Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Nov. 08, 2018 | Mar. 29, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | Helmerich & Payne, Inc. | ||
Entity Central Index Key | 46,765 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 7,250 | ||
Entity Common Stock, Shares Outstanding | 109,038,462 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 284,355 | $ 521,375 |
Short-term investments | 41,461 | 44,491 |
Accounts receivable, net of allowance of $6,217 and $5,721, respectively | 565,202 | 477,074 |
Inventories of materials and supplies, net | 158,134 | 137,204 |
Prepaid expenses and other | 66,398 | 55,123 |
Total current assets | 1,115,550 | 1,235,267 |
Investments | 98,696 | 84,026 |
Property, plant and equipment, net | 4,857,382 | 5,001,051 |
Noncurrent Assets: | ||
Goodwill | 64,777 | 51,705 |
Intangible assets, net | 73,207 | 50,785 |
Other assets | 5,255 | 17,154 |
Total noncurrent assets | 143,239 | 119,644 |
Total Assets | 6,214,867 | 6,439,988 |
Current Liabilities: | ||
Accounts payable | 132,664 | 135,628 |
Accrued liabilities | 244,504 | 208,757 |
Total current liabilities | 377,168 | 344,385 |
Noncurrent Liabilities: | ||
Long-term debt | 493,968 | 492,902 |
Deferred income taxes | 853,136 | 1,332,689 |
Other | 93,606 | 101,409 |
Total noncurrent liabilities | 1,454,964 | 1,931,012 |
Commitments and Contingencies (Note 15) | ||
Shareholders' Equity: | ||
Common stock, $.10 par value, 160,000,000 shares authorized,112,008,961 and 111,956,875 shares issued as of September 30, 2018 and 2017, respectively, and 108,993,718 and 108,604,047 shares outstanding as of September 30, 2018 and 2017, respectively | 11,201 | 11,196 |
Preferred stock, no par value, 1,000,000 shares authorized, no shares issued | ||
Additional paid-in capital | 500,393 | 487,248 |
Retained earnings | 4,027,779 | 3,855,686 |
Accumulated other comprehensive income | 16,550 | 2,300 |
Treasury stock, at cost, 3,015,243 shares and 3,352,828 shares as of September 30, 2018 and 2017, respectively | (173,188) | (191,839) |
Total shareholders' equity | 4,382,735 | 4,164,591 |
Total liabilities and shareholders' equity | $ 6,214,867 | $ 6,439,988 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Consolidated Balance Sheets | ||
Allowance for accounts receivable (in dollars) | $ 6,217 | $ 5,721 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 160,000,000 | 160,000,000 |
Common stock, shares issued | 112,008,961 | 111,956,875 |
Common stock, shares outstanding | 108,993,718 | 108,604,047 |
Preferred stock, no par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Treasury stock, shares | 3,015,243 | 3,352,828 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating revenues: | |||
Contract drilling | $ 2,449,051 | $ 1,788,758 | $ 1,610,957 |
Other | 38,217 | 15,983 | 13,275 |
Total operating revenues | 2,487,268 | 1,804,741 | 1,624,232 |
Operating costs and expenses: | |||
Contract drilling operating expenses, excluding depreciation and amortization | 1,626,387 | 1,242,605 | 892,748 |
Operating expenses applicable to other revenues | 26,223 | 6,712 | 6,057 |
Depreciation and amortization | 583,802 | 585,543 | 598,587 |
Research and development | 18,167 | 12,047 | 10,269 |
Selling, general and administrative | 200,619 | 151,002 | 146,183 |
Asset impairment charge | 23,128 | 6,250 | |
Gain on sale of assets | (22,660) | (20,627) | (9,896) |
Total operating costs and expenses | 2,455,666 | 1,977,282 | 1,650,198 |
Operating income (loss) from continuing operations | 31,602 | (172,541) | (25,966) |
Other income (expense) | |||
Interest and dividend income | 8,017 | 5,915 | 3,166 |
Interest expense | (24,265) | (19,747) | (22,913) |
Loss on investment securities | 1 | (25,989) | |
Other | 486 | 1,775 | (965) |
Total other income (expense) | (15,761) | (12,057) | (46,701) |
Income (loss) from continuing operations before income taxes | 15,841 | (184,598) | (72,667) |
Income tax benefit | (477,169) | (56,735) | (19,677) |
Income (loss) from continuing operations | 493,010 | (127,863) | (52,990) |
Income from discontinued operations before income taxes | 23,389 | 3,285 | 2,360 |
Income tax provision | 33,727 | 3,634 | 6,198 |
Loss from discontinued operations | (10,338) | (349) | (3,838) |
Net Income (Loss) | $ 482,672 | $ (128,212) | $ (56,828) |
Basic earnings per common share: | |||
Income (loss) from continuing operations (in dollars per share) | $ 4.49 | $ (1.20) | $ (0.50) |
Loss from discontinued operations (in dollars per share) | (0.10) | (0.04) | |
Net income (loss) (in dollars per share) | 4.39 | (1.20) | (0.54) |
Diluted earnings per common share: | |||
Income (loss) from continuing operations (in dollars per share) | 4.47 | (1.20) | (0.50) |
Loss from discontinued operations (in dollars per share) | (0.10) | (0.04) | |
Net income (loss) (in dollars per share) | $ 4.37 | $ (1.20) | $ (0.54) |
Weighted average shares outstanding (in thousands): | |||
Basic (in shares) | 108,851 | 108,500 | 107,996 |
Diluted (in shares) | 109,387 | 108,500 | 107,996 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Consolidated Statements of Comprehensive Income (Loss) | |||||||||||
Net income (loss) | $ 2,453 | $ (8,008) | $ (11,879) | $ 500,106 | $ (22,532) | $ (21,799) | $ (48,818) | $ (35,063) | $ 482,672 | $ (128,212) | $ (56,828) |
Other comprehensive income (loss), net of income taxes: | |||||||||||
Unrealized appreciation (depreciation) on securities, net of income taxes of $3.3 million at September 30, 2018, ($0.5) million at September 30, 2017 and $1.7 million at September 30, 2016 | 9,001 | (829) | 2,772 | ||||||||
Reclassification of realized losses in net income, net of income taxes of $0.6 million at September 30, 2016 | 926 | ||||||||||
Minimum pension liability adjustments, net of income taxes of $1.9 million at September 30, 2018, $1.9 million at September 30, 2017 and ($1.4) million at September 30, 2016 | 5,249 | 3,333 | (2,525) | ||||||||
Other comprehensive income | 14,250 | 2,504 | 1,173 | ||||||||
Comprehensive income (loss) | $ 496,922 | $ (125,708) | $ (55,655) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Consolidated Statements of Comprehensive Income (Loss) | |||
Unrealized appreciation (depreciation) on securities before reclassification, income taxes | $ 3.3 | $ (0.5) | $ 1.7 |
Reclassification of realized gains in net income, income taxes | 0.6 | ||
Minimum pension liability adjustments, income taxes | $ 1.9 | $ 1.9 | $ (1.4) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Total |
Balance at beginning of period at Sep. 30, 2015 | $ 11,099 | $ 420,141 | $ 4,648,346 | $ (1,377) | $ (182,363) | $ 4,895,846 |
Balance (in shares) at Sep. 30, 2015 | 110,987,000 | |||||
Balance (in shares) at Sep. 30, 2015 | 3,220,000 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net income (loss) | (56,828) | (56,828) | ||||
Other comprehensive income (loss) | 1,173 | 1,173 | ||||
Dividends declared | (301,711) | (301,711) | ||||
Exercise of employee stock options, net of shares withheld for employee taxes | $ 22 | 6,937 | $ (5,919) | 1,040 | ||
Exercise of employee stock options, net of shares withheld for employee taxes (in shares) | 220,000 | 99,000 | ||||
Tax benefit of stock-based awards | 934 | 934 | ||||
Vesting of restricted stock awards, net of shares withheld for employee taxes | $ 19 | (3,943) | $ 12 | (3,912) | ||
Vesting of restricted stock awards, net of shares withheld for employee taxes (in shares) | 193,000 | 3,000 | ||||
Stock-based compensation | 24,383 | 24,383 | ||||
Balance at end of period at Sep. 30, 2016 | $ 11,140 | 448,452 | 4,289,807 | (204) | $ (188,270) | 4,560,925 |
Balance (in shares) at Sep. 30, 2016 | 111,400,000 | |||||
Balance (in shares) at Sep. 30, 2016 | 3,322,000 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net income (loss) | (128,212) | (128,212) | ||||
Other comprehensive income (loss) | 2,504 | 2,504 | ||||
Dividends declared | (305,909) | (305,909) | ||||
Exercise of employee stock options, net of shares withheld for employee taxes | $ 42 | 15,738 | $ (5,246) | 10,534 | ||
Exercise of employee stock options, net of shares withheld for employee taxes (in shares) | 415,000 | 88,000 | ||||
Tax benefit of stock-based awards | 4,414 | 4,414 | ||||
Vesting of restricted stock awards, net of shares withheld for employee taxes | $ 14 | (7,539) | $ 1,677 | (5,848) | ||
Vesting of restricted stock awards, net of shares withheld for employee taxes (in shares) | 142,000 | (57,000) | ||||
Stock-based compensation | 26,183 | 26,183 | ||||
Balance at end of period at Sep. 30, 2017 | $ 11,196 | 487,248 | 3,855,686 | 2,300 | $ (191,839) | $ 4,164,591 |
Balance (in shares) at Sep. 30, 2017 | 111,957,000 | 111,956,875 | ||||
Balance (in shares) at Sep. 30, 2017 | 3,353,000 | 3,352,828 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net income (loss) | 482,672 | $ 482,672 | ||||
Other comprehensive income (loss) | 14,250 | 14,250 | ||||
Dividends declared | (310,024) | (310,024) | ||||
Exercise of employee stock options, net of shares withheld for employee taxes | (7,557) | $ 10,992 | 3,435 | |||
Exercise of employee stock options, net of shares withheld for employee taxes (in shares) | 1,000 | (202,000) | ||||
Adoption of ASU 2016-09 (Note 2) | ASU 2016-09 | 872 | (555) | 317 | |||
Vesting of restricted stock awards, net of shares withheld for employee taxes | $ 5 | (11,857) | $ 7,659 | (4,193) | ||
Vesting of restricted stock awards, net of shares withheld for employee taxes (in shares) | 51,000 | (136,000) | ||||
Stock-based compensation | 31,687 | 31,687 | ||||
Balance at end of period at Sep. 30, 2018 | $ 11,201 | $ 500,393 | $ 4,027,779 | $ 16,550 | $ (173,188) | $ 4,382,735 |
Balance (in shares) at Sep. 30, 2018 | 112,009,000 | 112,008,961 | ||||
Balance (in shares) at Sep. 30, 2018 | 3,015,000 | 3,015,243 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Consolidated Statements of Shareholders' Equity | |||
Dividends declared (in dollars per share) | $ 2.82 | $ 2.8 | $ 2.78 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 482,672 | $ (128,212) | $ (56,828) |
Adjustment for income from discontinued operations | 10,338 | 349 | 3,838 |
Income (loss) from continuing operations | 493,010 | (127,863) | (52,990) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 583,802 | 585,543 | 598,587 |
Asset impairment charge | 23,128 | 6,250 | |
Amortization of debt discount and debt issuance costs | 1,067 | 1,055 | 1,168 |
Provision for bad debt | 2,193 | 2,016 | |
(Recovery of) bad debt | (2,013) | ||
Stock-based compensation | 31,687 | 26,183 | 24,383 |
Pension settlement charge | 913 | 1,640 | 4,964 |
(Gain) loss on investment securities | (1) | 25,989 | |
Gain from sale of assets | (22,660) | (20,627) | (9,896) |
Deferred income tax (benefit) expense | (486,758) | (24,111) | 60,088 |
Other | 6,710 | 543 | 151 |
Change in assets and liabilities increasing (decreasing) cash: | |||
Accounts receivable | (85,202) | (97,114) | 72,792 |
Inventories of materials and supplies | (22,427) | (10,607) | 1,944 |
Prepaid expenses and other | (955) | 31,434 | (2,460) |
Accounts payable | (4,461) | 39,412 | (10,907) |
Accrued liabilities | 33,173 | (36,120) | 49,562 |
Deferred income tax liability | 2,268 | 3,472 | 3,703 |
Other noncurrent liabilities | (10,787) | (13,075) | (16,831) |
Net cash provided by operating activities from continuing operations | 544,700 | 361,781 | 754,484 |
Net cash provided by (used in) operating activities from discontinued operations | (169) | (150) | 47 |
Net cash provided by operating activities | 544,531 | 361,631 | 754,531 |
Cash flows from investing activities: | |||
Capital expenditures | (466,584) | (397,567) | (257,169) |
Purchase of short-term investments | (71,049) | (69,866) | (57,276) |
Payment for acquisition of business, net of cash acquired | (47,886) | (70,416) | |
Proceeds from sale of short-term investments | 68,776 | 69,449 | 58,381 |
Proceeds from asset sales | 44,381 | 23,412 | 21,845 |
Net cash used in investing activities | (472,362) | (444,988) | (234,219) |
Cash flows from financing activities: | |||
Payments on long-term debt | (40,000) | ||
Debt issuance costs | (1,111) | ||
Dividends paid | (308,430) | (305,515) | (300,152) |
Proceeds from stock option exercises | 6,355 | 11,285 | 2,774 |
Payments for employee taxes on net settlement of equity awards | (7,114) | (6,599) | (5,646) |
Net cash used in financing activities | (309,189) | (300,829) | (344,135) |
Net increase (decrease) in cash and cash equivalents | (237,020) | (384,186) | 176,177 |
Cash and cash equivalents, beginning of period | 521,375 | 905,561 | 729,384 |
Cash and cash equivalents, end of period | 284,355 | 521,375 | 905,561 |
Cash paid during the period: | |||
Interest paid | 20,502 | 22,936 | 28,011 |
Income tax refund, net | 38,400 | 23,463 | 24,109 |
Changes in accounts payable and accrued liabilities related to purchases of property, plant and equipment | $ (2,245) | $ (10,539) | $ 15,879 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Sep. 30, 2018 | |
NATURE OF OPERATIONS | |
NATURE OF OPERATIONS | HELMERICH & PAYNE, INC. Notes to Consolidated Financial Statements NOTE 1 NATURE OF OPERATIONS Helmerich & Payne, Inc. (which, together with its subsidiaries, is identified as the “Company,” “we,” “us,” or “our,” except where stated or the context requires otherwise) through its operating subsidiaries provides performance-driven drilling services and technologies that are intended to make hydrocarbon recovery safer and more economical for oil and gas exploration and production companies. Our global contract drilling business is composed of three reportable business segments: U.S. Land, Offshore and International Land. During the fiscal year ended September 30, 2018, our U.S. Land operations were primarily located in Colorado, Louisiana, Ohio, Oklahoma, New Mexico, North Dakota, Pennsylvania, Texas, Utah, West Virginia and Wyoming. Our Offshore operations were conducted in the Gulf of Mexico. Our International Land operations had rigs located in five international locations during fiscal year 2018: Argentina, Bahrain, Colombia, Ecuador and United Arab Emirates (“U.A.E.”). Additionally, we focus on research and development of technology designed to improve the efficiency and accuracy of drilling operations. We also own, develop and operate limited commercial real estate properties. Our real estate investments, which are located exclusively within Tulsa, Oklahoma, include a shopping center, multi-tenant industrial warehouse properties, and undeveloped real estate. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES | 12 Months Ended |
Sep. 30, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). We classified our former Venezuelan operation as a discontinued operation in the third quarter of fiscal year 2010, as more fully described in Note 4—Discontinued Operations. Unless indicated otherwise, the information in the Notes to Consolidated Financial Statements relates only to our continuing operations. Principles of Consolidation The consolidated financial statements include the accounts of Helmerich & Payne, Inc. and its domestic and foreign subsidiaries. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the fiscal year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. Foreign Currencies Our functional currency, together with all our foreign subsidiaries, is the U.S. dollar. Monetary assets and liabilities denominated in currencies other than the U.S. dollar are translated at exchange rates in effect at the end of the period, and the resulting gains and losses are recorded on our statement of operations. Aggregate foreign currency losses of $4.0 million, $7.1 million and $9.3 million in fiscal years 2018, 2017 and 2016, respectively, are included in direct operating costs. Use of Estimates The preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents include cash on hand, demand deposits with banks and all highly liquid investments with original maturities of three months or less. Our cash, cash equivalents and short-term investments are subject to potential credit risk, and certain of our cash accounts carry balances greater than the federally insured limits. We had restricted cash and cash equivalents of $41.8 million and $39.1 million at September 30, 2018 and 2017, respectively. Of the total at September 30, 2018 and 2017, $11.3 million and $9.4 million, respectively, is related to the acquisition of drilling technology companies described in Note 3—Business Combinations, $2.0 million as of both year ends is from the initial capitalization of the captive insurance company, and $28.5 million and $27.7 million, respectively, represents an additional amount management has elected to restrict for the purpose of potential insurance claims in our wholly-owned captive insurance company. The restricted amounts are primarily invested in short-term money market securities. See Note 2 for changes to the presentation of restricted cash effective October 1, 2018. The restricted cash and cash equivalents are reflected in the balance sheet as follows: September 30, 2018 2017 (in thousands) Prepaid expenses and other $ 39,830 $ 32,439 Other assets $ 2,000 $ 6,695 Inventories of Materials and Supplies Inventories are primarily replacement parts and supplies held for consumption in our drilling operations. Inventories are valued at the lower of cost or net realizable value. Cost is determined on a weighted average basis and includes the cost of materials, shipping, duties, labor and manufacturing overhead. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Our reserves during fiscal years 2018 and 2017 were 5.9 percent and 6.3 percent, respectively, of the balance to provide for non-recoverable inventory costs. The reserves for excess and obsolete inventory were $9.9 million and $9.2 million for fiscal years 2018 and 2017, respectively. Investments We maintain investments in equity securities of certain publicly traded companies. The cost of securities used in determining realized gains and losses is based on the average cost basis of the security purchased. We regularly review investment securities for impairment based on criteria that include the extent to which the investment’s carrying value exceeds its related fair value, the duration of the market decline and the financial strength and specific prospects of the issuer of the security. Unrealized gains are recognized in other comprehensive income. Unrealized losses that are other than temporary are recognized in earnings. See Note 2 for changes in accounting for investments effective October 1, 2018. Property, Plant, and Equipment Property, plant and equipment are stated at cost less accumulated depreciation. Substantially all property, plant and equipment are depreciated using the straight-line method based on the estimated useful lives of the assets after deducting their residual values. The amount of depreciation expense we record is dependent upon certain assumptions, including an asset’s estimated useful life, rate of consumption, and corresponding salvage value. We periodically review these assumptions and may change one or more of these assumptions. Changes in our assumptions may require us to recognize, on a prospective basis, increased or decreased depreciation expense. We capitalize interest on major projects during construction. Interest is capitalized based on the average interest rate on related debt. Capitalized interest for fiscal years 2018, 2017 and 2016 was $0.4 million, $0.3 million and $2.8 million, respectively. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Changes that could prompt such an assessment include a significant decline in revenue or cash margin per day, extended periods of low rig asset group utilization, changes in market demand for a specific asset, obsolescence, completion of specific contracts and/or overall general market conditions. If the review of the long-lived assets indicates that the carrying value of these assets/asset groups is more than the estimated undiscounted future cash flows projected to be realized from the use of the asset and its eventual disposal an impairment charge is made, as required, to adjust the carrying value down to the estimated fair value of the asset. The estimated fair value is determined based upon either an income approach using estimated discounted future cash flows or a market approach. Fair value is estimated, if applicable, considering factors such as recent market sales of rigs of other companies and our own sales of rigs, appraisals and other factors. Cash flows are estimated by management considering factors such as prospective market demand, margins, recent changes in rig technology and its effect on each rig’s marketability, any investment required to make a rig operational, suitability of rig size and make up to existing platforms, and competitive dynamics including industry utilization. Long-lived assets that are held for sale are recorded at the lower of carrying value or the fair value less costs to sell. Goodwill and Intangible Assets Goodwill represents the excess of purchase price over the fair value of net assets acquired in a business combination, at the date of acquisition. Goodwill and indefinite-life intangibles are not amortized but are tested for potential impairment at the reporting unit level at a minimum on an annual basis in the fourth fiscal quarter of each fiscal year or when indications of potential impairment exist. If an impairment is determined to exist, an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized, limited to the total amount of goodwill allocated to that reporting unit. The reporting unit level is defined as an operating segment or one level below an operating segment. Finite-lived intangible assets are amortized using the straight-line method over the period in which these assets contribute to our cash flows, generally estimated to be 15 years and are evaluated for impairment in accordance with our policies for valuation of long-lived assets. Drilling Revenues Contract drilling revenues are comprised of daywork drilling contracts for which the related revenues and expenses are recognized as services are performed and collection is reasonably assured. For certain contracts, we receive payments contractually designated for the mobilization of rigs and other drilling equipment. For certain contracts, mobilization payments received, and direct costs incurred for the mobilization, are deferred and recognized on a straight-line basis over the term of the related drilling contract. Costs incurred to relocate rigs and other drilling equipment to areas in which a contract has not been secured are expensed as incurred. Reimbursements received for out-of-pocket expenses are recorded as both revenues and direct costs. Reimbursements for fiscal years 2018, 2017 and 2016 were $274.7 million, $179.9 million and $125.9 million, respectively. For contracts that are terminated by customers prior to the expirations of their fixed terms, contractual provisions customarily require early termination amounts to be paid to us. Revenues from early terminated contracts are recognized when all contractual requirements have been met. Early termination revenue for fiscal years 2018, 2017 and 2016 was approximately $17.1 million, $29.4 million and $219.0 million, respectively. Rent Revenues We enter into leases with tenants in our rental properties consisting primarily of retail and multi-tenant warehouse space. The lease terms of tenants occupying space in the retail centers and warehouse buildings generally range from three to ten years. Minimum rents are recognized on a straight-line basis over the term of the related leases. Overage and percentage rents are based on tenants’ sales volume. Recoveries from tenants for property taxes and operating expenses are recognized in other operating revenues in the Consolidated Statements of Operations. Our rent revenues are as follows: Year Ended September 30, 2018 2017 2016 (in thousands) Minimum rents $ 9,950 $ 9,735 $ 9,196 Overage and percentage rents $ 1,040 $ 936 $ 1,211 At September 30, 2018, minimum future rental income to be received on noncancelable operating leases was as follows: Fiscal Year Amount (in thousands) 2019 $ 7,709 2020 6,314 2021 4,473 2022 2,488 2023 1,725 Thereafter 4,868 Total $ 27,577 Leasehold improvement allowances are capitalized and amortized over the lease term. At September 30, 2018 and 2017, the cost and accumulated depreciation for real estate properties were as follows: September 30, 2018 2017 (in thousands) Real estate properties $ 69,133 $ 66,005 Accumulated depreciation (42,272) (42,169) $ 26,861 $ 23,836 Income Taxes Current income tax expense is the amount of income taxes expected to be payable for the current fiscal year. Deferred income taxes are computed using the liability method and are provided on all temporary differences between the financial basis and the tax basis of our assets and liabilities. We provide for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed in Accounting Standards Codification (“ASC”) 740, Income Taxes , which is more fully discussed in Note 8—Income Taxes. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. We recognize accrued interest related to unrecognized tax benefits in interest expense and penalties in other expense in the Consolidated Statements of Operations. Earnings per Common Share Basic earnings per share is computed utilizing the two-class method and is calculated based on the weighted-average number of common shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted-average number of common and common equivalent shares outstanding during the periods utilizing the two-class method for stock options and nonvested restricted stock. We have granted and expect to continue to grant to employees restricted stock grants that contain non-forfeitable rights to dividends. Such grants are considered participating securities under ASC 260, Earnings Per Share . As such, we have included these grants in the calculation of our basic earnings per share and calculate basic earnings per share using the two-class method. Stock-Based Compensation Stock-based compensation expense is determined using a fair-value-based measurement method for all awards granted. In computing the impact, the fair value of each option is estimated on the date of grant based on the Black-Scholes options-pricing model utilizing assumptions for a risk free interest rate, volatility, dividend yield and expected remaining term of the awards. The assumptions used in calculating the fair value of stock-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. Stock-based compensation is recognized on a straight-line basis over the requisite service periods of the stock awards, which is generally the vesting period. Compensation expense related to stock options is recorded as a component of general and administrative expenses in the Consolidated Statements of Operations. Treasury Stock Treasury stock purchases are accounted for under the cost method whereby the cost of the acquired stock is recorded as treasury stock. Gains and losses on the subsequent reissuance of shares are credited or charged to additional paid-in capital using the average-cost method. Comprehensive Income or Loss Other comprehensive income or loss refers to revenues, expenses, gains, and losses that are included in comprehensive income or loss but excluded from net income or loss. We report the components of other comprehensive income or loss, net of tax, by their nature and disclose the tax effect allocated to each component in the Consolidated Statements of Comprehensive Income (Loss). Leases We lease office space and equipment for use in operations. Leases are evaluated at inception or upon any subsequent material modification and, depending on the lease terms, are classified as either capital leases or operating leases as appropriate under ASC 840, Leases . For operating leases that contain built-in pre-determined rent escalations, rent expense is recognized on a straight-line basis over the life of the lease. Leasehold improvements are capitalized and amortized over the lease term. We do not have significant capital leases. Recently Issued Accounting Updates Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standard Updates (“ASUs”) to the FASB ASC. We consider the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or clarifications of ASUs listed below. The following tables provide a brief description of recent accounting pronouncements and our analysis of the effects on our financial statements: Standard Description Date of Effect on the Financial Statements or Other Significant Matters Recently Adopted Accounting Pronouncements ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting The standard requires that all excess tax benefits and deficiencies previously recorded as additional paid-in capital be prospectively recorded in income tax expense. The adoption of this ASU could cause volatility in the effective tax rate on a quarter by quarter basis due primarily to fluctuations in the Company's stock price and the timing of stock option exercises and vesting of restricted share grants. The standard requires excess tax benefits to be presented as an operating activity on the statement of cash flows rather than as a financing activity. Excess tax benefits and deficiencies are recorded within the provision for income taxes within the Consolidated Statements of Operations on a prospective basis as required by the standard. The standard also requires taxes paid for employee withholdings to be presented as a financing activity on the statement of cash flows. October 1, 2017 We adopted this ASU during the first quarter of fiscal year 2018. We elected to present changes to the statement of cash flows on a retrospective basis as allowed by the standard in order to maintain comparability between fiscal years. As such, prior period cash flows from operations for the fiscal years ended September 30, 2017 and 2016 have been adjusted to reflect an increase of $4.4 million and $0.9 million, respectively, with a corresponding decrease to cash flows used in financing activities, compared to amounts previously reported. The standard also requires taxes paid for employee withholdings to be presented as a financing activity on the statement of cash flows but this requirement had no impact on our total financing activities as this has been the practice historically. We also elected to account for forfeitures of awards as they occur, instead of estimating a forfeiture amount. On October 1, 2017, we recorded a $0.3 million cumulative-effect adjustment to retained earnings for the differential between the amount of compensation cost previously recorded and the amount that would have been recorded without assuming forfeitures. ASU No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern The new guidance requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Disclosures are required when conditions give rise to substantial doubt. Substantial doubt is deemed to exist when it is probable that the company will be unable to meet its obligations within one year from the financial statement issuance date. September 30, 2017 We adopted ASU No. 2014-15, as required, on September 30, 2017 with no impact on our consolidated financial statements and disclosures. ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory This update simplifies the subsequent measurement of inventory. It replaces the current lower of cost or market test with the lower of cost or net realizable value test. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. October 1, 2017 We adopted this ASU during the first quarter of fiscal year 2018. There was no impact on our consolidated financial statements. ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment The new guidance eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of today’s goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on today’s Step 1). June 30, 2017 As permitted, we early adopted this guidance effective June 30, 2017, with no impact on our consolidated financial statements. Standards that are not yet adopted as of September 30, 2018 ASU No. 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans—General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans This ASU amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. October 1, 2021 We are currently evaluating the impact that the new guidance may have on our consolidated financial statements and disclosures. ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project, where entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. October 1, 2020 We are currently evaluating the impact that the new guidance may have on our consolidated financial statements and disclosures. ASU No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income This ASU relates to the impacts of the tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Reform Act”). The guidance permits the reclassification of certain income tax effects of the Tax Reform Act from Other Comprehensive Income to Retained Earnings. The guidance also requires certain new disclosures. This update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal periods and early adoption is permitted. Entities may adopt the guidance using one of two transition methods; retrospective to each period (or periods) in which the income tax effects of the Tax Reform Act related to the items remaining in Other Comprehensive Income are recognized or at the beginning of the period of adoption. October 1, 2019 We are currently evaluating the impact that the new guidance may have on our consolidated financial statements and disclosures. ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. Regardless of whether the change to the terms or conditions of the award requires modification accounting, the existing disclosure requirements and other aspects of U.S. GAAP associated with modification, such as earnings per share, continue to apply. October 1, 2018 We do not expect the new guidance to have a material impact on our consolidated financial statements. ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost The ASU will change how employers that sponsor defined benefit pension and/or other postretirement benefit plans present the net periodic benefit cost in the income statement. Employers will present the service cost component of net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. Employers will present the other components of the net periodic benefit cost separately from the line item(s) that includes the service cost and outside of any subtotal of operating income, if one is presented. October 1, 2018 We do not expect the new guidance to have a material impact on our consolidated financial statements. ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash The ASU requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. October 1, 2018 We will adopt the guidance retrospectively to all periods presented prior to the adoption date (October 1, 2018) by excluding the change in restricted cash balances from cash flows from operating activities. The impact of which will be an increase in the cash flows from operating activities in the fiscal years 2018 and 2017 by $2.7 million and $9.5 million, respectively. ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory Under current U.S. GAAP, the tax effects of intra-entity asset transfers (intercompany sales) are deferred until the transferred asset is sold to a third party or otherwise recovered through use. This is an exception to the principle in ASC 740, Income Taxes, that generally requires comprehensive recognition of current and deferred income taxes. The new guidance eliminates the exception for all intra-entity sales of assets other than inventory. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller's tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer's jurisdiction would also be recognized at the time of the transfer. The new guidance does not apply to intra-entity transfers of inventory. The income tax consequences from the sale of inventory from one member of a consolidated entity to another will continue to be deferred until the inventory is sold to a third party. October 1, 2018 We do not expect the new guidance to have a material impact on our consolidated financial statements. ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments The ASU is intended to reduce diversity in practice in presentation and classification of certain cash receipts and cash payments by providing guidance on eight specific cash flow issues. The ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. October 1, 2018 We plan to adopt this standard retrospectively to all periods presented. We are currently assessing the impact this standard will have on our consolidated statements of cash flows. ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) This ASU introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new model will apply to: (1) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, (2) loan commitments and certain other off-balance sheet credit exposures, (3) debt securities and other financial assets measured at fair value through other comprehensive income/(loss), and (4) beneficial interests in securitized financial assets. This update is effective for annual and interim periods beginning after December 15, 2019. October 1, 2020 We are currently evaluating the impact that the new guidance may have on our consolidated financial statements and disclosures. ASU No. 2016-02, Leases (Topic 842) ASU 2016-02 will require organizations that lease assets — referred to as “lessees” — to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under ASU 2016-02, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Lessor accounting remains substantially similar to current U.S. GAAP. In addition, disclosures of leasing activities are to be expanded to include qualitative along with specific quantitative information. For public entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-02 mandates a modified retrospective transition method with an option to use certain practical expedients. October 1, 2019 We are currently evaluating the potential impact of adopting this guidance on our consolidated financial statements and disclosures. ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities The standard requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income. The provisions of ASU 2016-01 are effective for interim and annual periods starting after December 15, 2017. At adoption, a cumulative-effect adjustment to beginning retained earnings will be recorded. October 1, 2018 Subsequent to adoption, changes in the fair value of our available-for-sale investments will be recognized in net income and the effect will be subject to stock market fluctuations. The cumulative catch up impact for the October 1, 2018 implementation will be a reclassification of $44 million, cumulative gains related to our available-for-sale securities, currently recorded in the beginning balance of the accumulated other comprehensive income, to beginning balance of retained earnings at October 1, 2018. ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606): Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The update outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance, including industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled for those goods or services. The update also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Furthermore, as part of Topic 606, the FASB introduced ASC 340-40 Other Assets and Deferred Costs, which provides guidance on the capitalization of contract related costs that are not within the scope of other authoritative literature. The update will be effective for fiscal reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Companies may use either a full retrospective or a modified retrospective approach to adopt the updates. October 1, 2018 We intend to adopt the new guidance using the modified retrospective approach. In preparation for our adoption of the new standard, we have evaluated representative samples of contracts and other forms of agreements with our customers based upon the five-step model specified by the new guidance. We have completed a preliminary assessment of the of the potential impact the implementation of this new guidance will have on our financial statements. Although our preliminary assessment may change based upon completion of our evaluation, the following summarizes the more significant impacts expected from the adoption of the new standard: · Certain revenues currently recognized at a point in time, are expected to be recognized over the term of the contract. · Certain associated costs to fulfill these contracts that are currently being expensed at a point in time, are expected to be capitalized as a contract fulfillment cost and amortized over the contract term, including expected contract extensions. · Enhance our disclosures to provide additional information relating to disaggregated revenue, contract assets and liabilities and remaining performance obligations. Concentration of Credit Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of temporary cash investments, short-term investments and trade receivables. The industry concentration has the potential to impact our overall exposure to market and credit risks, either positively or negatively, in that our customers could be affected by similar changes in economic, industry or other conditions. However, we believe that the credit risk posed by this industry concentration is offset by the creditworthiness of our customer base. We had revenues from individual customers, related to our U.S |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Sep. 30, 2018 | |
BUSINESS COMBINATIONS | |
BUSINESS COMBINATIONS | NOTE 3 BUSINESS COMBINATIONS Fiscal Year 2018 Acquisitions On December 8, 2017, we completed an acquisition (“MagVAR Acquisition”) of an unaffiliated company, Magnetic Variation Services, LLC (“MagVAR”), which is now a wholly-owned subsidiary of the Company. The operations for MagVAR are included with our other non-reportable business segments. At the effective time of the MagVAR Acquisition, MagVAR shareholders received aggregate cash consideration of $47.9 million, net of customary closing adjustments, and certain management members received restricted stock awards covering 213,904 shares of Helmerich & Payne, Inc. common stock. The grant date fair value of the restricted stock of $13.1 million is being amortized to expense over the three year vesting period. At closing, $6.0 million of the cash consideration was placed in escrow, to be released to the sellers twelve months after the acquisition closing date. The amount placed in escrow is classified as restricted cash and is included in prepaid expenses and other in the Consolidated Balance Sheet at September 30, 2018. Transaction costs related to the MagVAR Acquisition incurred during the fiscal year ended September 30, 2018 were approximately $1.2 million and are recorded in the Consolidated Statements of Operations within general and administrative expense. We recorded revenue of $11.6 million and a net loss of $3.0 million related to MagVAR during the fiscal year ended September 30, 2018. Through comprehensive 3D geomagnetic reference modeling, MagVAR provides measurement while drilling (“MWD”) survey corrections by identifying and quantifying MWD tool measurement errors in real-time, greatly improving directional drilling performance and wellbore placement. MagVAR technology has been successfully deployed in both onshore and offshore fields in North America, South America, Europe, Africa, Australia and Asia. The MagVAR Acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations , which requires the assets acquired and liabilities assumed to be recorded at their acquisition date fair values. The following table summarizes the purchase price and the fair values of assets acquired and liabilities assumed at the acquisition date (in thousands): Purchase Price Consideration given Cash consideration $ 48,485 Allocation of Purchase Price Fair value of assets acquired Current assets $ 2,286 Property, plant and equipment 13 Intangible assets, net 28,700 Goodwill 17,791 Total assets acquired $ 48,790 Fair value of liabilities assumed Current liabilities $ 305 Fair value of total assets acquired and liabilities assumed $ 48,485 Intangible assets acquired consist of developed technology, a trade name and customer relationships. The intangible assets are being amortized under a straight-line method over their estimated useful lives ranging from five to 20 years. The methodologies used in valuing the intangible assets include the multi-period excess earnings method for developed technology, the with and without method for customer relationships and the relief-from-royalty method for the trade name. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill. Factors comprising goodwill include the synergies expected from the expanded service capabilities as well as the value of the assembled workforce. The goodwill is reported within our other non-reportable business segments and was allocated to our MagVAR reporting unit. The goodwill is not subject to amortization, but is evaluated at least annually for impairment in the fourth quarter of each fiscal year, or more frequently if impairment indicators are present. The intangible assets and goodwill are amortized straight-line over 15 years for income tax purposes. The following unaudited pro forma combined financial information is provided for the fiscal year ended September 30, 2018 and 2017, as though the MagVAR Acquisition had been completed as of October 1, 2016. These pro forma combined results of operations have been prepared by adjusting our historical results to include the historical results of MagVAR and reflect pro forma adjustments based on available information and certain assumptions that we believe are reasonable, including application of an appropriate income tax to MagVAR’s pre-tax loss. Additionally, pro forma earnings for the fiscal year ended September 30, 2018 were adjusted to exclude $0.5 million of after-tax transaction costs. The unaudited pro forma combined financial information is provided for illustrative purposes only and is not necessarily indicative of the actual results that would have been achieved by the combined company for the periods presented or that may be achieved by the combined company in the future. Future results may vary significantly from the results reflected in this pro forma financial information. Pro Forma 2018 2017 (unaudited, in thousands) Revenues $ 2,490,955 $ 1,814,215 Net income (loss) $ 480,423 $ (126,355) Fiscal Year 2017 Acquisitions On June 2, 2017, we completed a merger transaction (“MOTIVE Merger”) pursuant to which an unaffiliated drilling technology company, MOTIVE Drilling Technologies, Inc., a Delaware corporation (“MOTIVE”), was merged with and into our wholly-owned subsidiary Spring Merger Sub, Inc., a Delaware corporation. MOTIVE survived the transaction and is now a wholly-owned subsidiary of the Company. The operations for MOTIVE are included within our other non-reportable business segments. At the effective time of the MOTIVE Merger, MOTIVE shareholders received aggregate cash consideration of $74.3 million, net of customary closing adjustments, and may receive up to an additional $25.0 million in potential earnout payments based on future performance. At closing, $9.4 million of the cash consideration was placed in escrow, with one-half to be released to the seller on each of the twelve and eighteen month anniversaries of the merger completion date. Transaction costs related to the MOTIVE Merger incurred during fiscal year 2017 were $3.2 million and are recorded in the Consolidated Statement of Operations within the general and administrative expense line item. We recorded revenue of $12.9 million and $3.3 million and a net loss of $20.1 million and $2.2 million related to MOTIVE during the fiscal years ended September 30, 2018 and 2017, respectively. MOTIVE has a proprietary Bit Guidance System™ that is an algorithm-driven system that considers the total economic consequences of directional drilling decisions and is designed to consistently lower drilling costs through more efficient drilling and increase hydrocarbon production through smoother wellbores and more accurate well placement. Given our strong and longstanding technology and innovation focus, we believe the technology will continue to advance and provide further benefits for the industry. The MOTIVE Merger was accounted for as a business combination in accordance with ASC 805, Business Combinations , which requires the assets acquired and liabilities assumed to be recorded at their acquisition date fair values. The following table summarizes the purchase price and the allocation of the fair values of assets acquired and liabilities assumed and separately identifiable intangible assets at the acquisition date (in thousands): Purchase Price Consideration given Cash consideration $ Long-term contingent earnout liability (Other noncurrent liabilities) Total consideration given $ Allocation of Purchase Price Fair value of assets acquired Current assets $ Property, plant and equipment Intangible assets, net Goodwill Total assets acquired $ Fair value of liabilities assumed Current liabilities $ Deferred income taxes Total liabilities acquired $ Fair value of total assets acquired and liabilities assumed $ Contingent consideration paid during fiscal year 2018 was $10.6 million. The fair value of the contingent consideration of $11.2 million and $14.9 million at September 30, 2018 and 2017, respectively, was calculated using a Monte Carlo simulation, which evaluates numerous potential earnings and pay out scenarios and is considered a Level 3 measurement under the fair value hierarchy. The change in the fair value of the contingent consideration of $6.9 million and $0.4 million during the fiscal year ended September 30, 2018 and 2017, respectively, was recorded in expenses applicable to other revenues in the Consolidated Statement of Operations. The developed technology is an intangible asset that will be amortized on a straight-line basis over an estimated 15-year life. The developed technology intangible asset was valued using an income approach, considering the estimated discounted future cash flows expected to be realized over the life of the asset, which is considered a Level 3 measurement under the fair value hierarchy. Goodwill represents the residual of the purchase price paid and consists largely of the synergies and economies of scale expected from the drilling technology providing more efficient drilling and directional drilling services, the first mover advantage obtained through the acquisition and expected future developments resulting from the assembled workforce. The goodwill is reported within our other non-reportable business segments and was allocated to our MOTIVE reporting unit. The goodwill is not subject to amortization but will be evaluated at least annually for impairment in the fourth quarter of each fiscal year or more frequently if impairment indicators are present. The developed technology and goodwill are not deductible for income tax purposes. An associated deferred tax liability has been recorded in regards to the developed technology. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Sep. 30, 2018 | |
DISCONTINUED OPERATIONS | |
DISCONTINUED OPERATIONS | NOTE 4 DISCONTINUED OPERATIONS Current and noncurrent liabilities consist of municipal and income taxes payable and social obligations due within the country in Venezuela. Expenses incurred for in-country obligations are reported as discontinued operations. The activity for the fiscal year ended September 30, 2018 was due to the remeasurement of uncertain tax liabilities as a result of the devaluation of the Venezuela Bolivar. Early in 2018, the Venezuelan government announced that it changed the existing dual-rate foreign currency exchange system by eliminating its heavily subsidized foreign exchange rate, which was 10 Bolivars per U.S. dollar, and relaunched an exchange system known as DICOM. The Venezuela government also established a new currency called the “Sovereign Bolivar,” which was determined by the elimination of five zeros from the old currency. The DICOM floating rate was approximately 62 Bolivars per U.S. dollar at September 30, 2018. The DICOM floating rate might not reflect the barter market exchange rates. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Sep. 30, 2018 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 5 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of September 30, 2018 and 2017 consisted of the following (in thousands): Estimated Useful Lives September 30, 2018 September 30, 2017 Contract drilling equipment 4 - 15 years $ 8,442,081 $ 8,197,572 Real estate properties 10 - 45 years 68,888 66,005 Other 2 - 23 years 471,310 450,031 Construction in progress 163,968 169,326 9,146,247 8,882,934 Accumulated depreciation (4,288,865) (3,881,883) Property, plant and equipment, net $ 4,857,382 $ 5,001,051 Impairments Consistent with our policy, we evaluate our drilling rigs and related equipment for impairment whenever events or changes in circumstances indicate the carrying value of these assets may exceed the estimated undiscounted future net cash flows. Our evaluation, among other things, includes a review of external market factors and an assessment on the future marketability of specific rigs’ asset group. Given the continued low utilization within our International FlexRig4 asset group and two of our domestic and international conventional rigs’ asset groups, together with the continued delivery of new, more capable rigs, we considered these economic factors to be indicators that these asset groups may potentially be impaired. At September 30, 2018, we performed impairment testing on our International FlexRig4 asset group, which has an aggregate net book value of $63.0 million. We concluded that the net book value of the drilling rigs’ asset group is recoverable through estimated undiscounted cash flows with a surplus. The most significant assumptions used in our undiscounted cash flow model include: timing on awards of future drilling contracts, oil prices, operating dayrates, operating costs, rig reactivation costs, drilling rig utilization, revenue efficiency, estimated remaining economic useful life and net proceeds received upon future sale/disposition. The assumptions are consistent with the Company’s internal budgets and forecasts for future years. These significant assumptions are classified as Level 3 inputs by ASC Topic 820 Fair Value Measurement and Disclosures as they are based upon unobservable inputs and primarily rely on management assumptions and forecasts. A lthough we believe the assumptions used in our analysis are reasonable and appropriate and the asset group weighted average of expected future undiscounted net cash flows exceeds the net book value of the asset group as of the fiscal year 2018 year-end impairment evaluation, different assumptions and estimates could materially impact the analysis and our resulting conclusion. At September 30, 2018, we engaged a third party independent accounting firm who performed a market valuation, utilizing the market approach, on two of our domestic and international conventional rigs’ asset groups, which have an aggregate net book values of $9.0 million and $15.2 million, respectively. We concluded that the fair values of these two asset groups exceed the net book values by approximately 64 percent and 141 percent, respectively, and as such, no impairment was recorded. The significant assumptions in the valuation exercise are classified as Level 2 and Level 3 inputs by ASC Topic 820 Fair Value Measurement and Disclosures. During the fourth quarter of fiscal year 2018, after ceasing operations in Ecuador, we entered into a sales negotiation with respect to the six conventional rigs, within a separate international conventional rigs’ asset group, with net book values of $20.8 million, present in the country, pursuant to which the rigs, together with associated equipment and machinery would be sold to a third party to be recycled. Certain components of these rigs, with an $8.5 million net book value, that are not subject to the sale agreement, will be transferred to the United States to be utilized on other FlexRigs with high activity and demand. The sales transaction was completed in November 2018. We recorded a non-cash impairment charge within our International Land segment of $9.2 million ($7.0 million, net of tax, or $0.06 per diluted share), which is included in Asset Impairment Charge on the Consolidated Statement of Operations for the fiscal year ended September 30, 2018. As a result, the remaining rig within the same asset group, not to be disposed of, was written down resulting in an additional impairment charge of $1.4 million ($1.0 million, net of tax, or $0.01 per diluted share). The assets were recorded at fair value based on the sales agreement and as such are classified as Level 2 within the fair value hierarchy. Furthermore, during the fourth quarter of fiscal year 2018, within our U.S. Land segment, management committed to a plan to auction several previously decommissioned rigs during fiscal year 2019. As a result, we wrote them down to their estimated fair values. We recorded a non-cash impairment charge of $5.7 million ($4.2 million, net of tax, or $0.04 per diluted share), which is included in Asset Impairment Charge on the Consolidated Statements of Operations for the fiscal year ended September 30, 2018. The assets were recorded at fair value based on the auction price and as such are classified as Level 2 of the fair value hierarchy. During fiscal year 2016, we recorded an asset impairment charge in the U.S. Land segment of $6.3 million to reduce the carrying value of rig and rig related equipment classified as held for sale to their estimated fair values, based on expected sales prices. Depreciation Depreciation in the Consolidated Statements of Operations of $583.8 million, $585.5 million and $598.6 million includes abandonments of $27.7 million, $42.6 million and $39.3 million for fiscal years 2018, 2017 and 2016, respectively. During 2018, we have shortened the estimated useful lives of certain components of rigs planned for conversion, with a total net book value of $3.7 million, resulting in an increase in depreciation expense during 2018 of approximately $9.7 million. This will also increase the depreciation expense for the next three months by approximately $0.9 million and will decrease the depreciation expense for fiscal years 2019, 2020, 2021, 2022, and 2023 by $2.3 million, $2.3 million, $2.2 million, $1.3 million, and $0.4 million, respectively, and thereafter by $1.0 million. Gain on Sale of Assets We had a gain on sales of assets of $22.7 million and $20.6 million in fiscal years 2018 and 2017, respectively. These gains were primarily related to drill pipe damaged or lost in drilling operations. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Sep. 30, 2018 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6 GOODWILL AND INTANGIBLE ASSETS Goodwill All of our goodwill is within our other non-reportable operating segments. The following is a summary of changes in goodwill (in thousands): Balance at September 30, 2016 $ 4,718 Additions 46,987 Balance at September 30, 2017 51,705 Additions (Note 3) 17,791 Impairment (4,719) Balance at September 30, 2018 $ 64,777 Intangible Assets Intangible assets arising from business acquisitions consisted of the following: September 30, 2018 September 30, 2017 Gross Gross Carrying Accumulated Carrying Accumulated (in thousands) Amount Amortization Net Amount Amortization Net Finite-lived intangible asset: Developed technology $ 70,000 $ 5,589 $ 64,411 $ 51,000 $ 1,134 $ 49,866 Trade name 5,700 237 5,463 — — — Customer relationships 4,000 667 3,333 — — — $ 79,700 $ 6,493 $ 73,207 $ 51,000 $ 1,134 $ 49,866 Indefinite-lived intangible asset: Trademark $ — $ — $ — $ 919 $ — $ 919 Amortization expense was $5.4 million and $1.1 million for fiscal years 2018 and 2017, respectively, and is estimated to be $5.8 million for each of the next four succeeding fiscal years and approximately $5.1 million for fiscal year 2023 . Impairments During the fourth quarter of fiscal year 2018, and as part of our annual goodwill impairment test, we performed a detailed assessment of the TerraVici reporting unit, where $4.7 million of goodwill was allocated. We determined that the estimated fair value of this reporting unit was less than its carrying amount and we recorded goodwill impairment losses of $ 4.7 million ($3.5 million, net of tax, or $0.03 per diluted share) . In addition, we recorded an intangible assets impairment loss of $0.9 million ($0.7 million net of tax, or $0.01 per diluted share). These impairment losses are included in Asset Impairment Charge on the Consolidated Statements of Operations for the fiscal year ended September 30, 2018. Our goodwill impairment analysis performed on our remaining technology reporting units in the fourth quarter of fiscal years 2018 and 2017 did not result in impairment charges. |
DEBT
DEBT | 12 Months Ended |
Sep. 30, 2018 | |
DEBT | |
DEBT | NOTE 7 DEBT We had the following unsecured long-term debt outstanding at rates and maturities shown in the following table: September 30, 2018 September 30, 2017 Unamortized Unamortized Face Debt Issuance Book Face Debt Issuance Book Amount Cost Value Amount Cost Value (in thousands) Unsecured senior notes issued March 19, 2015: Due March 19, 2025 $ 500,000 $ (6,032) $ 493,968 $ 500,000 $ (7,098) $ 492,902 500,000 (6,032) 493,968 500,000 (7,098) 492,902 Less long-term debt due within one year — — — — — — Long-term debt $ 500,000 $ (6,032) $ 493,968 $ 500,000 $ (7,098) $ 492,902 On March 19, 2015, we issued $500 million of 4.65 percent 10-year unsecured senior notes. Interest is payable semi-annually on March 15 and September 15. The debt discount is being amortized to interest expense using the effective interest method. The debt issuance costs are amortized straight-line over the stated life of the obligation, which approximates the effective interest method. On July 13, 2016, we entered into a $300 million unsecured revolving credit facility (the “2016 Credit Facility”) with a maturity date of July 13, 2021. The 2016 Credit Facility had a maximum of $75 million available to use as letters of credit. The majority of any borrowings under the facility would accrue interest at a spread over the London Interbank Offered Rate (“LIBOR”). We also paid a commitment fee based on the unused balance of the facility. Borrowing spreads as well as commitment fees were determined according to the Company’s credit rating. The spread over LIBOR ranged from 1.125 percent to 1.75 percent per annum and commitment fees ranged from 0.15 percent to 0.30 percent per annum. Based on our debt to total capitalization on September 30, 2018, the spread over LIBOR and commitment fees would be 1.125 percent and 0.15 percent, respectively. There was a financial covenant in the facility that required us to maintain a total debt to total capitalization ratio of less than 50 percent. The 2016 Credit Facility contained additional terms, conditions, restrictions and covenants that we believe were usual and customary in unsecured debt arrangements for companies of similar size and credit quality including a limitation that priority debt (as defined in the agreement) could not exceed 17.5 percent of the net worth of the Company. As of September 30, 2018, the Company had no borrowings against the line, but there were three letters of credit outstanding in the amount of $39.3 million. Two of these letters of credit in the amount of $29.3 million support self-insured losses under the Company’s high deductible casualty insurance programs and the remaining $10.0 million letter of credit supports an operating line of credit with a bank in Argentina. As a result, at September 30, 2018, we had $260.7 million available to borrow under the 2016 Credit Facility. Subsequent to September 30, 2018, the Company decreased one of the three letters of credit by $1.3 million, which increased availability under the facility to $262.0 million. Subsequent to our fiscal year-end, on November 13, 2018, we entered into a $750 million unsecured revolving credit facility (the “2018 Credit Facility”). In connection with entering into the 2018 Credit Facility, we terminated the 2016 Credit Facility. See Note 19-–Subsequent Events to our Consolidated Financial Statements for more information about the 2018 Credit Facility. At September 30, 2018, we had a $12 million unsecured standalone line of credit, which is purposed for the issuance of bid and performance bonds, as needed, for international land operations. As of September 30, 2018, we do not have any outstanding obligations against this facility. The applicable agreements for all unsecured debt contain additional terms, conditions and restrictions that we believe are usual and customary in unsecured debt arrangements for companies that are similar in size and credit quality. At September 30, 2018, we were in compliance with all debt covenants. At September 30, 2018, aggregate maturities of long-term debt are as follows (in thousands): Year ending September 30, 2019 $ — 2020 — 2021 — 2022 — 2023 — Thereafter 500,000 $ 500,000 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2018 | |
INCOME TAXES | |
