fair value less cost iii financial condition near term prospects issuer iv intent ability hold security period time sufficient allow anticipated recovery fair value cost securities used determining realized gains losses based average cost basis security sold fiscal 2014 marketable equity availableforsale securities fair value date sales 492 million sold gross realized gain sales availableforsale securities totaled 452 million fiscal 2013 marketable equity availableforsale securities fair value date sale 2141 million sold gross realized gain sales availableforsale securities totaled 1534 million sales marketable equity availableforsale securities fiscal 2012 gains availableforsale securities included gain sale investment securities consolidated statements income fiscal 2013 sold shares three limited partnerships primarily invested international equities carried cost 94 million realizing gain 88 million included gain sale investment securities consolidated statements income longer investments limited partnerships notes consolidated financial statements continued helmerich payne inc note 8 financial instruments fair value measurement continued assets held nonqualified supplemental savings plan carried fair market value totaled 143 million 105 million september 30 2014 2013 respectively assets comprised mutual funds measured using level 1 inputs majority cash equivalents invested highlyliquid moneymarket mutual funds invested primarily direct indirect obligations us government carrying amount cash equivalents approximates fair value due short maturity investments carrying value assets accrued liabilities approximated fair value september 30 2014 2013 asc 820 defines fair value price would received sell asset paid transfer liability orderly transaction market participants measurement date asc 820 establishes fair value hierarchy prioritize inputs used valuation techniques three levels follows • level 1observable inputs reflect quoted prices active markets identical assets liabilities active markets • level 2inputs level 1 observable either directly indirectly quoted prices similar assets liabilities quoted prices markets active inputs observable corroborated observable market data substantially full term assets liabilities • level 3valuations based inputs unobservable corroborated market data september 30 2014 financial assets utilizing level 1 inputs include cash equivalents equity securities active markets money market funds elected classify restricted assets included current assets also included cash denominated foreign currency elected classify restricted included current assets discontinued operations limited remaining liabilities discontinued operations items quoted current market prices readily available september 30 2014 level 2 inputs include bank certificate deposit included current assets currently financial instruments utilizing level 3 inputs notes consolidated financial statements continued helmerich payne inc note 8 financial instruments fair value measurement continued following table summarizes assets measured fair value recurring basis presented consolidated balance sheets september 30 2014 following information presents supplemental fair value information longterm fixedrate debt september 30 2014 september 30 2013 fair value fixedrate debt estimated using discounted cash flows rates reflecting current interest rates similar maturities plus credit spread estimated using outstanding market information debt instruments similar credit profile us debt valued using level 2 input note 9 employee benefit plans maintain domestic noncontributory defined benefit pension plan covering certain us employees meet certain age service requirements july 2003 revised helmerich payne inc employee retirement plan pension plan close pension plan new participants effective october 1 2003 reduce benefit accruals current participants september 30 2006 time benefit accruals discontinued pension plan frozen notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued following table provides reconciliation changes pension benefit obligations fair value pension plan assets twoyear period ended september 30 2014 statement funded status september 30 2014 2013 amounts recognized consolidated balance sheets follows thousands amounts recognized accumulated comprehensive income september 30 2014 2013 yet reflected net periodic benefit cost follows thousands amount recognized accumulated comprehensive income yet reflected periodic benefit cost expected amortized next years periodic benefit cost net actuarial loss 12 million weighted average assumptions used pension calculations follows notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued mortality table issued society actuaries october 2014 used september 30 2014 pension calculation new mortality information reflects improved life expectancies projected mortality improvements contributed 73 million pension plan fiscal 2014 fund distributions lieu liquidating pension assets estimate contributing least 01 million fiscal 2015 meet minimum contribution required law may make additional contributions fiscal 2015 needed fund unexpected distributions components net periodic pension expense benefit follows record settlement expense benefit payments exceed total annual service interest costs following table reflects expected benefits paid pension plan next five fiscal years aggregate five years thereafter thousands included pension plan unfunded supplemental executive retirement plan investment strategy asset allocation investment policy strategies established longterm view mind investment strategy intended help pay cost plan providing adequate security meet benefits promised plan maintain diversified asset mix minimize risk material loss portfolio value might occur devaluation single investment determining appropriate asset mix financial strength ability fund potential shortfalls considered plan assets invested portfolios diversified publicmarket equity securities fixed income securities plan directly hold securities company expected longterm rate return plan assets based historical projected rates return current planned asset classes plans investment portfolio analyzing historical experience future expectations return volatility various asset classes notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued target allocation 2015 asset allocation pension plan end fiscal 2014 2013 asset category follows plan assets fair value plan assets september 30 2014 2013 summarized level within fair value hierarchy described note 8 follows notes consolidated financial statements continued helmerich payne inc note 9 employee benefit plans continued plans financial assets utilizing level 1 inputs valued based quoted prices active markets identical securities plan assets utilizing level 2 plans assets utilizing level 3 inputs consist oil gas properties fair value oil gas properties determined wells fargo bank na based upon actual revenue received previous twelvemonth period experience similar assets following table sets forth summary changes fair value plans level 3 assets years ended september 30 2014 2013 defined contribution plan substantially employees united states payroll may elect participate 401kthrift plan contributing portion earnings contribute amount equal 100 percent first five percent participants compensation subject certain limitations annual expense incurred defined contribution plan 323 million 283 million 267 million fiscal 2014 2013 2012 respectively notes consolidated financial statements continued helmerich payne inc note 10 supplemental balance sheet information following reflects activity reserve bad debt 2014 2013 2012 prepaid expenses current assets accrued liabilities longterm liabilities september 30 consist following notes consolidated financial statements continued helmerich payne inc note 11 supplemental cash flow information capital expenditures consolidated statements cash flows years ended september 30 2014 2013 2012 include additions incurred paid end year following table reconciles total capital expenditures incurred total capital expenditures consolidated statements cash flows note 12 risk factors concentration credit financial instruments potentially subject us concentrations credit risk consist primarily temporary cash investments shortterm investments trade receivables place temporary cash investments us established financial institutions invest diversified portfolio highly rated shortterm money market instruments trade receivables primarily established companies oil gas industry may impact credit risk customers may similarly affected prolonged changes economic industry conditions international sales also present various risks including governmental activities may limit disrupt markets restrict movement funds international sales however large international governmentowned national oil companies perform ongoing credit evaluations customers typically require collateral support trade receivables provide allowance doubtful accounts necessary cover estimated credit losses allowance based managements knowledge customer accounts volatility market operations materially affected oil gas prices oil natural gas prices historically volatile difficult predict current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining customers future spending levels volatility along notes consolidated financial statements continued helmerich payne inc note 12 risk factors continued difficulty predicting future prices lead many exploration production companies base capital spending much conservative estimates commodity prices result demand contract drilling services always purely function movement commodity prices addition customers may finance exploration activities cash flow operations incurrence debt issuance equity deterioration credit capital markets may cause difficulty customers obtain funding capital needs reduction cash flow resulting declines commodity prices reduction available financing may result reduction customer spending demand drilling services reduction spending could material adverse effect operations selfinsurance selfinsure significant portion expected losses relating workers compensation general liability automobile liability generally deductibles range 1 million 3 million per occurrence depending coverage whether claim occurs outside inside united states insurance purchased deductibles reduce exposure catastrophic events estimates recorded incurred outstanding liabilities workers compensation general liability claims incurred reported estimates based adjusters estimates historic experience statistical methods believe reliable nonetheless insurance estimates include certain assumptions management judgments regarding frequency severity claims claim development settlement practices unanticipated changes factors may produce materially different amounts expense would reported programs whollyowned captive insurance company finances significant portion physical damage risk companyowned drilling rigs well international casualty deductibles international drilling operations international drilling operations may significantly contribute revenues net operating income assurance able successfully conduct operations failure may adverse effect financial position results operations cash flows also success international operations subject numerous contingencies beyond managements control contingencies include general regional economic conditions fluctuations currency exchange rates modified exchange controls changes international regulatory requirements international employment issues risk expropriation real personal property burden complying foreign laws additionally event extended labor strikes occur country experiences significant political economic social instability could experience shortages labor andor material supplies necessary operate drilling rigs thereby potentially causing adverse material effect business financial condition results operations operating country currently considered highly inflationary defined cumulative inflation rates exceeding 100 percent recent threeyear period foreign subsidiaries use us dollar functional currency local currency monetary assets remeasured us dollars gains losses resulting foreign currency transactions included current results operations foreign economy considered highly inflationary would impact consolidated financial statements notes consolidated financial statements continued helmerich payne inc note 12 risk factors continued impact local laws future operations certain areas may conducted entities local citizens interests entities including joint ventures hold minority interest pursuant arrangements conduct operations contract local entities believe neither operating entities pursuant arrangements would material adverse effect operations revenues assurance cases able structure restructure operations conform local law administration thereof terms acceptable us note 13 commitments contingencies purchase obligations fiscal 2014 announced agreements build operate 83 new flexrigs us subsequent september 30 2014 announced agreements build operate six new flexrigs us november 13 2014 41 new flexrigs customer commitments remained construction rig construction cost included construction progress transferred contract drilling equipment rig placed field service equipment parts supplies ordered advance promote efficient construction progress september 30 2014 purchase orders outstanding approximately 4129 million purchase drilling equipment leases september 30 2014 leasing approximately 204000 square feet office space near downtown tulsa oklahoma also lease office space equipment use operations operating leases contain builtin predetermined rent escalations rent expense recognized straightline basis life lease leasehold improvements capitalized amortized lease term future minimum rental payments required operating leases initial remaining noncancelable lease terms excess year september 30 2014 follows total rent expense 121 million 99 million 85 million fiscal 2014 2013 2012 respectively contingencies various legal actions majority arise ordinary course business pending maintain insurance certain business risks subject certain deductibles none legal notes consolidated financial statements continued helmerich payne inc note 13 commitments contingencies continued actions expected material adverse effect financial condition cash flows results operations contingently liable sureties respect bonds issued sureties connection certain commitments entered us normal course business agreed indemnify sureties payments made respect bonds ordinary course business contingencies arise resulting existing condition situation set circumstances involving uncertainty realization possible gain contingency account gain contingencies accordance provisions asc 450 contingencies therefore record gain contingencies recognize income realized property equipment venezuelan subsidiary seized venezuelan government june 30 2010 whollyowned subsidiaries helmerich payne international drilling co helmerich payne de venezuela ca filed lawsuit united states district court district columbia september 23 2011 bolivarian republic venezuela petroleos de venezuela sa pdvsa petroleo sa petroleo subsidiaries seek damages taking venezuelan drilling business violation international law breach contract exists possibility realizing recovery currently unable determine timing amounts may receive likelihood recovery gain contingencies recognized consolidated financial statements third quarter fiscal 2013 fourth fiscal quarter 2012 settled arbitration disputes third parties affiliated venezuelan government pdvsa petroleo related seizure property venezuela proceeds 150 million 75 million received recorded discontinued operations fiscal 2013 2012 respectively november 8 2013 united states district court eastern district louisiana approved previously disclosed october 30 2013 plea agreement wholly owned subsidiary helmerich payne international drilling co united states department justice united states attorneys office eastern district louisiana doj courts approval plea agreement resolved dojs investigation certain choke manifold testing irregularities occurred 2010 one helmerich payne international drilling cos offshore platform rigs gulf mexico engaged discussions inspector generals office department interior regarding events subject dojs investigation although presently believe outcome discussions material adverse effect company provide assurances timing eventual outcome discussions note 14 segment information operate principally contract drilling industry contract drilling business includes following reportable operating segments us land offshore international land contract drilling operations consist mainly contracting companyowned drilling equipment primarily large oil gas exploration companies provide information different types business activities operate included offshore international land along us land reportable operating segment separate reportable operating segments additionally reportable operating segment strategic business unit managed separately primary international areas operation include colombia ecuador argentina tunisia bahrain uae notes consolidated financial statements continued helmerich payne inc note 14 segment information continued south american middle eastern countries includes additional nonreportable operating segments revenues included consist