INCOME TAXES | NOTE 8 INCOME TAXES Impact of Tax Reform On December 22, 2017, the President of the United States signed into law the Tax Reform Act. Among a number of substantial changes to the current U.S. federal income tax rules, the Tax Reform Act decreases the marginal U.S. corporate income tax rate from 35 percent to 21 percent, provides for bonus depreciation that will allow for full expensing of qualified property in the year placed in service, limits the deductibility of certain expenditures, and significantly changes the U.S. taxation of certain foreign operations. By operation of law, we will apply a blended U.S. statutory federal income tax rate of 24.5 percent for fiscal year 2018. As a result of the Tax Reform Act, we were required to revalue deferred tax assets and liabilities from 35 percent to 21 percent. This revaluation has resulted in recognition of a tax benefit of approximately $502.1 million, which is included as a component of income tax expense in continuing operations on the Consolidated Statements of Operations. On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. In accordance with SAB 118, we recorded our best estimate of the impact of the Tax Reform Act in our fiscal year end income tax provision in accordance with our understanding of the Tax Reform Act and guidance available as of the date of this filing. Although we believe we have substantially completed our accounting for certain income tax effects of the Tax Reform Act, to the extent that the Internal Revenue Service or U.S. Treasury issues additional guidance during the SAB 118 measurement period, the Company will promptly evaluate whether any additional adjustments are required. Income Tax Provision and Rate The components of the provision (benefit) for income taxes are as follows: Year Ended September 30, 2018 2017 2016 (in thousands) Current: Federal $ 757 $ (36,260) $ (86,010) Foreign 6,492 4,108 9,987 State 2,340 (472) (3,742) 9,589 (32,624) (79,765) Deferred: Federal (508,256) (14,953) 58,136 Foreign 7,415 (7,827) 408 State 14,083 (1,331) 1,544 (486,758) (24,111) 60,088 Total benefit $ (477,169) $ (56,735) $ (19,677) The amounts of domestic and foreign income (loss) before income taxes are as follows: Year Ended September 30, 2018 2017 2016 (in thousands) Domestic $ 27,436 $ (173,157) $ (49,636) Foreign (11,595) (11,441) (23,031) $ 15,841 $ (184,598) $ (72,667) Effective income tax rates as compared to the U.S. Federal income tax rate are as follows: Year Ended September 30, 2018 2017 2016 U.S. Federal income tax rate 24.5 % 35.0 % 35.0 % Effect of foreign taxes 87.8 1.8 (13.8) State income taxes, net of federal tax benefit 68.8 0.6 3.2 U.S. domestic production activities — (2.1) (10.4) Remeasurement of deferred tax related to Tax Reform Act (3,169.4) — — Other impact of foreign operations (43.4) (2.9) 14.7 Non-deductible meals and entertainment (1) 8.2 — — Equity compensation (1) (5.3) — — Officer's compensation (1) 1.7 — — Contingent consideration adjustment (1) 10.7 — — Other (1) 4.1 (1.7) (1.6) Effective income tax rate (3,012.3) % 30.7 % 27.1 % (1) For fiscal years 2017 and 2016, “other” reflects adjustments for non-deductible meals and entertainment, equity compensation, officer’s compensation and contingent consideration. Effective tax rates differ from the U.S. federal statutory rate of 24.5 percent (blended for fiscal year 2018) due to state and foreign income taxes, change of the federal income tax rate from the Tax Reform Act, and the tax effect of non-deductible expenses (primarily related to certain meals and entertainment, officer’s compensation limited pursuant to Section 162(m) of the Code, and adjustments to the contingent consideration related to the MOTIVE Merger). Deferred Taxes Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. Recoverability of any tax assets are evaluated and necessary valuation allowances are provided. The carrying value of the net deferred tax assets is based on management’s judgments using certain estimates and assumptions that we will be able to generate sufficient future taxable income in certain tax jurisdictions to realize the benefits of such assets. If these estimates and related assumptions change in the future, additional valuation allowances may be recorded against the deferred tax assets resulting in additional income tax expense in the future. The components of our net deferred tax liabilities are as follows: September 30, 2018 2017 (in thousands) Deferred tax liabilities: Property, plant and equipment $ 904,734 $ 1,386,512 Available-for-sale securities 10,464 24,940 Other 12,787 21,609 Total deferred tax liabilities 927,985 1,433,061 Deferred tax assets: Pension reserves 3,477 7,614 Self-insurance reserves 13,100 19,461 Net operating loss, foreign tax credit, and other federal tax credit carryforwards 55,889 62,478 Financial accruals 45,708 62,971 Other 4,888 6,003 Total deferred tax assets 123,062 158,527 Valuation allowance (48,213) (58,155) Net deferred tax assets 74,849 100,372 Net deferred tax liabilities $ 853,136 $ 1,332,689 The change in our net deferred tax assets and liabilities is impacted by foreign currency remeasurement. As of September 30, 2018, we had federal, state and foreign tax net operating loss carryforwards of $50.8 million, $31.2 million and $83.7 million, respectively, and foreign tax credit carryforwards of approximately $24.9 million (of which $20.1 million is reflected as a deferred tax asset in our Consolidated Financial Statements prior to consideration of our valuation allowance) which will expire in fiscal years 2019 through 2038. The valuation allowance is primarily attributable to foreign and certain state net operating loss carryforwards of $22.8 million and $0.5 million, respectively, and foreign tax credit carryforwards of $20.1 million, equity compensation of $2.3 million, and foreign minimum tax credit carryforwards of $2.5 million which more likely than not will not be utilized. Unrecognized Tax Benefits We recognize accrued interest related to unrecognized tax benefits in interest expense, and penalties in other expense in the Consolidated Statements of Operations. As of September 30, 2018 and 2017, we had accrued interest and penalties of $2.2 million and $2.8 million, respectively. A reconciliation of the change in our gross unrecognized tax benefits for the fiscal years ended September 30, 2018 and 2017 is as follows: September 30, 2018 2017 (in thousands) Unrecognized tax benefits at October 1, $ 4,773 $ 9,551 Gross increases - tax positions in prior periods 3 — Gross decreases - tax positions in prior periods — (1) Gross decreases - current period effect of tax positions (280) (170) Gross increases - current period effect of tax positions 10,537 300 Expiration of statute of limitations for assessments (128) (4,907) Unrecognized tax benefits at September 30, $ 14,905 $ 4,773 As of September 30, 2018 and 2017, our liability for unrecognized tax benefits includes $14.3 million and $3.7 million, respectively, of unrecognized tax benefits related to discontinued operations that, if recognized, would not affect the effective tax rate. The remaining unrecognized tax benefits would affect the effective tax rate if recognized. The liabilities for unrecognized tax benefits and related interest and penalties are included in other noncurrent liabilities in our Consolidated Balance Sheets. For the next 12 months, we cannot predict with certainty whether we will achieve ultimate resolution of any uncertain tax position associated with our U.S. and international land operations that could result in increases or decreases of our unrecognized tax benefits. However, we do not expect the increases or decreases to have a material effect on our results of operations or financial position. Tax Returns We file a consolidated U.S. federal income tax return, as well as income tax returns in various states and foreign jurisdictions. The tax years that remain open to examination by U.S. federal and state jurisdictions include fiscal years 2014 through 2017, with exception of certain state jurisdictions currently under audit. The tax years remaining open to examination by foreign jurisdictions include 2003 through 2017. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Sep. 30, 2018 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | NOTE 9 SHAREHOLDERS’ EQUITY The Company has authorization from the Board of Directors for the repurchase of up to four million common shares in any calendar year. The repurchases may be made using our cash and cash equivalents or other available sources. We had no purchases of common shares during the fiscal years ended September 30, 2018, 2017 and 2016. Accumulated Other Comprehensive Income (Loss) Components of accumulated other comprehensive income (loss) were as follows: September 30, 2018 2017 2016 (in thousands) Pre-tax amounts: Unrealized appreciation on securities $ 44,023 $ 31,700 $ 33,051 Unrealized actuarial loss (21,693) (28,873) (34,112) $ 22,330 $ 2,827 $ (1,061) After-tax amounts: Unrealized appreciation on securities $ 29,071 $ 20,070 $ 20,899 Unrealized actuarial loss (12,521) (17,770) (21,103) $ 16,550 $ 2,300 $ (204) The following is a summary of the changes in accumulated other comprehensive income (loss), net of tax, by component for the fiscal year ended September 30, 2018: Unrealized Appreciation on Defined Available-for-sale Benefit Securities Pension Plan Total (in thousands) Balance at September 30, 2017 $ 20,070 $ (17,770) $ 2,300 Other comprehensive income before reclassifications 9,001 — 9,001 Amounts reclassified from accumulated other comprehensive income — 5,249 5,249 Net current-period other comprehensive income 9,001 5,249 14,250 Balance at September 30, 2018 $ 29,071 $ (12,521) $ 16,550 The following provides detail about accumulated other comprehensive income (loss) components which were reclassified to the Consolidated Statements of Operations during the fiscal years ended September 30, 2018, 2017 and 2016: Amount Reclassified from Accumulated Other Comprehensive Affected Line Details About Accumulated Other Income (Loss) Item in the Consolidated Comprehensive Income (Loss) Components 2018 2017 2016 Statements of Operations (in thousands) Other-than-temporary impairment of available-for-sale securities $ — $ — $ 1,509 Loss on investment securities — — (583) Income tax provision — — 926 Net of tax Amortization of net actuarial loss on defined benefit pension plan $ 7,180 $ 5,238 $ (3,968) Selling, general and administrative (1,931) (1,905) 1,443 Income tax provision 5,249 3,333 (2,525) Net of tax Total reclassifications for the period $ 5,249 $ 3,333 $ (1,599) |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Sep. 30, 2018 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 10 STOCK-BASED COMPENSATION On March 2, 2016, the Helmerich & Payne, Inc. 2016 Omnibus Incentive Plan (the “2016 Plan”) was approved by our stockholders. The 2016 Plan, among other things, authorizes the Human Resources Committee of the Board to grant non-qualified stock options and restricted stock awards to selected employees and to non-employee Directors. Restricted stock may be granted for no consideration other than prior and future services. The purchase price per share for stock options may not be less than market price of the underlying stock on the date of grant. Stock options expire 10 years after the grant date. Awards outstanding in the Helmerich & Payne, Inc. 2005 Long-Term Incentive Plan and the Helmerich & Payne, Inc. 2010 Long-Term Incentive Plan (collectively the “2010 Plan”) remain subject to the terms and conditions of those plans. During the fiscal year ended September 30, 2018, there were 693,873 non-qualified stock options and 411,977 shares of restricted stock awards granted under the 2016 Plan. An additional 213,904 of restricted stock grants were awarded outside of the 2016 Plan. A summary of compensation cost for stock-based payment arrangements recognized in general and administrative expense in fiscal years 2018, 2017 and 2016 is as follows: September 30, 2018 2017 2016 (in thousands) Compensation expense Stock options $ 7,913 $ 7,439 $ 8,290 Restricted stock 23,774 18,744 16,093 $ 31,687 $ 26,183 $ 24,383 Stock Options Vesting requirements for stock options are determined by the Human Resources Committee of our Board of Directors. Options currently outstanding began vesting one year after the grant date with 25 percent of the options vesting for four consecutive years. We use the Black-Scholes formula to estimate the fair value of stock options granted to employees. The fair value of the options is amortized to compensation expense on a straight-line basis over the requisite service periods of the stock awards, which are generally the vesting periods. The weighted-average fair value calculations for options granted within the fiscal period are based on the following weighted-average assumptions set forth in the table below. Options that were granted in prior periods are based on assumptions prevailing at the date of grant. 2018 2017 2016 Risk-free interest rate (1) 2.2 % 2.0 % 1.8 % Expected stock volatility (2) 36.1 % 38.9 % 37.6 % Dividend yield (3) 4.7 % 3.7 % 4.6 % Expected term (in years) (4) 6.0 5.5 5.5 (1) The risk-free interest rate is based on U.S. Treasury securities for the expected term of the option. (2) Expected volatilities are based on the daily closing price of our stock based upon historical experience over a period which approximates the expected term of the option. (3) The dividend yield is based on our current dividend yield. (4) The expected term of the options granted represents the period of time that they are expect to be outstanding. We estimate term of option granted based on historical experience with grants and exercise. Based on these calculations, the weighted-average fair value per option granted to acquire a share of common stock was $13.17, $20.48 and $13.12 per share for fiscal years 2018, 2017 and 2016, respectively. The following summary reflects the stock option activity for our common stock and related information for fiscal years 2018, 2017 and 2016 (shares in thousands): 2018 2017 2016 Weighted-Average Weighted-Average Weighted-Average Shares Exercise Price Shares Exercise Price Shares Exercise Price Outstanding at October 1, 3,278 $ 56.41 3,312 $ 51.74 2,776 $ 48.51 Granted 694 59.03 396 76.61 876 58.25 Exercised (375) 36.88 (415) 38.04 (220) 31.52 Forfeited/Expired (98) 70.77 (15) 68.32 (120) 61.80 Outstanding on September 30, 3,499 $ 58.62 3,278 $ 56.41 3,312 $ 51.74 Exercisable on September 30, 2,193 $ 56.31 2,167 $ 50.87 2,225 $ 46.66 Shares available to grant 5,140 5,624 6,600 The following table summarizes information about stock options at September 30, 2018 (shares in thousands): Outstanding Stock Options Exercisable Stock Options Weighted-Average Weighted-Average Weighted-Average Range of Exercise Prices Options Remaining Life Exercise Price Options Exercise Price $0.00 to $21.07 180 0.2 $ 21.07 180 $ 21.07 $21.07 to $59.76 2,417 5.9 55.16 1,418 53.03 $59.76 to $68.83 358 6.3 68.66 275 68.83 $68.83 to $81.31 544 7.1 79.79 320 79.86 3,499 2,193 At September 30, 2018, the weighted-average remaining life of exercisable stock options was 4.36 years and the aggregate intrinsic value was $30.9 million with a weighted-average exercise price of $56.31 per share. The number of options vested or expected to vest at September 30, 2018 was 1,306,087 with an aggregate intrinsic value of $10.6 million and a weighted-average exercise price of $62.49 per share. As of September 30, 2018, the unrecognized compensation cost related to the stock options was $7.3 million. That cost is expected to be recognized over a weighted-average period of 2.3 years. The total intrinsic value of options exercised during fiscal years 2018, 2017 and 2016 was $9.9 million, $13.1 million and $6.3 million, respectively. The grant date fair value of shares vested during fiscal years 2018, 2017 and 2016 was $8.8 million, $6.7 million and $9.6 million, respectively. Restricted Stock Restricted stock awards consist of our common stock and are time-vested over three to six years. We recognize compensation expense on a straight-line basis over the vesting period. The fair value of restricted stock awards is determined based on the closing price of our shares on the grant date. As of September 30, 2018, there was $34.4 million of total unrecognized compensation cost related to unvested restricted stock awards. That cost is expected to be recognized over a weighted-average period of 2.4 years. A summary of the status of our restricted stock awards as of September 30, 2018, and of changes in restricted stock outstanding during the fiscal years ended September 30, 2018, 2017 and 2016, is as follows (shares in thousands): 2018 2017 2016 Weighted-Average Weighted-Average Weighted-Average Grant Date Fair Grant Date Fair Grant Date Fair Shares Value per Share Shares Value per Share Shares Value per Share Outstanding at October 1, 659 $ 70.76 648 $ 64.24 668 $ 67.03 Granted 626 59.53 292 78.69 294 58.25 Vested (1) (258) 70.60 (271) 63.81 (256) 64.75 Forfeited (26) 66.73 (10) 68.09 (58) 63.65 Outstanding on September 30, 1,001 $ 63.74 659 $ 70.76 648 $ 64.24 (1) The number of restricted stock awards vested includes shares that we withheld on behalf of our employees to satisfy the statutory tax withholding requirements. |
EARNINGS (LOSSES) PER COMMON SH
EARNINGS (LOSSES) PER COMMON SHARE | 12 Months Ended |
Sep. 30, 2018 | |
EARNINGS (LOSSES) PER COMMON SHARE | |
EARNINGS (LOSSES) PER COMMON SHARE | NOTE 11 EARNINGS (LOSSES) PER COMMON SHARE The following table sets forth the computation of basic and diluted earnings per share: September 30, 2018 2017 2016 (in thousands) Numerator: Income (loss) from continuing operations $ 493,010 $ (127,863) $ (52,990) Loss from discontinued operations (10,338) (349) (3,838) Net income (loss) 482,672 (128,212) (56,828) Adjustment for basic earnings per share Earnings allocated to unvested shareholders (4,346) (1,811) (1,858) Numerator for basic earnings per share: From continuing operations 488,664 (129,674) (54,848) From discontinued operations (10,338) (349) (3,838) 478,326 (130,023) (58,686) Adjustment for diluted earnings per share: Effect of reallocating undistributed earnings of unvested shareholders 7 — — Numerator for diluted earnings per share: From continuing operations 488,671 (129,674) (54,848) From discontinued operations (10,338) (349) (3,838) $ 478,333 $ (130,023) $ (58,686) Denominator: Denominator for basic earnings per share - weighted-average shares 108,851 108,500 107,996 Effect of dilutive shares from stock options and restricted stock 536 — — Denominator for diluted earnings per share - adjusted weighted-average shares 109,387 108,500 107,996 Basic earnings per common share: Income (loss) from continuing operations $ 4.49 $ (1.20) $ (0.50) Loss from discontinued operations (0.10) — (0.04) Net income (loss) $ 4.39 $ (1.20) $ (0.54) Diluted earnings per common share: Income (loss) from continuing operations $ 4.47 $ (1.20) $ (0.50) Loss from discontinued operations (0.10) — (0.04) Net income (loss) $ 4.37 $ (1.20) $ (0.54) We had a net loss for fiscal years 2017 and 2016. Accordingly, our diluted earnings per share calculation for those years were equivalent to our basic earnings per share calculation since diluted earnings per share excluded any assumed exercise of equity awards. These were excluded because they were deemed to be anti-dilutive, meaning their inclusion would have reduced the reported net loss per share in the applicable period. The following shares attributable to outstanding equity awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive: 2018 2017 2016 (in thousands, except per share amounts) Shares excluded from calculation of diluted earnings per share 1,559 1,008 1,788 Weighted-average price per share $ 68.28 $ 74.38 $ 63.73 |
FAIR VALUE MEASUREMENT OF FINAN
FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Sep. 30, 2018 | |
FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS | |
FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS | NOTE 12 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS We have certain assets and liabilities that are required to be measured and disclosed at fair value. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. We use the fair value hierarchy established in ASC 820-10 to measure fair value to prioritize the inputs: · Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. · Level 2 — Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. · Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The assets held in a Non-Qualified Supplemental Savings Plan are carried at fair value and totaled $16.2 million and $13.9 million at September 30, 2018 and 2017, respectively. The assets are comprised of mutual funds that are measured using Level 1 inputs. Short-term investments include securities classified as trading securities. Both realized and unrealized gains and losses on trading securities are included in other income (expense) in the Consolidated Statements of Operations. The securities are recorded at fair value. Our non-financial assets, such as intangible assets, goodwill and property, plant and equipment, are recorded at fair value when acquired in a business combination or when an impairment charge is recognized. If measured at fair value in the Consolidated Balance Sheets, these would generally be classified within Level 2 or 3 of the fair value hierarchy. Refer to Note 3—Business Combinations, Note 5—Property, Plant and Equipment and Note 6—Goodwill and Intangible Assets for details on these fair value measurements. The majority of cash equivalents are invested in highly-liquid money-market mutual funds invested primarily in direct or indirect obligations of the U.S. Government. The carrying amount of cash and cash equivalents approximates fair value due to the short maturity of those investments. The carrying value of other current assets, accrued liabilities and other liabilities approximated fair value at September 30, 2018 and 2017. The following table summarizes our assets measured at fair value presented in our Consolidated Balance Sheet as of September 30, 2018: Fair Value (Level 1) (Level 2) (Level 3) (in thousands) Recurring fair value measurements: Short-term investments: Certificates of deposit $ 1,500 $ — $ 1,500 $ — Corporate and municipal debt securities 17,518 — 17,518 — U.S. government and federal agency securities 22,443 22,443 — — Total short-term investments 41,461 22,443 19,018 — Cash and cash equivalents 284,355 284,355 — — Investments 82,496 82,496 — — Other current assets 39,830 39,830 — — Other assets 2,000 2,000 — — Total assets measured at fair value $ 450,142 $ 431,124 $ 19,018 $ — Liabilities: Contingent earnout liability $ 11,160 $ — $ — $ 11,160 At September 30, 2018, our financial instruments measured at fair value utilizing Level 1 inputs include cash equivalents, U.S. Agency issued debt securities, equity securities with active markets, and money market funds that are classified as restricted assets. The current portion of restricted amounts are included in prepaid expenses and other, and the noncurrent portion is included in other assets. For these items, quoted current market prices are readily available. At September 30, 2018, assets measured at fair value using Level 2 inputs include certificates of deposit, municipal bonds and corporate bonds measured using broker quotations that utilize observable market inputs. Our financial instruments measured using Level 3 inputs consist of potential earnout payments associated with the acquisition of MOTIVE in fiscal year 2017. The valuation techniques used for determining the fair value of the potential earnout payments use a Monte Carlo simulation which evaluates numerous potential earnings and pay out scenarios. The following table presents a reconciliation of changes in fair value of our financial assets and liabilities classified as Level 3 fair value measurements in the fair value hierarchy for the indicated periods: 2018 2017 (in thousands) Net liabilities at beginning of period $ 14,879 $ — Total gains or losses: Included in earnings 6,906 14,879 Settlements (1) (10,625) — Net liabilities at end of period $ 11,160 $ 14,879 (1) Settlements represent earnout payments that have been earned or paid during the period. The following information presents the supplemental fair value information about long-term fixed-rate debt at September 30, 2018 and September 30, 2017. September 30, 2018 2017 (in millions) Carrying value of long-term fixed-rate debt $ 494.0 $ 492.9 Fair value of long-term fixed-rate debt $ 509.3 $ 529.0 The fair value for the $500 million fixed-rate debt was based on broker quotes at September 30, 2018. The notes are classified within Level 2 of the fair value hierarchy as they are not actively traded in markets. On an ongoing basis we evaluate the marketable equity securities to determine if any decline in fair value below cost is other-than-temporary. If a decline in fair value below cost is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis established. We review several factors to determine whether a loss is other-than-temporary. These factors include, but are not limited to, (i) the length of time a security is in an unrealized loss position, (ii) the extent to which fair value is less than cost, (iii) the financial condition and near-term prospects of the issuer and (iv) our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. When securities are sold, the cost of securities used in determining realized gains and losses is based on the average cost basis of the security sold. The estimated fair value of our available-for-sale securities, reflected on our Consolidated Balance Sheets as Investments, is based on Level 1 inputs. The following is a summary of available-for-sale securities, which excludes assets held in a Non-Qualified Supplemental Savings Plan: Gross Gross Estimated Unrealized Unrealized Fair Cost Gains Losses Value (in thousands) Equity Securities: September 30, 2018 $ 38,473 $ 44,023 $ — $ 82,496 September 30, 2017 $ 38,473 $ 31,700 $ — $ 70,173 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Sep. 30, 2018 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | NOTE 13 EMPLOYEE BENEFIT PLANS We maintain a domestic noncontributory defined benefit pension plan covering certain U.S. employees who meet certain age and service requirements. In July 2003, we revised the Helmerich & Payne, Inc. Employee Retirement Plan (“Pension Plan”) to close the Pension Plan to new participants effective October 1, 2003, and reduce benefit accruals for current participants through September 30, 2006, at which time benefit accruals were discontinued and the Pension Plan was frozen. The following table provides a reconciliation of the changes in the pension benefit obligations and fair value of Pension Plan assets over the two-year period ended September 30, 2017 and a statement of the funded status as of September 30, 2018 and 2017: 2018 2017 (in thousands) Accumulated Benefit Obligation $ 106,205 $ 109,976 Changes in projected benefit obligations Projected benefit obligation at beginning of year $ 109,976 $ 109,731 Interest cost 4,077 4,053 Actuarial (gain) loss (2,143) 3,633 Benefits paid (5,705) (7,441) Projected benefit obligation at end of year $ 106,205 $ 109,976 Change in plan assets Fair value of plan assets at beginning of year $ 92,816 $ 90,748 Actual return on plan assets 7,754 9,470 Employer contribution 32 39 Benefits paid (5,705) (7,441) Fair value of plan assets at end of year $ 94,897 $ 92,816 Funded status of the plan at end of year $ (11,308) $ (17,160) The amounts recognized in the Consolidated Balance Sheets at September 30, 2018 and 2017 are as follows (in thousands): Accrued liabilities $ (58) $ (45) Noncurrent liabilities-other (11,250) (17,115) Net amount recognized $ (11,308) $ (17,160) The amounts recognized in Accumulated Other Comprehensive Income (Loss) at September 30, 2018 and 2017, and not yet reflected in net periodic benefit cost, are as follows (in thousands): Net actuarial loss $ (21,693) $ (28,873) The amount recognized in Accumulated Other Comprehensive Income (Loss) and not yet reflected in periodic benefit cost expected to be amortized in next year’s periodic benefit cost is a net actuarial loss of $1.2 million. The weighted average assumptions used for the pension calculations were as follows: September 30, 2018 2017 2016 Discount rate for net periodic benefit costs 3.79 % 3.64 % 4.27 % Discount rate for year-end obligations 4.27 % 3.79 % 3.64 % Expected return on plan assets 6.06 % 6.17 % 5.89 % The mortality table issued by the Society of Actuaries in October 2018 was used for the September 30, 2018 pension calculation. The new mortality information reflects improved life expectancies and projected mortality improvements. We did not make any contributions to the Pension Plan in fiscal year 2018. In fiscal year 2019, we do not expect minimum contributions required by law to be needed. However, we may make contributions in fiscal year 2019 if needed to fund unexpected distributions in lieu of liquidating pension assets. Components of the net periodic pension expense (benefit) were as follows: Year Ended September 30, 2018 2017 2016 (in thousands) Interest cost $ 4,077 $ 4,053 $ 4,266 Expected return on plan assets (5,555) (5,130) (5,616) Recognized net actuarial loss 1,926 2,891 2,083 Settlement 913 1,640 4,964 Net pension expense $ 1,361 $ 3,454 $ 5,697 We record settlement expense when benefit payments exceed the total annual service and interest costs. The following table reflects the expected benefits to be paid from the Pension Plan in each of the next five fiscal years, and in the aggregate for the five years thereafter (in thousands). Year Ended September 30, 2019 2020 2021 2022 2023 2024 – 2028 Total $ 18,075 $ 7,433 $ 5,684 $ 6,351 $ 6,665 $ 31,813 $ 76,021 Included in the Pension Plan is an unfunded supplemental executive retirement plan. Investment Strategy and Asset Allocation Our investment policy and strategies are established with a long-term view in mind. The investment strategy is intended to help pay the cost of the Pension Plan while providing adequate security to meet the benefits promised under the Pension Plan. We maintain a diversified asset mix to minimize the risk of a material loss to the portfolio value that might occur from devaluation of any single investment. In determining the appropriate asset mix, our financial strength and ability to fund potential shortfalls are considered. Pension Plan assets are invested in portfolios of diversified public-market equity securities and fixed income securities. The Pension Plan does not directly hold securities of the Company. The expected long-term rate of return on Pension Plan assets is based on historical and projected rates of return for current and planned asset classes in the Pension Plan’s investment portfolio after analyzing historical experience and future expectations of the return and volatility of various asset classes. The target allocation for 2019 and the asset allocation for the Pension Plan at the end of fiscal years 2018 and 2017, by asset category, follows: Percentage of Plan Target Assets at Allocation September 30, Asset Category 2019 2018 2017 U.S. equities 45 % 52 % 50 % International equities 20 15 16 Fixed income 35 33 34 Real estate and other — — — Total 100 % 100 % 100 % Plan Assets The fair value of Pension Plan assets at September 30, 2018 and 2017, summarized by level within the fair value hierarchy described in Note 12—Fair Value Measurement of Financial Instruments, are as follows: Fair Value as of September 30, 2018 Total Level 1 Level 2 Level 3 (in thousands) Short-term investments $ 2,745 $ 2,745 $ — $ — Mutual funds: Domestic stock funds 18,361 18,361 — — Bond funds 17,918 17,918 — — Balanced funds 17,977 17,977 — — International stock funds 14,548 14,548 — — Total mutual funds 68,804 68,804 — — Domestic common stock 23,232 20,771 2,461 — Oil and gas properties 116 — — 116 Total $ 94,897 $ 92,320 $ 2,461 $ 116 Fair Value as of September 30, 2017 Total Level 1 Level 2 Level 3 (in thousands) Short-term investments $ 3,488 $ 3,488 $ — $ — Mutual funds: Domestic stock funds 18,377 18,377 — — Bond funds 18,357 18,357 — — Balanced funds 18,222 18,222 — — International stock funds 14,583 14,583 — — Total mutual funds 69,539 69,539 — — Domestic common stock 19,692 19,692 — — Oil and gas properties 97 — — 97 Total $ 92,816 $ 92,719 $ — $ 97 The Pension Plan’s financial assets utilizing Level 1 inputs are valued based on quoted prices in active markets for identical securities. The Pension Plan’s Level 2 financial assets include foreign common stock. The Pension Plan’s assets utilizing Level 3 inputs consist of oil and gas properties. The fair value of oil and gas properties is determined by Wells Fargo Bank, N.A., based upon actual revenue received for the previous twelve-month period and experience with similar assets. The following table sets forth a summary of changes in the fair value of the Pension Plan’s Level 3 assets for the fiscal years ended September 30, 2018 and 2017: Oil and Gas Properties Year Ended September 30, 2018 2017 (in thousands) Balance, beginning of year $ 97 $ 177 Unrealized gains (losses) relating to property still held at the reporting date 19 (80) Balance, end of year $ 116 $ 97 Defined Contribution Plan Substantially all employees on the U.S. payroll may elect to participate in our 401(k)/Thrift Plan by contributing a portion of their earnings. We contribute an amount equal to 100 percent of the first five percent of the participant’s compensation subject to certain limitations. The annual expense incurred for this defined contribution plan was $26.6 million, $16.6 million and $21.6 million in fiscal years 2018, 2017 and 2016, respectively. During fiscal year 2016, we determined that employee workforce reductions which started during 2015 and continued into 2016 due to reduced drilling activity resulted in a partial plan termination of the 401(k)/Thrift Plan. Partial plan terminations result in affected participants becoming fully vested in Company contributions and actual earnings thereon at the termination date. As a result of the partial plan termination status, we accrued additional employer contributions totaling $6.3 million in general and administrative expense in fiscal year 2016. |