primarily rental income consolidated revenues expenses reflect elimination material intercompany transactions evaluate segment performance based income loss operations segment operating income taxes includes • revenues external internal customers • direct operating costs • depreciation • allocated general administrative costs excludes corporate costs depreciation income asset sales corporate income expense general administrative costs allocated segments based primarily specific identification extent identification practical methods believe reasonable reflection utilization services provided segment operating income segments nongaap financial measure performance excludes certain general administrative expenses corporate depreciation income asset sales corporate income expense consider segment operating income important supplemental measure operating performance presenting trends core businesses use measure facilitate periodtoperiod comparisons operating performance reportable segments aggregate eliminating items affect comparability periods believe segment operating income useful investors provides means evaluate operating performance segments ongoing basis using criteria used internal decision makers additionally highlights operating trends aids analytical comparisons however segment operating income limitations used alternative operating income loss performance measure determined accordance gaap excludes certain costs may affect operating performance future periods notes consolidated financial statements continued helmerich payne inc note 14 segment information continued summarized financial information reportable segments continuing operations years ended september 30 2014 2013 2012 shown following table notes consolidated financial statements continued helmerich payne inc note 14 segment information continued following table reconciles segment operating income continuing operations income taxes reported consolidated statements income following table presents revenues external customers longlived assets country based location service provided longlived assets comprised property plant equipment notes consolidated financial statements continued helmerich payne inc note 14 segment information continued revenues one customer accounted approximately 107 percent 95 percent 120 percent total operating revenues years ended september 30 2014 2013 2012 respectively revenues another customer accounted approximately 82 percent 79 percent 102 percent total operating revenues years ended september 30 2014 2013 2012 respectively collectively receivables customers approximately 1225 million 941 million september 30 2014 2013 respectively note 15 selected quarterly financial data unaudited sum earnings per share four quarters may equal total earnings per share year due changes average number common shares outstanding first quarter fiscal 2014 net income includes aftertax gain sale assets 37 million 003 per share diluted basis second quarter fiscal 2014 net income includes aftertax gain sale assets 27 million 002 per share diluted basis aftertax gain sale investment securities 129 million 012 per share diluted basis third quarter fiscal 2014 net income includes aftertax gain sale assets 14 million 001 per share diluted basis aftertax gain sale investment securities 149 million 013 per share diluted basis notes consolidated financial statements continued helmerich payne inc note 15 selected quarterly financial data unaudited continued fourth quarter fiscal 2014 net income includes aftertax gain sale assets 50 million 005 per share diluted basis first quarter fiscal 2013 net income includes aftertax gain sale assets 34 million 003 per share diluted basis aftertax gain sale investment securities 55 million 005 per share diluted basis second quarter fiscal 2013 net income includes aftertax gain sale assets 34 million 003 per share diluted basis third quarter fiscal 2013 net income includes aftertax gain sale assets 26 million 002 per share diluted basis aftertax gain sale investment securities 924 million 086 per share diluted basis fourth quarter fiscal 2013 net income includes aftertax gain sale assets 28 million 003 per share diluted basis item 9item 8 financial statements supplementary data information required item may found pages 18 34 registrants annual report shareholders fiscal 1999 incorporated herein reference item 9item 8 financial statements supplementary data information required item may found pages 34 63 company’s annual report item 9 nannannannannannannanitem 15 exhibits financial statement schedules reports form 8k 1 financial statements following appear companys annual report stockholders fiscal 2002 pages indicated incorporated herein reference 2 financial statement schedules omitted inapplicable required information contained financial statements included notes thereto 3 exhibits following documents included exhibits form 10k exhibits incorporated reference herein duly noted unless noted exhibit filed herewith 21 agreement plan merger dated february 23 2002 among helmerich payne inc cimarex energy co mountain acquisition co key production company inc incorporated herein reference exhibit 21 cimarex energy co registration statement 33387948 form s4 filed may 9 2002 31 restated certificate incorporation amendment restated certificate incorporation company incorporated herein reference exhibit 31 companys annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 32 amended restated bylaws company incorporated herein reference exhibit 32 companys quarterly report form 10q securities exchange commission quarter ended march 31 2002 sec file 00104221 41 rights agreement dated january 8 1996 company liberty national bank trust company oklahoma city na incorporated herein reference companys form 8a dated january 18 1996 sec file 00104221 101 consulting services agreement w h helmerich iii company effective january 1 1990 amended incorporated herein reference exhibit 103 companys annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 102 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 106 companys annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 103 helmerich payne inc 1990 stock option plan incorporated herein reference exhibit 107 companys annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 104 form nonqualified stock option agreement 1990 stock option plan incorporated reference exhibit 992 companys registration statement 3355239 form s8 dated august 26 1994 105 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 106 companys annual report form 10k securities exchange commission fiscal 1999 sec file 00104221 106 helmerich payne inc 1996 stock incentive plan incorporated herein reference exhibit 991 companys registration statement 33334939 form s8 dated september 4 1997 107 form nonqualified stock option agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 992 companys registration statement 33334939 form s8 dated september 4 1997 108 form restricted stock agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 1012 companys annual report form 10k securities exchange commission fiscal 1997 sec file 00104221 109 helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 991 companys registration statement 33363124 form s8 dated june 15 2001 1010 form agreements helmerich payne inc 2000 stock incentive plan restricted stock award agreement ii incentive stock option agreement iii nonqualified stock option agreement incorporated reference exhibit 992 companys registration statement 33363124 form s8 dated june 15 2001 1011 distribution agreement dated february 23 2002 helmerich payne inc cimarex energy co incorporated herein reference exhibit 101 cimarex energy co registration statement 33387948 form s4 filed may 9 2002 1012 tax sharing agreement dated february 23 2002 helmerich payne inc cimarex energy co incorporated herein reference exhibit 102 cimarex energy co registration statement 33387948 form s4 filed may 9 2002 1013 employee benefits agreement dated february 23 2002 helmerich payne inc cimarex energy co incorporated herein reference exhibit 103 cimarex energy co registration statement 33387948 form s4 filed may 9 2002 1014 form director nonqualified stock option agreement 2000 helmerich payne inc stock incentive plan incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1015 form change control agreement helmerich payne inc ep incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1016 form change control agreement helmerich payne inc nonep incorporated herein reference exhibit 103 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1017 helmerich payne inc ep severance plan dated august 26 2002 1018 second amendment credit agreement dated july 16 2002 among helmerich payne international drilling co helmerich payne inc bank one oklahoma na incorporated herein reference exhibit 104 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1019 credit agreement dated july 16 2002 among helmerich payne international drilling co helmerich payne inc several lenders time party thereto bank oklahoma national association incorporated herein reference exhibit 105 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1020 note purchase agreement dated august 15 2002 among helmerich payne international drilling co helmerich payne inc various insurance companies 13 companys annual report stockholders fiscal 2002 21 list subsidiaries company 231 consent independent auditors compensatory plan arrangement b report form 8k company filed five reports form 8k last quarter fiscal 2002 follows form 8k dated july 24 2002 containing press release attached unaudited consolidated condensed balance sheets consolidated statements income financial results lines business announcing companys third quarter 2002 earnings form 8k dated august 16 2002 disclosing first closing companys intermediate term debt facility form 8k dated september 5 2002 containing press release announcing registration statement cimarex energy co declared effective securities exchange commission fiscal 2003 earnings guidance form 8k dated september 20 2002 containing press release announcing september 27 2002 established record date companys common stock entitled receive spinoff distribution cimarex energy co common stock september 30 2002 established payment date spinoff distribution form 8k dated september 30 2002 containing press release announcing completion spinoff cimarex energy co subsequent merger key production company inc subsidiary cimarex energy co signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc hans helmerich hans helmerich president chief executive officer date december 23 2002 pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated certification hans helmerich certify 1 reviewed annual report form 10k helmerich payne inc 2 based knowledge annual report contain untrue statement material fact omit state material fact necessary make statements made light circumstances statements made misleading respect period covered annual report 3 based knowledge financial statements financial information included annual report fairly present material respects financial condition results operations cash flows company periods presented annual report 4 companys certifying officers responsible establishing maintaining disclosure controls procedures defined exchange act rules 13a14 15d14 company designed disclosure controls procedures ensure material information relating company including consolidated subsidiaries made known us others within entities particularly period annual report prepared b evaluated effectiveness companys disclosure controls procedures date within 90 days prior filing date annual report evaluation date c presented annual report conclusions effectiveness disclosure controls procedures based evaluation date 5 companys certifying officers disclosed based recent evaluation companys auditors audit committee companys board directors persons performing equivalent functions significant deficiencies design operation internal controls could adversely affect companys ability record process summarize report financial data identified companys auditors material weaknesses internal controls b fraud whether material involves management employees significant role companys internal controls 6 companys certifying officers indicated annual report whether significant changes internal controls factors could significantly affect internal controls subsequent date recent evaluation including corrective actions regard significant deficiencies material weaknesses hans helmerich hans helmerich chief executive officer december 23 2002 certification douglas e fears certify 1 reviewed annual report form 10k helmerich payne inc 2 based knowledge annual report contain untrue statement material fact omit state material fact necessary make statements made light circumstances statements made misleading respect period covered annual report 3 based knowledge financial statements financial information included annual report fairly present material respects financial condition results operations cash flows company periods presented annual report 4 companys certifying officers responsible establishing maintaining disclosure controls procedures defined exchange act rules 13a14 15d14 company designed disclosure controls procedures ensure material information relating company including consolidated subsidiaries made known us others within entities particularly period annual report prepared b evaluated effectiveness companys disclosure controls procedures date within 90 days prior filing date annual report evaluation date c presented annual report conclusions effectiveness disclosure controls procedures based evaluation date 5 companys certifying officers disclosed based recent evaluation companys auditors audit committee companys board directors persons performing equivalent functions significant deficiencies design operation internal controls could adversely affect companys ability record process summarize report financial data identified companys auditors material weaknesses internal controls b fraud whether material involves management employees significant role companys internal controls 6 companys certifying officers indicated annual report whether significant changes internal controls factors could significantly affect internal controls subsequent date recent evaluation including corrective actions regard significant deficiencies material weaknesses douglas e fears douglas e fears chief financial officer december 23 2002 certification ceo cfo pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 connection annual report helmerich payne inc company form 10k period ending september 30 2002 filed securities exchange commission date hereof report hans helmerich chief executive officer company douglas e fears chief financial officer company hereby certifies pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 best knowledge 1 report fully complies requirements section 13a securities exchange act 1934 2 information contained report fairly presents material respects financial condition result operations company hans helmerich douglas e fears hans helmerich douglas e fears chief executive officer chief executive officer december 23 2002 december 23 2002 index exhibits compensatory plan arrangementitem 15 exhibits financial statement schedules reports form 8k 1 financial statements following appear company’s annual report pages indicated incorporated herein reference 2 financial statement schedules omitted inapplicable required information contained financial statements included notes thereto 3 exhibits following documents included exhibits form 10k exhibits incorporated reference herein duly noted unless noted exhibit filed herewith 31 restated certificate incorporation amendment restated certificate incorporation company incorporated herein reference exhibit 31 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 32 amended restated bylaws company incorporated herein reference exhibit 32 company’s quarterly report form 10q securities exchange commission quarter ended march 31 2002 sec file 00104221 41 rights agreement dated january 8 1996 company liberty national bank trust company oklahoma city na incorporated herein reference company’s form 8a dated january 18 1996 sec file 00104221 101 consulting services agreement w h helmerich iii company effective january 1 1990 amended incorporated herein reference exhibit 103 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 102 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 106 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 103 helmerich payne inc 1990 stock option plan incorporated herein reference exhibit 107 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 104 form nonqualified stock option agreement 1990 stock option plan incorporated reference exhibit 992 company’s registration statement 3355239 form s8 dated august 26 1994 105 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 106 company’s annual report form 10k securities exchange commission fiscal 1999 sec file 00104221 106 helmerich payne inc 1996 stock incentive plan incorporated herein reference exhibit 991 company’s registration statement 33334939 form s8 dated september 4 1997 107 form nonqualified stock option agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 992 company’s registration statement 33334939 form s8 dated september 4 1997 108 form restricted stock agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 1012 company’s annual report form 10k securities exchange commission fiscal 1997 sec file 00104221 109 helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 991 company’s registration statement 33363124 form s8 dated june 15 2001 1010 form agreements helmerich payne inc 2000 stock incentive plan restricted stock award agreement ii incentive stock option agreement iii nonqualified stock option agreement incorporated reference exhibit 992 company’s registration statement 33363124 form s8 dated june 15 2001 1011 distribution agreement dated february 23 2002 helmerich payne inc cimarex energy co incorporated herein reference exhibit 101 cimarex energy co registration statement 33387948 form s4 filed may 9 2002 1012 tax sharing agreement dated february 23 2002 helmerich payne inc cimarex energy co incorporated herein reference exhibit 102 cimarex energy co registration statement 33387948 form s4 filed may 9 2002 1013 form director nonqualified stock option agreement 2000 helmerich payne inc stock incentive plan incorporated herein reference exhibit 101 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1014 form change control agreement helmerich payne inc incorporated herein reference exhibit 103 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1015 second amendment credit agreement dated july 16 2002 among helmerich payne international drilling co helmerich payne inc bank one oklahoma na incorporated herein reference exhibit 104 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1016 credit agreement dated july 16 2002 among helmerich payne international drilling co helmerich payne inc several lenders time party thereto bank oklahoma national association incorporated herein reference exhibit 105 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1017 note purchase agreement dated august 15 2002 among helmerich payne international drilling co helmerich payne inc various insurance companies incorporated herein reference exhibit 1020 company’s annual report form 10k securities exchange commission fiscal 2002 sec file 00104221 1018 office lease dated may 30 2003 kb fund iv helmerich payne inc 13 company’s annual report stockholders fiscal 2003 21list subsidiaries company 231 consent independent auditors 311 certification chief executive officer adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer adopted pursuant section 302 sarbanesoxley act 2002 32 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 compensatory plan arrangement b reports form 8k company filed two reports form 8k last quarter fiscal 2003 follows signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc hans helmerich hans helmerich president chief executive officer date december 23 2003 pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated exhibit index following documents included exhibits form 10k exhibits incorporated reference herein duly noted unless noted exhibit filed herewith 31 restated certificate incorporation amendment restated certificate incorporation company incorporated herein reference exhibit 31 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 32 amended restated bylaws company incorporated herein reference exhibit 32 company’s quarterly report form 10q securities exchange commission quarter ended march 31 2002 sec file 00104221 41 rights agreement dated january 8 1996 company liberty national bank trust company oklahoma city na incorporated herein reference company’s form 8a dated january 18 1996 sec file 00104221 101 consulting services agreement w h helmerich iii company effective january 1 1990 amended incorporated herein reference exhibit 103 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 102 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 106 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 103 helmerich payne inc 1990 stock option plan incorporated herein reference exhibit 107 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 104 form nonqualified stock option agreement 1990 stock option plan incorporated reference exhibit 992 company’s registration statement 3355239 form s8 dated august 26 1994 105 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 106 company’s annual report form 10k securities exchange commission fiscal 1999 sec file 00104221 106 helmerich payne inc 1996 stock incentive plan incorporated herein reference exhibit 991 company’s registration statement 33334939 form s8 dated september 4 1997 107 form nonqualified stock option agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 992 company’s registration statement 33334939 form s8 dated september 4 1997 108 form restricted stock agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 1012 company’s annual report form 10k securities exchange commission fiscal 1997 sec file 00104221 109 helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 991 company’s registration statement 33363124 form s8 dated june 15 2001 1010 form agreements helmerich payne inc 2000 stock incentive plan restricted stock award agreement ii incentive stock option agreement iii nonqualified stock option agreement incorporated reference exhibit 992 company’s registration statement 33363124 form s8 dated june 15 2001 1011 distribution agreement dated february 23 2002 helmerich payne inc cimarex energy co incorporated herein reference exhibit 101 cimarex energy co registration statement 33387948 form s4 filed may 9 2002 1012 tax sharing agreement dated february 23 2002 helmerich payne inc cimarex energy co incorporated herein reference exhibit 102 cimarex energy co registration statement 33387948 form s4 filed may 9 2002 1013 form director nonqualified stock option agreement 2000 helmerich payne inc stock incentive plan incorporated herein reference exhibit 101 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1014 form change control agreement helmerich payne inc incorporated herein reference exhibit 103 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1015 second amendment credit agreement dated july 16 2002 among helmerich payne international drilling co helmerich payne inc bank one oklahoma na incorporated herein reference exhibit 104 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1016 credit agreement dated july 16 2002 among helmerich payne international drilling co helmerich payne inc several lenders time party thereto bank oklahoma national association incorporated herein reference exhibit 105 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1017 note purchase agreement dated august 15 2002 among helmerich payne international drilling co helmerich payne inc various insurance companies incorporated herein reference exhibit 1020 company’s annual report form 10k securities exchange commission fiscal 2002 sec file 00104221 1018 office lease dated may 30 2003 kb fund iv helmerich payne inc 13 company’s annual report stockholders fiscal 2003 21 list subsidiaries company 231 consent independent auditors 311 certification chief executive officer adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer adopted pursuant section 302 sarbanesoxley act 2002 32 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 compensatory plan arrangementitem 15 exhibits financial statement schedules reports form 8k 1 financial statements following appear company’s annual report pages indicated incorporated herein reference 2 financial statement schedules omitted inapplicable required information contained financial statements included notes thereto 3 exhibits following documents included exhibits form 10k exhibits incorporated reference herein duly noted unless noted exhibit filed herewith 31 restated certificate incorporation amendment restated certificate incorporation company incorporated herein reference exhibit 31 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 32 amended restated bylaws company incorporated herein reference exhibit 32 company’s quarterly report form 10q securities exchange commission quarter ended march 31 2002 sec file 00104221 41 rights agreement dated january 8 1996 company liberty national bank trust company oklahoma city na incorporated herein reference company’s form 8a dated january 18 1996 sec file 00104221 101 consulting services agreement w h helmerich iii company effective january 1 1990 incorporated herein reference exhibit 103 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 102 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 106 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 103 helmerich payne inc 1990 stock option plan incorporated herein reference exhibit 107 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 104 form nonqualified stock option agreement 1990 stock option plan incorporated reference exhibit 992 company’s registration statement 3355239 form s8 dated august 26 1994 105 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 109 company’s annual report form 10k securities exchange commission fiscal 1999 sec file 00104221 106 helmerich payne inc 1996 stock incentive plan incorporated herein reference exhibit 991 company’s registration statement 33334939 form s8 dated september 4 1997 107 form nonqualified stock option agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 992 company’s registration statement 33334939 form s8 dated september 4 1997 108 form restricted stock agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 1012 company’s annual report form 10k securities exchange commission fiscal 1997 sec file 00104221 109 helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 991 company’s registration statement 33363124 form s8 dated june 15 2001 1010 form agreements helmerich payne inc 2000 stock incentive plan restricted stock award agreement ii incentive stock option agreement iii nonqualified stock option agreement incorporated reference exhibit 992 company’s registration statement 33363124 form s8 dated june 15 2001 1011 form director nonqualified stock option agreement 2000 helmerich payne inc stock incentive plan incorporated herein reference exhibit 101 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1012 form change control agreement helmerich payne inc incorporated herein reference exhibit 103 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1013 second amendment credit agreement dated july 16 2002 among helmerich payne international drilling co helmerich payne inc bank one oklahoma na incorporated herein reference exhibit 104 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1014 credit agreement dated july 16 2002 among helmerich payne international drilling co helmerich payne inc several lenders time party thereto bank oklahoma national association incorporated herein reference exhibit 105 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1015 note purchase agreement dated august 15 2002 among helmerich payne international drilling co helmerich payne inc various insurance companies incorporated herein reference exhibit 1020 company’s annual report form 10k securities exchange commission fiscal 2002 sec file 00104221 1016 office lease dated may 30 2003 kb fund iv helmerich payne inc incorporated herein reference exhibit 1018 company’s annual report form 10k securities exchange commission fiscal 2003 sec file 00104221 1017 helmerich payne inc director deferred compensation plan incorporated herein reference exhibit 101 company’s form 8k filed september 9 2004 1018 shareholders agreement registration rights agreement dated july 19 2004 helmerich payne international drilling co atwood oceanics inc incorporated herein reference exhibit 11 company’s amended schedule 13d filed july 21 2004 1019 underwriting agreement dated october 13 2004 helmerich payne international drilling co various underwriters incorporated herein reference exhibit 11 company’s form 8k filed october 14 2004 1020 helmerich payne inc annual bonus plan executive officers incorporated herein reference exhibit 101 company’s form 8k filed december 6 2004 13 company’s annual report shareholders fiscal 2004 21 list subsidiaries company incorporated herein reference exhibit 21 company’s annual report form 10k securities exchange commission fiscal 2003 sec file 00104221 231 consent independent registered public accounting firm 311 certification chief executive officer adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer adopted pursuant section 302 sarbanes oxley act 2002 32 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 management compensatory plan arrangement b reports form 8k company filed two reports form 8k last quarter fiscal 2004 follows signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated index exhibits 31 restated certificate incorporation amendment restated certificate incorporation company incorporated herein reference exhibit 31 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 32 amended restated bylaws company incorporated herein reference exhibit 32 company’s quarterly report form 10q securities exchange commission quarter ended march 31 2002 sec file 00104221 41 rights agreement dated january 8 1996 company liberty national bank trust company oklahoma city na incorporated herein reference company’s form 8a dated january 18 1996 sec file 00104221 101 consulting services agreement w h helmerich iii company effective january 1 1990 incorporated herein reference exhibit 103 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 102 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 106 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 103 helmerich payne inc 1990 stock option plan incorporated herein reference exhibit 107 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 104 form nonqualified stock option agreement 1990 stock option plan incorporated reference exhibit 992 company’s registration statement 3355239 form s8 dated august 26 1994 105 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 109 company’s annual report form 10k securities exchange commission fiscal 1999 sec file 00104221 106 helmerich payne inc 1996 stock incentive plan incorporated herein reference exhibit 991 company’s registration statement 33334939 form s8 dated september 4 1997 107 form nonqualified stock option agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 992 company’s registration statement 33334939 form s8 dated september 4 1997 108 form restricted stock agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 1012 company’s annual report form 10k securities exchange commission fiscal 1997 sec file 00104221 109 helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 991 company’s registration statement 33363124 form s8 dated june 15 2001 1010 form agreements helmerich payne inc 2000 stock incentive plan restricted stock award agreement ii incentive stock option agreement iii nonqualified stock option agreement incorporated reference exhibit 992 company’s registration statement 33363124 form s8 dated june 15 2001 1011 form director nonqualified stock option agreement 2000 helmerich payne inc stock incentive plan incorporated herein reference exhibit 101 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1012 form change control agreement helmerich payne inc incorporated herein reference exhibit 103 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1013 second amendment credit agreement dated july 16 2002 among helmerich payne international drilling co helmerich payne inc bank one oklahoma na incorporated herein reference exhibit 104 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1014 credit agreement dated july 16 2002 among helmerich payne international drilling co helmerich payne inc several lenders time party thereto bank oklahoma national association incorporated herein reference exhibit 105 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1015 note purchase agreement dated august 15 2002 among helmerich payne international drilling co helmerich payne inc various insurance companies incorporated herein reference exhibit 1020 company’s annual report form 10k securities exchange commission fiscal 2002 sec file 00104221 1016 office lease dated may 30 2003 kb fund iv helmerich payne inc incorporated herein reference exhibit 1018 company’s annual report form 10k securities exchange commission fiscal 2003 sec file 00104221 1017 helmerich payne inc director deferred compensation plan incorporated herein reference exhibit 101 company’s form 8k filed september 9 2004 1018 shareholders agreement registration rights agreement dated july 19 2004 helmerich payne international drilling co atwood oceanics inc incorporated herein reference exhibit 11 company’s amended schedule 13d filed july 21 2004 1019 underwriting agreement dated october 13 2004 helmerich payne international drilling co various underwriters incorporated herein reference exhibit 11 company’s form 8k filed october 14 2004 1020 helmerich payne inc annual bonus plan executive officers incorporated herein reference exhibit 101 company’s form 8k filed december 6 2004 13 company’s annual report shareholders fiscal 2004 21 list subsidiaries company incorporated herein reference exhibit 21 company’s annual report form 10k securities exchange commission fiscal 2003 sec file 00104221 231 consent independent registered public accounting firm 311 certification chief executive officer adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer adopted pursuant section 302 sarbanes oxley act 2002 32 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 management compensatory plan arrangementitem 15 exhibits financial statement schedules management