SUPPLEMENTAL BALANCE SHEET INFO
SUPPLEMENTAL BALANCE SHEET INFORMATION | 12 Months Ended |
Sep. 30, 2018 | |
SUPPLEMENTAL BALANCE SHEET INFORMATION | |
SUPPLEMENTAL BALANCE SHEET INFORMATION | NOTE 14 SUPPLEMENTAL BALANCE SHEET INFORMATION The following reflects the activity in our reserve for bad debt for fiscal years 2018, 2017 and 2016: 2018 2017 2016 (in thousands) Reserve for bad debt: Balance at October 1, $ 5,721 $ 2,696 $ 6,181 Provision for (recovery of) bad debt 2,193 2,016 (2,013) (Write-off) recovery of bad debt (1,697) 1,009 (1,472) Balance at September 30, $ 6,217 $ 5,721 $ 2,696 Accounts receivable, prepaid expenses and other current assets, accrued liabilities and long-term liabilities at September 30, 2018 and 2017 consist of the following: September 30, 2018 2017 (in thousands) Accounts receivable, net of reserve: Trade receivables $ 530,859 $ 398,348 Income tax receivable 34,343 78,726 Total accounts receivable, net of reserve $ 565,202 $ 477,074 Prepaid expenses and other current assets: Restricted cash $ 39,830 $ 32,439 Deferred mobilization 6,484 6,458 Prepaid insurance 6,149 4,060 Prepaid value added tax 1,931 3,870 Prepaid maintenance and rent 8,526 5,940 Prepaid multi-flex rig fabrication 1,327 — Other 2,151 2,356 Total prepaid expenses and other current assets $ 66,398 $ 55,123 Accrued liabilities: Accrued operating costs $ 37,528 $ 36,949 Payroll and employee benefits 80,915 54,941 Taxes payable, other than income tax 50,683 35,638 Self-insurance liabilities 15,887 22,159 Deferred income 20,527 25,893 Deferred mobilization 9,662 9,828 Accrued income taxes 7,375 8,011 Escrow 11,258 4,690 Litigation and claims 1,749 1,779 Other 8,920 8,869 Total accrued liabilities $ 244,504 $ 208,757 Noncurrent liabilities — Other: Pension and other non-qualified retirement plans $ 35,051 $ 37,989 Self-insurance liabilities 39,380 29,037 Contingent earnout liability 11,160 14,879 Deferred mobilization 2,738 7,689 Uncertain tax positions including interest and penalties 2,870 3,562 Other 2,407 8,253 Total noncurrent liabilities — other $ 93,606 $ 101,409 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 15 COMMITMENTS AND CONTINGENCIES Purchase Commitments Equipment, parts and supplies are ordered in advance to promote efficient construction and capital improvement progress. At September 30, 2018, we had purchase commitments for equipment, parts and supplies of approximately $110.4 million. Guarantee Arrangements In the normal course of our business, we enter into agreements with financial institutions to provide letters of credit and surety bonds in connection with certain commitments entered into by us. We are contingently liable to these financial institutions in respect of such letters of credit and bonds and have agreed to indemnify the financial institutions for any payments made by them in respect of such letters of credit and bonds. None of these balance sheet arrangements either has, or is likely to have, a material effect on our consolidated financial statements. Lease Obligations At September 30, 2018, we were leasing our corporate office headquarters near downtown Tulsa, Oklahoma. We also lease other office space and equipment for use in operations. Future minimum rental payments required under operating leases having initial or remaining non-cancelable lease terms in excess of a year at September 30, 2018 are as follows: Amount Fiscal Year (in thousands) 2019 $ 9,113 2020 6,670 2021 4,357 2022 3,985 2023 3,721 Thereafter 5,095 Total $ 32,941 Total rent expense was $13.7 million, $14.0 million and $13.5 million for fiscal years 2018, 2017 and 2016, respectively. The future minimum lease payments for our Tulsa corporate office is a material portion of the amounts shown in the table above. This lease agreement commenced on May 30, 2003 and has subsequently been amended, most recently on August 25, 2017. The agreement will expire on January 31, 2025; however, we have two five-year renewal options. Contingencies We are party to legal proceedings and regulatory actions from time to time, including a number of cases which are currently pending. We maintain insurance against certain business risks subject to certain deductibles. With the exception of the matters discussed below, none of these legal actions are expected to have a material adverse effect on our financial condition, cash flows or results of operations. During the ordinary course of our business, contingencies arise resulting from an existing condition, situation, or set of circumstances involving an uncertainty as to the realization of a possible gain contingency. We account for gain contingencies in accordance with the provisions of ASC 450, Contingencies , and, therefore, we do not record gain contingencies and recognize income until realized. The property and equipment of our Venezuelan subsidiary was seized by the Venezuelan government on June 30, 2010. Our wholly-owned subsidiaries, Helmerich & Payne International Drilling Co. (“HPIDC”) and Helmerich & Payne de Venezuela, C.A., filed a lawsuit in the United States District Court for the District of Columbia on September 23, 2011 against the Bolivarian Republic of Venezuela, Petroleos de Venezuela, S.A. (“PDVSA”) and PDVSA Petroleo, S.A. (“Petroleo”). Our subsidiaries seek damages for the taking of their Venezuelan drilling business in violation of international law and for breach of contract. While there exists the possibility of realizing a recovery, we are currently unable to determine the timing or amounts we may receive, if any, or the likelihood of recovery. No contingent gains were recognized in our Consolidated Financial Statements during the fiscal years ended September 30, 2018, 2017 and 2016. |
BUSINESS SEGMENT AND GEOGRAPHIC
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Sep. 30, 2018 | |
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION | |
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION | NOTE 16 BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION Description of the Business We are a global contract drilling company based in Tulsa, Oklahoma with operations in all major U.S. onshore basins as well as South America and the Middle East. Our contract drilling operations consist mainly of contracting Company-owned drilling equipment primarily to large oil and gas exploration companies. We are the recognized industry leader in drilling as well as technological innovation. At September 30, 2018, our contract drilling business includes the following reportable operating segments: · U.S. Land · Offshore · International Land Each reportable operating segment is a strategic business unit that is managed separately and consolidated revenues and expenses reflect the elimination of all material intercompany transactions. Other includes additional non-reportable operating segments. Revenues included in “other” consist of revenue from our drilling technology services as well as rental income. Segment Performance We evaluate segment performance based on income or loss from continuing operations (segment operating income) before income taxes which includes: · Revenues from external and internal customers · Direct operating costs · Depreciation and · Allocated general and administrative costs but excludes acquisition related costs, corporate costs for other depreciation, income from asset sales and other corporate income and expense. General and administrative costs are allocated to the segments based primarily on specific identification and, to the extent that such identification is not practical, on other methods which we believe to be a reasonable reflection of the utilization of services provided. Summarized financial information of our reportable segments for continuing operations for each of the fiscal years ended September 30, 2018, 2017 and 2016 is shown in the following table: September 30, 2018 International (in thousands) U.S. Land Offshore Land Other Eliminations Total External Sales $ 2,068,195 $ 142,500 $ 238,356 $ 38,217 $ - $ 2,487,268 Intersegment 1,189 — — 1,026 $ (2,215) - Total Sales 2,069,384 142,500 238,356 39,243 (2,215) 2,487,268 Segment Operating Income (Loss) 150,698 26,124 (683) (27,790) — 148,349 Depreciation and Amortization 505,112 10,392 46,826 21,472 — 583,802 Total Assets 5,012,378 105,439 362,033 735,017 — 6,214,867 Additions to Long-Lived Assets 441,624 4,326 4,424 18,456 — 468,830 September 30, 2017 International (in thousands) U.S. Land Offshore Land Other Eliminations Total External Sales $ 1,439,523 $ 136,263 $ 212,972 $ 15,983 $ — $ 1,804,741 Intersegment — — — 862 (862) — Total Sales 1,439,523 136,263 212,972 16,845 (862) 1,804,741 Segment Operating Income (Loss) (94,880) 24,201 (7,224) (9,449) — (87,352) Depreciation and Amortization 499,486 11,764 53,622 20,671 — 585,543 Total Assets 4,967,074 99,533 413,392 959,986 — 6,439,985 Additions to Long-Lived Assets 394,508 2,847 3,400 7,351 — 408,106 September 30, 2016 International (in thousands) U.S. Land Offshore Land Other Eliminations Total External Sales $ 1,242,462 $ 138,601 $ 229,894 $ 13,275 $ — $ 1,624,232 Intersegment — — — 855 (855) — Total Sales 1,242,462 138,601 229,894 14,130 (855) 1,624,232 Segment Operating Income (Loss) 74,118 15,659 (14,086) (7,491) — 68,200 Depreciation and Amortization 508,237 12,495 57,102 20,753 — 598,587 Total Assets 5,005,299 105,152 487,181 1,234,323 — 6,831,955 Additions to Long-Lived Assets 209,156 9,694 2,364 20,076 — 241,290 The following table reconciles segment operating income (loss) to income from continuing operations before income taxes as reported on the Consolidated Statements of Operations: Year Ended September 30, 2018 2017 2016 (in thousands) Segment operating income (loss) $ 148,349 $ (87,352) $ 68,200 Income from asset sales 22,660 20,627 9,896 Acquisition related costs (8,153) — — Corporate selling, general and administrative costs and corporate depreciation (131,254) (105,816) (104,062) Operating income (loss) 31,602 (172,541) (25,966) Other income (expense) Interest and dividend income 8,017 5,915 3,166 Interest expense (24,265) (19,747) (22,913) Gain (loss) on investment securities 1 — (25,989) Other 486 1,775 (965) Total unallocated amounts (15,761) (12,057) (46,701) Income (loss) from continuing operations before income taxes $ 15,841 $ (184,598) $ (72,667) The following table presents revenues from external customers and long-lived assets by country based on the location of service provided: Year Ended September 30, 2018 2017 2016 (in thousands) Operating revenues United States $ 2,247,400 $ 1,591,769 $ 1,386,786 Argentina 190,038 157,257 159,427 Colombia 38,793 37,554 20,488 Ecuador — 6 4,948 Other Foreign 11,037 18,155 52,583 Total $ 2,487,268 $ 1,804,741 $ 1,624,232 Property, plant and equipment, net United States $ 4,591,913 $ 4,686,235 $ 4,804,328 Argentina 133,617 155,978 183,286 Colombia 74,042 81,798 91,815 Ecuador 10,781 22,298 438 Other Foreign 47,029 54,742 64,866 Total $ 4,857,382 $ 5,001,051 $ 5,144,733 |
GUARANTOR AND NON-GUARANTOR FIN
GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION | 12 Months Ended |
Sep. 30, 2018 | |
GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION | |
GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION | NOTE 17 GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION In March 2015, Helmerich & Payne International Drilling Co. (“the issuer”), a 100 percent owned subsidiary of Helmerich & Payne, Inc. (“parent”, “the guarantor”), issued senior unsecured notes with an aggregate principal amount of $500.0 million. The notes are fully and unconditionally guaranteed by the parent. No subsidiaries of the parent currently guarantee the notes, subject to certain provisions that if any subsidiary guarantees certain other debt of the issuer or parent, then such subsidiary will provide a guarantee of the obligation under the notes. In connection with the notes, we are providing the following condensed consolidating financial information in accordance with the Securities and Exchange Commission disclosure requirements, so that separate financial statements of the issuer are not required to be filed. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements. Condensed consolidating financial information for the issuer, Helmerich & Payne International Drilling Co., and parent, guarantor, Helmerich & Payne, Inc. is shown in the tables below. CONDENSED CONSOLIDATING BALANCE SHEETS September 30, 2018 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ — $ 273,214 $ 11,141 $ — $ 284,355 Short-term investments — 41,461 — — 41,461 Accounts receivable, net of allowance (29) 499,644 65,859 (272) 565,202 Inventories of materials and supplies — 127,154 30,980 — 158,134 Prepaid expenses and other 20,783 10,649 35,539 (573) 66,398 Total current assets 20,754 952,122 143,519 (845) 1,115,550 Investments 16,200 82,496 — — 98,696 Property, plant and equipment, net 46,859 4,515,077 295,446 — 4,857,382 Intercompany receivables 161,532 2,024,652 294,206 (2,480,390) — Goodwill — — 64,777 — 64,777 Intangible assets, net — — 73,207 — 73,207 Other assets 268 907 4,080 — 5,255 Investment in subsidiaries 5,981,197 172,513 — (6,153,710) — Total assets $ 6,226,810 $ 7,747,767 $ 875,235 $ (8,634,945) $ 6,214,867 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 83,819 $ 43,626 $ 5,483 $ (264) $ 132,664 Accrued liabilities 43,449 164,542 37,093 (580) 244,504 Total current liabilities 127,268 208,168 42,576 (844) 377,168 Noncurrent liabilities: Long-term debt — 493,968 — — 493,968 Deferred income taxes (7,112) 834,714 25,534 — 853,136 Intercompany payables 1,701,694 178,759 599,837 (2,480,290) — Other 22,225 48,836 22,545 — 93,606 Noncurrent liabilities - discontinued operations — — 14,254 — 14,254 Total noncurrent liabilities 1,716,807 1,556,277 662,170 (2,480,290) 1,454,964 Shareholders’ equity: Common stock 11,201 100 — (100) 11,201 Additional paid-in capital 500,393 52,437 1,040 (53,477) 500,393 Retained earnings 4,027,779 5,910,955 169,449 (6,080,404) 4,027,779 Accumulated other comprehensive income 16,550 19,830 — (19,830) 16,550 Treasury stock, at cost (173,188) — — — (173,188) Total shareholders’ equity 4,382,735 5,983,322 170,489 (6,153,811) 4,382,735 Total liabilities and shareholders’ equity $ 6,226,810 $ 7,747,767 $ 875,235 $ (8,634,945) $ 6,214,867 September 30, 2017 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ — $ 507,504 $ 13,871 $ — $ 521,375 Short-term investments — 44,491 — — 44,491 Accounts receivable, net of allowance 766 411,599 64,714 (5) 477,074 Inventories of materials and supplies — 102,470 34,734 — 137,204 Prepaid expenses and other 12,200 6,383 36,982 (442) 55,123 Total current assets 12,966 1,072,447 150,301 (447) 1,235,267 Investments 13,853 70,173 — — 84,026 Property, plant and equipment, net 49,851 4,609,144 342,056 — 5,001,051 Intercompany receivables 90,885 1,746,662 248,540 (2,086,087) — Goodwill — — 51,705 — 51,705 Intangible assets, net — — 50,785 — 50,785 Other assets 4,955 3,839 8,360 — 17,154 Investment in subsidiaries 5,470,050 183,382 — (5,653,432) — Total assets $ 5,642,560 $ 7,685,647 $ 851,747 $ (7,739,966) $ 6,439,988 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 82,947 $ 48,092 $ 4,589 $ — $ 135,628 Accrued liabilities 26,698 148,491 34,015 (447) 208,757 Total current liabilities 109,645 196,583 38,604 (447) 344,385 Noncurrent liabilities: Long-term debt — 492,902 — — 492,902 Deferred income taxes (11,201) 1,286,381 57,509 — 1,332,689 Intercompany payables 1,354,068 210,823 521,096 (2,085,987) — Other 25,457 43,471 32,481 — 101,409 Noncurrent liabilities - discontinued operations — — 4,012 — 4,012 Total noncurrent liabilities 1,368,324 2,033,577 615,098 (2,085,987) 1,931,012 Shareholders’ equity: Common stock 11,196 100 — (100) 11,196 Additional paid-in capital 487,248 52,437 1,039 (53,476) 487,248 Retained earnings 3,855,686 5,396,212 197,006 (5,593,218) 3,855,686 Accumulated other comprehensive income 2,300 6,738 — (6,738) 2,300 Treasury stock, at cost (191,839) — — — (191,839) Total shareholders’ equity 4,164,591 5,455,487 198,045 (5,653,532) 4,164,591 Total liabilities and shareholders’ equity $ 5,642,560 $ 7,685,647 $ 851,747 $ (7,739,966) $ 6,439,988 CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS Year Ended September 30, 2018 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Operating revenue $ — $ 2,210,695 $ 276,660 $ (87) $ 2,487,268 Operating costs and other 14,276 2,120,465 321,863 (938) 2,455,666 Operating income (loss) from continuing operations (14,276) 90,230 (45,203) 851 31,602 Other income (expense), net 526 7,363 1,466 (851) 8,504 Interest expense (499) (20,426) (3,340) — (24,265) Equity in net income (loss) of subsidiaries 498,055 (11,039) — (487,016) — Income (loss) from continuing operations before income taxes 483,806 66,128 (47,077) (487,016) 15,841 Income tax (benefit) provision 1,134 (448,613) (29,690) — (477,169) Income (loss) from continuing operations 482,672 514,741 (17,387) (487,016) 493,010 Income from discontinued operations before income taxes — — 23,389 — 23,389 Income tax provision — — 33,727 — 33,727 Loss from discontinued operations — — (10,338) — (10,338) Net income (loss) $ 482,672 $ 514,741 $ (27,725) $ (487,016) $ 482,672 Year Ended September 30, 2017 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Operating revenue $ — $ 1,575,787 $ 229,021 $ (67) $ 1,804,741 Operating costs and other 16,566 1,707,473 254,125 (882) 1,977,282 Operating income (loss) from continuing operations (16,566) (131,686) (25,104) 815 (172,541) Other income (expense), net (240) 7,342 1,403 (815) 7,690 Interest expense (398) (20,136) 787 — (19,747) Equity in net income (loss) of subsidiaries (116,212) (8,012) — 124,224 — Income (loss) from continuing operations before income taxes (133,416) (152,492) (22,914) 124,224 (184,598) Income tax benefit (5,204) (38,600) (12,931) — (56,735) Income (loss) from continuing operations (128,212) (113,892) (9,983) 124,224 (127,863) Income from discontinued operations before income taxes — — 3,285 — 3,285 Income tax provision — — 3,634 — 3,634 Loss from discontinued operations — — (349) — (349) Net income (loss) $ (128,212) $ (113,892) $ (10,332) $ 124,224 $ (128,212) Year Ended September 30, 2016 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Operating revenue $ — $ 1,373,511 $ 250,791 $ (70) $ 1,624,232 Operating costs and other 13,145 1,358,269 280,107 (1,323) 1,650,198 Operating income (loss) from continuing operations (13,145) 15,242 (29,316) 1,253 (25,966) Other expense, net (194) (22,243) (98) (1,253) (23,788) Interest expense (375) (20,256) (2,282) — (22,913) Equity in net income (loss) of subsidiaries (47,166) (14,472) — 61,638 — Loss from continuing operations before income taxes (60,880) (41,729) (31,696) 61,638 (72,667) Income tax (benefit) provision (4,052) 5,127 (20,752) — (19,677) Income (loss) from continuing operations (56,828) (46,856) (10,944) 61,638 (52,990) Income from discontinued operations before income taxes — — 2,360 — 2,360 Income tax provision — — 6,198 — 6,198 Loss from discontinued operations — — (3,838) — (3,838) Net income (loss) $ (56,828) $ (46,856) $ (14,782) $ 61,638 $ (56,828) CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year Ended September 30, 2018 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Net income (loss) $ 482,672 $ 514,741 $ (27,725) $ (487,016) $ 482,672 Other comprehensive income, net of income taxes: Unrealized appreciation on securities, net — 9,001 — — 9,001 Minimum pension liability adjustments, net 1,137 4,112 — — 5,249 Other comprehensive income 1,137 13,113 — — 14,250 Comprehensive income (loss) $ 483,809 $ 527,854 $ (27,725) $ (487,016) $ 496,922 Year Ended September 30, 2017 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Net loss $ (128,212) $ (113,892) $ (10,332) $ 124,224 $ (128,212) Other comprehensive income, net of income taxes: Unrealized depreciation on securities, net — (829) — — (829) Minimum pension liability adjustments, net 860 2,473 — — 3,333 Other comprehensive income 860 1,644 — — 2,504 Comprehensive loss $ (127,352) $ (112,248) $ (10,332) $ 124,224 $ (125,708) Year Ended September 30, 2016 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Net loss $ (56,828) $ (46,856) $ (14,782) $ 61,638 $ (56,828) Other comprehensive loss, net of income taxes: Unrealized appreciation on securities, net — 2,772 — — 2,772 Reclassification of realized losses in net income, net — 926 — — 926 Minimum pension liability adjustments, net (63) (2,462) — — (2,525) Other comprehensive income (loss) (63) 1,236 — — 1,173 Comprehensive loss $ (56,891) $ (45,620) $ (14,782) $ 61,638 $ (55,655) CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Year Ended September 30, 2018 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 759 $ 539,476 $ 4,296 $ — $ 544,531 Cash flows from investing activities: Capital expenditures (12,723) (443,743) (10,118) — (466,584) Purchase of short-term investments — (71,049) — — (71,049) Payment for acquisition of business, net of cash acquired (47,886) — — — (47,886) Proceeds from sale of short-term investments — 68,776 — — 68,776 Intercompany transfers 60,609 (60,609) — — — Proceeds from asset sales — 41,289 3,092 — 44,381 Net cash used in investing activities — (465,336) (7,026) — (472,362) Cash flows from financing activities: Intercompany transfers 308,430 (308,430) — — — Dividends paid (308,430) — — — (308,430) Payments for employee taxes on net settlement of equity awards (7,114) — — — (7,114) Proceeds from stock option exercises 6,355 — — — 6,355 Net cash provided by (used in) financing activities (759) (308,430) — — (309,189) Net increase (decrease) in cash and cash equivalents — (234,290) (2,730) — (237,020) Cash and cash equivalents, beginning of period — 507,504 13,871 — 521,375 Cash and cash equivalents, end of period $ — $ 273,214 $ 11,141 $ — $ 284,355 Year Ended September 30, 2017, as adjusted Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Net cash (used in) provided by operating activities $ (4,686) $ 354,711 $ 11,606 $ — $ 361,631 Cash flows from investing activities: Capital expenditures (4,264) (387,392) (5,911) — (397,567) Purchase of short-term investments — (69,866) — — (69,866) Payment for acquisition of business, net cash acquired (70,416) — — — (70,416) Proceeds from sale of short-term investments — 69,449 — — 69,449 Intercompany transfers 74,680 (74,680) — — — Proceeds from asset sales — 22,724 688 — 23,412 Net cash used in investing activities — (439,765) (5,223) — (444,988) Cash flows from financing activities: Intercompany transfers 305,515 (305,515) — — — Dividends paid (305,515) — — — (305,515) Payments for employee taxes on net settlement of equity awards (6,599) — — — (6,599) Proceeds from stock option exercises 11,285 — — — 11,285 Net cash provided by (used in) financing activities 4,686 (305,515) — — (300,829) Net increase (decrease) in cash and cash equivalents — (390,569) 6,383 — (384,186) Cash and cash equivalents, beginning of period — 898,073 7,488 — 905,561 Cash and cash equivalents, end of period $ — $ 507,504 $ 13,871 $ — $ 521,375 September 30, 2016, as adjusted Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ 2,863 $ 777,756 $ (26,088) $ — $ 754,531 Cash flows from investing activities: Capital expenditures (16,119) (235,078) (5,972) — (257,169) Purchase of short-term investments — (57,276) — — (57,276) Proceeds from sale of short-term investments — 58,381 — — 58,381 Intercompany transfers 16,119 (16,119) — — — Proceeds from asset sales 9 19,237 2,599 — 21,845 Net cash provided by (used in) investing activities 9 (230,855) (3,373) — (234,219) Cash flows from financing activities: Payments on long-term debt — (40,000) — — (40,000) Debt issuance costs — (1,111) — — (1,111) Intercompany transfers 300,152 (300,152) — — — Dividends paid (300,152) — — — (300,152) Payments from employee taxes on net settlement of equity awards (5,646) — — — (5,646) Proceeds from stock option exercises 2,774 — — — 2,774 Net cash used in financing activities (2,872) (341,263) — — (344,135) Net increase (decrease) in cash and cash equivalents — 205,638 (29,461) — 176,177 Cash and cash equivalents, beginning of period — 692,435 36,949 — 729,384 Cash and cash equivalents, end of period $ — $ 898,073 $ 7,488 $ — $ 905,561 |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Sep. 30, 2018 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | NOTE 18 SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (in thousands, except per share amounts) 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total (1) Operating revenues $ 564,087 $ 577,484 $ 648,872 $ 696,825 $ 2,487,268 Operating income (loss) 3,520 (1,253) 6,217 31,602 Income (loss) from continuing operations 500,642 (1,633) (8,174) 493,010 Net income (loss) 500,106 (11,879) (8,008) 482,672 Basic earnings per common share: Income (loss) from continuing operations 4.57 (0.03) (0.08) 0.02 4.49 Net income (loss) 4.57 (0.12) (0.08) 0.02 4.39 Diluted earnings per common share: Income (loss) from continuing operations 4.55 (0.03) (0.08) 0.02 4.47 Net income (loss) 4.55 (0.12) (0.08) 0.02 4.37 (1) The sum of earnings per share for the four quarters may not equal the total earnings per share for the fiscal year due to changes in the average number of common shares outstanding. In the first quarter of fiscal year 2018, net income includes a tax benefit of approximately $502.1 million, or $4.59 per share on a diluted basis, an after-tax gain from the sale of assets of $4.2 million, or $0.04 per share on a diluted basis. In the second quarter of fiscal year 2018, net loss includes an after-tax gain from the sale of assets of $3.8 million, or $0.04 per share on a diluted basis. In the third quarter of fiscal year 2018, net loss includes an after-tax gain from the sale of assets of $3.1 million, or $0.02 per share on a diluted basis. In the fourth quarter of fiscal year 2018, net loss includes an after-tax gain from the sale of assets of $5.5 million, or $0.05 per share on a diluted basis and an after-tax loss from asset impairments of approximately $17.2 million, or $0.16 per share on a diluted basis. 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Total (1) Operating revenues $ 368,590 $ 405,283 $ 498,564 $ 532,304 $ 1,804,741 Operating loss (49,164) (65,672) (28,028) (29,677) (172,541) Loss from continuing operations (34,554) (48,473) (23,125) (21,711) (127,863) Net loss (35,063) (48,818) (21,799) (22,532) (128,212) Basic earnings per common share: Loss from continuing operations (0.33) (0.45) (0.22) (0.20) (1.20) Net loss (0.33) (0.45) (0.21) (0.21) (1.20) Diluted earnings per common share: Loss from continuing operations (0.33) (0.45) (0.22) (0.20) (1.20) Net loss (0.33) (0.45) (0.21) (0.21) (1.20) (1) The sum of earnings per share for the four quarters may not equal the total earnings per share for the year due to changes in the average number of common shares outstanding. In the first quarter of fiscal year 2017, net loss includes an after-tax gain from the sale of assets of $0.6 million, or $0.01 per share on a diluted basis. In the second quarter of fiscal year 2017, net loss includes an after-tax gain from the sale of assets of $10.1 million, or $0.09 per share on a diluted basis. In the third quarter of fiscal year 2017, net loss includes an after-tax gain from the sale of assets of $1.3 million, or $0.01 per share on a diluted basis. In the fourth quarter of fiscal year 2017, net loss includes an after-tax gain from the sale of assets of $2.3 million, or $0.02 per share on a diluted basis. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2018 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 19 SUBSEQUENT EVENTS On November 13, 2018, we entered into the 2018 Credit Facility, which will mature on November 13, 2023. The 2018 Credit Facility has $750 million in aggregate availability with a maximum of $75 million available for use as letters of credit. The 2018 Credit Facility also permits aggregate commitments under the facility to be increased by $300 million, subject to the satisfaction of certain conditions and the procurement of additional commitments from new or existing lenders. The 2018 Credit Facility is currently guaranteed by our wholly-owned direct subsidiary, HPIDC, which guarantee is subject to release following certain events set forth in the 2018 Credit Facility. The borrowings under the 2018 Credit Facility accrue interest at a spread over either the London Interbank Offered Rate (LIBOR) or the Base Rate. We also pay a commitment fee based on the unused balance of the facility. Borrowing spreads as well as commitment fees are determined based on the debt rating for senior unsecured debt of the Company or HPIDC as determined by Moody’s and S&P. The spread over LIBOR ranges from 0.875 percent to 1.500 percent per annum and commitment fees range from 0.075 percent to 0.200 percent per annum. Based on the unsecured debt rating of HPIDC on September 30, 2018, the spread over LIBOR would have been 1.125 percent and commitment fees would have been 0.125 percent. There is a financial covenant in the 2018 Credit Facility that requires us to maintain a total debt to total capitalization ratio of less than 50 percent. The 2018 Credit Facility contains additional terms, conditions, restrictions and covenants that we believe are usual and customary in unsecured debt arrangements for companies of similar size and credit quality, including a limitation that priority debt (as defined in the credit agreement) may not exceed 17.5 percent of the net worth of the Company. As of the closing, there were no borrowings, but there were three letters of credit outstanding in the amount of $38.0 million, and we had $712.0 million available to borrow under the 2018 Credit Facility. In connection with entering into the 2018 Credit Facility, we terminated our $300 million unsecured credit facility under the credit agreement dated as of July 13, 2016 by and among HPIDC, as borrower, the Company, as guarantor, Wells Fargo, National Association, as administrative agent, and the lenders party thereto. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). We classified our former Venezuelan operation as a discontinued operation in the third quarter of fiscal year 2010, as more fully described in Note 4—Discontinued Operations. Unless indicated otherwise, the information in the Notes to Consolidated Financial Statements relates only to our continuing operations. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Helmerich & Payne, Inc. and its domestic and foreign subsidiaries. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the fiscal year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Foreign Currencies | Foreign Currencies Our functional currency, together with all our foreign subsidiaries, is the U.S. dollar. Monetary assets and liabilities denominated in currencies other than the U.S. dollar are translated at exchange rates in effect at the end of the period, and the resulting gains and losses are recorded on our statement of operations. Aggregate foreign currency losses of $4.0 million, $7.1 million and $9.3 million in fiscal years 2018, 2017 and 2016, respectively, are included in direct operating costs. |