compensatory plan arrangement signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated william l armstrong william l armstrong director date december 13 2006 glenn cox glenn cox director date december 13 2006 george dotson george dotson director date december 13 2006 hans helmerich hans helmerich director ceo date december 13 2006 w h helmerich iii w h helmerich iii director date december 13 2006 edward b rust jr edward b rust jr director date december 13 2006 paula marshall paula marshall director date december 13 2006 john zeglis john zeglis director date december 13 2006 douglas e fears douglas e fears principal financial officer date december 13 2006 gordon k helm gordon k helm principal accounting officer date december 13 2006item 15 exhibits financial statement schedules management compensatory plan arrangement signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc hans helmerich hans helmerich president chief executive officer date november 28 2007 pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated william l armstrong glenn cox william l armstrong director glenn cox director date november 28 2007 date november 28 2007 randy foutch hans helmerich randy foutch director hans helmerich director ceo date november 28 2007 date november 28 2007 w h helmerich iii edward b rust jr w h helmerich iii director edward b rust jr director date november 28 2007 date november 28 2007 paula marshall john zeglis paula marshall director john zeglis director date november 28 2007 date november 28 2007 douglas e fears gordon k helm douglas e fears gordon k helm principal financial officer principal accounting officer date november 28 2007 date november 28 2007 exhibit index following documents included exhibits annual report form 10k exhibits incorporated herein duly noted exhibit description 31 amended restated certificate incorporation helmerich payne inc incorporated reference exhibit 31 companys annual report form 10k securities exchange commission fiscal 2006 sec file 00104221 32 amended restated bylaws company incorporated herein reference exhibit 31 companys form 8k filed october 11 2007 sec file 00104221 41 rights agreement dated january 8 1996 company liberty national bank trust company oklahoma city na incorporated herein reference companys form 8a dated january 18 1996 sec file 00104221 42 amendment rights agreement dated december 8 2005 company umb bank na incorporated herein reference exhibit 4 companys form 8k filed december 12 2005 sec file 00104221 101 consulting services agreement w h helmerich iii company dated march 30 1990 incorporated herein reference exhibit 103 companys annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 102 amendment consulting services agreement w h helmerich iii company dated december 26 1990 incorporated herein reference exhibit 102 companys annual report form 10k securities exchange commission fiscal 2006 sec file 00104221 103 second amendment consulting services agreement w h helmerich iii company dated september 11 2006 incorporated herein reference exhibit 101 companys form 8k filed september 13 2006 sec file 00104221 104 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 106 companys annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 105 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 109 companys annual report form 10k securities exchange commission fiscal 1999 sec file 00104221 106 helmerich payne inc 1996 stock incentive plan incorporated herein reference exhibit 991 companys registration statement 33334939 form s8 dated september 4 1997 107 form nonqualified stock option agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 992 companys registration statement 33334939 form s8 dated september 4 1997 108 form restricted stock agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 1012 companys annual report form 10k securities exchange commission fiscal 1997 sec file 00104221 109 helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 991 companys registration statement 33363124 form s8 dated june 15 2001 1010 form agreements helmerich payne inc 2000 stock incentive plan restricted stock award agreement ii incentive stock option agreement iii nonqualified stock option agreement incorporated reference exhibit 992 companys registration statement 33363124 form s8 dated june 15 2001 1011 form director nonqualified stock option agreement 2000 helmerich payne inc stock incentive plan incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1012 form change control agreement helmerich payne inc incorporated herein reference exhibit 103 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1013 credit agreement dated july 16 2002 among helmerich payne international drilling co helmerich payne inc several lenders time party thereto bank oklahoma na incorporated herein reference exhibit 105 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1014 first amendment credit agreement dated july 15 2003 among helmerich payne inc helmerich payne international drilling co bank oklahoma na incorporated herein reference exhibit 1014 companys annual report form 10k securities exchange commission fiscal 2005 sec file 00104221 1015 second amendment credit agreement dated may 4 2004 among helmerich payne inc helmerich payne international drilling co bank oklahoma na incorporated herein reference exhibit 1015 companys annual report form 10k securities exchange commission fiscal 2005 sec file 00104221 1016 third amendment credit agreement dated july 13 2004 among helmerich payne inc helmerich payne international drilling co bank oklahoma na incorporated herein reference exhibit 1016 companys annual report form 10k securities exchange commission fiscal 2005 sec file 00104221 1017 fourth amendment credit agreement dated july 12 2005 among helmerich payne inc helmerich payne international drilling co bank oklahoma na incorporated herein reference exhibit 101 companys form 8k filed july 13 2005 sec file 00104221 1018 fifth amendment credit agreement dated july 11 2006 among helmerich payne inc helmerich payne international drilling co bank oklahoma na incorporated herein reference exhibit 104 companys form 8k filed july 11 2006 sec file 00104221 1019 first amended restated credit agreement dated december 18 2006 among helmerich payne international drilling co helmerich payne inc bank oklahoma national association incorporated herein reference exhibit 102 companys form 8k filed december 20 2006 sec file 00104221 1020 note purchase agreement dated august 15 2002 among helmerich payne international drilling co helmerich payne inc various insurance companies incorporated herein reference exhibit 1020 companys annual report form 10k securities exchange commission fiscal 2002 sec file 00104221 1021 credit agreement dated december 18 2006 among helmerich payne international drilling co helmerich payne inc wells fargo bank national association incorporated herein reference exhibit 101 companys form 8k filed december 20 2006 sec file 00104221 1022 office lease dated may 30 2003 kb fund iv helmerich payne inc incorporated herein reference exhibit 1018 companys annual report form 10k securities exchange commission fiscal 2003 sec file 00104221 1023 helmerich payne inc director deferred compensation plan incorporated herein reference exhibit 101 companys form 8k filed september 9 2004 sec file 00104221 1024 shareholders agreement registration rights agreement dated july 19 2004 helmerich payne international drilling co atwood oceanics inc incorporated herein reference exhibit 11 companys amended schedule 13d filed july 21 2004 1025 underwriting agreement dated october 13 2004 helmerich payne international drilling co various underwriters incorporated herein reference exhibit 11 companys form 8k filed october 14 2004 sec file 00104221 1026 helmerich payne inc annual bonus plan executive officers incorporated herein reference exhibit 101 companys form 8k filed december 9 2005 sec file 00104221 1027 advisory services agreement dated february 17 2006 helmerich payne inc george dotson incorporated herein reference exhibit 101 companys form 8k filed february 21 2006 sec file 00104221 1028 first amendment advisory services agreement dated march 7 2007 helmerich payne inc george dotson incorporated herein reference exhibit 101 companys form 8k filed march 8 2007 sec file 00104221 1029 helmerich payne inc 2005 longterm incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2006 1030 form agreements helmerich payne inc 2005 longterm incentive plan nonqualified stock option agreement ii incentive stock option agreement iii restricted stock award agreement incorporated herein reference exhibit 1027 companys annual report form 10k securities exchange commission fiscal 2006 sec file 00104221 1031 fabrication contract helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 101 companys form 8k filed december 7 2006 sec file 00104221 1032 contract dated july 18 2007 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference companys form 8k filed july 7 2007 sec file 00104221 13 companys annual report shareholders fiscal 2007 21 list subsidiaries company 231 consent independent registered public accounting firm 311 certification chief executive officer pursuant rule 13a14a promulgated securities exchange act 1934 amended adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer pursuant rule 13a14a promulgated securities exchange act 1934 amended adopted pursuant section 302 sarbanesoxley act 2002 32 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002item 15 exhibits financial statement schedules management compensatory plan arrangement signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc hans helmerich hans helmerich president chief executive officer date november 26 2008 pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated william l armstrong william l armstrong director date november 26 2008 glenn cox glenn cox director date november 26 2008 randy foutch randy foutch director date november 26 2008 hans helmerich hans helmerich director ceo date november 26 2008 w h helmerich iii w h helmerich iii director date november 26 2008 paula marshall paula marshall director date november 26 2008 francis rooney francis rooney director date november 26 2008 edward b rust jr edward b rust jr director date november 26 2008 john zeglis john zeglis director date november 26 2008 douglas e fears douglas e fears principal financial officer date november 26 2008 gordon k helm gordon k helm principal accounting officer date november 26 2008 exhibit index following documents included exhibits annual report form 10k exhibits incorporated herein duly noted suchitem 15 exhibits financial statement schedules management compensatory plan arrangement signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc hans helmerich hans helmerich president chief executive officer date november 25 2009 pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated william l armstrong william l armstrong director date november 25 2009 randy foutch randy foutch director date november 25 2009 hans helmerich hans helmerich director ceo date november 25 2009 w h helmerich iii w h helmerich iii director date november 25 2009 paula marshall paula marshall director date november 25 2009 francis rooney francis rooney director date november 25 2009 edward b rust jr edward b rust jr director date november 25 2009 john zeglis john zeglis director date november 25 2009 douglas e fears douglas e fears principal financial officer date november 25 2009 gordon k helm gordon k helm principal accounting officer date november 25 2009 exhibit index following documents included exhibits annual report form 10k exhibits incorporated herein duly noted management compensation plan arrangementitem 15 exhibits financial statement schedules management compensatory plan arrangement signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated william l armstrong william l armstrong director date november 24 2010 randy foutch randy foutch director november 24 2010 hans helmerich hans helmerich director ceo date november 24 2010 w h helmerich iii w h helmerich iii director date november 24 2010 paula marshall paula marshall director date november 24 2010 francis rooney francis rooney director date november 24 2010 edward b rust jr edward b rust jr director date november 24 2010 john zeglis john zeglis director date november 24 2010 juan pablo tardio juan pablo tardio principal financial officer date november 24 2010 gordon k helm gordon k helm principal accounting officer date november 24 2010 exhibit index following documents included exhibits annual report form 10k exhibits incorporated herein duly noted management compensatory plan arrangementitem 15 exhibits financial statement schedules management compensatory plan arrangement signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated william l armstrong william l armstrong director date november 23 2011 randy foutch randy foutch director november 23 2011 hans helmerich hans helmerich director ceo date november 23 2011 w h helmerich iii w h helmerich iii director date november 23 2011 paula marshall paula marshall director date november 23 2011 francis rooney francis rooney director date november 23 2011 edward b rust jr edward b rust jr director date november 23 2011 john zeglis john zeglis director date november 23 2011 juan pablo tardio juan pablo tardio principal financial officer date november 23 2011 gordon k helm gordon k helm principal accounting officer date november 23 2011 exhibit index following documents included exhibits annual report form 10k exhibits incorporated herein duly noted management compensatory plan arrangementitem 15 exhibits financial statement schedules a1 financial statements following appear annual report stockholders exhibit 13 form 10k pages indicated incorporated herein reference 2financial statement schedules omitted inapplicable required information contained financial statements included notes thereto 3exhibits following documents included exhibits form 10k exhibits incorporated reference duly noted 31 amended restated certificate incorporation helmerich payne inc incorporated herein reference exhibit 31 companys form 8k filed march 14 2012 sec file 00104221 32 amended restated bylaws helmerich payne inc incorporated herein reference exhibit 32 companys form 8k filed march 14 2012 sec file 00104221 41 rights agreement dated january 8 1996 company liberty national bank trust company oklahoma city na incorporated herein reference exhibit 1 companys form 8k filed january 18 1996 sec file 00104221 42 amendment rights agreement dated december 8 2005 company umb bank na incorporated herein reference exhibit 4 companys form 8k filed december 12 2005 sec file 00104221 101 helmerich payne inc 2000 stock incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2001 102 20121 amendment helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 105 companys quarterly report form 10q securities exchange commission quarter ended march 31 2012 sec file 00104221 103 form agreements helmerich payne inc 2000 stock incentive plan restricted stock award agreement ii incentive stock option agreement iii nonqualified stock option agreement incorporated reference exhibit 992 companys registration statement 33363124 form s8 dated june 15 2001 104 form director nonqualified stock option agreement helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 105 form change control agreement helmerich payne inc incorporated herein reference exhibits 102 103 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 106 note purchase agreement dated august 15 2002 among helmerich payne international drilling co helmerich payne inc various insurance companies incorporated herein reference exhibit 1020 companys annual report form 10k securities exchange commission fiscal 2002 sec file 00104221 107 note purchase agreement dated june 15 2009 among helmerich payne international drilling co helmerich payne inc various note purchasers incorporated reference exhibit 101 companys form 8k filed july 21 2009 sec file 00104221 108 credit agreement dated may 25 2012 among helmerich payne international drilling co helmerich payne inc wells fargo bank national association incorporated reference exhibit 101 companys form 8k filed may 31 2012 sec file 00104221 109 office lease dated may 30 2003 kb fund iv helmerich payne inc incorporated herein reference exhibit 1018 companys annual report form 10k securities exchange commission fiscal 2003 sec file 00104221 1010 first amendment lease asp inc helmerich payne inc incorporated herein reference exhibit 101 companys form 8k filed may 29 2008 sec file 00104221 1011 second amendment office lease dated december 13 2011 asp inc helmerich payne inc incorporated herein reference exhibit 101 form 8k filed company december 14 2011 sec file 00104221 1012 third amendment office lease dated september 5 2012 asp inc helmerich payne inc 1013 helmerich payne inc annual bonus plan executive officers incorporated herein reference exhibit 104 companys quarterly report form 10q securities exchange commission quarter ended march 31 2012 sec file 00104221 1014 helmerich payne inc 2005 longterm incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2006 1015 20121 amendment helmerich payne inc 2005 longterm incentive plan incorporated herein reference exhibit 106 companys quarterly report form 10q securities exchange commission quarter ended march 31 2012 sec file 00104221 1016 form agreements helmerich payne inc 2005 longterm incentive plan applicable certain executives nonqualified stock option agreement ii incentive stock option agreement iii restricted stock award agreement incorporated herein reference exhibit 102 companys form 8k filed december 7 2009 sec file 00104221 1017 form agreements helmerich payne inc 2005 longterm incentive plan applicable participants certain executives nonqualified stock option agreement incentive stock option agreement restricted stock award agreement incorporated herein reference exhibit 103 companys form 8k filed december 7 2009 sec file 00104221 1018 form amendment nonqualified stock option agreements amendment restricted stock award agreements helmerich payne inc 2005 longterm incentive plan applicable certain executive officers incorporated herein reference exhibit 104 companys form 8k filed december 7 2009 sec file 00104221 1019 form amendment nonqualified stock option agreements amendment restricted stock award agreements helmerich payne inc 2005 longterm incentive plan applicable participants certain executive officers incorporated herein reference exhibit 105 companys form 8k filed december 7 2009 sec file 00104221 1020 helmerich payne inc 2010 longterm incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2011 1021 form agreements helmerich payne inc 2010 longterm incentive plan applicable certain executives nonqualified stock option award agreement ii restricted stock award agreement incorporated herein reference exhibit 101 companys form 8k filed march 14 2012 sec file 00104221 1022 form agreements helmerich payne inc 2010 longterm incentive plan applicable participants certain executives nonqualified stock option award agreement ii restricted stock award agreement incorporated herein reference exhibit 102 companys form 8k filed march 14 2012 sec file 00104221 1023 form agreements helmerich payne inc 2010 longterm incentive plan applicable directors nonqualified stock option award agreement ii restricted stock award agreement incorporated reference exhibit 103 companys form 8k filed march 14 2012 sec file 00104221 1024 fabrication contract helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 101 companys form 8k filed december 7 2006 sec file 00104221 1025 contract dated july 18 2007 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 101 companys form 8k filed july 18 2007 sec file 00104221 1026 amendment contract dated august 8 2008 helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 1033 companys annual report form 10k securities exchange commission fiscal 2008 sec file 00104221 1027 amendment contract dated august 8 2008 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 1034 companys annual report form 10k securities exchange commission fiscal 2008 sec file 00104221 1028 second amendment contract dated march 26 2010 helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 1024 companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1029 second amendment contract dated march 26 2010 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 1025 companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1030 third amendment contract dated august 4 2011 helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 1026 companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1031 third amendment contract dated august 4 2011 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 1027 companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1032 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1033 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1034 helmerich payne inc director deferred compensation plan incorporated herein reference exhibit 103 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 13 companys annual report stockholders fiscal 2012 21 list subsidiaries company 231 consent independent registered public accounting firm 311 certification chief executive officer pursuant rule 13a14a promulgated securities exchange act 1934 amended adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer pursuant rule 13a14a promulgated securities exchange act 1934 amended adopted pursuant section 302 sarbanesoxley act 2002 32 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 101 financial statements annual report form 10k helmerich payne inc fiscal year ended september 30 2012 filed november 21 2012 formatted xbrl consolidated statements income ii consolidated balance sheets iii consolidated statements shareholders equity iv consolidated statements cash flows v notes consolidated financial statements management compensatory plan arrangement signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated william l armstrong william l armstrong director date november 21 2012 randy foutch randy foutch director date november 21 2012 hans helmerich hans helmerich director ceo date november 21 2012 john w lindsay john w lindsay director president date november 21 2012 paula marshall paula marshall director date november 21 2012 thomas petrie thomas petrie director date november 21 2012 donald f robillard jr donald f robillard jr director date november 21 2012 francis rooney francis rooney director date november 21 2012 edward b rust jr edward b rust jr director date november 21 2012 john zeglis john zeglis director date november 21 2012 juan pablo tardio juan pablo tardio principal financial officer date november 21 2012 gordon k helm gordon k helm principal accounting officer date november 21 2012 exhibit index following documents included exhibits annual report form 10k exhibits incorporated herein duly noted management compensatory plan arrangementitem 15 exhibits financial statement schedules 1financial statements consolidated financial statements together notes thereto report ernst young llp dated november 27 2013 included item 8 financial statements supplementary data form 10k 2financial statement schedules omitted applicable required information contained financial statements included notes thereto 3exhibits following documents included exhibits form 10k exhibits incorporated reference duly noted 31 amended restated certificate incorporation helmerich payne inc incorporated herein reference exhibit 31 companys form 8k filed march 14 2012 sec file 00104221 32 amended restated bylaws helmerich payne inc incorporated herein reference exhibit 31 companys form 8k filed september 4 2013 sec file 00104221 41 rights agreement dated january 8 1996 company liberty national bank trust company oklahoma city na incorporated herein reference exhibit 1 companys form 8k filed january 18 1996 sec file 00104221 42 amendment rights agreement dated december 8 2005 company umb bank na incorporated herein reference exhibit 4 companys form 8k filed december 12 2005 sec file 00104221 101 helmerich payne inc 2000 stock incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2001 102 20121 amendment helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 105 companys quarterly report form 10q securities exchange commission quarter ended march 31 2012 sec file 00104221 103 form agreements helmerich payne inc 2000 stock incentive plan restricted stock award agreement ii incentive stock option agreement iii nonqualified stock option agreement incorporated reference exhibit 992 companys registration statement 33363124 form s8 dated june 15 2001 104 form director nonqualified stock option agreement helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 105 form change control agreement helmerich payne inc incorporated herein reference exhibits 102 103 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 106 note purchase agreement dated august 15 2002 among helmerich payne international drilling co helmerich payne inc various insurance companies incorporated herein reference exhibit 1020 companys annual report form 10k securities exchange commission fiscal 2002 sec file 00104221 107 note purchase agreement dated june 15 2009 among helmerich payne international drilling co helmerich payne inc various note purchasers incorporated reference exhibit 101 companys form 8k filed july 21 2009 sec file 00104221 108 credit agreement dated may 25 2012 among helmerich payne international drilling co helmerich payne inc wells fargo bank national association incorporated reference exhibit 101 companys form 8k filed may 31 2012 sec file 00104221 109 office lease dated may 30 2003 kb fund iv helmerich payne inc incorporated herein reference exhibit 1018 companys annual report form 10k securities exchange commission fiscal 2003 sec file 00104221 1010 first amendment lease asp inc helmerich payne inc incorporated herein reference exhibit 101 companys form 8k filed may 29 2008 sec file 00104221 1011 second amendment office lease dated december 13 2011 asp inc helmerich payne inc incorporated herein reference exhibit 101 form 8k filed company december 14 2011 sec file 00104221 1012 third amendment office lease dated september 5 2012 asp inc helmerich payne inc incorporated herein reference exhibit 1012 companys annual report form 10k securities exchange commission fiscal 2012 sec file 00104221 1013 fifth amendment office lease dated december 21 2012 asp inc helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended december 31 2012 sec file 00104221 1014 sixth amendment office lease dated april 24 2013 asp inc helmerich payne inc incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended june 30 2013 sec file 00104221 1015 seventh amendment office lease dated september 16 2013 asp inc helmerich payne inc incorporated herein reference exhibit 101 form 8k filed company september 17 2013 sec file 00104221 1016 helmerich payne inc annual bonus plan executive officers incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended february 7 2013 sec file 00104221 1017 helmerich payne inc 2005 longterm incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2006 1018 20121 amendment helmerich payne inc 2005 longterm incentive plan incorporated herein reference exhibit 106 companys quarterly report form 10q securities exchange commission quarter ended march 31 2012 sec file 00104221 1019 form agreements helmerich payne inc 2005 longterm incentive plan applicable certain executives nonqualified stock option agreement ii incentive stock option agreement iii restricted stock award agreement incorporated herein reference exhibit 102 companys form 8k filed december 7 2009 sec file 00104221 1020 form agreements helmerich payne inc 2005 longterm incentive plan applicable participants certain executives nonqualified stock option agreement incentive stock option agreement restricted stock award agreement incorporated herein reference exhibit 103 companys form 8k filed december 7 2009 sec file 00104221 1021 form amendment nonqualified stock option agreements amendment restricted stock award agreements helmerich payne inc 2005 longterm incentive plan applicable certain executive officers incorporated herein reference exhibit 104 companys form 8k filed december 7 2009 sec file 00104221 1022 form amendment nonqualified stock option agreements amendment restricted stock award agreements helmerich payne inc 2005 longterm incentive plan applicable participants certain executive officers incorporated herein reference exhibit 105 companys form 8k filed december 7 2009 sec file 00104221 1023 helmerich payne inc 2010 longterm incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2011 1024 form agreements helmerich payne inc 2010 longterm incentive plan applicable certain executives nonqualified stock option award agreement ii restricted stock award agreement incorporated herein reference exhibit 101 companys form 8k filed march 14 2012 sec file 00104221 1025 form agreements helmerich payne inc 2010 longterm incentive plan applicable participants certain executives nonqualified stock option award agreement ii restricted stock award agreement incorporated herein reference exhibit 102 companys form 8k filed march 14 2012 sec file 00104221 1026 form agreements helmerich payne inc 2010 longterm incentive plan applicable directors nonqualified stock option award agreement ii restricted stock award agreement incorporated reference exhibit 103 companys form 8k filed march 14 2012 sec file 00104221 1027 fabrication contract helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 101 companys form 8k filed december 7 2006 sec file 00104221 1028 contract dated july 18 2007 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 101 companys form 8k filed july 18 2007 sec file 00104221 1029 amendment contract dated august 8 2008 helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 1033 companys annual report form 10k securities exchange commission fiscal 2008 sec file 00104221 1030 amendment contract dated august 8 2008 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 1034 companys annual report form 10k securities exchange commission fiscal 2008 sec file 00104221 1031 second amendment contract dated march 26 2010 helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 1024 companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1032 second amendment contract dated march 26 2010 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 1025 companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1033 third amendment contract dated august 4 2011 helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 1026 companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1034 third amendment contract dated august 4 2011 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 1027 companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1035 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1036 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1037 helmerich payne inc director deferred compensation plan incorporated herein reference exhibit 103 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1038 stock purchase agreement dated may 23 2013 helmerich payne international drilling co atwood oceanics inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended june 30 2013 sec file 00104221 1039 lockupagreement dated may 23 2013 helmerich payne international drilling co goldman sachs co incorporated herein reference exhibit 103 companys quarterly report form 10q securities exchange commission quarter ended june 30 2013 sec file 00104221 1040 first amendment stock purchase agreement dated june 13 2013 helmerich payne international drilling co atwood oceanics inc incorporated herein reference exhibit 104 companys quarterly report form 10q securities exchange commission quarter ended june 30 2013 sec file 00104221 21 list subsidiaries company 231 consent independent registered public accounting firm 311 certification chief executive officer pursuant rule 13a14a promulgated securities exchange act 1934 amended adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer pursuant rule 13a14a promulgated securities exchange act 1934 amended adopted pursuant section 302 sarbanesoxley act 2002 32 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 991 plea agreement dated october 30 2013 helmerich payne international drilling co united states department justice united states attorneys office eastern district louisiana incorporated herein reference exhibit 991 companys form 8k filed november 8 2013 sec file 00104221 101 financial statements form 10k formatted xbrl consolidated statements income ii consolidated statements comprehensive income iii consolidated balance sheets iv consolidated statements shareholders equity v consolidated statements cash flows vi notes consolidated financial statements management compensatory plan arrangement signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated exhibit index following documents included exhibits form 10k exhibits incorporated herein duly noted management compensatory plan arrangementitem 15 exhibits financial statement schedules 1 financial statements consolidated financial statements together notes thereto report ernst young llp dated november 25 2015 listed included item 8 financial statements supplementary data form 10k 2 financial statement schedules omitted applicable required information contained financial statements included notes thereto 3 exhibits following documents included exhibits form 10k exhibits incorporated reference duly noted 31 amended restated certificate incorporation helmerich payne inc incorporated herein reference exhibit 31 companys form 8k filed march 14 2012 sec file 00104221 32 amended restated bylaws helmerich payne inc incorporated herein reference exhibit 31 companys form 8ka filed june 9 2014 sec file 00104221 41 rights agreement dated january 8 1996 company liberty national bank trust company oklahoma city na incorporated herein reference exhibit 1 companys form 8k filed january 18 1996 sec file 00104221 42 amendment rights agreement dated december 8 2005 company umb bank na incorporated herein reference exhibit 4 companys form 8k filed december 12 2005 sec file 00104221 43 base indenture dated march 19 2015 helmerich payne international drilling co helmerich payne inc wells fargo bank national association incorporated herein reference exhibit 41 companys form 8k filed march 19 2015 sec file 00104221 44 first supplemental indenture dated march 19 2015 helmerich payne international drilling co helmerich payne inc wells fargo bank national association incorporated herein reference exhibit 42 companys form 8k filed march 19 2015 sec file 00104221 45 form note included exhibit 44 101 