Use of Estimates | Use of Estimates The preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents include cash on hand, demand deposits with banks and all highly liquid investments with original maturities of three months or less. Our cash, cash equivalents and short-term investments are subject to potential credit risk, and certain of our cash accounts carry balances greater than the federally insured limits. We had restricted cash and cash equivalents of $41.8 million and $39.1 million at September 30, 2018 and 2017, respectively. Of the total at September 30, 2018 and 2017, $11.3 million and $9.4 million, respectively, is related to the acquisition of drilling technology companies described in Note 3—Business Combinations, $2.0 million as of both year ends is from the initial capitalization of the captive insurance company, and $28.5 million and $27.7 million, respectively, represents an additional amount management has elected to restrict for the purpose of potential insurance claims in our wholly-owned captive insurance company. The restricted amounts are primarily invested in short-term money market securities. See Note 2 for changes to the presentation of restricted cash effective October 1, 2018. The restricted cash and cash equivalents are reflected in the balance sheet as follows: September 30, 2018 2017 (in thousands) Prepaid expenses and other $ 39,830 $ 32,439 Other assets $ 2,000 $ 6,695 |
Inventories of Materials and Supplies | Inventories of Materials and Supplies Inventories are primarily replacement parts and supplies held for consumption in our drilling operations. Inventories are valued at the lower of cost or net realizable value. Cost is determined on a weighted average basis and includes the cost of materials, shipping, duties, labor and manufacturing overhead. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Our reserves during fiscal years 2018 and 2017 were 5.9 percent and 6.3 percent, respectively, of the balance to provide for non-recoverable inventory costs. The reserves for excess and obsolete inventory were $9.9 million and $9.2 million for fiscal years 2018 and 2017, respectively. |
Investments | Investments We maintain investments in equity securities of certain publicly traded companies. The cost of securities used in determining realized gains and losses is based on the average cost basis of the security purchased. We regularly review investment securities for impairment based on criteria that include the extent to which the investment’s carrying value exceeds its related fair value, the duration of the market decline and the financial strength and specific prospects of the issuer of the security. Unrealized gains are recognized in other comprehensive income. Unrealized losses that are other than temporary are recognized in earnings. See Note 2 for changes in accounting for investments effective October 1, 2018. |
Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant and equipment are stated at cost less accumulated depreciation. Substantially all property, plant and equipment are depreciated using the straight-line method based on the estimated useful lives of the assets after deducting their residual values. The amount of depreciation expense we record is dependent upon certain assumptions, including an asset’s estimated useful life, rate of consumption, and corresponding salvage value. We periodically review these assumptions and may change one or more of these assumptions. Changes in our assumptions may require us to recognize, on a prospective basis, increased or decreased depreciation expense. We capitalize interest on major projects during construction. Interest is capitalized based on the average interest rate on related debt. Capitalized interest for fiscal years 2018, 2017 and 2016 was $0.4 million, $0.3 million and $2.8 million, respectively. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Changes that could prompt such an assessment include a significant decline in revenue or cash margin per day, extended periods of low rig asset group utilization, changes in market demand for a specific asset, obsolescence, completion of specific contracts and/or overall general market conditions. If the review of the long-lived assets indicates that the carrying value of these assets/asset groups is more than the estimated undiscounted future cash flows projected to be realized from the use of the asset and its eventual disposal an impairment charge is made, as required, to adjust the carrying value down to the estimated fair value of the asset. The estimated fair value is determined based upon either an income approach using estimated discounted future cash flows or a market approach. Fair value is estimated, if applicable, considering factors such as recent market sales of rigs of other companies and our own sales of rigs, appraisals and other factors. Cash flows are estimated by management considering factors such as prospective market demand, margins, recent changes in rig technology and its effect on each rig’s marketability, any investment required to make a rig operational, suitability of rig size and make up to existing platforms, and competitive dynamics including industry utilization. Long-lived assets that are held for sale are recorded at the lower of carrying value or the fair value less costs to sell. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of purchase price over the fair value of net assets acquired in a business combination, at the date of acquisition. Goodwill and indefinite-life intangibles are not amortized but are tested for potential impairment at the reporting unit level at a minimum on an annual basis in the fourth fiscal quarter of each fiscal year or when indications of potential impairment exist. If an impairment is determined to exist, an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized, limited to the total amount of goodwill allocated to that reporting unit. The reporting unit level is defined as an operating segment or one level below an operating segment. Finite-lived intangible assets are amortized using the straight-line method over the period in which these assets contribute to our cash flows, generally estimated to be 15 years and are evaluated for impairment in accordance with our policies for valuation of long-lived assets. |
Revenue Recognition | Drilling Revenues Contract drilling revenues are comprised of daywork drilling contracts for which the related revenues and expenses are recognized as services are performed and collection is reasonably assured. For certain contracts, we receive payments contractually designated for the mobilization of rigs and other drilling equipment. For certain contracts, mobilization payments received, and direct costs incurred for the mobilization, are deferred and recognized on a straight-line basis over the term of the related drilling contract. Costs incurred to relocate rigs and other drilling equipment to areas in which a contract has not been secured are expensed as incurred. Reimbursements received for out-of-pocket expenses are recorded as both revenues and direct costs. Reimbursements for fiscal years 2018, 2017 and 2016 were $274.7 million, $179.9 million and $125.9 million, respectively. For contracts that are terminated by customers prior to the expirations of their fixed terms, contractual provisions customarily require early termination amounts to be paid to us. Revenues from early terminated contracts are recognized when all contractual requirements have been met. Early termination revenue for fiscal years 2018, 2017 and 2016 was approximately $17.1 million, $29.4 million and $219.0 million, respectively. Rent Revenues We enter into leases with tenants in our rental properties consisting primarily of retail and multi-tenant warehouse space. The lease terms of tenants occupying space in the retail centers and warehouse buildings generally range from three to ten years. Minimum rents are recognized on a straight-line basis over the term of the related leases. Overage and percentage rents are based on tenants’ sales volume. Recoveries from tenants for property taxes and operating expenses are recognized in other operating revenues in the Consolidated Statements of Operations. Our rent revenues are as follows: Year Ended September 30, 2018 2017 2016 (in thousands) Minimum rents $ 9,950 $ 9,735 $ 9,196 Overage and percentage rents $ 1,040 $ 936 $ 1,211 At September 30, 2018, minimum future rental income to be received on noncancelable operating leases was as follows: Fiscal Year Amount (in thousands) 2019 $ 7,709 2020 6,314 2021 4,473 2022 2,488 2023 1,725 Thereafter 4,868 Total $ 27,577 Leasehold improvement allowances are capitalized and amortized over the lease term. At September 30, 2018 and 2017, the cost and accumulated depreciation for real estate properties were as follows: September 30, 2018 2017 (in thousands) Real estate properties $ 69,133 $ 66,005 Accumulated depreciation (42,272) (42,169) $ 26,861 $ 23,836 |
Income Taxes | Income Taxes Current income tax expense is the amount of income taxes expected to be payable for the current fiscal year. Deferred income taxes are computed using the liability method and are provided on all temporary differences between the financial basis and the tax basis of our assets and liabilities. We provide for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed in Accounting Standards Codification (“ASC”) 740, Income Taxes , which is more fully discussed in Note 8—Income Taxes. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. We recognize accrued interest related to unrecognized tax benefits in interest expense and penalties in other expense in the Consolidated Statements of Operations. |
Earnings per Common Share | Earnings per Common Share Basic earnings per share is computed utilizing the two-class method and is calculated based on the weighted-average number of common shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted-average number of common and common equivalent shares outstanding during the periods utilizing the two-class method for stock options and nonvested restricted stock. We have granted and expect to continue to grant to employees restricted stock grants that contain non-forfeitable rights to dividends. Such grants are considered participating securities under ASC 260, Earnings Per Share . As such, we have included these grants in the calculation of our basic earnings per share and calculate basic earnings per share using the two-class method. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is determined using a fair-value-based measurement method for all awards granted. In computing the impact, the fair value of each option is estimated on the date of grant based on the Black-Scholes options-pricing model utilizing assumptions for a risk free interest rate, volatility, dividend yield and expected remaining term of the awards. The assumptions used in calculating the fair value of stock-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. Stock-based compensation is recognized on a straight-line basis over the requisite service periods of the stock awards, which is generally the vesting period. Compensation expense related to stock options is recorded as a component of general and administrative expenses in the Consolidated Statements of Operations. |
Treasury Stock | Treasury Stock Treasury stock purchases are accounted for under the cost method whereby the cost of the acquired stock is recorded as treasury stock. Gains and losses on the subsequent reissuance of shares are credited or charged to additional paid-in capital using the average-cost method. |
Comprehensive Income or Loss | Comprehensive Income or Loss Other comprehensive income or loss refers to revenues, expenses, gains, and losses that are included in comprehensive income or loss but excluded from net income or loss. We report the components of other comprehensive income or loss, net of tax, by their nature and disclose the tax effect allocated to each component in the Consolidated Statements of Comprehensive Income (Loss). |
Leases | Leases We lease office space and equipment for use in operations. Leases are evaluated at inception or upon any subsequent material modification and, depending on the lease terms, are classified as either capital leases or operating leases as appropriate under ASC 840, Leases . For operating leases that contain built-in pre-determined rent escalations, rent expense is recognized on a straight-line basis over the life of the lease. Leasehold improvements are capitalized and amortized over the lease term. We do not have significant capital leases. |
Recently Issued Accounting Updates | Recently Issued Accounting Updates Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standard Updates (“ASUs”) to the FASB ASC. We consider the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or clarifications of ASUs listed below. The following tables provide a brief description of recent accounting pronouncements and our analysis of the effects on our financial statements: Standard Description Date of Effect on the Financial Statements or Other Significant Matters Recently Adopted Accounting Pronouncements ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting The standard requires that all excess tax benefits and deficiencies previously recorded as additional paid-in capital be prospectively recorded in income tax expense. The adoption of this ASU could cause volatility in the effective tax rate on a quarter by quarter basis due primarily to fluctuations in the Company's stock price and the timing of stock option exercises and vesting of restricted share grants. The standard requires excess tax benefits to be presented as an operating activity on the statement of cash flows rather than as a financing activity. Excess tax benefits and deficiencies are recorded within the provision for income taxes within the Consolidated Statements of Operations on a prospective basis as required by the standard. The standard also requires taxes paid for employee withholdings to be presented as a financing activity on the statement of cash flows. October 1, 2017 We adopted this ASU during the first quarter of fiscal year 2018. We elected to present changes to the statement of cash flows on a retrospective basis as allowed by the standard in order to maintain comparability between fiscal years. As such, prior period cash flows from operations for the fiscal years ended September 30, 2017 and 2016 have been adjusted to reflect an increase of $4.4 million and $0.9 million, respectively, with a corresponding decrease to cash flows used in financing activities, compared to amounts previously reported. The standard also requires taxes paid for employee withholdings to be presented as a financing activity on the statement of cash flows but this requirement had no impact on our total financing activities as this has been the practice historically. We also elected to account for forfeitures of awards as they occur, instead of estimating a forfeiture amount. On October 1, 2017, we recorded a $0.3 million cumulative-effect adjustment to retained earnings for the differential between the amount of compensation cost previously recorded and the amount that would have been recorded without assuming forfeitures. ASU No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern The new guidance requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Disclosures are required when conditions give rise to substantial doubt. Substantial doubt is deemed to exist when it is probable that the company will be unable to meet its obligations within one year from the financial statement issuance date. September 30, 2017 We adopted ASU No. 2014-15, as required, on September 30, 2017 with no impact on our consolidated financial statements and disclosures. ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory This update simplifies the subsequent measurement of inventory. It replaces the current lower of cost or market test with the lower of cost or net realizable value test. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. October 1, 2017 We adopted this ASU during the first quarter of fiscal year 2018. There was no impact on our consolidated financial statements. ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment The new guidance eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of today’s goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on today’s Step 1). June 30, 2017 As permitted, we early adopted this guidance effective June 30, 2017, with no impact on our consolidated financial statements. Standards that are not yet adopted as of September 30, 2018 ASU No. 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans—General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans This ASU amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. October 1, 2021 We are currently evaluating the impact that the new guidance may have on our consolidated financial statements and disclosures. ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project, where entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. October 1, 2020 We are currently evaluating the impact that the new guidance may have on our consolidated financial statements and disclosures. ASU No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income This ASU relates to the impacts of the tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Reform Act”). The guidance permits the reclassification of certain income tax effects of the Tax Reform Act from Other Comprehensive Income to Retained Earnings. The guidance also requires certain new disclosures. This update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal periods and early adoption is permitted. Entities may adopt the guidance using one of two transition methods; retrospective to each period (or periods) in which the income tax effects of the Tax Reform Act related to the items remaining in Other Comprehensive Income are recognized or at the beginning of the period of adoption. October 1, 2019 We are currently evaluating the impact that the new guidance may have on our consolidated financial statements and disclosures. ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. Regardless of whether the change to the terms or conditions of the award requires modification accounting, the existing disclosure requirements and other aspects of U.S. GAAP associated with modification, such as earnings per share, continue to apply. October 1, 2018 We do not expect the new guidance to have a material impact on our consolidated financial statements. ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost The ASU will change how employers that sponsor defined benefit pension and/or other postretirement benefit plans present the net periodic benefit cost in the income statement. Employers will present the service cost component of net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. Employers will present the other components of the net periodic benefit cost separately from the line item(s) that includes the service cost and outside of any subtotal of operating income, if one is presented. October 1, 2018 We do not expect the new guidance to have a material impact on our consolidated financial statements. ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash The ASU requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. October 1, 2018 We will adopt the guidance retrospectively to all periods presented prior to the adoption date (October 1, 2018) by excluding the change in restricted cash balances from cash flows from operating activities. The impact of which will be an increase in the cash flows from operating activities in the fiscal years 2018 and 2017 by $2.7 million and $9.5 million, respectively. ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory Under current U.S. GAAP, the tax effects of intra-entity asset transfers (intercompany sales) are deferred until the transferred asset is sold to a third party or otherwise recovered through use. This is an exception to the principle in ASC 740, Income Taxes, that generally requires comprehensive recognition of current and deferred income taxes. The new guidance eliminates the exception for all intra-entity sales of assets other than inventory. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller's tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer's jurisdiction would also be recognized at the time of the transfer. The new guidance does not apply to intra-entity transfers of inventory. The income tax consequences from the sale of inventory from one member of a consolidated entity to another will continue to be deferred until the inventory is sold to a third party. October 1, 2018 We do not expect the new guidance to have a material impact on our consolidated financial statements. ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments The ASU is intended to reduce diversity in practice in presentation and classification of certain cash receipts and cash payments by providing guidance on eight specific cash flow issues. The ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. October 1, 2018 We plan to adopt this standard retrospectively to all periods presented. We are currently assessing the impact this standard will have on our consolidated statements of cash flows. ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) This ASU introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new model will apply to: (1) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, (2) loan commitments and certain other off-balance sheet credit exposures, (3) debt securities and other financial assets measured at fair value through other comprehensive income/(loss), and (4) beneficial interests in securitized financial assets. This update is effective for annual and interim periods beginning after December 15, 2019. October 1, 2020 We are currently evaluating the impact that the new guidance may have on our consolidated financial statements and disclosures. ASU No. 2016-02, Leases (Topic 842) ASU 2016-02 will require organizations that lease assets — referred to as “lessees” — to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under ASU 2016-02, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Lessor accounting remains substantially similar to current U.S. GAAP. In addition, disclosures of leasing activities are to be expanded to include qualitative along with specific quantitative information. For public entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-02 mandates a modified retrospective transition method with an option to use certain practical expedients. October 1, 2019 We are currently evaluating the potential impact of adopting this guidance on our consolidated financial statements and disclosures. ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities The standard requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income. The provisions of ASU 2016-01 are effective for interim and annual periods starting after December 15, 2017. At adoption, a cumulative-effect adjustment to beginning retained earnings will be recorded. October 1, 2018 Subsequent to adoption, changes in the fair value of our available-for-sale investments will be recognized in net income and the effect will be subject to stock market fluctuations. The cumulative catch up impact for the October 1, 2018 implementation will be a reclassification of $44 million, cumulative gains related to our available-for-sale securities, currently recorded in the beginning balance of the accumulated other comprehensive income, to beginning balance of retained earnings at October 1, 2018. ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606): Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The update outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance, including industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled for those goods or services. The update also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Furthermore, as part of Topic 606, the FASB introduced ASC 340-40 Other Assets and Deferred Costs, which provides guidance on the capitalization of contract related costs that are not within the scope of other authoritative literature. The update will be effective for fiscal reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Companies may use either a full retrospective or a modified retrospective approach to adopt the updates. October 1, 2018 We intend to adopt the new guidance using the modified retrospective approach. In preparation for our adoption of the new standard, we have evaluated representative samples of contracts and other forms of agreements with our customers based upon the five-step model specified by the new guidance. We have completed a preliminary assessment of the of the potential impact the implementation of this new guidance will have on our financial statements. Although our preliminary assessment may change based upon completion of our evaluation, the following summarizes the more significant impacts expected from the adoption of the new standard: · Certain revenues currently recognized at a point in time, are expected to be recognized over the term of the contract. · Certain associated costs to fulfill these contracts that are currently being expensed at a point in time, are expected to be capitalized as a contract fulfillment cost and amortized over the contract term, including expected contract extensions. · Enhance our disclosures to provide additional information relating to disaggregated revenue, contract assets and liabilities and remaining performance obligations. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of temporary cash investments, short-term investments and trade receivables. The industry concentration has the potential to impact our overall exposure to market and credit risks, either positively or negatively, in that our customers could be affected by similar changes in economic, industry or other conditions. However, we believe that the credit risk posed by this industry concentration is offset by the creditworthiness of our customer base. We had revenues from individual customers, related to our U.S. Land segment, that constituted 10 percent or more of our total revenues as follows: (In thousands) 2018 2017 2016 EOG Resources, Inc. $ $ $ In addition, we have certain customers that make up a significant portion of our Accounts Receivable at September 30, 2018, as indicated in the table below: Percentage of Accounts Receivable EOG Resources, Inc. 8.8 % Occidental Oil and Gas Corporation 4.7 % We place temporary cash investments in the U.S. with established financial institutions and invest in a diversified portfolio of highly rated, short-term money market instruments. Our trade receivables, primarily with established companies in the oil and gas industry, may impact credit risk as customers may be similarly affected by prolonged changes in economic and industry conditions. International sales also present various risks including governmental activities that may limit or disrupt markets and restrict the movement of funds. Most of our international sales, however, are to large international or government-owned national oil companies. We perform credit evaluations of customers and do not typically require collateral in support for trade receivables. We provide an allowance for doubtful accounts, when necessary, to cover estimated credit losses. Such an allowance is based on management’s knowledge of customer accounts. |
Volatility of Market | Volatility of Market Our operations can be materially affected by oil and gas prices. Oil and natural gas prices have been historically volatile and difficult to predict with any degree of certainty. While current energy prices are important contributors to positive cash flow for customers, expectations about future prices and price volatility are generally more important for determining a customer’s future spending levels. This volatility, along with the difficulty in predicting future prices, can lead many exploration and production companies to base their capital spending on more conservative estimates of commodity prices. As a result, demand for contract drilling services is not always purely a function of the movement of commodity prices. In addition, customers may finance their exploration activities through cash flow from operations, the incurrence of debt or the issuance of equity. Any deterioration in the credit and capital markets may cause difficulty for customers to obtain funding for their capital needs. A reduction of cash flow resulting from declines in commodity prices or a reduction of available financing may result in a reduction in customer spending and the demand for our services. This reduction in spending could have a material adverse effect on our operations. |
Self-Insurance | Self-Insurance We have accrued a liability for estimated workers’ compensation and other casualty claims incurred based upon cash reserves plus an estimate of loss development and incurred but not reported claims. The estimate is based upon historical trends. Insurance recoveries related to such liability are recorded when considered probable. We self-insure a significant portion of expected losses relating to workers’ compensation, general liability and automobile liability. Generally, deductibles range from $1 million to $5 million per occurrence depending on the coverage and whether a claim occurs outside or inside of the United States. Insurance is purchased over deductibles to reduce our exposure to catastrophic events. Estimates are recorded for incurred outstanding liabilities for workers’ compensation, general liability claims and claims that are incurred but not reported. Estimates are based on adjusters’ estimates, historic experience and statistical methods that we believe are reliable. We have also engaged an actuary to perform a review of our domestic casualty losses. Nonetheless, insurance estimates include certain assumptions and management judgments regarding the frequency and severity of claims, claim development and settlement practices. Unanticipated changes in these factors may produce materially different amounts of expense that would be reported under these programs. |
International Land Drilling Operations | International Land Drilling Operations International Land drilling operations may significantly contribute to our revenues and net operating income. There can be no assurance that we will be able to successfully conduct such operations, and a failure to do so may have an adverse effect on our financial position, results of operations, and cash flows. Also, the success of our international land operations will be subject to numerous contingencies, some of which are beyond management’s control. These contingencies include general and regional economic conditions, fluctuations in currency exchange rates, modified exchange controls, changes in international regulatory requirements and international employment issues, risk of expropriation of real and personal property and the burden of complying with foreign laws. Additionally, in the event that extended labor strikes occur or a country experiences significant political, economic or social instability, we could experience shortages in labor and/or material and supplies necessary to operate some of our drilling rigs, thereby potentially causing an adverse material effect on our business, financial condition and results of operations. In Argentina, while our dayrate is denominated in U.S. dollars, we are paid in Argentine pesos. The Argentine branch of one of our second-tier subsidiaries remits U.S. dollars to its U.S. parent by converting the Argentine pesos into U.S. dollars through the Argentine Foreign Exchange Market and repatriating the U.S. dollars. Argentina has a history of implementing currency controls which restrict the conversion and repatriation of US dollars. These controls were not in place in Argentina during this past fiscal year. Argentina’s economy is considered highly inflationary, which is defined as cumulative inflation rates exceeding 100 percent in the most recent three-year period based on inflation data published by the respective governments. Nonetheless, all of our foreign subsidiaries use the U.S. dollar as the functional currency and local currency monetary assets and liabilities are remeasured into U.S. dollars with gains and losses resulting from foreign currency transactions included in current results of operations. Because of the impact of local laws, our future operations in certain areas may be conducted through entities in which local citizens own interests and through entities (including joint ventures) in which we hold only a minority interest or pursuant to arrangements under which we conduct operations under contract to local entities. While we believe that neither operating through such entities nor pursuant to such arrangements would have a material adverse effect on our operations or revenues, there can be no assurance that we will in all cases be able to structure or restructure our operations to conform to local law (or the administration thereof) on terms acceptable to us. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Summary of significant accounting policies | |