helmerich payne inc 2000 stock incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2001 102 20121 amendment helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 105 companys quarterly report form 10q securities exchange commission quarter ended march 31 2012 sec file 00104221 103 form agreements helmerich payne inc 2000 stock incentive plan restricted stock award agreement ii incentive stock option agreement iii nonqualified stock option agreement incorporated reference exhibit 992 companys registration statement 33363124 form s8 dated june 15 2001 104 form director nonqualified stock option agreement helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 105 form change control agreement helmerich payne inc incorporated herein reference exhibits 102 103 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 106 note purchase agreement dated june 15 2009 among helmerich payne international drilling co helmerich payne inc various note purchasers incorporated reference exhibit 101 companys form 8k filed july 21 2009 sec file 00104221 107 credit agreement dated may 25 2012 among helmerich payne international drilling co helmerich payne inc wells fargo bank national association incorporated reference exhibit 101 companys form 8k filed may 31 2012 sec file 00104221 108 purchase agreement dated march 12 2015 among helmerich payne international drilling co helmerich payne inc goldman sachs co wells fargo securities llc incorporated herein reference exhibit 101 companys form 8k filed march 13 2015 sec file 00104221 109 registration rights agreement dated march 19 2015 helmerich payne international drilling co helmerich payne inc goldman sachs co wells fargo securities llc incorporated herein reference exhibit 44 companys form 8k filed march 19 2015 sec file 00104221 1010 office lease dated may 30 2003 kb fund iv helmerich payne inc incorporated herein reference exhibit 1018 companys annual report form 10k securities exchange commission fiscal 2003 sec file 00104221 1011 first amendment lease asp inc helmerich payne inc incorporated herein reference exhibit 101 companys form 8k filed may 29 2008 sec file 00104221 1012 second amendment office lease dated december 13 2011 asp inc helmerich payne inc incorporated herein reference exhibit 101 form 8k filed company december 14 2011 sec file 00104221 1013 third amendment office lease dated september 5 2012 asp inc helmerich payne inc form fourth amendment office lease attached thereto exhibit b incorporated herein reference exhibit 1012 companys annual report form 10k securities exchange commission fiscal 2012 sec file 00104221 1014 fifth amendment office lease dated december 21 2012 asp inc helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended december 31 2012 sec file 00104221 1015 sixth amendment office lease dated april 24 2013 asp inc helmerich payne inc incorporated herein reference exhibit 101 form 8k filed company april 26 2013 sec file 00104221 1016 seventh amendment office lease dated september 16 2013 asp inc helmerich payne inc incorporated herein reference exhibit 101 form 8k filed company september 17 2013 sec file 00104221 1017 eighth amendment office lease dated march 24 2014 asp inc helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended march 31 2014 sec file 00104221 1018 ninth amendment office lease dated june 16 2014 asp inc helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended june 30 2014 sec file 00104221 1019 tenth amendment office lease dated november 26 2014 asp inc helmerich payne inc incorporated herein reference exhibit 105 companys quarterly report form 10q securities exchange commission quarter ended december 31 2014 sec file 00104221 1020 eleventh amendment office lease dated february 18 2015 twelfth amendment office lease dated june 30 2015 helmerich payne inc asp inc incorporated herein reference exhibits 101 102 companys quarterly report form 10q securities exchange commission quarter ended june 30 2015 sec file 00104221 1021 thirteenth amendment office lease dated october 9 2015 asp inc helmerich payne inc 1022 helmerich payne inc annual bonus plan executive officers incorporated herein reference exhibit 107 companys quarterly report form 10q securities exchange commission quarter ended march 31 2015 sec file 00104221 1023 helmerich payne inc 2005 longterm incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2006 1024 20121 amendment helmerich payne inc 2005 longterm incentive plan incorporated herein reference exhibit 106 companys quarterly report form 10q securities exchange commission quarter ended march 31 2012 sec file 00104221 1025 form agreements helmerich payne inc 2005 longterm incentive plan applicable certain executives nonqualified stock option agreement ii incentive stock option agreement iii restricted stock award agreement incorporated herein reference exhibit 102 companys form 8k filed december 7 2009 sec file 00104221 1026 form agreements helmerich payne inc 2005 longterm incentive plan applicable participants certain executives nonqualified stock option agreement incentive stock option agreement restricted stock award agreement incorporated herein reference exhibit 103 companys form 8k filed december 7 2009 sec file 00104221 1027 form amendment nonqualified stock option agreements amendment restricted stock award agreements helmerich payne inc 2005 longterm incentive plan applicable certain executive officers incorporated herein reference exhibit 104 companys form 8k filed december 7 2009 sec file 00104221 1028 form amendment nonqualified stock option agreements amendment restricted stock award agreements helmerich payne inc 2005 longterm incentive plan applicable participants certain executive officers incorporated herein reference exhibit 105 companys form 8k filed december 7 2009 sec file 00104221 1029 helmerich payne inc 2010 longterm incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2011 1030 form agreements helmerich payne inc 2010 longterm incentive plan applicable certain executives nonqualified stock option award agreement incorporated herein reference exhibit 101 companys form 8k filed march 14 2012 sec file 00104221 ii restricted stock award agreement incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended december 31 2013 sec file 00104221 1031 form agreements helmerich payne inc 2010 longterm incentive plan applicable participants certain executives nonqualified stock option award agreement incorporated herein reference exhibit 102 companys form 8k filed march 14 2012 sec file 00104221 ii restricted stock award agreement incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended december 31 2013 sec file 00104221 1032 form agreements helmerich payne inc 2010 longterm incentive plan applicable directors nonqualified stock option award agreement ii restricted stock award agreement incorporated reference exhibit 103 companys form 8k filed march 14 2012 sec file 00104221 1033 fabrication contract helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 101 companys form 8k filed december 7 2006 sec file 00104221 1034 contract dated july 18 2007 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 101 companys form 8k filed july 18 2007 sec file 00104221 1035 amendment contract dated august 8 2008 helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 1033 companys annual report form 10k securities exchange commission fiscal 2008 sec file 00104221 1036 amendment contract dated august 8 2008 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 1034 companys annual report form 10k securities exchange commission fiscal 2008 sec file 00104221 1037 second amendment contract dated march 26 2010 third amendment contract dated august 4 2011 helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibits 1024 1026 respectively companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1038 second amendment contract dated march 26 2010 third amendment contract dated august 4 2011 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibits 1025 1027 respectively companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1039 fourth amendment contract dated january 11 2013 fifth amendment contract dated november 21 2014 helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibits 101 103 respectively companys quarterly report form 10q securities exchange commission quarter ended december 31 2014 sec file 00104221 1040 fourth amendment contract dated january 11 2013 fifth amendment contract dated november 21 2014 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibits 102 104 respectively companys quarterly report form 10q securities exchange commission quarter ended december 31 2014 sec file 00104221 1041 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1042 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1043 helmerich payne inc director deferred compensation plan incorporated herein reference exhibit 103 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1044 advisory services agreement dated march 5 2014 helmerich payne inc hans c helmerich incorporated herein reference exhibit 101 companys form 8k filed march 7 2014 sec file 00104221 1045 advisory services agreement effective march 4 2015 helmerich payne inc steven r mackey incorporated herein reference exhibit 107 companys quarterly report form 10q securities exchange commission quarter ended march 31 2015 sec file 00104221 121 helmerich payne incs statement regarding computation ratio earnings fixed charges 21 list subsidiaries company 231 consent independent registered public accounting firm 311 certification chief executive officer pursuant rule 13a14a promulgated securities exchange act 1934 amended adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer pursuant rule 13a14a promulgated securities exchange act 1934 amended adopted pursuant section 302 sarbanesoxley act 2002 32 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 991 plea agreement dated october 30 2013 helmerich payne international drilling co united states department justice united states attorneys office eastern district louisiana incorporated herein reference exhibit 991 companys form 8k filed november 8 2013 sec file 00104221 101 financial statements form 10k formatted xbrl consolidated statements income ii consolidated statements comprehensive income iii consolidated balance sheets iv consolidated statements shareholders equity v consolidated statements cash flows vi notes consolidated financial statements management compensatory plan arrangement signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc john w lindsay john w lindsay president chief executive officer date november 25 2015 pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated exhibit index following documents included exhibits form 10k exhibits incorporated herein duly noted exhibit description 101 financial statements form 10k formatted xbrl consolidated statements income ii consolidated statements comprehensive income iii consolidated balance sheets iv consolidated statements shareholders equity v consolidated statements cash flows vi notes consolidated financial statements management compensatory plan arrangementitem 15 exhibits financial statement schedules 1 financial statements consolidated financial statements together notes thereto report ernst young llp dated november 23 2016 listed included item 8 financial statements supplementary data form 10k 2 financial statement schedules omitted applicable required information contained financial statements included notes thereto 3 exhibits following documents included exhibits form 10k exhibits incorporated reference duly noted 31 amended restated certificate incorporation helmerich payne inc incorporated herein reference exhibit 31 companys form 8k filed march 14 2012 sec file 00104221 32 amended restated bylaws helmerich payne inc incorporated herein reference exhibit 31 companys form 8k filed september 7 2016 sec file 00104221 41 base indenture dated march 19 2015 helmerich payne international drilling co helmerich payne inc wells fargo bank national association incorporated herein reference exhibit 41 companys form 8k filed march 19 2015 sec file 00104221 42 first supplemental indenture dated march 19 2015 helmerich payne international drilling co helmerich payne inc wells fargo bank national association incorporated herein reference exhibit 42 companys form 8k filed march 19 2015 sec file 00104221 43 form note included exhibit 42 101 change control agreement applicable chief executive officer form change control agreement applicable certain officers ceo employees helmerich payne inc incorporated herein reference exhibits 101 102 companys quarterly report form 10q securities exchange commission quarter ended june 30 2016 sec file 00104221 102 credit agreement dated july 13 2016 among helmerich payne international drilling co helmerich payne inc wells fargo bank national association incorporated reference exhibit 101 companys form 8k filed july 13 2016 sec file 00104221 103 office lease dated may 30 2003 kb fund iv helmerich payne inc incorporated herein reference exhibit 1018 companys annual report form 10k securities exchange commission fiscal 2003 sec file 00104221 104 first amendment lease asp inc helmerich payne inc incorporated herein reference exhibit 101 companys form 8k filed may 29 2008 sec file 00104221 105 second amendment office lease dated december 13 2011 asp inc helmerich payne inc incorporated herein reference exhibit 101 form 8k filed company december 14 2011 sec file 00104221 106 third amendment office lease dated september 5 2012 asp inc helmerich payne inc form fourth amendment office lease attached thereto exhibit b incorporated herein reference exhibit 1012 companys annual report form 10k securities exchange commission fiscal 2012 sec file 00104221 107 fifth amendment office lease dated december 21 2012 asp inc helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended december 31 2012 sec file 00104221 108 sixth amendment office lease dated april 24 2013 asp inc helmerich payne inc incorporated herein reference exhibit 101 form 8k filed company april 26 2013 sec file 00104221 109 seventh amendment office lease dated september 16 2013 asp inc helmerich payne inc incorporated herein reference exhibit 101 form 8k filed company september 17 2013 sec file 00104221 1010 eighth amendment office lease dated march 24 2014 asp inc helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended march 31 2014 sec file 00104221 1011 ninth amendment office lease dated june 16 2014 asp inc helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended june 30 2014 sec file 00104221 1012 tenth amendment office lease dated november 26 2014 asp inc helmerich payne inc incorporated herein reference exhibit 105 companys quarterly report form 10q securities exchange commission quarter ended december 31 2014 sec file 00104221 1013 eleventh amendment office lease dated february 18 2015 twelfth amendment office lease dated june 30 2015 helmerich payne inc asp inc incorporated herein reference exhibits 101 102 companys quarterly report form 10q securities exchange commission quarter ended june 30 2015 sec file 00104221 1014 thirteenth amendment office lease dated october 9 2015 asp inc helmerich payne inc incorporated herein reference exhibit 101 companys annual report form 10k securities exchange commission fiscal 2015 sec file 00104221 1015 helmerich payne inc 2005 longterm incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2006 1016 20121 amendment helmerich payne inc 2005 longterm incentive plan incorporated herein reference exhibit 106 companys quarterly report form 10q securities exchange commission quarter ended march 31 2012 sec file 00104221 1017 form agreements helmerich payne inc 2005 longterm incentive plan applicable certain executives nonqualified stock option agreement ii incentive stock option agreement iii restricted stock award agreement incorporated herein reference exhibit 102 companys form 8k filed december 7 2009 sec file 00104221 1018 form agreements helmerich payne inc 2005 longterm incentive plan applicable participants certain executives nonqualified stock option agreement incentive stock option agreement restricted stock award agreement incorporated herein reference exhibit 103 companys form 8k filed december 7 2009 sec file 00104221 1019 form amendment nonqualified stock option agreements amendment restricted stock award agreements helmerich payne inc 2005 longterm incentive plan applicable certain executive officers incorporated herein reference exhibit 104 companys form 8k filed december 7 2009 sec file 00104221 1020 form amendment nonqualified stock option agreements amendment restricted stock award agreements helmerich payne inc 2005 longterm incentive plan applicable participants certain executive officers incorporated herein reference exhibit 105 companys form 8k filed december 7 2009 sec file 00104221 1021 helmerich payne inc 2010 longterm incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2011 1022 form agreements helmerich payne inc 2010 longterm incentive plan applicable certain executives nonqualified stock option award agreement incorporated herein reference exhibit 101 companys form 8k filed march 14 2012 sec file 00104221 ii restricted stock award agreement incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended december 31 2013 sec file 00104221 1023 form agreements helmerich payne inc 2010 longterm incentive plan applicable participants