Schedule of the location of restricted cash and cash equivalents in the balance sheet | September 30, 2018 2017 (in thousands) Prepaid expenses and other $ 39,830 $ 32,439 Other assets $ 2,000 $ 6,695 |
Schedule of rent revenues | Year Ended September 30, 2018 2017 2016 (in thousands) Minimum rents $ 9,950 $ 9,735 $ 9,196 Overage and percentage rents $ 1,040 $ 936 $ 1,211 |
Schedule of future minimum rental income to be received on noncancelable operating leases | Fiscal Year Amount (in thousands) 2019 $ 7,709 2020 6,314 2021 4,473 2022 2,488 2023 1,725 Thereafter 4,868 Total $ 27,577 |
Schedule of cost and accumulated depreciation for real estate properties | September 30, 2018 2017 (in thousands) Real estate properties $ 69,133 $ 66,005 Accumulated depreciation (42,272) (42,169) $ 26,861 $ 23,836 |
Operating revenues | |
Summary of significant accounting policies | |
Schedule of concentration of risk | (In thousands) 2018 2017 2016 EOG Resources, Inc. $ $ $ |
Receivables | |
Summary of significant accounting policies | |
Schedule of concentration of risk | Percentage of Accounts Receivable EOG Resources, Inc. 8.8 % Occidental Oil and Gas Corporation 4.7 % |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
MagVAR Acquisition | |
Summary of the purchase price and the allocation of the fair values of assets acquired and liabilities assumed | The following table summarizes the purchase price and the fair values of assets acquired and liabilities assumed at the acquisition date (in thousands): Purchase Price Consideration given Cash consideration $ 48,485 Allocation of Purchase Price Fair value of assets acquired Current assets $ 2,286 Property, plant and equipment 13 Intangible assets, net 28,700 Goodwill 17,791 Total assets acquired $ 48,790 Fair value of liabilities assumed Current liabilities $ 305 Fair value of total assets acquired and liabilities assumed $ 48,485 |
Pro forma of financial information | Pro Forma 2018 2017 (unaudited, in thousands) Revenues $ 2,490,955 $ 1,814,215 Net income (loss) $ 480,423 $ (126,355) |
MOTIVE Merger | |
Summary of the purchase price and the allocation of the fair values of assets acquired and liabilities assumed | The following table summarizes the purchase price and the allocation of the fair values of assets acquired and liabilities assumed and separately identifiable intangible assets at the acquisition date (in thousands): Purchase Price Consideration given Cash consideration $ Long-term contingent earnout liability (Other noncurrent liabilities) Total consideration given $ Allocation of Purchase Price Fair value of assets acquired Current assets $ Property, plant and equipment Intangible assets, net Goodwill Total assets acquired $ Fair value of liabilities assumed Current liabilities $ Deferred income taxes Total liabilities acquired $ Fair value of total assets acquired and liabilities assumed $ |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
PROPERTY, PLANT AND EQUIPMENT | |
Summary of property and equipment | Property, plant and equipment as of September 30, 2018 and 2017 consisted of the following (in thousands): Estimated Useful Lives September 30, 2018 September 30, 2017 Contract drilling equipment 4 - 15 years $ 8,442,081 $ 8,197,572 Real estate properties 10 - 45 years 68,888 66,005 Other 2 - 23 years 471,310 450,031 Construction in progress 163,968 169,326 9,146,247 8,882,934 Accumulated depreciation (4,288,865) (3,881,883) Property, plant and equipment, net $ 4,857,382 $ 5,001,051 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of changes in goodwill | The following is a summary of changes in goodwill (in thousands): Balance at September 30, 2016 $ 4,718 Additions 46,987 Balance at September 30, 2017 51,705 Additions (Note 3) 17,791 Impairment (4,719) Balance at September 30, 2018 $ 64,777 |
Schedule of finite-lived and indefinite-lived intangible assets other than goodwill | September 30, 2018 September 30, 2017 Gross Gross Carrying Accumulated Carrying Accumulated (in thousands) Amount Amortization Net Amount Amortization Net Finite-lived intangible asset: Developed technology $ 70,000 $ 5,589 $ 64,411 $ 51,000 $ 1,134 $ 49,866 Trade name 5,700 237 5,463 — — — Customer relationships 4,000 667 3,333 — — — $ 79,700 $ 6,493 $ 73,207 $ 51,000 $ 1,134 $ 49,866 Indefinite-lived intangible asset: Trademark $ — $ — $ — $ 919 $ — $ 919 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
DEBT | |
Schedule of components of unsecured long-term debt outstanding | September 30, 2018 September 30, 2017 Unamortized Unamortized Face Debt Issuance Book Face Debt Issuance Book Amount Cost Value Amount Cost Value (in thousands) Unsecured senior notes issued March 19, 2015: Due March 19, 2025 $ 500,000 $ (6,032) $ 493,968 $ 500,000 $ (7,098) $ 492,902 500,000 (6,032) 493,968 500,000 (7,098) 492,902 Less long-term debt due within one year — — — — — — Long-term debt $ 500,000 $ (6,032) $ 493,968 $ 500,000 $ (7,098) $ 492,902 |
Schedule of aggregate maturities of long-term debt | At September 30, 2018, aggregate maturities of long-term debt are as follows (in thousands): Year ending September 30, 2019 $ — 2020 — 2021 — 2022 — 2023 — Thereafter 500,000 $ 500,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
INCOME TAXES | |
Schedule of components of the provision (benefit) for income taxes | Year Ended September 30, 2018 2017 2016 (in thousands) Current: Federal $ 757 $ (36,260) $ (86,010) Foreign 6,492 4,108 9,987 State 2,340 (472) (3,742) 9,589 (32,624) (79,765) Deferred: Federal (508,256) (14,953) 58,136 Foreign 7,415 (7,827) 408 State 14,083 (1,331) 1,544 (486,758) (24,111) 60,088 Total benefit $ (477,169) $ (56,735) $ (19,677) |
Schedule of domestic and foreign income (loss) before income taxes | Year Ended September 30, 2018 2017 2016 (in thousands) Domestic $ 27,436 $ (173,157) $ (49,636) Foreign (11,595) (11,441) (23,031) $ 15,841 $ (184,598) $ (72,667) |
Schedule of effective income tax rates as compared to the U.S. Federal income tax rate | Year Ended September 30, 2018 2017 2016 U.S. Federal income tax rate 24.5 % 35.0 % 35.0 % Effect of foreign taxes 87.8 1.8 (13.8) State income taxes, net of federal tax benefit 68.8 0.6 3.2 U.S. domestic production activities — (2.1) (10.4) Remeasurement of deferred tax related to Tax Reform Act (3,169.4) — — Other impact of foreign operations (43.4) (2.9) 14.7 Non-deductible meals and entertainment (1) 8.2 — — Equity compensation (1) (5.3) — — Officer's compensation (1) 1.7 — — Contingent consideration adjustment (1) 10.7 — — Other (1) 4.1 (1.7) (1.6) Effective income tax rate (3,012.3) % 30.7 % 27.1 % (1) For fiscal years 2017 and 2016, “other” reflects adjustments for non-deductible meals and entertainment, equity compensation, officer’s compensation and contingent consideration. |
Schedule of components of net deferred tax liabilities | September 30, 2018 2017 (in thousands) Deferred tax liabilities: Property, plant and equipment $ 904,734 $ 1,386,512 Available-for-sale securities 10,464 24,940 Other 12,787 21,609 Total deferred tax liabilities 927,985 1,433,061 Deferred tax assets: Pension reserves 3,477 7,614 Self-insurance reserves 13,100 19,461 Net operating loss, foreign tax credit, and other federal tax credit carryforwards 55,889 62,478 Financial accruals 45,708 62,971 Other 4,888 6,003 Total deferred tax assets 123,062 158,527 Valuation allowance (48,213) (58,155) Net deferred tax assets 74,849 100,372 Net deferred tax liabilities $ 853,136 $ 1,332,689 |
Schedule of reconciliation of the change in the entity's gross unrecognized tax benefits | September 30, 2018 2017 (in thousands) Unrecognized tax benefits at October 1, $ 4,773 $ 9,551 Gross increases - tax positions in prior periods 3 — Gross decreases - tax positions in prior periods — (1) Gross decreases - current period effect of tax positions (280) (170) Gross increases - current period effect of tax positions 10,537 300 Expiration of statute of limitations for assessments (128) (4,907) Unrecognized tax benefits at September 30, $ 14,905 $ 4,773 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
SHAREHOLDERS' EQUITY | |
Schedule of components of accumulated other comprehensive income (loss) | September 30, 2018 2017 2016 (in thousands) Pre-tax amounts: Unrealized appreciation on securities $ 44,023 $ 31,700 $ 33,051 Unrealized actuarial loss (21,693) (28,873) (34,112) $ 22,330 $ 2,827 $ (1,061) After-tax amounts: Unrealized appreciation on securities $ 29,071 $ 20,070 $ 20,899 Unrealized actuarial loss (12,521) (17,770) (21,103) $ 16,550 $ 2,300 $ (204) |
Summary of the changes in accumulated other comprehensive income (loss), net of tax, by component | Unrealized Appreciation on Defined Available-for-sale Benefit Securities Pension Plan Total (in thousands) Balance at September 30, 2017 $ 20,070 $ (17,770) $ 2,300 Other comprehensive income before reclassifications 9,001 — 9,001 Amounts reclassified from accumulated other comprehensive income — 5,249 5,249 Net current-period other comprehensive income 9,001 5,249 14,250 Balance at September 30, 2018 $ 29,071 $ (12,521) $ 16,550 |
Schedule of accumulated other comprehensive income (loss) components which were reclassified to the Statement of Operations | Amount Reclassified from Accumulated Other Comprehensive Affected Line Details About Accumulated Other Income (Loss) Item in the Consolidated Comprehensive Income (Loss) Components 2018 2017 2016 Statements of Operations (in thousands) Other-than-temporary impairment of available-for-sale securities $ — $ — $ 1,509 Loss on investment securities — — (583) Income tax provision — — 926 Net of tax Amortization of net actuarial loss on defined benefit pension plan $ 7,180 $ 5,238 $ (3,968) Selling, general and administrative (1,931) (1,905) 1,443 Income tax provision 5,249 3,333 (2,525) Net of tax Total reclassifications for the period $ 5,249 $ 3,333 $ (1,599) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
STOCK-BASED COMPENSATION | |
Summary of compensation cost for stock-based payment arrangements recognized in general and administrative expense | September 30, 2018 2017 2016 (in thousands) Compensation expense Stock options $ 7,913 $ 7,439 $ 8,290 Restricted stock 23,774 18,744 16,093 $ 31,687 $ 26,183 $ 24,383 |
Summary of weighted-average assumptions utilized in determining the fair value of options granted | 2018 2017 2016 Risk-free interest rate (1) 2.2 % 2.0 % 1.8 % Expected stock volatility (2) 36.1 % 38.9 % 37.6 % Dividend yield (3) 4.7 % 3.7 % 4.6 % Expected term (in years) (4) 6.0 5.5 5.5 (1) The risk-free interest rate is based on U.S. Treasury securities for the expected term of the option. (2) Expected volatilities are based on the daily closing price of our stock based upon historical experience over a period which approximates the expected term of the option. (3) The dividend yield is based on our current dividend yield. (4) The expected term of the options granted represents the period of time that they are expect to be outstanding. We estimate term of option granted based on historical experience with grants and exercise. |
Summary of stock option activity | The following summary reflects the stock option activity for our common stock and related information for fiscal years 2018, 2017 and 2016 (shares in thousands): 2018 2017 2016 Weighted-Average Weighted-Average Weighted-Average Shares Exercise Price Shares Exercise Price Shares Exercise Price Outstanding at October 1, 3,278 $ 56.41 3,312 $ 51.74 2,776 $ 48.51 Granted 694 59.03 396 76.61 876 58.25 Exercised (375) 36.88 (415) 38.04 (220) 31.52 Forfeited/Expired (98) 70.77 (15) 68.32 (120) 61.80 Outstanding on September 30, 3,499 $ 58.62 3,278 $ 56.41 3,312 $ 51.74 Exercisable on September 30, 2,193 $ 56.31 2,167 $ 50.87 2,225 $ 46.66 Shares available to grant 5,140 5,624 6,600 |
Summary of information about outstanding and exercisable stock options | The following table summarizes information about stock options at September 30, 2018 (shares in thousands): Outstanding Stock Options Exercisable Stock Options Weighted-Average Weighted-Average Weighted-Average Range of Exercise Prices Options Remaining Life Exercise Price Options Exercise Price $0.00 to $21.07 180 0.2 $ 21.07 180 $ 21.07 $21.07 to $59.76 2,417 5.9 55.16 1,418 53.03 $59.76 to $68.83 358 6.3 68.66 275 68.83 $68.83 to $81.31 544 7.1 79.79 320 79.86 3,499 2,193 |
Summary of restricted stock awards and changes in restricted stock outstanding | A summary of the status of our restricted stock awards as of September 30, 2018, and of changes in restricted stock outstanding during the fiscal years ended September 30, 2018, 2017 and 2016, is as follows (shares in thousands): 2018 2017 2016 Weighted-Average Weighted-Average Weighted-Average Grant Date Fair Grant Date Fair Grant Date Fair Shares Value per Share Shares Value per Share Shares Value per Share Outstanding at October 1, 659 $ 70.76 648 $ 64.24 668 $ 67.03 Granted 626 59.53 292 78.69 294 58.25 Vested (1) (258) 70.60 (271) 63.81 (256) 64.75 Forfeited (26) 66.73 (10) 68.09 (58) 63.65 Outstanding on September 30, 1,001 $ 63.74 659 $ 70.76 648 $ 64.24 (1) The number of restricted stock awards vested includes shares that we withheld on behalf of our employees to satisfy the statutory tax withholding requirements. |
EARNINGS (LOSSES) PER COMMON _2
EARNINGS (LOSSES) PER COMMON SHARE (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
EARNINGS (LOSSES) PER COMMON SHARE | |
Schedule of computation of basic and diluted earnings per share | September 30, 2018 2017 2016 (in thousands) Numerator: Income (loss) from continuing operations $ 493,010 $ (127,863) $ (52,990) Loss from discontinued operations (10,338) (349) (3,838) Net income (loss) 482,672 (128,212) (56,828) Adjustment for basic earnings per share Earnings allocated to unvested shareholders (4,346) (1,811) (1,858) Numerator for basic earnings per share: From continuing operations 488,664 (129,674) (54,848) From discontinued operations (10,338) (349) (3,838) 478,326 (130,023) (58,686) Adjustment for diluted earnings per share: Effect of reallocating undistributed earnings of unvested shareholders 7 — — Numerator for diluted earnings per share: From continuing operations 488,671 (129,674) (54,848) From discontinued operations (10,338) (349) (3,838) $ 478,333 $ (130,023) $ (58,686) Denominator: Denominator for basic earnings per share - weighted-average shares 108,851 108,500 107,996 Effect of dilutive shares from stock options and restricted stock 536 — — Denominator for diluted earnings per share - adjusted weighted-average shares 109,387 108,500 107,996 Basic earnings per common share: Income (loss) from continuing operations $ 4.49 $ (1.20) $ (0.50) Loss from discontinued operations (0.10) — (0.04) Net income (loss) $ 4.39 $ (1.20) $ (0.54) Diluted earnings per common share: Income (loss) from continuing operations $ 4.47 $ (1.20) $ (0.50) Loss from discontinued operations (0.10) — (0.04) Net income (loss) $ 4.37 $ (1.20) $ (0.54) |
Schedule of shares attributable to outstanding equity awards excluded from the calculation of diluted earnings per share | 2018 2017 2016 (in thousands, except per share amounts) Shares excluded from calculation of diluted earnings per share 1,559 1,008 1,788 Weighted-average price per share $ 68.28 $ 74.38 $ 63.73 |
FAIR VALUE MEASUREMENT OF FIN_2
FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS | |
Summary of assets measured at fair value | Fair Value (Level 1) (Level 2) (Level 3) (in thousands) Recurring fair value measurements: Short-term investments: Certificates of deposit $ 1,500 $ — $ 1,500 $ — Corporate and municipal debt securities 17,518 — 17,518 — U.S. government and federal agency securities 22,443 22,443 — — Total short-term investments 41,461 22,443 19,018 — Cash and cash equivalents 284,355 284,355 — — Investments 82,496 82,496 — — Other current assets 39,830 39,830 — — Other assets 2,000 2,000 — — Total assets measured at fair value $ 450,142 $ 431,124 $ 19,018 $ — Liabilities: Contingent earnout liability $ 11,160 $ — $ — $ 11,160 |
Schedule of reconciliation of changes in the fair value of our financial assets and liabilities classified as Level 3 | 2018 2017 (in thousands) Net liabilities at beginning of period $ 14,879 $ — Total gains or losses: Included in earnings 6,906 14,879 Settlements (1) (10,625) — Net liabilities at end of period $ 11,160 $ 14,879 (1) Settlements represent earnout payments that have been earned or paid during the period. |
Summary of supplemental fair value information about long-term fixed-rate debt | September 30, 2018 2017 (in millions) Carrying value of long-term fixed-rate debt $ 494.0 $ 492.9 Fair value of long-term fixed-rate debt $ 509.3 $ 529.0 |
Summary of available-for-sale securities | Gross Gross Estimated Unrealized Unrealized Fair Cost Gains Losses Value (in thousands) Equity Securities: September 30, 2018 $ 38,473 $ 44,023 $ — $ 82,496 September 30, 2017 $ 38,473 $ 31,700 $ — $ 70,173 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
EMPLOYEE BENEFIT PLANS | |
Schedule of reconciliation of the changes in the pension benefit obligations, fair value of Pension Plan assets and statement of the funded status | 2018 2017 (in thousands) Accumulated Benefit Obligation $ 106,205 $ 109,976 Changes in projected benefit obligations Projected benefit obligation at beginning of year $ 109,976 $ 109,731 Interest cost 4,077 4,053 Actuarial (gain) loss (2,143) 3,633 Benefits paid (5,705) (7,441) Projected benefit obligation at end of year $ 106,205 $ 109,976 Change in plan assets Fair value of plan assets at beginning of year $ 92,816 $ 90,748 Actual return on plan assets 7,754 9,470 Employer contribution 32 39 Benefits paid (5,705) (7,441) Fair value of plan assets at end of year $ 94,897 $ 92,816 Funded status of the plan at end of year $ (11,308) $ (17,160) |
Schedule of amounts recognized in the Consolidated Balance Sheets | The amounts recognized in the Consolidated Balance Sheets at September 30, 2018 and 2017 are as follows (in thousands): Accrued liabilities $ (58) $ (45) Noncurrent liabilities-other (11,250) (17,115) Net amount recognized $ (11,308) $ (17,160) |
Schedule of amounts recognized in Accumulated Other Comprehensive Income (Loss) and not yet reflected in net periodic benefit cost | The amounts recognized in Accumulated Other Comprehensive Income (Loss) at September 30, 2018 and 2017, and not yet reflected in net periodic benefit cost, are as follows (in thousands): Net actuarial loss $ (21,693) $ (28,873) |
Schedule of weighted average assumptions used for the pension calculations | September 30, 2018 2017 2016 Discount rate for net periodic benefit costs 3.79 % 3.64 % 4.27 % Discount rate for year-end obligations 4.27 % 3.79 % 3.64 % Expected return on plan assets 6.06 % 6.17 % 5.89 % |
Schedule of components of net periodic pension expense (benefit) | Year Ended September 30, 2018 2017 2016 (in thousands) Interest cost $ 4,077 $ 4,053 $ 4,266 Expected return on plan assets (5,555) (5,130) (5,616) Recognized net actuarial loss 1,926 2,891 2,083 Settlement 913 1,640 4,964 Net pension expense $ 1,361 $ 3,454 $ 5,697 |
Schedule of expected benefits to be paid from the Pension Plan | The following table reflects the expected benefits to be paid from the Pension Plan in each of the next five fiscal years, and in the aggregate for the five years thereafter (in thousands). Year Ended September 30, 2019 2020 2021 2022 2023 2024 – 2028 Total $ 18,075 $ 7,433 $ 5,684 $ 6,351 $ 6,665 $ 31,813 $ 76,021 |
Schedule of target allocation and the asset allocation for the Pension Plan | Percentage of Plan Target Assets at Allocation September 30, Asset Category 2019 2018 2017 U.S. equities 45 % 52 % 50 % International equities 20 15 16 Fixed income 35 33 34 Real estate and other — — — Total 100 % 100 % 100 % |
Schedule of fair value of Pension Plan assets, summarized by level within fair value hierarchy | Fair Value as of September 30, 2018 Total Level 1 Level 2 Level 3 (in thousands) Short-term investments $ 2,745 $ 2,745 $ — $ — Mutual funds: Domestic stock funds 18,361 18,361 — — Bond funds 17,918 17,918 — — Balanced funds 17,977 17,977 — — International stock funds 14,548 14,548 — — Total mutual funds 68,804 68,804 — — Domestic common stock 23,232 20,771 2,461 — Oil and gas properties 116 — — 116 Total $ 94,897 $ 92,320 $ 2,461 $ 116 Fair Value as of September 30, 2017 Total Level 1 Level 2 Level 3 (in thousands) Short-term investments $ 3,488 $ 3,488 $ — $ — Mutual funds: Domestic stock funds 18,377 18,377 — — Bond funds 18,357 18,357 — — Balanced funds 18,222 18,222 — — International stock funds 14,583 14,583 — — Total mutual funds 69,539 69,539 — — Domestic common stock 19,692 19,692 — — Oil and gas properties 97 — — 97 Total $ 92,816 $ 92,719 $ — $ 97 |
Summary of changes in fair value of the Pension Plan's Level 3 assets | Oil and Gas Properties Year Ended September 30, 2018 2017 (in thousands) Balance, beginning of year $ 97 $ 177 Unrealized gains (losses) relating to property still held at the reporting date 19 (80) Balance, end of year $ 116 $ 97 |
SUPPLEMENTAL BALANCE SHEET IN_2
SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
SUPPLEMENTAL BALANCE SHEET INFORMATION | |
Schedule of supplemental balance sheet information, reflecting activity in the entity's reserve for bad debt | 2018 2017 2016 (in thousands) Reserve for bad debt: Balance at October 1, $ 5,721 $ 2,696 $ 6,181 Provision for (recovery of) bad debt 2,193 2,016 (2,013) (Write-off) recovery of bad debt (1,697) 1,009 (1,472) Balance at September 30, $ 6,217 $ 5,721 $ 2,696 |
Schedule of supplemental balance sheet information, accounts receivable, prepaid expenses and other current assets, accrued liabilities and long-term liabilities | September 30, 2018 2017 (in thousands) Accounts receivable, net of reserve: Trade receivables $ 530,859 $ 398,348 Income tax receivable 34,343 78,726 Total accounts receivable, net of reserve $ 565,202 $ 477,074 Prepaid expenses and other current assets: Restricted cash $ 39,830 $ 32,439 Deferred mobilization 6,484 6,458 Prepaid insurance 6,149 4,060 Prepaid value added tax 1,931 3,870 Prepaid maintenance and rent 8,526 5,940 Prepaid multi-flex rig fabrication 1,327 — Other 2,151 2,356 Total prepaid expenses and other current assets $ 66,398 $ 55,123 Accrued liabilities: Accrued operating costs $ 37,528 $ 36,949 Payroll and employee benefits 80,915 54,941 Taxes payable, other than income tax 50,683 35,638 Self-insurance liabilities 15,887 22,159 Deferred income 20,527 25,893 Deferred mobilization 9,662 9,828 Accrued income taxes 7,375 8,011 Escrow 11,258 4,690 Litigation and claims 1,749 1,779 Other 8,920 8,869 Total accrued liabilities $ 244,504 $ 208,757 Noncurrent liabilities — Other: Pension and other non-qualified retirement plans $ 35,051 $ 37,989 Self-insurance liabilities 39,380 29,037 Contingent earnout liability 11,160 14,879 Deferred mobilization 2,738 7,689 Uncertain tax positions including interest and penalties 2,870 3,562 Other 2,407 8,253 Total noncurrent liabilities — other $ 93,606 $ 101,409 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of future minimum rental payments required under operating leases | Amount Fiscal Year (in thousands) 2019 $ 9,113 2020 6,670 2021 4,357 2022 3,985 2023 3,721 Thereafter 5,095 Total $ 32,941 |
BUSINESS SEGMENT AND GEOGRAPH_2
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION | |
Summary of financial information of the entity's reportable segments | Summarized financial information of our reportable segments for continuing operations for each of the fiscal years ended September 30, 2018, 2017 and 2016 is shown in the following table: September 30, 2018 International (in thousands) U.S. Land Offshore Land Other Eliminations Total External Sales $ 2,068,195 $ 142,500 $ 238,356 $ 38,217 $ - $ 2,487,268 Intersegment 1,189 — — 1,026 $ (2,215) - Total Sales 2,069,384 142,500 238,356 39,243 (2,215) 2,487,268 Segment Operating Income (Loss) 150,698 26,124 (683) (27,790) — 148,349 Depreciation and Amortization 505,112 10,392 46,826 21,472 — 583,802 Total Assets 5,012,378 105,439 362,033 735,017 — 6,214,867 Additions to Long-Lived Assets 441,624 4,326 4,424 18,456 — 468,830 September 30, 2017 International (in thousands) U.S. Land Offshore Land Other Eliminations Total External Sales $ 1,439,523 $ 136,263 $ 212,972 $ 15,983 $ — $ 1,804,741 Intersegment — — — 862 (862) — Total Sales 1,439,523 136,263 212,972 16,845 (862) 1,804,741 Segment Operating Income (Loss) (94,880) 24,201 (7,224) (9,449) — (87,352) Depreciation and Amortization 499,486 11,764 53,622 20,671 — 585,543 Total Assets 4,967,074 99,533 413,392 959,986 — 6,439,985 Additions to Long-Lived Assets 394,508 2,847 3,400 7,351 — 408,106 September 30, 2016 International (in thousands) U.S. Land Offshore Land Other Eliminations Total External Sales $ 1,242,462 $ 138,601 $ 229,894 $ 13,275 $ — $ 1,624,232 Intersegment — — — 855 (855) — Total Sales 1,242,462 138,601 229,894 14,130 (855) 1,624,232 Segment Operating Income (Loss) 74,118 15,659 (14,086) (7,491) — 68,200 Depreciation and Amortization 508,237 12,495 57,102 20,753 — 598,587 Total Assets 5,005,299 105,152 487,181 1,234,323 — 6,831,955 Additions to Long-Lived Assets 209,156 9,694 2,364 20,076 — 241,290 |
Schedule of reconciliation of segment operating income (loss) to income from continuing operations before income taxes | Year Ended September 30, 2018 2017 2016 (in thousands) Segment operating income (loss) $ 148,349 $ (87,352) $ 68,200 Income from asset sales 22,660 20,627 9,896 Acquisition related costs (8,153) — — Corporate selling, general and administrative costs and corporate depreciation (131,254) (105,816) (104,062) Operating income (loss) 31,602 (172,541) (25,966) Other income (expense) Interest and dividend income 8,017 5,915 3,166 Interest expense (24,265) (19,747) (22,913) Gain (loss) on investment securities 1 — (25,989) Other 486 1,775 (965) Total unallocated amounts (15,761) (12,057) (46,701) Income (loss) from continuing operations before income taxes $ 15,841 $ (184,598) $ (72,667) |
Schedule of revenues from external customers and long-lived assets | Year Ended September 30, 2018 2017 2016 (in thousands) Operating revenues United States $ 2,247,400 $ 1,591,769 $ 1,386,786 Argentina 190,038 157,257 159,427 Colombia 38,793 37,554 20,488 Ecuador — 6 4,948 Other Foreign 11,037 18,155 52,583 Total $ 2,487,268 $ 1,804,741 $ 1,624,232 Property, plant and equipment, net United States $ 4,591,913 $ 4,686,235 $ 4,804,328 Argentina 133,617 155,978 183,286 Colombia 74,042 81,798 91,815 Ecuador 10,781 22,298 438 Other Foreign 47,029 54,742 64,866 Total $ 4,857,382 $ 5,001,051 $ 5,144,733 |
GUARANTOR AND NON-GUARANTOR F_2
GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION | |
Schedule of Condensed Consolidating Balance Sheets | CONDENSED CONSOLIDATING BALANCE SHEETS September 30, 2018 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ — $ 273,214 $ 11,141 $ — $ 284,355 Short-term investments — 41,461 — — 41,461 Accounts receivable, net of allowance (29) 499,644 65,859 (272) 565,202 Inventories of materials and supplies — 127,154 30,980 — 158,134 Prepaid expenses and other 20,783 10,649 35,539 (573) 66,398 Total current assets 20,754 952,122 143,519 (845) 1,115,550 Investments 16,200 82,496 — — 98,696 Property, plant and equipment, net 46,859 4,515,077 295,446 — 4,857,382 Intercompany receivables 161,532 2,024,652 294,206 (2,480,390) — Goodwill — — 64,777 — 64,777 Intangible assets, net — — 73,207 — 73,207 Other assets 268 907 4,080 — 5,255 Investment in subsidiaries 5,981,197 172,513 — (6,153,710) — Total assets $ 6,226,810 $ 7,747,767 $ 875,235 $ (8,634,945) $ 6,214,867 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 83,819 $ 43,626 $ 5,483 $ (264) $ 132,664 Accrued liabilities 43,449 164,542 37,093 (580) 244,504 Total current liabilities 127,268 208,168 42,576 (844) 377,168 Noncurrent liabilities: Long-term debt — 493,968 — — 493,968 Deferred income taxes (7,112) 834,714 25,534 — 853,136 Intercompany payables 1,701,694 178,759 599,837 (2,480,290) — Other 22,225 48,836 22,545 — 93,606 Noncurrent liabilities - discontinued operations — — 14,254 — 14,254 Total noncurrent liabilities 1,716,807 1,556,277 662,170 (2,480,290) 1,454,964 Shareholders’ equity: Common stock 11,201 100 — (100) 11,201 Additional paid-in capital 500,393 52,437 1,040 (53,477) 500,393 Retained earnings 4,027,779 5,910,955 169,449 (6,080,404) 4,027,779 Accumulated other comprehensive income 16,550 19,830 — (19,830) 16,550 Treasury stock, at cost (173,188) — — — (173,188) Total shareholders’ equity 4,382,735 5,983,322 170,489 (6,153,811) 4,382,735 Total liabilities and shareholders’ equity $ 6,226,810 $ 7,747,767 $ 875,235 $ (8,634,945) $ 6,214,867 September 30, 2017 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ — $ 507,504 $ 13,871 $ — $ 521,375 Short-term investments — 44,491 — — 44,491 Accounts receivable, net of allowance 766 411,599 64,714 (5) 477,074 Inventories of materials and supplies — 102,470 34,734 — 137,204 Prepaid expenses and other 12,200 6,383 36,982 (442) 55,123 Total current assets 12,966 1,072,447 150,301 (447) 1,235,267 Investments 13,853 70,173 — — 84,026 Property, plant and equipment, net 49,851 4,609,144 342,056 — 5,001,051 Intercompany receivables 90,885 1,746,662 248,540 (2,086,087) — Goodwill — — 51,705 — 51,705 Intangible assets, net — — 50,785 — 50,785 Other assets 4,955 3,839 8,360 — 17,154 Investment in subsidiaries 5,470,050 183,382 — (5,653,432) — Total assets $ 5,642,560 $ 7,685,647 $ 851,747 $ (7,739,966) $ 6,439,988 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 82,947 $ 48,092 $ 4,589 $ — $ 135,628 Accrued liabilities 26,698 148,491 34,015 (447) 208,757 Total current liabilities 109,645 196,583 38,604 (447) 344,385 Noncurrent liabilities: Long-term debt — 492,902 — — 492,902 Deferred income taxes (11,201) 1,286,381 57,509 — 1,332,689 Intercompany payables 1,354,068 210,823 521,096 (2,085,987) — Other 25,457 43,471 32,481 — 101,409 Noncurrent liabilities - discontinued operations — — 4,012 — 4,012 Total noncurrent liabilities 1,368,324 2,033,577 615,098 (2,085,987) 1,931,012 Shareholders’ equity: Common stock 11,196 100 — (100) 11,196 Additional paid-in capital 487,248 52,437 1,039 (53,476) 487,248 Retained earnings 3,855,686 5,396,212 197,006 (5,593,218) 3,855,686 Accumulated other comprehensive income 2,300 6,738 — (6,738) 2,300 Treasury stock, at cost (191,839) — — — (191,839) Total shareholders’ equity 4,164,591 5,455,487 198,045 (5,653,532) 4,164,591 Total liabilities and shareholders’ equity $ 5,642,560 $ 7,685,647 $ 851,747 $ (7,739,966) $ 6,439,988 |
Schedule of Condensed Consolidating Statements of Operations | CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS Year Ended September 30, 2018 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Operating revenue $ — $ 2,210,695 $ 276,660 $ (87) $ 2,487,268 Operating costs and other 14,276 2,120,465 321,863 (938) 2,455,666 Operating income (loss) from continuing operations (14,276) 90,230 (45,203) 851 31,602 Other income (expense), net 526 7,363 1,466 (851) 8,504 Interest expense (499) (20,426) (3,340) — (24,265) Equity in net income (loss) of subsidiaries 498,055 (11,039) — (487,016) — Income (loss) from continuing operations before income taxes 483,806 66,128 (47,077) (487,016) 15,841 Income tax (benefit) provision 1,134 (448,613) (29,690) — (477,169) Income (loss) from continuing operations 482,672 514,741 (17,387) (487,016) 493,010 Income from discontinued operations before income taxes — — 23,389 — 23,389 Income tax provision — — 33,727 — 33,727 Loss from discontinued operations — — (10,338) — (10,338) Net income (loss) $ 482,672 $ 514,741 $ (27,725) $ (487,016) $ 482,672 Year Ended September 30, 2017 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Operating revenue $ — $ 1,575,787 $ 229,021 $ (67) $ 1,804,741 Operating costs and other 16,566 1,707,473 254,125 (882) 1,977,282 Operating income (loss) from continuing operations (16,566) (131,686) (25,104) 815 (172,541) Other income (expense), net (240) 7,342 1,403 (815) 7,690 Interest expense (398) (20,136) 787 — (19,747) Equity in net income (loss) of subsidiaries (116,212) (8,012) — 124,224 — Income (loss) from continuing operations before income taxes (133,416) (152,492) (22,914) 124,224 (184,598) Income tax benefit (5,204) (38,600) (12,931) — (56,735) Income (loss) from continuing operations (128,212) (113,892) (9,983) 124,224 (127,863) Income from discontinued operations before income taxes — — 3,285 — 3,285 Income tax provision — — 3,634 — 3,634 Loss from discontinued operations — — (349) — (349) Net income (loss) $ (128,212) $ (113,892) $ (10,332) $ 124,224 $ (128,212) Year Ended September 30, 2016 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Operating revenue $ — $ 1,373,511 $ 250,791 $ (70) $ 1,624,232 Operating costs and other 13,145 1,358,269 280,107 (1,323) 1,650,198 Operating income (loss) from continuing operations (13,145) 15,242 (29,316) 1,253 (25,966) Other expense, net (194) (22,243) (98) (1,253) (23,788) Interest expense (375) (20,256) (2,282) — (22,913) Equity in net income (loss) of subsidiaries (47,166) (14,472) — 61,638 — Loss from continuing operations before income taxes (60,880) (41,729) (31,696) 61,638 (72,667) Income tax (benefit) provision (4,052) 5,127 (20,752) — (19,677) Income (loss) from continuing operations (56,828) (46,856) (10,944) 61,638 (52,990) Income from discontinued operations before income taxes — — 2,360 — 2,360 Income tax provision — — 6,198 — 6,198 Loss from discontinued operations — — (3,838) — (3,838) Net income (loss) $ (56,828) $ (46,856) $ (14,782) $ 61,638 $ (56,828) |
Schedule of Condensed Consolidating Statements of Comprehensive Income (Loss) | CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year Ended September 30, 2018 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Net income (loss) $ 482,672 $ 514,741 $ (27,725) $ (487,016) $ 482,672 Other comprehensive income, net of income taxes: Unrealized appreciation on securities, net — 9,001 — — 9,001 Minimum pension liability adjustments, net 1,137 4,112 — — 5,249 Other comprehensive income 1,137 13,113 — — 14,250 Comprehensive income (loss) $ 483,809 $ 527,854 $ (27,725) $ (487,016) $ 496,922 Year Ended September 30, 2017 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Net loss $ (128,212) $ (113,892) $ (10,332) $ 124,224 $ (128,212) Other comprehensive income, net of income taxes: Unrealized depreciation on securities, net — (829) — — (829) Minimum pension liability adjustments, net 860 2,473 — — 3,333 Other comprehensive income 860 1,644 — — 2,504 Comprehensive loss $ (127,352) $ (112,248) $ (10,332) $ 124,224 $ (125,708) Year Ended September 30, 2016 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Net loss $ (56,828) $ (46,856) $ (14,782) $ 61,638 $ (56,828) Other comprehensive loss, net of income taxes: Unrealized appreciation on securities, net — 2,772 — — 2,772 Reclassification of realized losses in net income, net — 926 — — 926 Minimum pension liability adjustments, net (63) (2,462) — — (2,525) Other comprehensive income (loss) (63) 1,236 — — 1,173 Comprehensive loss $ (56,891) $ (45,620) $ (14,782) $ 61,638 $ (55,655) |
Schedule of Condensed Consolidating Statements of Cash Flows | CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Year Ended September 30, 2018 Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 759 $ 539,476 $ 4,296 $ — $ 544,531 Cash flows from investing activities: Capital expenditures (12,723) (443,743) (10,118) — (466,584) Purchase of short-term investments — (71,049) — — (71,049) Payment for acquisition of business, net of cash acquired (47,886) — — — (47,886) Proceeds from sale of short-term investments — 68,776 — — 68,776 Intercompany transfers 60,609 (60,609) — — — Proceeds from asset sales — 41,289 3,092 — 44,381 Net cash used in investing activities — (465,336) (7,026) — (472,362) Cash flows from financing activities: Intercompany transfers 308,430 (308,430) — — — Dividends paid (308,430) — — — (308,430) Payments for employee taxes on net settlement of equity awards (7,114) — — — (7,114) Proceeds from stock option exercises 6,355 — — — 6,355 Net cash provided by (used in) financing activities (759) (308,430) — — (309,189) Net increase (decrease) in cash and cash equivalents — (234,290) (2,730) — (237,020) Cash and cash equivalents, beginning of period — 507,504 13,871 — 521,375 Cash and cash equivalents, end of period $ — $ 273,214 $ 11,141 $ — $ 284,355 Year Ended September 30, 2017, as adjusted Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Net cash (used in) provided by operating activities $ (4,686) $ 354,711 $ 11,606 $ — $ 361,631 Cash flows from investing activities: Capital expenditures (4,264) (387,392) (5,911) — (397,567) Purchase of short-term investments — (69,866) — — (69,866) Payment for acquisition of business, net cash acquired (70,416) — — — (70,416) Proceeds from sale of short-term investments — 69,449 — — 69,449 Intercompany transfers 74,680 (74,680) — — — Proceeds from asset sales — 22,724 688 — 23,412 Net cash used in investing activities — (439,765) (5,223) — (444,988) Cash flows from financing activities: Intercompany transfers 305,515 (305,515) — — — Dividends paid (305,515) — — — (305,515) Payments for employee taxes on net settlement of equity awards (6,599) — — — (6,599) Proceeds from stock option exercises 11,285 — — — 11,285 Net cash provided by (used in) financing activities 4,686 (305,515) — — (300,829) Net increase (decrease) in cash and cash equivalents — (390,569) 6,383 — (384,186) Cash and cash equivalents, beginning of period — 898,073 7,488 — 905,561 Cash and cash equivalents, end of period $ — $ 507,504 $ 13,871 $ — $ 521,375 September 30, 2016, as adjusted Helmerich & Payne Helmerich & Payne, Inc. International Drilling Co. Non-Guarantor Total (In thousands) (Guarantor) (Issuer) Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ 2,863 $ 777,756 $ (26,088) $ — $ 754,531 Cash flows from investing activities: Capital expenditures (16,119) (235,078) (5,972) — (257,169) Purchase of short-term investments — (57,276) — — (57,276) Proceeds from sale of short-term investments — 58,381 — — 58,381 Intercompany transfers 16,119 (16,119) — — — Proceeds from asset sales 9 19,237 2,599 — 21,845 Net cash provided by (used in) investing activities 9 (230,855) (3,373) — (234,219) Cash flows from financing activities: Payments on long-term debt — (40,000) — — (40,000) Debt issuance costs — (1,111) — — (1,111) Intercompany transfers 300,152 (300,152) — — — Dividends paid (300,152) — — — (300,152) Payments from employee taxes on net settlement of equity awards (5,646) — — — (5,646) Proceeds from stock option exercises 2,774 — — — 2,774 Net cash used in financing activities (2,872) (341,263) — — (344,135) Net increase (decrease) in cash and cash equivalents — 205,638 (29,461) — 176,177 Cash and cash equivalents, beginning of period — 692,435 36,949 — 729,384 Cash and cash equivalents, end of period $ — $ 898,073 $ 7,488 $ — $ 905,561 |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Schedule of selected quarterly financial data (unaudited) | (in thousands, except per share amounts) 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total (1) Operating revenues $ 564,087 $ 577,484 $ 648,872 $ 696,825 $ 2,487,268 Operating income (loss) 3,520 (1,253) 6,217 31,602 Income (loss) from continuing operations 500,642 (1,633) (8,174) 493,010 Net income (loss) 500,106 (11,879) (8,008) 482,672 Basic earnings per common share: Income (loss) from continuing operations 4.57 (0.03) (0.08) 0.02 4.49 Net income (loss) 4.57 (0.12) (0.08) 0.02 4.39 Diluted earnings per common share: Income (loss) from continuing operations 4.55 (0.03) (0.08) 0.02 4.47 Net income (loss) 4.55 (0.12) (0.08) 0.02 4.37 (1) changes in the average number of common shares outstanding. 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Total (1) Operating revenues $ 368,590 $ 405,283 $ 498,564 $ 532,304 $ 1,804,741 Operating loss (49,164) (65,672) (28,028) (29,677) (172,541) Loss from continuing operations (34,554) (48,473) (23,125) (21,711) (127,863) Net loss (35,063) (48,818) (21,799) (22,532) (128,212) Basic earnings per common share: Loss from continuing operations (0.33) (0.45) (0.22) (0.20) (1.20) Net loss (0.33) (0.45) (0.21) (0.21) (1.20) Diluted earnings per common share: Loss from continuing operations (0.33) (0.45) (0.22) (0.20) (1.20) Net loss (0.33) (0.45) (0.21) (0.21) (1.20) (1) The sum of earnings per share for the four quarters may not equal the total earnings per share for the year due to changes in the average number of common shares outstanding. |
NATURE OF OPERATIONS (Details)
NATURE OF OPERATIONS (Details) | 12 Months Ended |
Sep. 30, 2018segmentitem | |
NATURE OF OPERATIONS | |
Number of reportable business segments | segment | 3 |
Number of international locations | item | 5 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES - Foreign Currency (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES | |||
Foreign currency gains (losses) | $ (4) | $ (7.1) | $ (9.3) |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
RESTRICTED CASH AND CASH EQUIVALENTS | ||
Restricted cash and cash equivalents | $ 41,800 | $ 39,100 |
Restricted cash and cash equivalents from initial capitalization of captive insurance company | 2,000 | |
Additional cash and cash equivalents restricted at the election of management for potential insurance claims | 28,500 | 27,700 |
Drilling technology companies acquisitions | ||
RESTRICTED CASH AND CASH EQUIVALENTS | ||
Restricted cash and cash equivalents | 11,300 | 9,400 |
Prepaid expenses and other | ||
RESTRICTED CASH AND CASH EQUIVALENTS | ||
Restricted cash and cash equivalents | 39,830 | 32,439 |
Other assets. | ||
RESTRICTED CASH AND CASH EQUIVALENTS | ||
Restricted cash and cash equivalents | $ 2,000 | $ 6,695 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES - Inventories of Materials and Supplies (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES | ||
Inventory reserve percentage | 5.90% | 6.30% |
Reserves for excess and obsolete inventory | $ 9.9 | $ 9.2 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES - Property, Plant, and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
CAPITALIZATION OF INTEREST | |||
Capitalized interest | $ 0.4 | $ 0.3 | $ 2.8 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES - Goodwill and Intangible Assets (Details) | 12 Months Ended |
Sep. 30, 2018 | |
Finite-lived intangible assets | |
Amortization period | 15 years |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES - Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
DRILLING REVENUES | |||
Reimbursements received | $ 274.7 | $ 179.9 | $ 125.9 |
Early termination revenue | $ 17.1 | $ 29.4 | $ 219 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES - Rent Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Rent revenues | |||
Minimum rents | $ 9,950 | $ 9,735 | $ 9,196 |
Overage and percentage rents | 1,040 | 936 | $ 1,211 |
Fiscal Year | |||
2,019 | 7,709 | ||
2,020 | 6,314 | ||
2,021 | 4,473 | ||
2,022 | 2,488 | ||
2,023 | 1,725 | ||
Thereafter | 4,868 | ||
Total | 27,577 | ||
Cost and accumulated depreciation for real estate properties | |||
Real estate properties | 69,133 | 66,005 | |
Accumulated depreciation | (42,272) | (42,169) | |
Real estate properties, Net | $ 26,861 | $ 23,836 | |
Minimum | |||
Rent revenues | |||
Lease term | 3 years | ||
Maximum | |||
Rent revenues | |||
Lease term | 10 years |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES - Recently issued accounting updates (Details) - USD ($) $ in Thousands | Oct. 01, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Oct. 01, 2017 |
New accounting pronouncements | |||||
Net cash provided by operating activities | $ 544,531 | $ 361,631 | $ 754,531 | ||
Net cash used in financing activities | (309,189) | (300,829) | (344,135) | ||
Retained earnings | (4,027,779) | (3,855,686) | |||
ASU 2016-09 | Adjustments | |||||
New accounting pronouncements | |||||
Net cash provided by operating activities | 4,400 | 900 | |||
Net cash used in financing activities | (4,400) | $ (900) | |||
Retained earnings | $ 300 | ||||
ASU 2016-18 | Adjustments | |||||
New accounting pronouncements | |||||
Net cash provided by operating activities | $ 2,700 | $ 9,500 | |||
ASU 2016-01 | Adjustments | |||||
New accounting pronouncements | |||||
Reclassification adjustment | $ 44,000 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES - Concentration of Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Major customers | |||||||||||
Operating revenue | $ 696,825 | $ 648,872 | $ 577,484 | $ 564,087 | $ 532,304 | $ 498,564 | $ 405,283 | $ 368,590 | $ 2,487,268 | $ 1,804,741 | $ 1,624,232 |
Operating revenues | Customer concentration | EOG Resources, Inc. | |||||||||||
Major customers | |||||||||||
Operating revenue | $ 258,194 | $ 163,582 | $ 124,262 | ||||||||
Receivables | Credit concentration | EOG Resources, Inc. | |||||||||||
Major customers | |||||||||||
Concentration percentage | 8.80% | ||||||||||
Receivables | Credit concentration | Occidental Oil and Gas Corporation | |||||||||||
Major customers | |||||||||||
Concentration percentage | 4.70% |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES - Self-Insurance (Details) $ in Millions | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Minimum | |
Risk or uncertainty | |
Insurance coverage deductibles range for claims which occur outside or inside the United States | $ 1 |
Maximum | |
Risk or uncertainty | |
Insurance coverage deductibles range for claims which occur outside or inside the United States | $ 5 |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RISKS AND UNCERTAINTIES - International Drilling Operations (Details) | 12 Months Ended |
Sep. 30, 2018 | |
Risk or uncertainty | |
Period for which cumulative inflation rates used for considering country as highly inflationary | 3 years |
Minimum | |
Risk or uncertainty | |
Cumulative inflation rate before a country is considered highly inflationary (as a percent) | 100.00% |
BUSINESS COMBINATIONS - MagVAR
BUSINESS COMBINATIONS - MagVAR (Details) - USD ($) $ in Thousands | Dec. 08, 2017 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Business Combinations | |||||||||||||
Operating revenue | $ 696,825 | $ 648,872 | $ 577,484 | $ 564,087 | $ 532,304 | $ 498,564 | $ 405,283 | $ 368,590 | $ 2,487,268 | $ 1,804,741 | $ 1,624,232 | ||
Net loss | (2,453) | $ 8,008 | $ 11,879 | $ (500,106) | 22,532 | $ 21,799 | $ 48,818 | $ 35,063 | $ (482,672) | 128,212 | 56,828 | ||
Estimated useful lives (in years) | 15 years | ||||||||||||
Fair value of assets acquired | |||||||||||||
Goodwill | 64,777 | $ 51,705 | $ 64,777 | $ 64,777 | 51,705 | $ 4,718 | |||||||
Minimum | Restricted stock | |||||||||||||
Business Combinations | |||||||||||||
Vesting period | 3 years | ||||||||||||
Maximum | Restricted stock | |||||||||||||
Business Combinations | |||||||||||||
Vesting period | 6 years | ||||||||||||
MagVAR Acquisition | |||||||||||||
Business Combinations | |||||||||||||
Aggregate cash consideration net of closing adjustments | $ 47,900 | ||||||||||||
Period escrow to be released to seller | 12 months | ||||||||||||
Operating revenue | $ 11,600 | ||||||||||||
Net loss | 3,000 | ||||||||||||
Purchase Price | |||||||||||||
Cash consideration | $ 48,485 | ||||||||||||
Fair value of assets acquired | |||||||||||||
Current assets | 2,286 | ||||||||||||
Property, plant and equipment | 13 | ||||||||||||
Intangible assets, net | 28,700 | ||||||||||||
Goodwill | 17,791 | ||||||||||||
Total assets acquired | 48,790 | ||||||||||||
Fair value of liabilities assumed | |||||||||||||
Current liabilities | 305 | ||||||||||||
Fair value of total assets acquired and liabilities assumed | 48,485 | ||||||||||||
Pro forma financial information: | |||||||||||||
After-tax transaction costs excluded from pro forma earnings | 500 | ||||||||||||
Revenues | 2,490,955 | 1,814,215 | |||||||||||
Net income (loss) | 480,423 | $ (126,355) | |||||||||||
MagVAR Acquisition | Prepaid expenses and other | |||||||||||||
Business Combinations | |||||||||||||
Restricted cash | $ 6,000 | ||||||||||||
MagVAR Acquisition | Restricted stock | |||||||||||||
Business Combinations | |||||||||||||
Restricted stock awards issued | 213,904 | ||||||||||||
Grant date fair value of restricted stock | $ 13,100 | ||||||||||||
Vesting period | 3 years | ||||||||||||
MagVAR Acquisition | General and Administrative | |||||||||||||
Business Combinations | |||||||||||||
Business acquisition transaction cost | $ 1,200 | $ 1,200 | $ 1,200 | ||||||||||
MagVAR Acquisition | Minimum | |||||||||||||
Business Combinations | |||||||||||||
Estimated useful lives (in years) | 5 years | ||||||||||||
MagVAR Acquisition | Maximum | |||||||||||||
Business Combinations | |||||||||||||
Estimated useful lives (in years) | 20 years |
BUSINESS COMBINATIONS - Motive
BUSINESS COMBINATIONS - Motive Merger (Details) - USD ($) $ in Thousands | Jun. 02, 2017 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Business Combinations | ||||||||||||
Payment to acquire business, net | $ 47,886 | $ 70,416 | ||||||||||
Operating revenue | $ 696,825 | $ 648,872 | $ 577,484 | $ 564,087 | $ 532,304 | $ 498,564 | $ 405,283 | $ 368,590 | 2,487,268 | 1,804,741 | $ 1,624,232 | |
Net loss | (2,453) | $ 8,008 | $ 11,879 | $ (500,106) | 22,532 | $ 21,799 | $ 48,818 | $ 35,063 | (482,672) | 128,212 | 56,828 | |
Fair value of assets acquired | ||||||||||||
Goodwill | 64,777 | 51,705 | 64,777 | 51,705 | $ 4,718 | |||||||
Fair value of liabilities assumed | ||||||||||||
Contingent earnout liability | 11,160 | 14,879 | $ 11,160 | 14,879 | ||||||||
Estimated useful lives (in years) | 15 years | |||||||||||
MOTIVE Merger | ||||||||||||
Business Combinations | ||||||||||||
Operating revenue | $ 12,900 | 3,300 | ||||||||||
Net loss | 20,100 | 2,200 | ||||||||||
Future potential earnout payments | $ 25,000 | |||||||||||
Cash placed in escrow | $ 9,400 | |||||||||||
Percentage of escrow to be released to seller on each of twelve and eighteenth month anniversaries | 50.00% | |||||||||||
Purchase Price | ||||||||||||
Cash consideration | $ 74,275 | |||||||||||
Long-term contingent earnout liability (Other noncurrent liabilities) | 14,509 | |||||||||||
Total cash consideration given | 88,784 | |||||||||||
Fair value of assets acquired | ||||||||||||
Current assets | 4,425 | |||||||||||
Property, plant and equipment | 300 | |||||||||||
Intangible assets, net | 51,000 | |||||||||||
Goodwill | 46,987 | |||||||||||
Total assets acquired | 102,712 | |||||||||||
Fair value of liabilities assumed | ||||||||||||
Current liabilities | 25 | |||||||||||
Deferred income taxes | 13,903 | |||||||||||
Total liabilities acquired | 13,928 | |||||||||||
Fair value of total assets acquired and liabilities assumed | $ 88,784 | |||||||||||
Contingent consideration paid | 10,600 | |||||||||||
Change in fair value of contingent consideration | 6,900 | 400 | ||||||||||
Estimated useful lives (in years) | 15 years | |||||||||||
MOTIVE Merger | (Level 3) | ||||||||||||
Fair value of liabilities assumed | ||||||||||||
Contingent earnout liability | $ 11,200 | 14,900 | $ 11,200 | 14,900 | ||||||||
MOTIVE Merger | General and Administrative | ||||||||||||
Business Combinations | ||||||||||||
Business acquisition transaction cost | $ 3,200 | $ 3,200 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) | Sep. 30, 2018 / $ | Mar. 31, 2018item / $ |
DISCONTINUED OPERATIONS | ||
Foreign exchange rate ( Bolivars per United States dollars) | 10 | |
Number of zeros eliminated from the old currency | item | 5 | |
DICOM floating rate (Bolivars per United States dollars) | 62 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
PROPERTY, PLANT AND EQUIPMENT | |||
Gross, property, plant and equipment | $ 9,146,247 | $ 8,882,934 | |
Accumulated depreciation | (4,288,865) | (3,881,883) | |
Property, plant and equipment, net | 4,857,382 | 5,001,051 | $ 5,144,733 |
Contract drilling equipment | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Gross, property, plant and equipment | $ 8,442,081 | 8,197,572 | |
Contract drilling equipment | Minimum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Estimated Useful Lives | 4 years | ||
Contract drilling equipment | Maximum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Estimated Useful Lives | 15 years | ||
Real estate properties | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Gross, property, plant and equipment | $ 68,888 | 66,005 | |
Real estate properties | Minimum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Estimated Useful Lives | 10 years | ||
Real estate properties | Maximum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Estimated Useful Lives | 45 years | ||
Other. | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Gross, property, plant and equipment | $ 471,310 | 450,031 | |
Other. | Minimum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Estimated Useful Lives | 2 years | ||
Other. | Maximum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Estimated Useful Lives | 23 years | ||
Construction in progress | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Gross, property, plant and equipment | $ 163,968 | $ 169,326 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Impairments (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($)item$ / shares | Sep. 30, 2018USD ($)item | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | |
Impairments | ||||
Property, plant and equipment, net | $ 4,857,382 | $ 4,857,382 | $ 5,144,733 | $ 5,001,051 |
International FlexRig4 Asset Group | ||||
Impairments | ||||
Property, plant and equipment, net | $ 63,000 | $ 63,000 | ||
Two conventional rigs asset group | ||||
Impairments | ||||
Number of asset groups potentially impaired | item | 2 | 2 | ||
Number of asset groups evaluated | item | 2 | 2 | ||
Impairment charge for asset held for use | $ 0 | |||
U.S. Land | Land Rigs | ||||
Impairments | ||||
Impairment charge for assets held for sale | $ 6,300 | |||
U.S. Land | Two conventional rigs asset group | ||||
Impairments | ||||
Property, plant and equipment, net | $ 9,000 | $ 9,000 | ||
Percentage the fair values exceed the net book values | 64.00% | |||
U.S. Land | Decommissioned rigs | ||||
Impairments | ||||
Impairment charge for assets held for sale | 5,700 | |||
Impairment charge for assets held for sale, net of tax | $ 4,200 | |||
Diluted earnings per share for impairment charge for assets held for sale (in dollars per share) | $ / shares | $ 0.04 | |||
International Land | Two conventional rigs asset group | ||||
Impairments | ||||
Property, plant and equipment, net | $ 15,200 | $ 15,200 | ||
Percentage the fair values exceed the net book values | 141.00% | |||
International Land | Six conventional rigs asset group | ||||
Impairments | ||||
Property, plant and equipment, net | 20,800 | $ 20,800 | ||
Impairment charge for asset held for use | $ 1,400 | |||
Number of rigs held for sale | item | 6 | 6 | ||
Net book value of certain rig components transferred | $ 8,500 | $ 8,500 | ||
Impairment charge for assets held for sale | 9,200 | |||
Impairment charge for assets held for sale, net of tax | $ 7,000 | |||
Diluted earnings per share for impairment charge for assets held for sale (in dollars per share) | $ / shares | $ 0.06 | |||
Impairment charge for asset held for use, net of tax | $ 1,000 | |||
Diluted earnings per share for impairment charge for assets held for use (in dollars per share) | $ / shares | $ 0.01 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT - Depreciation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment | |||
Depreciation | $ 583,802 | $ 585,543 | $ 598,587 |
Abandonments | 27,700 | 42,600 | 39,300 |
Net book value | 4,857,382 | $ 5,001,051 | $ 5,144,733 |
Rigs components depreciation | |||
Property, Plant and Equipment | |||
Net book value | 3,700 | ||
Increase in depreciation | 9,700 | ||
Remainder of fiscal year | 900 | ||
2,019 | (2,300) | ||
2,020 | (2,300) | ||
2,021 | (2,200) | ||
2,022 | (1,300) | ||
2,023 | (400) | ||
Thereafter | $ (1,000) |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT - Gain on sale of assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
PROPERTY, PLANT AND EQUIPMENT | |||
Gain on sale of assets | $ 22,660 | $ 20,627 | $ 9,896 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill | ||
Goodwill, Balance at beginning of period | $ 51,705 | $ 4,718 |
Additions (Note 3) | 17,791 | 46,987 |
Impairment | (4,719) | |
Goodwill, Balance at end of period | $ 64,777 | $ 51,705 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Intangible Assets | ||
Gross Carrying Amount, Finite-lived | $ 79,700 | $ 51,000 |
Accumulated Amortization | 6,493 | 1,134 |
Net, Finite-lived | 73,207 | 49,866 |
Trademark | ||
Intangible Assets | ||
Indefinite-lived intangible asset | 919 | |
Developed technology | ||
Intangible Assets | ||
Gross Carrying Amount, Finite-lived | 70,000 | 51,000 |
Accumulated Amortization | 5,589 | 1,134 |
Net, Finite-lived | 64,411 | $ 49,866 |
Trade name | ||
Intangible Assets | ||
Gross Carrying Amount, Finite-lived | 5,700 | |
Accumulated Amortization | 237 | |
Net, Finite-lived | 5,463 | |
Customer relationships | ||
Intangible Assets | ||
Gross Carrying Amount, Finite-lived | 4,000 | |
Accumulated Amortization | 667 | |
Net, Finite-lived | $ 3,333 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
GOODWILL AND INTANGIBLE ASSETS | ||
Amortization | $ 5.4 | $ 1.1 |
Expected annual amortization in next fiscal year | 5.8 | |
Expected annual amortization in year two | 5.8 | |
Expected annual amortization in year three | 5.8 | |
Expected annual amortization in year four | 5.8 | |
Expected annual amortization in year five | $ 5.1 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Impairments (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Impairments | ||||
Goodwill | $ 64,777 | $ 64,777 | $ 51,705 | $ 4,718 |
Goodwill impairment loss | 4,719 | |||
Impairment of intangible assets excluding goodwill | 900 | |||
Impairment of intangible assets excluding goodwill, net of tax | $ 700 | |||
Diluted earnings per share, intangible assets excluding goodwill (in dollars per share) | $ 0.01 | |||
TerraVici | ||||
Impairments | ||||
Goodwill | $ 4,700 | $ 4,700 | ||
Goodwill impairment loss | 4,700 | |||
Goodwill impairment loss, net of tax | $ 3,500 | |||
Diluted earnings per share related to goodwill impairment (in dollars per share) | $ 0.03 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 19, 2015 |
Debt | |||
Face Amount | $ 500,000 | $ 500,000 | |
Unamortized Debt Issuance Cost | (6,032) | (7,098) | |
Unamortized Debt Issuance Cost, due after one year | (6,032) | (7,098) | |
Long-term debt | 493,968 | 492,902 | |
Long-term debt | 493,968 | 492,902 | |
Unsecured senior notes issued March 19, 2015 | |||
Debt | |||
Face Amount | 500,000 | 500,000 | $ 500,000 |
Unamortized Debt Issuance Cost | (6,032) | (7,098) | |
Long-term debt | $ 493,968 | $ 492,902 |
DEBT - Debt activity (Details)
DEBT - Debt activity (Details) | Jul. 13, 2016USD ($) | Mar. 19, 2015USD ($) | Nov. 13, 2018USD ($)letter | Sep. 30, 2018USD ($)letter | Sep. 30, 2017USD ($) |
Debt | |||||
Face Amount | $ 500,000,000 | $ 500,000,000 | |||
Unsecured senior notes issued March 19, 2015 | |||||
Debt | |||||
Face Amount | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | ||
Long-term debt stated interest rate percentage | 4.65% | ||||
Term of debt | 10 years | ||||
2016 Credit Facility | |||||
Debt | |||||
Maximum borrowing capacity | $ 300,000,000 | ||||
Commitment fee (as a percent) | 0.15% | ||||
Maximum limit of priority debt on net worth | 17.50% | ||||
Borrowing amount outstanding | $ 0 | ||||
Available borrowing capacity | $ 260,700,000 | ||||
2016 Credit Facility | Minimum | |||||
Debt | |||||
Commitment fee (as a percent) | 0.15% | ||||
2016 Credit Facility | Maximum | |||||
Debt | |||||
Commitment fee (as a percent) | 0.30% | ||||
Total debt to total capitalization (as a percent) | 50.00% | ||||
2016 Credit Facility | London Interbank Offered Rate (LIBOR) | |||||
Debt | |||||
Interest spread on borrowings (as a percent) | 1.125% | ||||
2016 Credit Facility | London Interbank Offered Rate (LIBOR) | Minimum | |||||
Debt | |||||
Interest spread on borrowings (as a percent) | 1.125% | ||||
2016 Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | |||||
Debt | |||||
Interest spread on borrowings (as a percent) | 1.75% | ||||
2016 Credit Facility | Letters of credit | |||||
Debt | |||||
Maximum borrowing capacity | $ 75,000,000 | ||||
Number of letters of credit outstanding | letter | 3 | ||||
Letters of credit outstanding/issued | $ 39,300,000 | ||||
2016 Credit Facility | Issued to support self-insured losses under high deductible casualty insurance programs | |||||
Debt | |||||
Number of letters of credit outstanding | letter | 2 | ||||
Letters of credit outstanding/issued | $ 29,300,000 | ||||
2016 Credit Facility | Letter of credit supporting an operating line of credit with a bank in Argentina | |||||
Debt | |||||
Letters of credit outstanding/issued | 10,000,000 | ||||
2016 Credit Facility | Subsequent Event | |||||
Debt | |||||
Available borrowing capacity | $ 262,000,000 | ||||
Decrease in credit facility | $ 300,000,000 | ||||
2016 Credit Facility | Subsequent Event | Letters of credit | |||||
Debt | |||||
Number of letters of credit decreased | letter | 1 | ||||
Decrease in credit facility | $ 1,300,000 | ||||
2018 Credit Facility | Subsequent Event | |||||
Debt | |||||
Maximum borrowing capacity | 750,000,000 | ||||
Borrowing amount outstanding | 0 | ||||
Letters of credit outstanding/issued | 3 | ||||
Available borrowing capacity | $ 712,000,000 | ||||
2018 Credit Facility | Subsequent Event | Forecast | |||||
Debt | |||||
Commitment fee (as a percent) | 0.125% | ||||
2018 Credit Facility | Subsequent Event | Minimum | |||||
Debt | |||||
Commitment fee (as a percent) | 0.075% | ||||
2018 Credit Facility | Subsequent Event | Maximum | |||||
Debt | |||||
Commitment fee (as a percent) | 0.20% | ||||
Total debt to total capitalization (as a percent) | 50.00% | ||||
2018 Credit Facility | Subsequent Event | London Interbank Offered Rate (LIBOR) | Forecast | |||||
Debt | |||||
Interest spread on borrowings (as a percent) | 1.125% | ||||
2018 Credit Facility | Subsequent Event | London Interbank Offered Rate (LIBOR) | Minimum | |||||
Debt | |||||
Interest spread on borrowings (as a percent) | 0.875% | ||||
2018 Credit Facility | Subsequent Event | London Interbank Offered Rate (LIBOR) | Maximum | |||||
Debt | |||||
Interest spread on borrowings (as a percent) | 1.50% | ||||
2018 Credit Facility | Subsequent Event | Letters of credit | |||||
Debt | |||||
Maximum borrowing capacity | $ 75,000,000 | ||||
Letters of credit outstanding/issued | $ 38,000,000 | ||||
Unsecured standalone line of credit facility | |||||
Debt | |||||
Maximum borrowing capacity | $ 12,000,000 |
DEBT - Maturities of long-term
DEBT - Maturities of long-term debt (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Aggregate maturities of long-term debt | |
Thereafter | $ 500,000 |
Long-term debt | $ 500,000 |
INCOME TAXES - Tax Cuts and Job
INCOME TAXES - Tax Cuts and Jobs Act of 2017 (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
INCOME TAXES | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 24.50% | 35.00% | 35.00% | |
Income tax expense (benefit) related to new tax act | $ 502.1 | $ 502.1 |
INCOME TAXES - Components of pr
INCOME TAXES - Components of provision (benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Current: | |||
Federal | $ 757 | $ (36,260) | $ (86,010) |
Foreign | 6,492 | 4,108 | 9,987 |
State | 2,340 | (472) | (3,742) |
Total current | 9,589 | (32,624) | (79,765) |
Deferred: | |||
Federal | (508,256) | (14,953) | 58,136 |
Foreign | 7,415 | (7,827) | 408 |
State | 14,083 | (1,331) | 1,544 |
Total deferred | (486,758) | (24,111) | 60,088 |
Total benefit | (477,169) | (56,735) | (19,677) |
Amounts of domestic and foreign income before income taxes | |||
Domestic | 27,436 | (173,157) | (49,636) |
Foreign | (11,595) | (11,441) | (23,031) |
Income (loss) from continuing operations before income taxes | $ 15,841 | $ (184,598) | $ (72,667) |
INCOME TAXES - Effective tax ra
INCOME TAXES - Effective tax rate (Details) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Effective income tax rates as compared to the U.S. Federal income tax rate | |||
U.S. Federal income tax rate (as a percent) | 24.50% | 35.00% | 35.00% |
Effect of foreign taxes (as a percent) | 87.80% | 1.80% | (13.80%) |
State income taxes, net of federal tax benefit (as a percent) | 68.80% | 0.60% | 3.20% |
U.S. domestic production activities (as a percent) | (2.10%) | (10.40%) | |
Remeasurement of deferred tax related to Tax Reform Act (as a percent) | (3169.40%) | ||
Other impact of foreign operations (as a percent) | (43.40%) | (2.90%) | 14.70% |
Non-deductible meals and entertainment (as a percent) | 8.20% | ||
Equity compensation (as a percent) | (5.30%) | ||
Officer's compensation (as a percent) | 1.70% | ||
Contingent consideration adjustment (as a percent) | 10.70% | ||
Other (1) (as a percent) | 4.10% | (1.70%) | (1.60%) |
Effective income tax rate (as a percent) | (3012.30%) | 30.70% | 27.10% |
INCOME TAXES - Deferred tax (De
INCOME TAXES - Deferred tax (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Deferred tax liabilities: | ||
Property, plant and equipment | $ 904,734 | $ 1,386,512 |
Available-for-sale securities | 10,464 | 24,940 |
Other | 12,787 | 21,609 |
Total deferred tax liabilities | 927,985 | 1,433,061 |
Deferred tax assets: | ||
Pension reserves | 3,477 | 7,614 |
Self-insurance reserves | 13,100 | 19,461 |
Net operating loss, foreign tax credit, and other federal tax credit carryforwards | 55,889 | 62,478 |
Financial accruals | 45,708 | 62,971 |
Other | 4,888 | 6,003 |
Total deferred tax assets | 123,062 | 158,527 |
Valuation allowance | (48,213) | (58,155) |
Net deferred tax assets | 74,849 | 100,372 |