certain executives nonqualified stock option award agreement incorporated herein reference exhibit 102 companys form 8k filed march 14 2012 sec file 00104221 ii restricted stock award agreement incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended december 31 2013 sec file 00104221 1024 form agreements helmerich payne inc 2010 longterm incentive plan applicable directors nonqualified stock option award agreement ii restricted stock award agreement incorporated reference exhibit 103 companys form 8k filed march 14 2012 sec file 00104221 1025 helmerich payne inc 2016 omnibus incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 19 2016 1026 form agreements helmerich payne inc 2016 omnibus incentive plan applicable certain executives nonqualified stock option award agreement ii restricted stock award agreement 1027 form agreements helmerich payne inc 2016 omnibus incentive plan applicable participants certain executives nonqualified stock option award agreement ii restricted stock award agreement 1028 form agreements helmerich payne inc 2016 omnibus incentive plan applicable directors nonqualified stock option award agreement ii restricted stock award agreement 1029 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1030 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1031 helmerich payne inc director deferred compensation plan incorporated herein reference exhibit 103 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1032 advisory services agreement dated march 5 2014 helmerich payne inc hans c helmerich incorporated herein reference exhibit 101 companys form 8k filed march 7 2014 sec file 00104221 1033 advisory services agreement effective march 4 2015 helmerich payne inc steven r mackey incorporated herein reference exhibit 107 companys quarterly report form 10q securities exchange commission quarter ended march 31 2015 sec file 00104221 1034 amendment advisory services agreement dated february 28 2016 helmerich payne inc steven r mackey incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended march 31 2016 sec file 00104221 1035 confidential settlement agreement general release claims entered october 14 2016 joshua keel helmerich payne inc helmerich payne international drilling co certain parties thereto 121 helmerich payne incs statement regarding computation ratio earnings fixed charges list subsidiaries company 231 consent independent registered public accounting firm 311 certification chief executive officer pursuant rule 13a14a promulgated securities exchange act 1934 amended adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer pursuant rule 13a14a promulgated securities exchange act 1934 amended adopted pursuant section 302 sarbanesoxley act 2002 32 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 991 plea agreement dated october 30 2013 helmerich payne international drilling co united states department justice united states attorneys office eastern district louisiana incorporated herein reference exhibit 991 companys form 8k filed november 8 2013 sec file 00104221 financial statements form 10k formatted xbrl consolidated statements operations ii consolidated statements comprehensive income loss iii consolidated balance sheets iv consolidated statements shareholders equity v consolidated statements cash flows vi notes consolidated financial statements management compensatory plan arrangement item 16 form 10k summary none signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc john w lindsay john w lindsay president chief executive officer date november 23 2016 pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated exhibit index following documents included exhibits form 10k exhibits incorporated herein duly noted management compensatory plan arrangementitem 15 exhibits financial statement schedules 1 financial statements consolidated financial statements together notes thereto report ernst young llp dated november 22 2017 listed included item 8 “financial statements supplementary data” form 10k page report independent registered public accounting firm consolidated statements operations years ended september 30 2017 2016 2015 consolidated statements comprehensive income loss years ended september 30 2017 2016 2015 consolidated balance sheets september 30 2017 2016 consolidated statements shareholders’ equity years ended september 30 2017 2016 2015 consolidated statements cash flows years ended september 30 2017 2016 2015 notes consolidated financial statements 2 financial statement schedules omitted applicable required information contained financial statements included notes thereto 3 exhibits following documents included exhibits form 10k exhibits incorporated reference duly noted 1017 helmerich payne inc 2005 longterm incentive plan incorporated herein reference appendix “a” company’s proxy statement schedule 14a filed january 26 2006 1018 20121 amendment helmerich payne inc 2005 longterm incentive plan incorporated herein reference exhibit 106 company’s quarterly report form 10q securities exchange commission quarter ended march 31 2012 sec file 00104221 1019 form agreements helmerich payne inc 2005 longterm incentive plan applicable certain executives nonqualified stock option agreement ii incentive stock option agreement iii restricted stock award agreement incorporated herein reference exhibit 102 company’s form 8k filed december 7 2009 sec file 00104221 1020 form agreements helmerich payne inc 2005 longterm incentive plan applicable participants certain executives nonqualified stock option agreement incentive stock option agreement restricted stock award agreement incorporated herein reference exhibit 103 company’s form 8k filed december 7 2009 sec file 00104221 1021 form amendment nonqualified stock option agreements amendment restricted stock award agreements helmerich payne inc 2005 longterm incentive plan applicable certain executive officers incorporated herein reference exhibit 104 company’s form 8k filed december 7 2009 sec file 00104221 1022 form amendment nonqualified stock option agreements amendment restricted stock award agreements helmerich payne inc 2005 longterm incentive plan applicable participants certain executive officers incorporated herein reference exhibit 105 company’s form 8k filed december 7 2009 sec file 00104221 1023 helmerich payne inc 2010 longterm incentive plan incorporated herein reference appendix “a” company’s proxy statement schedule 14a filed january 26 2011 1024 form agreements helmerich payne inc 2010 longterm incentive plan applicable certain executives nonqualified stock option award agreement incorporated herein reference exhibit 101 company’s form 8k filed march 14 2012 sec file 00104221 ii restricted stock award agreement incorporated herein reference exhibit 101 company’s quarterly report form 10q securities exchange commission quarter ended december 31 2013 sec file 00104221 1025 form agreements helmerich payne inc 2010 longterm incentive plan applicable participants certain executives nonqualified stock option award agreement incorporated herein reference exhibit 102 company’s form 8k filed march 14 2012 sec file 00104221 ii restricted stock award agreement incorporated herein reference exhibit 102 company’s quarterly report form 10q securities exchange commission quarter ended december 31 2013 sec file 00104221 1026 form agreements helmerich payne inc 2010 longterm incentive plan applicable directors nonqualified stock option award agreement ii restricted stock award agreement incorporated reference exhibit 103 company’s form 8k filed march 14 2012 sec file 00104221 1027 helmerich payne inc 2016 omnibus incentive plan incorporated herein reference appendix “a” company’s proxy statement schedule 14a filed january 19 2016 1028 form agreements helmerich payne inc 2016 omnibus incentive plan applicable certain executives nonqualified stock option award agreement ii restricted stock award agreement incorporated reference exhibit 1026 company’s annual report form 10k securities exchange commission fiscal 2016 sec file 00104221 management compensatory plan arrangement item 16 form 10k summary none page left blank intentionally signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized date november 22 2017 pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated signature title date john w lindsay director president chief executive november 22 2017 john w lindsay officer principal executive officer juan pablo tardio vice president chief financial officer november 22 2017 juan pablo tardio principal financial officer gordon k helm vice president controller principal november 22 2017 gordon k helm accounting officer hans helmerich director chairman board november 22 2017 hans helmerich kevin g cramton director november 22 2017 kevin g cramton randy foutch director november 22 2017 randy foutch paula marshall director november 22 2017 paula marshall jose r mas director november 22 2017 jose r mas thomas petrie director november 22 2017 thomas petrie donald f robillard jr director november 22 2017 donald f robillard jr edward b rust jr director november 22 2017 edward b rust jr john zeglis director november 22 2017 john zeglisitem 15 exhibits financial statement schedules 1 financial statements consolidated financial statements together notes thereto report ernst young llp dated november 16 2018 listed included item 8 “financial statements supplementary data” form 10k 2 financial statement schedules omitted applicable required information contained financial statements included notes thereto 3 exhibits following documents included exhibits form 10k exhibits incorporated reference duly noted management compensatory plan arrangement item 16 form 10k summary none page left blank intentionally signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated signature title date john w lindsay director president chief executive november 16 2018 john w lindsay officer principal executive officer mark w smith vice president chief financial officer november 16 2018 mark w smith principal financial officer principal accounting officer hans helmerich director chairman board november 16 2018 hans helmerich delany bellinger director november 16 2018 delany bellinger kevin g cramton director november 16 2018 kevin g cramton randy foutch director november 16 2018 randy foutch paula marshall director november 16 2018 paula marshall jose r mas director november 16 2018 jose r mas thomas petrie director november 16 2018 thomas petrie donald f robillard jr director november 16 2018 donald f robillard jr edward b rust jr director november 16 2018 edward b rust jr john zeglis director november 16 2018 john zeglisitem 15 exhibits financial statement schedules 1 financial statements consolidated financial statements together notes thereto report ernst young llp dated november 15 2019 listed included item 8 “financial statements supplementary data” form 10k 2 financial statement schedules omitted applicable required information contained financial statements included notes thereto 3 exhibits following documents included exhibits form 10k exhibits incorporated reference duly noted financial statements form 10k formatted inline xbrl consolidated statements operations ii consolidated statements comprehensive income loss iii consolidated balance sheets iv consolidated statements shareholders’ equity v consolidated statements cash flows vi notes consolidated financial statements cover page interactive date file formatted inline xbrl contained exhibit 101 management compensatory plan arrangement item 16 form 10k summary none page left blank intentionally signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicateditem 15 exhibits financial statement schedules 1 financial statements consolidated financial statements together notes thereto report ernst young llp dated november 20 2020 listed included item 8 “financial statements supplementary data” form 10k 2 financial statement schedules omitted applicable required information contained financial statements included notes thereto 3 exhibits following documents included exhibits form 10k exhibits incorporated reference duly noted management compensatory plan arrangement item 16 form 10k summary none page left blank intentionally signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicateditem 15 exhibits financial statement schedules 1 financial statements consolidated financial statements together notes thereto report ernst young llp dated november 26 2014 included item 8 financial statements supplementary data form 10k 2 financial statement schedules omitted applicable required information contained financial statements included notes thereto 3 exhibits following documents included exhibits form 10k exhibits incorporated reference duly noted 31 amended restated certificate incorporation helmerich payne inc incorporated herein reference exhibit 31 companys form 8k filed march 14 2012 sec file 00104221 32 amended restated bylaws helmerich payne inc incorporated herein reference exhibit 31 companys form 8ka filed june 9 2014 sec file 00104221 41 rights agreement dated january 8 1996 company liberty national bank trust company oklahoma city na incorporated herein reference exhibit 1 companys form 8k filed january 18 1996 sec file 00104221 42 amendment rights agreement dated december 8 2005 company umb bank na incorporated herein reference exhibit 4 companys form 8k filed december 12 2005 sec file 00104221 101 helmerich payne inc 2000 stock incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2001 102 20121 amendment helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 105 companys quarterly report form 10q securities exchange commission quarter ended march 31 2012 sec file 00104221 103 form agreements helmerich payne inc 2000 stock incentive plan restricted stock award agreement ii incentive stock option agreement iii nonqualified stock option agreement incorporated reference exhibit 992 companys registration statement 33363124 form s8 dated june 15 2001 104 form director nonqualified stock option agreement helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 105 form change control agreement helmerich payne inc incorporated herein reference exhibits 102 103 companys quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 106 note purchase agreement dated june 15 2009 among helmerich payne international drilling co helmerich payne inc various note purchasers incorporated reference exhibit 101 companys form 8k filed july 21 2009 sec file 00104221 107 credit agreement dated may 25 2012 among helmerich payne international drilling co helmerich payne inc wells fargo bank national association incorporated reference exhibit 101 companys form 8k filed may 31 2012 sec file 00104221 108 office lease dated may 30 2003 kb fund iv helmerich payne inc incorporated herein reference exhibit 1018 companys annual report form 10k securities exchange commission fiscal 2003 sec file 00104221 109 first amendment lease asp inc helmerich payne inc incorporated herein reference exhibit 101 companys form 8k filed may 29 2008 sec file 00104221 1010 second amendment office lease dated december 13 2011 asp inc helmerich payne inc incorporated herein reference exhibit 101 form 8k filed company december 14 2011 sec file 00104221 1011 third amendment office lease dated september 5 2012 asp inc helmerich payne inc incorporated herein reference exhibit 1012 companys annual report form 10k securities exchange commission fiscal 2012 sec file 00104221 1012 fifth amendment office lease dated december 21 2012 asp inc helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended december 31 2012 sec file 00104221 1013 sixth amendment office lease dated april 24 2013 asp inc helmerich payne inc incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended june 30 2013 sec file 00104221 1014 seventh amendment office lease dated september 16 2013 asp inc helmerich payne inc incorporated herein reference exhibit 101 form 8k filed company september 17 2013 sec file 00104221 1015 eighth amendment office lease dated march 24 2014 asp inc helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended march 31 2014 sec file 00104221 1016 ninth amendment office lease dated june 16 2014 asp inc helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended june 30 2014 sec file 00104221 1017 helmerich payne inc annual bonus plan executive officers incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended february 7 2013 sec file 00104221 1018 helmerich payne inc 2005 longterm incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2006 1019 20121 amendment helmerich payne inc 2005 longterm incentive plan incorporated herein reference exhibit 106 companys quarterly report form 10q securities exchange commission quarter ended march 31 2012 sec file 00104221 1020 form agreements helmerich payne inc 2005 longterm incentive plan applicable certain executives nonqualified stock option agreement ii incentive stock option agreement iii restricted stock award agreement incorporated herein reference exhibit 102 companys form 8k filed december 7 2009 sec file 00104221 1021 form agreements helmerich payne inc 2005 longterm incentive plan applicable participants certain executives nonqualified stock option agreement incentive stock option agreement restricted stock award agreement incorporated herein reference exhibit 103 companys form 8k filed december 7 2009 sec file 00104221 1022 form amendment nonqualified stock option agreements amendment restricted stock award agreements helmerich payne inc 2005 longterm incentive plan applicable certain executive officers incorporated herein reference exhibit 104 companys form 8k filed december 7 2009 sec file 00104221 1023 form amendment nonqualified stock option agreements amendment restricted stock award agreements helmerich payne inc 2005 longterm incentive plan applicable participants certain executive officers incorporated herein reference exhibit 105 companys form 8k filed december 7 2009 sec file 00104221 1024 helmerich payne inc 2010 longterm incentive plan incorporated herein reference appendix companys proxy statement schedule 14a filed january 26 2011 1025 form agreements helmerich payne inc 2010 longterm incentive plan applicable certain executives nonqualified stock option award agreement incorporated herein reference exhibit 101 companys form 8k filed march 14 2012 sec file 00104221 ii restricted stock award agreement incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended december 30 2014 sec file 00104221 1026 form agreements helmerich payne inc 2010 longterm incentive plan applicable participants certain executives nonqualified stock option award agreement incorporated herein reference exhibit 102 companys form 8k filed march 14 2012 sec file 00104221 ii restricted stock award agreement incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended december 30 2014 sec file 00104221 1027 form agreements helmerich payne inc 2010 longterm incentive plan applicable directors nonqualified stock option award agreement ii restricted stock award agreement incorporated reference exhibit 103 companys form 8k filed march 14 2012 sec file 00104221 1028 fabrication contract helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 101 companys form 8k filed december 7 2006 sec file 00104221 1029 contract dated july 18 2007 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 101 companys form 8k filed july 18 2007 sec file 00104221 1030 amendment contract dated august 8 2008 helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 1033 companys annual report form 10k securities exchange commission fiscal 2008 sec file 00104221 1031 amendment contract dated august 8 2008 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 1034 companys annual report form 10k securities exchange commission fiscal 2008 sec file 00104221 1032 second amendment contract dated march 26 2010 helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 1024 companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1033 second amendment contract dated march 26 2010 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 1025 companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1034 third amendment contract dated august 4 2011 helmerich payne international drilling co southeast texas industries inc incorporated herein reference exhibit 1026 companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1035 third amendment contract dated august 4 2011 helmerich payne international drilling co southeast texas industrial services inc incorporated herein reference exhibit 1027 companys annual report form 10k securities exchange commission fiscal 2011 sec file 00104221 1036 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 101 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1037 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1038 helmerich payne inc director deferred compensation plan incorporated herein reference exhibit 103 companys quarterly report form 10q securities exchange commission quarter ended december 31 2008 sec file 00104221 1039 stock purchase agreement dated may 23 2013 helmerich payne international drilling co atwood oceanics inc incorporated herein reference exhibit 102 companys quarterly report form 10q securities exchange commission quarter ended june 30 2013 sec file 00104221 1040 lockupagreement dated may 23 2013 helmerich payne international drilling co goldman sachs co incorporated herein reference exhibit 103 companys quarterly report form 10q securities exchange commission quarter ended june 30 2013 sec file 00104221 1041 first amendment stock purchase agreement dated june 13 2013 helmerich payne international drilling co atwood oceanics inc incorporated herein reference exhibit 104 companys quarterly report form 10q securities exchange commission quarter ended june 30 2013 sec file 00104221 1042 advisory services agreement dated march 5 2014 helmerich payne inc hans c helmerich incorporated herein reference exhibit 101 companys form 8k filed march 7 2014 sec file 00104221 21 list subsidiaries company 231 consent independent registered public accounting firm 311 certification chief executive officer pursuant rule 13a14a promulgated securities exchange act 1934 amended adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer pursuant rule 13a14a promulgated securities exchange act 1934 amended adopted pursuant section 302 sarbanesoxley act 2002 32 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 991 plea agreement dated october 30 2013 helmerich payne international drilling co united states department justice united states attorneys office eastern district louisiana incorporated herein reference exhibit 991 companys form 8k filed november 8 2013 sec file 00104221 101 financial statements form 10k formatted xbrl consolidated statements income ii consolidated statements comprehensive income iii consolidated balance sheets iv consolidated statements shareholders equity v consolidated statements cash flows vi notes consolidated financial statements management compensatory plan arrangement signatures pursuant requirements section 13 15d securities exchange act 1934 company duly caused report signed behalf undersigned thereunto duly authorized helmerich payne inc john w lindsay john w lindsay president chief executive officer date november 26 2014 pursuant requirements securities exchange act 1934 report signed following persons behalf company capacities dates indicated exhibit index following documents included exhibits form 10k exhibits incorporated herein duly noted management compensatory plan arrangementnanitem 15 exhibits financial statement schedules 1 financial statements following appear company’s annual report pages indicated incorporated herein reference 2 financial statement schedules omitted inapplicable required information contained financial statements included notes thereto 3 exhibits following documents included exhibits form 10k exhibits incorporated herein duly noted unless noted exhibit filed herewith 31 restated certificate incorporation amendment restated certificate incorporation company incorporated herein reference exhibit 31 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 32 amended restated bylaws company incorporated herein reference exhibit 32 company’s quarterly report form 10q securities exchange commission quarter ended march 31 2002 sec file 00104221 41 rights agreement dated january 8 1996 company liberty national bank trust company oklahoma city na incorporated herein reference company’s form 8a dated january 18 1996 sec file 00104221 42 amendment 1 rights agreement dated december 8 2005 company umb bank na incorporated herein reference exhibit 4 company’s form 8k filed december 12 2005 101 consulting services agreement w h helmerich iii company effective january 1 1990 incorporated herein reference exhibit 103 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 102 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 106 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 103 helmerich payne inc 1990 stock option plan incorporated herein reference exhibit 107 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 104 form nonqualified stock option agreement 1990 stock option plan incorporated reference exhibit 992 company’s registration statement 3355239 form s8 dated august 26 1994 105 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 109 company’s annual report form 10k securities exchange commission fiscal 1999 sec file 00104221 106 helmerich payne inc 1996 stock incentive plan incorporated herein reference exhibit 991 company’s registration statement 33334939 form s8 dated september 4 1997 107 form nonqualified stock option agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 992 company’s registration statement 33334939 form s8 dated september 4 1997 108 form restricted stock agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 1012 company’s annual report form 10k securities exchange commission fiscal 1997 sec file 00104221 109 helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 991 company’s registration statement 33363124 form s8 dated june 15 2001 1010 form agreements helmerich payne inc 2000 stock incentive plan restricted stock award agreement ii incentive stock option agreement iii nonqualified stock option agreement incorporated reference exhibit 992 company’s registration statement 33363124 form s8 dated june 15 2001 1011 form director nonqualified stock option agreement 2000 helmerich payne inc stock incentive plan incorporated herein reference exhibit 101 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1012 form change control agreement helmerich payne inc incorporated herein reference exhibit 103 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1013 credit agreement dated july 16 2002 among helmerich payne international drilling co helmerich payne inc several lenders time party thereto bank oklahoma na incorporated herein reference exhibit 105 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1014 first amendment credit agreement dated july 15 2003 among helmerich payne inc helmerich payne international drilling co bank oklahoma na 1015 second amendment credit agreement dated may 4 2004 among helmerich payne inc helmerich payne international drilling co bank oklahoma na 1016 third amendment credit agreement dated july 13 2004 among helmerich payne inc helmerich payne international drilling co bank oklahoma na 1017 fourth amendment credit agreement dated july 12 2005 among helmerich payne inc helmerich payne international drilling co bank oklahoma na incorporated herein reference exhibit 101 company’s form 8k filed july 13 2005 sec file 00104221 1018 note purchase agreement dated august 15 2002 among helmerich payne international drilling co helmerich payne inc various insurance companies incorporated herein reference exhibit 1020 company’s annual report form 10k securities exchange commission fiscal 2002 sec file 00104221 1019 office lease dated may 30 2003 kb fund iv helmerich payne inc incorporated herein reference exhibit 1018 company’s annual report form 10k securities exchange commission fiscal 2003 sec file 00104221 1020 helmerich payne inc director deferred compensation plan incorporated herein reference exhibit 101 company’s form 8k filed september 9 2004 1021 shareholders agreement registration rights agreement dated july 19 2004 helmerich payne international drilling co atwood oceanics inc incorporated herein reference exhibit 11 company’s amended schedule 13d filed july 21 2004 1022 underwriting agreement dated october 13 2004 helmerich payne international drilling co various underwriters incorporated herein reference exhibit 11 company’s form 8k filed october 14 2004 1023 amended restated helmerich payne inc annual bonus plan executive officers together fiscal 2005 executive officer compensation incorporated herein reference exhibit 101 company’s form 8k filed december 9 2005 13 company’s annual report shareholders fiscal 2005 21 list subsidiaries company 231 consent independent registered public accounting firm 311 certification chief executive officer adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer adopted pursuant section 302 sarbanesoxley act 2002 32 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 management compensatory plan arrangement exhibit index 31 restated certificate incorporation amendment restated certificate incorporation company incorporated herein reference exhibit 31 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 32 amended restated bylaws company incorporated herein reference exhibit 32 company’s quarterly report form 10q securities exchange commission quarter ended march 31 2002 sec file 00104221 41 rights agreement dated january 8 1996 company liberty national bank trust company oklahoma city na incorporated herein reference company’s form 8a dated january 18 1996 sec file 00104221 42 amendment 1 rights agreement dated december 8 2005 company vmb bank na incorporated herein reference exhibit 4 company’s form 8k filed december 12 2005 101 consulting services agreement w h helmerich iii company effective january 1 1990 incorporated herein reference exhibit 103 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 102 supplemental retirement income plan salaried employees helmerich payne inc incorporated herein reference exhibit 106 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 103 helmerich payne inc 1990 stock option plan incorporated herein reference exhibit 107 company’s annual report form 10k securities exchange commission fiscal 1996 sec file 00104221 104 form nonqualified stock option agreement 1990 stock option plan incorporated reference exhibit 992 company’s registration statement 3355239 form s8 dated august 26 1994 105 supplemental savings plan salaried employees helmerich payne inc incorporated herein reference exhibit 109 company’s annual report form 10k securities exchange commission fiscal 1999 sec file 00104221 106 helmerich payne inc 1996 stock incentive plan incorporated herein reference exhibit 991 company’s registration statement 33334939 form s8 dated september 4 1997 107 form nonqualified stock option agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 992 company’s registration statement 33334939 form s8 dated september 4 1997 108 form restricted stock agreement helmerich payne inc 1996 stock incentive plan incorporated reference exhibit 1012 company’s annual report form 10k securities exchange commission fiscal 1997 sec file 00104221 109 helmerich payne inc 2000 stock incentive plan incorporated herein reference exhibit 991 company’s registration statement 33363124 form s8 dated june 15 2001 1010 form agreements helmerich payne inc 2000 stock incentive plan restricted stock award agreement ii incentive stock option agreement iii nonqualified stock option agreement incorporated reference exhibit 992 company’s registration statement 33363124 form s8 dated june 15 2001 1011 form director nonqualified stock option agreement 2000 helmerich payne inc stock incentive plan incorporated herein reference exhibit 101 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1012 form change control agreement helmerich payne inc incorporated herein reference exhibit 103 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1013 credit agreement dated july 16 2002 among helmerich payne international drilling co helmerich payne inc several lenders time party thereto bank oklahoma na incorporated herein reference exhibit 105 company’s quarterly report form 10q securities exchange commission quarter ended june 30 2002 sec file 00104221 1014 first amendment credit agreement dated july 15 2003 among helmerich payne inc helmerich payne international drilling co bank oklahoma na 1015 second amendment credit agreement dated may 4 2004 among helmerich payne inc helmerich payne international drilling co bank oklahoma na 1016 third amendment credit agreement dated july 13 2004 among helmerich payne inc helmerich payne international drilling co bank oklahoma na 1017 fourth amendment credit agreement dated july 12 2005 among helmerich payne inc helmerich payne international drilling co bank oklahoma na incorporated herein reference exhibit 101 company’s form 8k filed july 13 2005 sec file 00104221 1018 note purchase agreement dated august 15 2002 among helmerich payne international drilling co helmerich payne inc various insurance companies incorporated herein reference exhibit 1020 company’s annual report form 10k securities exchange commission fiscal 2002 sec file 00104221 1019 office lease dated may 30 2003 kb fund iv helmerich payne inc incorporated herein reference exhibit 1018 company’s annual report form 10k securities exchange commission fiscal 2003 sec file 00104221 1020 helmerich payne inc director deferred compensation plan incorporated herein reference exhibit 101 company’s form 8k filed september 9 2004 1021 shareholders agreement registration rights agreement dated july 19 2004 helmerich payne international drilling co atwood oceanics inc incorporated herein reference exhibit 11 company’s amended schedule 13d filed july 21 2004 1022 underwriting agreement dated october 13 2004 helmerich payne international drilling co various underwriters incorporated herein reference exhibit 11 company’s form 8k filed october 14 2004 1023 amended restated helmerich payne inc annual bonus plan executive officers together fiscal 2005 executive officer compensation incorporated herein reference exhibit 101 company’s form 8k filed december 9 2005 13 company’s annual report shareholders fiscal 2005 21 list subsidiaries company 231 consent independent registered public accounting firm 311 certification chief executive officer adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer adopted pursuant section 302 sarbanesoxley act 2002 32 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 management compensatory plan arrangement