Net deferred tax liabilities | $ 853,136 | $ 1,332,689 |
INCOME TAXES - Operating loss (
INCOME TAXES - Operating loss (Details) $ in Millions | Sep. 30, 2018USD ($) |
Federal | |
Operating Loss Carryforwards | |
Amount of net operating loss carryforwards | $ 50.8 |
State | |
Operating Loss Carryforwards | |
Amount of net operating loss carryforwards | 31.2 |
Amount of state net operating loss carryforwards | 22.8 |
Foreign | |
Operating Loss Carryforwards | |
Amount of net operating loss carryforwards | 83.7 |
Amount of foreign net operating loss carryforwards | $ 0.5 |
INCOME TAXES - Tax credits (Det
INCOME TAXES - Tax credits (Details) $ in Millions | Sep. 30, 2018USD ($) |
Tax credits | |
Tax credit carryforwards | $ 24.9 |
Deferred tax assets, tax credit carryforwards | 20.1 |
Equity compensation | 2.3 |
Foreign | |
Tax credits | |
Amount of foreign tax credit carryforwards | 20.1 |
Minimum tax credit carryforwards | $ 2.5 |
INCOME TAXES - Unrecognized tax
INCOME TAXES - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
INCOME TAXES | ||
Accrued interest and penalties related to unrecognized tax benefits | $ 2,200 | $ 2,800 |
Reconciliation of the change in gross unrecognized tax benefits | ||
Unrecognized tax benefits at the beginning of the period | 4,773 | 9,551 |
Gross increases - tax positions in prior periods | 3 | |
Gross decreases - tax positions in prior periods | (1) | |
Gross decreases - current period effect of tax positions | (280) | (170) |
Gross increases - current period effect of tax positions | 10,537 | 300 |
Expiration of statute of limitations for assessments | (128) | (4,907) |
Unrecognized tax benefits at the end of the period | 14,905 | 4,773 |
Unrecognized tax benefits related to discontinued operations | $ 14,300 | $ 3,700 |
SHAREHOLDERS' EQUITY - Repurcha
SHAREHOLDERS' EQUITY - Repurchases of Stock (Details) - shares | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Repurchase of shares | |||
Repurchase of common stock (in shares) | 0 | 0 | 0 |
Maximum | |||
Repurchase of shares | |||
Number of common shares authorized to be repurchased | 4,000,000 |
SHAREHOLDERS' EQUITY - AOCI Com
SHAREHOLDERS' EQUITY - AOCI Components (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
After-tax amounts: | |||
Accumulated other comprehensive income (loss) | $ 16,550 | $ 2,300 | |
Unrealized Appreciation on Available for sale Securities | |||
Pre-tax amounts: | |||
Accumulated other comprehensive income (loss) before tax | 44,023 | 31,700 | $ 33,051 |
After-tax amounts: | |||
Accumulated other comprehensive income (loss) | 29,071 | 20,070 | 20,899 |
Defined Benefit Pension Plan | |||
Pre-tax amounts: | |||
Accumulated other comprehensive income (loss) before tax | (21,693) | (28,873) | (34,112) |
After-tax amounts: | |||
Accumulated other comprehensive income (loss) | (12,521) | (17,770) | (21,103) |
Accumulated Other Comprehensive (Loss) Income | |||
Pre-tax amounts: | |||
Accumulated other comprehensive income (loss) before tax | 22,330 | 2,827 | (1,061) |
After-tax amounts: | |||
Accumulated other comprehensive income (loss) | $ 16,550 | $ 2,300 | $ (204) |
SHAREHOLDERS' EQUITY - AOCI Cha
SHAREHOLDERS' EQUITY - AOCI Changes (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Rollforward of accumulated other comprehensive income (loss), net of tax | |
Balance at beginning of period | $ 4,164,591 |
Balance at end of period | 4,382,735 |
Unrealized Appreciation on Available for sale Securities | |
Rollforward of accumulated other comprehensive income (loss), net of tax | |
Balance at beginning of period | 20,070 |
Other comprehensive income before reclassifications | 9,001 |
Net current-period other comprehensive income | 9,001 |
Balance at end of period | 29,071 |
Defined Benefit Pension Plan | |
Rollforward of accumulated other comprehensive income (loss), net of tax | |
Balance at beginning of period | (17,770) |
Amounts reclassified from accumulated other comprehensive income | 5,249 |
Net current-period other comprehensive income | 5,249 |
Balance at end of period | (12,521) |
Accumulated Other Comprehensive (Loss) Income | |
Rollforward of accumulated other comprehensive income (loss), net of tax | |
Balance at beginning of period | 2,300 |
Other comprehensive income before reclassifications | 9,001 |
Amounts reclassified from accumulated other comprehensive income | 5,249 |
Net current-period other comprehensive income | 14,250 |
Balance at end of period | $ 16,550 |
SHAREHOLDER'S EQUITY - AOCI Rec
SHAREHOLDER'S EQUITY - AOCI Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||||||||||
Loss on investment securities | $ 1 | $ (25,989) | |||||||||
Income tax provision | 477,169 | $ 56,735 | 19,677 | ||||||||
Net Income (Loss) | $ 2,453 | $ (8,008) | $ (11,879) | $ 500,106 | $ (22,532) | $ (21,799) | $ (48,818) | $ (35,063) | 482,672 | (128,212) | (56,828) |
Net income (loss) attributable to parent, basic | 478,326 | (130,023) | (58,686) | ||||||||
Accumulated Other Comprehensive (Loss) Income | Reclassification out of AOCI | |||||||||||
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||||||||||
Net income (loss) attributable to parent, basic | 5,249 | 3,333 | (1,599) | ||||||||
Other-than-temporary impairment of available-for-sale securities | Reclassification out of AOCI | |||||||||||
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||||||||||
Loss on investment securities | 1,509 | ||||||||||
Income tax provision | (583) | ||||||||||
Net Income (Loss) | 926 | ||||||||||
Defined Benefit Pension Plan | |||||||||||
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||||||||||
Reclassifications for the period, tax | (1,931) | (1,905) | 1,443 | ||||||||
Reclassifications for the period, net of tax | 5,249 | 3,333 | (2,525) | ||||||||
Amortization of net actuarial loss on defined benefit pension plan | Selling, general and administrative | |||||||||||
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||||||||||
Reclassifications for the period, before tax | $ 7,180 | $ 5,238 | $ (3,968) |
STOCK-BASED COMPENSATION - Comp
STOCK-BASED COMPENSATION - Compensation cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock based awards | |||
Compensation expense (in dollars) | $ 31,687 | $ 26,183 | $ 24,383 |
Stock options | |||
Stock based awards | |||
Number of shares granted | 694,000 | 396,000 | 876,000 |
Compensation expense (in dollars) | $ 7,913 | $ 7,439 | $ 8,290 |
Restricted stock | |||
Stock based awards | |||
Number of shares granted | 626,000 | 292,000 | 294,000 |
Compensation expense (in dollars) | $ 23,774 | $ 18,744 | $ 16,093 |
2016 Plan | Stock options | |||
Stock based awards | |||
The period from the grant date after which options expire | 10 years | ||
Number of shares granted | 693,873 | ||
2016 Plan | Restricted stock | |||
Stock based awards | |||
Number of shares granted | 411,977 | ||
2010 Plan | Restricted stock | |||
Stock based awards | |||
Number of shares granted | 213,904 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock options (Details) - Stock options shares in Thousands | 12 Months Ended | ||
Sep. 30, 2018Y$ / sharesshares | Sep. 30, 2017$ / sharesshares | Sep. 30, 2016$ / sharesshares | |
Stock based award plan | |||
Vesting period | 1 year | ||
Option vesting (as a percent) | 25.00% | ||
Number of consecutive years that options vest | Y | 4 | ||
Weighted-average assumptions utilized in determining the fair value of options | |||
Risk-free interest rate (as a percent) | 2.20% | 2.00% | 1.80% |
Expected stock volatility (as a percent) | 36.10% | 38.90% | 37.60% |
Dividend yield (as a percent) | 4.70% | 3.70% | 4.60% |
Expected term (in years) | 6 years | 5 years 6 months | 5 years 6 months |
Options | |||
Weighted-average fair value of options granted (in dollars per share) | $ 13.17 | $ 20.48 | $ 13.12 |
Options outstanding at the beginning of the period (in shares) | shares | 3,278 | 3,312 | 2,776 |
Granted (in shares) | shares | 694 | 396 | 876 |
Exercised (in shares) | shares | (375) | (415) | (220) |
Forfeited/Expired (in shares) | shares | (98) | (15) | (120) |
Option outstanding at the end of the period (in shares) | shares | 3,499 | 3,278 | 3,312 |
Exercisable at the end of the period (in shares) | shares | 2,193 | 2,167 | 2,225 |
Shares available to grant | shares | 5,140 | 5,624 | 6,600 |
Weighted-Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 56.41 | $ 51.74 | $ 48.51 |
Granted (in dollars per share) | 59.03 | 76.61 | 58.25 |
Exercised (in dollars per share) | 36.88 | 38.04 | 31.52 |
Forfeited/Expired (in dollars per share) | 70.77 | 68.32 | 61.80 |
Outstanding at the end of the period (in dollars per share) | 58.62 | 56.41 | 51.74 |
Vested and expected to vest at the end of the period (in dollars per share) | 62.49 | ||
Exercisable at the end of the period (in dollars per share) | $ 56.31 | $ 50.87 | $ 46.66 |
STOCK-BASED COMPENSATION - Exer
STOCK-BASED COMPENSATION - Exercise prices (Details) shares in Thousands | 12 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Information about outstanding and exercisable stock options | |
Outstanding Stock Options, Options at the end of the period (in shares) | shares | 3,499 |
Exercisable Stock Options, Options at the end of the period (in shares) | shares | 2,193 |
Range of Exercise Prices from $0.00 to $21.07 | |
Information about outstanding and exercisable stock options | |
Exercise price, low end of range (in dollars per share) | $ 0 |
Exercise price, high end of range (in dollars per share) | $ 21.070 |
Outstanding Stock Options, Options at the end of the period (in shares) | shares | 180 |
Outstanding Stock Options, Weighted-Average Remaining Life | 2 months 12 days |
Outstanding Stock Options, Weighted-Average Exercise Price (in dollars per share) | $ 21.07 |
Exercisable Stock Options, Options at the end of the period (in shares) | shares | 180 |
Exercisable Stock Options, Weighted-Average Exercise Price (in dollars per share) | $ 21.07 |
Range of Exercise Prices from $21.07 to $59.76 | |
Information about outstanding and exercisable stock options | |
Exercise price, low end of range (in dollars per share) | 21.07 |
Exercise price, high end of range (in dollars per share) | $ 59.76 |
Outstanding Stock Options, Options at the end of the period (in shares) | shares | 2,417 |
Outstanding Stock Options, Weighted-Average Remaining Life | 5 years 10 months 24 days |
Outstanding Stock Options, Weighted-Average Exercise Price (in dollars per share) | $ 55.16 |
Exercisable Stock Options, Options at the end of the period (in shares) | shares | 1,418 |
Exercisable Stock Options, Weighted-Average Exercise Price (in dollars per share) | $ 53.03 |
Range of Exercise Prices from $59.76 to $68.83 | |
Information about outstanding and exercisable stock options | |
Exercise price, low end of range (in dollars per share) | 59.76 |
Exercise price, high end of range (in dollars per share) | $ 68.83 |
Outstanding Stock Options, Options at the end of the period (in shares) | shares | 358 |
Outstanding Stock Options, Weighted-Average Remaining Life | 6 years 3 months 18 days |
Outstanding Stock Options, Weighted-Average Exercise Price (in dollars per share) | $ 68.66 |
Exercisable Stock Options, Options at the end of the period (in shares) | shares | 275 |
Exercisable Stock Options, Weighted-Average Exercise Price (in dollars per share) | $ 68.83 |
Range of Exercise Prices from $68.83 to $81.31 | |
Information about outstanding and exercisable stock options | |
Exercise price, low end of range (in dollars per share) | 68.83 |
Exercise price, high end of range (in dollars per share) | $ 81.31 |
Outstanding Stock Options, Options at the end of the period (in shares) | shares | 544 |
Outstanding Stock Options, Weighted-Average Remaining Life | 7 years 1 month 6 days |
Outstanding Stock Options, Weighted-Average Exercise Price (in dollars per share) | $ 79.79 |
Exercisable Stock Options, Options at the end of the period (in shares) | shares | 320 |
Exercisable Stock Options, Weighted-Average Exercise Price (in dollars per share) | $ 79.86 |
STOCK-BASED COMPENSATION - Othe
STOCK-BASED COMPENSATION - Other (Details) - Stock options - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock based awards | |||
Weighted-average remaining life of exercisable stock options | 4 years 4 months 10 days | ||
Exercisable at the end of the period (in dollars) | $ 30.9 | ||
Exercisable Stock Options, Weighted-Average Exercise Price (in dollars per share) | $ 56.31 | ||
Options vested and expected to vest at the end of the period (in shares) | 1,306,087 | ||
Options vested or expected to vest, aggregate intrinsic value (in dollars) | $ 10.6 | ||
Options vested or expected to vest, weighted-average exercise price (in dollars per share) | $ 62.49 | ||
Unrecognized compensation cost (in dollars) | $ 7.3 | ||
Period over which unrecognized compensation cost is expected to be recognized | 2 years 3 months 18 days | ||
Total intrinsic value of options exercised (in dollars) | $ 9.9 | $ 13.1 | $ 6.3 |
Grant date fair value of shares vested (in dollars) | $ 8.8 | $ 6.7 | $ 9.6 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock (Details) - Restricted stock - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock based award plan | |||
Unrecognized compensation cost (in dollars) | $ 34.4 | ||
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 2 years 4 months 24 days | ||
Restricted stock awards activity, shares | |||
Unvested at the beginning of the period (in shares) | 659 | 648 | 668 |
Granted (in shares) | 626 | 292 | 294 |
Vested (in shares) | (258) | (271) | (256) |
Forfeited (in shares) | (26) | (10) | (58) |
Unvested at the end of the period (in shares) | 1,001 | 659 | 648 |
Restricted stock awards activity, weighted average grant date fair value | |||
Unvested at the beginning of the period (in dollars per share) | $ 70.76 | $ 64.24 | $ 67.03 |
Granted (in dollars per share) | 59.53 | 78.69 | 58.25 |
Vested (in dollars per share) | 70.60 | 63.81 | 64.75 |
Forfeited (in dollars per share) | 66.73 | 68.09 | 63.65 |
Unvested at the end of the period (in dollars per share) | $ 63.74 | $ 70.76 | $ 64.24 |
Minimum | |||
Stock based award plan | |||
Vesting period | 3 years | ||
Maximum | |||
Stock based award plan | |||
Vesting period | 6 years |
EARNINGS (LOSSES) PER COMMON _3
EARNINGS (LOSSES) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | |||||||||||
Income (loss) from continuing operations | $ 2,175 | $ (8,174) | $ (1,633) | $ 500,642 | $ (21,711) | $ (23,125) | $ (48,473) | $ (34,554) | $ 493,010 | $ (127,863) | $ (52,990) |
Loss from discontinued operations | (10,338) | (349) | (3,838) | ||||||||
Net Income (Loss) | $ 2,453 | $ (8,008) | $ (11,879) | $ 500,106 | $ (22,532) | $ (21,799) | $ (48,818) | $ (35,063) | 482,672 | (128,212) | (56,828) |
Adjustment for basic earnings per share: | |||||||||||
Earnings allocated to unvested shareholders | (4,346) | (1,811) | (1,858) | ||||||||
Numerator for basic earnings per share: | |||||||||||
From continuing operations | 488,664 | (129,674) | (54,848) | ||||||||
From discontinued operations | (10,338) | (349) | (3,838) | ||||||||
Net income (loss) attributable to parent, basic | 478,326 | (130,023) | (58,686) | ||||||||
Adjustment for diluted earnings per share: | |||||||||||
Effect of reallocating undistributed earnings of unvested shareholders | 7 | ||||||||||
Numerator for diluted earnings per share: | |||||||||||
From continuing operations | 488,671 | (129,674) | (54,848) | ||||||||
From discontinued operations | (10,338) | (349) | (3,838) | ||||||||
Net income (loss) attributable to parent, diluted | $ 478,333 | $ (130,023) | $ (58,686) | ||||||||
Denominator: | |||||||||||
Denominator for basic earnings per share – weighted-average shares | 108,851 | 108,500 | 107,996 | ||||||||
Effect of dilutive shares from stock options and restricted stock (in shares) | 536 | ||||||||||
Denominator for diluted earnings per share – adjusted weighted-average shares | 109,387 | 108,500 | 107,996 | ||||||||
Basic earnings per common share: | |||||||||||
Income (loss) from continuing operations (in dollars per share) | $ 0.02 | $ (0.08) | $ (0.03) | $ 4.57 | $ (0.20) | $ (0.22) | $ (0.45) | $ (0.33) | $ 4.49 | $ (1.20) | $ (0.50) |
Loss from discontinued operations (in dollars per share) | (0.10) | (0.04) | |||||||||
Net income (loss) (in dollars per share) | 0.02 | (0.08) | (0.12) | 4.57 | (0.21) | (0.21) | (0.45) | (0.33) | 4.39 | (1.20) | (0.54) |
Diluted earnings per common share: | |||||||||||
Income (loss) from continuing operations (in dollars per share) | 0.02 | (0.08) | (0.03) | 4.55 | (0.20) | (0.22) | (0.45) | (0.33) | 4.47 | (1.20) | (0.50) |
Loss from discontinued operations (in dollars per share) | (0.10) | (0.04) | |||||||||
Net income (loss) (in dollars per share) | $ 0.02 | $ (0.08) | $ (0.12) | $ 4.55 | $ (0.21) | $ (0.21) | $ (0.45) | $ (0.33) | $ 4.37 | $ (1.20) | $ (0.54) |
Outstanding equity awards | |||||||||||
Shares excluded from calculation of diluted earnings per share (in shares) | 1,559 | 1,008 | 1,788 | ||||||||
Weighted-average price per share (in dollars per share) | $ 68.28 | $ 74.38 | $ 63.73 |
FAIR VALUE MEASUREMENT OF FIN_3
FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS - Assets measured at fair value (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Liabilities: | ||
Contingent earnout liability | $ 11,160 | $ 14,879 |
Total Measure at Fair Value | Recurring basis | ||
Short-term investments: | ||
Short-term investments | 41,461 | |
Cash and cash equivalents | 284,355 | |
Investments | 82,496 | |
Other current assets | 39,830 | |
Other assets | 2,000 | |
Total assets measured at fair value | 450,142 | |
Liabilities: | ||
Contingent earnout liability | 11,160 | |
(Level 1) | ||
Non-qualified Supplemental Savings Plan | ||
Assets held in Non-qualified Supplement Savings Plan, at fair value | 16,200 | $ 13,900 |
(Level 1) | Recurring basis | ||
Short-term investments: | ||
Short-term investments | 22,443 | |
Cash and cash equivalents | 284,355 | |
Investments | 82,496 | |
Other current assets | 39,830 | |
Other assets | 2,000 | |
Total assets measured at fair value | 431,124 | |
(Level 2) | Recurring basis | ||
Short-term investments: | ||
Short-term investments | 19,018 | |
Total assets measured at fair value | 19,018 | |
(Level 3) | Recurring basis | ||
Liabilities: | ||
Contingent earnout liability | 11,160 | |
Certificates of deposit | Total Measure at Fair Value | Recurring basis | ||
Short-term investments: | ||
Short-term investments | 1,500 | |
Certificates of deposit | (Level 2) | Recurring basis | ||
Short-term investments: | ||
Short-term investments | 1,500 | |
Corporate and municipal debt securities | Total Measure at Fair Value | Recurring basis | ||
Short-term investments: | ||
Short-term investments | 17,518 | |
Corporate and municipal debt securities | (Level 2) | Recurring basis | ||
Short-term investments: | ||
Short-term investments | 17,518 | |
U.S. government and federal agency securities | Total Measure at Fair Value | Recurring basis | ||
Short-term investments: | ||
Short-term investments | 22,443 | |
U.S. government and federal agency securities | (Level 1) | Recurring basis | ||
Short-term investments: | ||
Short-term investments | $ 22,443 |
FAIR VALUE MEASUREMENT OF FIN_4
FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS - Level 3 reconciliation (Details) - (Level 3) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Reconciliation of changes in the fair value of our financial assets and liabilities | ||
Net liabilities at beginning of period | $ 14,879 | |
Included in earnings | 6,906 | $ 14,879 |
Settlements | (10,625) | |
Net liabilities at end of period | $ 11,160 | $ 14,879 |
FAIR VALUE MEASUREMENT OF FIN_5
FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS - Long-term debt fair value (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 19, 2015 |
Supplemental fair value information about long-term fixed-rate debt | |||
Long-term debt | $ 493,968 | $ 492,902 | |
Debt issued | 500,000 | 500,000 | |
Unsecured senior notes issued March 19, 2015 | |||
Supplemental fair value information about long-term fixed-rate debt | |||
Debt issued | 500,000 | 500,000 | $ 500,000 |
Carrying value | |||
Supplemental fair value information about long-term fixed-rate debt | |||
Long-term debt | 494,000 | 492,900 | |
Total Measure at Fair Value | (Level 2) | |||
Supplemental fair value information about long-term fixed-rate debt | |||
Fair value of long-term fixed-rate debt | $ 509,300 | $ 529,000 |
FAIR VALUE MEASUREMENT OF FIN_6
FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS - Equity Securities (Details) - Equity securities - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Available-for-sale securities | ||
Cost | $ 38,473 | $ 38,473 |
Gross Unrealized Gains | 44,023 | 31,700 |
Estimated Fair Value | $ 82,496 | $ 70,173 |
EMPLOYEE BENEFIT PLANS - Pensio
EMPLOYEE BENEFIT PLANS - Pension benefit obligations and fair value of plan assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
EMPLOYEE BENEFIT PLANS | |||
Accumulated Benefit Obligation | $ 106,205 | $ 109,976 | |
Changes in projected benefit obligations | |||
Projected benefit obligation at beginning of year | 109,976 | 109,731 | |
Interest cost | 4,077 | 4,053 | $ 4,266 |
Actuarial (gain) loss | (2,143) | 3,633 | |
Benefits paid | (5,705) | (7,441) | |
Projected benefit obligation at end of year | 106,205 | 109,976 | 109,731 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 92,816 | 90,748 | |
Actual return on plan assets | 7,754 | 9,470 | |
Employer contribution | 32 | 39 | |
Benefits paid | (5,705) | (7,441) | |
Fair value of plan assets at end of year | 94,897 | 92,816 | $ 90,748 |
Funded status of the plan at end of year | (11,308) | $ (17,160) | |
Net actuarial loss, which is expected to be amortized in next year's periodic benefit cost | $ 1,200 |
EMPLOYEE BENEFIT PLANS - Recogn
EMPLOYEE BENEFIT PLANS - Recognized in balance sheet and accumulated other comprehensive income (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Amounts Recognized in the Consolidated Balance Sheets | ||
Accrued liabilities | $ (58) | $ (45) |
Noncurrent liabilities-other | (11,250) | (17,115) |
Net amount recognized | (11,308) | (17,160) |
Amounts recognized in accumulated other comprehensive income and not yet reflected in net periodic benefit cost | ||
Net actuarial loss | (21,693) | $ (28,873) |
Net actuarial loss, which is expected to be amortized in next year's periodic benefit cost | $ 1,200 |
EMPLOYEE BENEFIT PLANS - Weight
EMPLOYEE BENEFIT PLANS - Weighted average assumptions (Details) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Weighted average assumptions used for the pension calculations | |||
Discount rate for net periodic benefit costs (as a percent) | 3.79% | 3.64% | 4.27% |
Discount rate for year-end obligations (as a percent) | 4.27% | 3.79% | 3.64% |
Expected return on plan assets (as a percent) | 6.06% | 6.17% | 5.89% |
EMPLOYEE BENEFIT PLANS - Compon
EMPLOYEE BENEFIT PLANS - Components of net periodic pension expense (benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Components of the net periodic pension expense (benefit) | |||
Interest cost | $ 4,077 | $ 4,053 | $ 4,266 |
Expected return on plan assets | (5,555) | (5,130) | (5,616) |
Recognized net actuarial loss | 1,926 | 2,891 | 2,083 |
Settlement | 913 | 1,640 | 4,964 |
Net pension expense | $ 1,361 | $ 3,454 | $ 5,697 |
EMPLOYEE BENEFIT PLANS - Expect
EMPLOYEE BENEFIT PLANS - Expected benefits to be paid (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Expected benefits to be paid from the Pension Plan | |
2,019 | $ 18,075 |
2,020 | 7,433 |
2,021 | 5,684 |
2,022 | 6,351 |
2,023 | 6,665 |
2024-2028 | 31,813 |
Total | $ 76,021 |
EMPLOYEE BENEFIT PLANS - Asset
EMPLOYEE BENEFIT PLANS - Asset and target allocation (Details) | Sep. 30, 2018 | Sep. 30, 2017 |
EMPLOYEE BENEFIT PLANS | ||
Target Allocation (as a percent) | 100.00% | |
Percentage of Plan Assets | 100.00% | 100.00% |
U.S. equities | ||
EMPLOYEE BENEFIT PLANS | ||
Target Allocation (as a percent) | 45.00% | |
Percentage of Plan Assets | 52.00% | 50.00% |
International equities | ||
EMPLOYEE BENEFIT PLANS | ||
Target Allocation (as a percent) | 20.00% | |
Percentage of Plan Assets | 15.00% | 16.00% |
Fixed income | ||
EMPLOYEE BENEFIT PLANS | ||
Target Allocation (as a percent) | 35.00% | |
Percentage of Plan Assets | 33.00% | 34.00% |
EMPLOYEE BENEFIT PLANS - Plan A
EMPLOYEE BENEFIT PLANS - Plan Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
PLAN ASSETS | |||
Fair value of plan assets | $ 94,897 | $ 92,816 | $ 90,748 |
(Level 1) | |||
PLAN ASSETS | |||
Fair value of plan assets | 92,320 | 92,719 | |
(Level 1) | Short-term investments. | |||
PLAN ASSETS | |||
Fair value of plan assets | 2,745 | 3,488 | |
(Level 1) | Mutual funds | |||
PLAN ASSETS | |||
Fair value of plan assets | 68,804 | 69,539 | |
(Level 1) | Domestic stock funds | |||
PLAN ASSETS | |||
Fair value of plan assets | 18,361 | 18,377 | |
(Level 1) | Bond funds | |||
PLAN ASSETS | |||
Fair value of plan assets | 17,918 | 18,357 | |
(Level 1) | Balanced funds | |||
PLAN ASSETS | |||
Fair value of plan assets | 17,977 | 18,222 | |
(Level 1) | International stock funds | |||
PLAN ASSETS | |||
Fair value of plan assets | 14,548 | 14,583 | |
(Level 1) | Domestic common stock | |||
PLAN ASSETS | |||
Fair value of plan assets | 20,771 | 19,692 | |
(Level 2) | |||
PLAN ASSETS | |||
Fair value of plan assets | 2,461 | ||
(Level 2) | Domestic common stock | |||
PLAN ASSETS | |||
Fair value of plan assets | 2,461 | ||
(Level 3) | |||
PLAN ASSETS | |||
Fair value of plan assets | 116 | 97 | $ 177 |
(Level 3) | Oil and Gas Properties | |||
PLAN ASSETS | |||
Fair value of plan assets | 116 | 97 | |
Total Measure at Fair Value | |||
PLAN ASSETS | |||
Fair value of plan assets | 94,897 | 92,816 | |
Total Measure at Fair Value | Short-term investments. | |||
PLAN ASSETS | |||
Fair value of plan assets | 2,745 | 3,488 | |
Total Measure at Fair Value | Mutual funds | |||
PLAN ASSETS | |||
Fair value of plan assets | 68,804 | 69,539 | |
Total Measure at Fair Value | Domestic stock funds | |||
PLAN ASSETS | |||
Fair value of plan assets | 18,361 | 18,377 | |
Total Measure at Fair Value | Bond funds | |||
PLAN ASSETS | |||
Fair value of plan assets | 17,918 | 18,357 | |
Total Measure at Fair Value | Balanced funds | |||
PLAN ASSETS | |||
Fair value of plan assets | 17,977 | 18,222 | |
Total Measure at Fair Value | International stock funds | |||
PLAN ASSETS | |||
Fair value of plan assets | 14,548 | 14,583 | |
Total Measure at Fair Value | Domestic common stock | |||
PLAN ASSETS | |||
Fair value of plan assets | 23,232 | 19,692 | |
Total Measure at Fair Value | Oil and Gas Properties | |||
PLAN ASSETS | |||
Fair value of plan assets | $ 116 | $ 97 |
EMPLOYEE BENEFIT PLANS - Change
EMPLOYEE BENEFIT PLANS - Change in fair value (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Change in plan assets | ||
Fair value of plan assets at beginning of year | $ 92,816 | $ 90,748 |
Fair value of plan assets at end of year | 94,897 | 92,816 |
(Level 3) | ||
Change in plan assets | ||
Fair value of plan assets at beginning of year | 97 | 177 |
Unrealized gains (losses) relating to property still held at the reporting date | 19 | (80) |
Fair value of plan assets at end of year | $ 116 | $ 97 |
EMPLOYEE BENEFIT PLANS - Define
EMPLOYEE BENEFIT PLANS - Defined contribution plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
DEFINED CONTRIBUTION PLAN | |||
Percentage of employer's contribution under 401(k)/ Thrift Plan matching the first 5 percent of participant's compensation subject to certain limitations | 100.00% | ||
Percentage of participant's compensation eligible for employer's matching contribution | 5.00% | ||
Annual expense incurred for defined contribution plan | $ 26.6 | $ 16.6 | $ 21.6 |
General and Administrative | |||
DEFINED CONTRIBUTION PLAN | |||
Employer contribution | $ 6.3 |
SUPPLEMENTAL BALANCE SHEET IN_3
SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reserve for bad debt: | |||
Balance at the beginning of the period | $ 5,721 | $ 2,696 | $ 6,181 |
Provision for bad debt | 2,193 | 2,016 | |
(Recovery of) bad debt | (2,013) | ||
(Write-off) of bad debt | (1,472) | ||
Recovery of write-off of bad debt | (1,697) | 1,009 | |
Balance at the end of the period | 6,217 | 5,721 | $ 2,696 |
Accounts receivable, net of reserve: | |||
Trade receivables | 530,859 | 398,348 | |
Income tax receivable | 34,343 | 78,726 | |
Total accounts receivable, net of reserve | 565,202 | 477,074 | |
Prepaid expenses and other current assets: | |||
Restricted cash | 39,830 | 32,439 | |
Deferred mobilization | 6,484 | 6,458 | |
Prepaid insurance | 6,149 | 4,060 | |
Prepaid value added tax | 1,931 | 3,870 | |
Prepaid maintenance and rent | 8,526 | 5,940 | |
Prepaid multi-flex rig fabrication | 1,327 | ||
Other | 2,151 | 2,356 | |
Total prepaid expenses and other current assets | 66,398 | 55,123 | |
Accrued liabilities: | |||
Accrued operating costs | 37,528 | 36,949 | |
Payroll and employee benefits | 80,915 | 54,941 | |
Taxes payable, other than income tax | 50,683 | 35,638 | |
Self-insurance liabilities | 15,887 | 22,159 | |
Deferred income | 20,527 | 25,893 | |
Deferred mobilization | 9,662 | 9,828 | |
Accrued income taxes | 7,375 | 8,011 | |
Escrow | 11,258 | 4,690 | |
Litigation and claims | 1,749 | 1,779 | |
Other | 8,920 | 8,869 | |
Total accrued liabilities | 244,504 | 208,757 | |
Noncurrent liabilities - Other: | |||
Pension and other non-qualified retirement plans | 35,051 | 37,989 | |
Self-insurance liabilities | 39,380 | 29,037 | |
Contingent earnout liability | 11,160 | 14,879 | |
Deferred mobilization | 2,738 | 7,689 | |
Uncertain tax positions including interest and penalties | 2,870 | 3,562 | |
Other | 2,407 | 8,253 | |
Total noncurrent liabilities - other | $ 93,606 | $ 101,409 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Purchase obligations | |||
Purchase orders outstanding for equipment, parts and supplies | $ 110,400 | ||
Fiscal Year | |||
2,019 | 9,113 | ||
2,020 | 6,670 | ||
2,021 | 4,357 | ||
2,022 | 3,985 | ||
2,023 | 3,721 | ||
Thereafter | 5,095 | ||
Total | 32,941 | ||
Commitments and Contingencies | |||
Total rent expense | 13,700 | $ 14,000 | $ 13,500 |
Contingencies | |||
Contingent gains recognized in consolidated financial statements | $ 0 | ||
Office space near downtown Tulsa, Oklahoma | |||
Contingencies | |||
Number of renewal options | 2 | ||
Lease renewal term | 5 years |
BUSINESS SEGMENT AND GEOGRAPH_3
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION - Income by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment information | |||||||||||
Total Sales | $ 696,825 | $ 648,872 | $ 577,484 | $ 564,087 | $ 532,304 | $ 498,564 | $ 405,283 | $ 368,590 | $ 2,487,268 | $ 1,804,741 | $ 1,624,232 |
Segment Operating Income (Loss) | 148,349 | (87,352) | 68,200 | ||||||||
Depreciation | 583,802 | 585,543 | 598,587 | ||||||||
Total Assets | 6,214,867 | 6,439,985 | 6,214,867 | 6,439,985 | 6,831,955 | ||||||
Additions to Long-Lived Assets | 468,830 | 408,106 | 241,290 | ||||||||
U.S. Land | |||||||||||
Segment information | |||||||||||
Total Sales | 2,069,384 | 1,439,523 | 1,242,462 | ||||||||
Segment Operating Income (Loss) | 150,698 | (94,880) | 74,118 | ||||||||
Depreciation | 505,112 | 499,486 | 508,237 | ||||||||
Total Assets | 5,012,378 | 4,967,074 | 5,012,378 | 4,967,074 | 5,005,299 | ||||||
Additions to Long-Lived Assets | 441,624 | 394,508 | 209,156 | ||||||||
Offshore | |||||||||||
Segment information | |||||||||||
Total Sales | 142,500 | 136,263 | 138,601 | ||||||||
Segment Operating Income (Loss) | 26,124 | 24,201 | 15,659 | ||||||||
Depreciation | 10,392 | 11,764 | 12,495 | ||||||||
Total Assets | 105,439 | 99,533 | 105,439 | 99,533 | 105,152 | ||||||
Additions to Long-Lived Assets | 4,326 | 2,847 | 9,694 | ||||||||
International Land | |||||||||||
Segment information | |||||||||||
Total Sales | 238,356 | 212,972 | 229,894 | ||||||||
Segment Operating Income (Loss) | (683) | (7,224) | (14,086) | ||||||||
Depreciation | 46,826 | 53,622 | 57,102 | ||||||||
Total Assets | 362,033 | 413,392 | 362,033 | 413,392 | 487,181 | ||||||
Additions to Long-Lived Assets | 4,424 | 3,400 | 2,364 | ||||||||
Other | |||||||||||
Segment information | |||||||||||
Total Sales | 39,243 | 16,845 | 14,130 | ||||||||
Segment Operating Income (Loss) | (27,790) | (9,449) | (7,491) | ||||||||
Depreciation | 21,472 | 20,671 | 20,753 | ||||||||
Total Assets | $ 735,017 | $ 959,986 | 735,017 | 959,986 | 1,234,323 | ||||||
Additions to Long-Lived Assets | 18,456 | 7,351 | 20,076 | ||||||||
Operating segment | |||||||||||
Segment information | |||||||||||
Total Sales | 2,487,268 | 1,804,741 | 1,624,232 | ||||||||
Operating segment | U.S. Land | |||||||||||
Segment information | |||||||||||
Total Sales | 2,068,195 | 1,439,523 | 1,242,462 | ||||||||
Operating segment | Offshore | |||||||||||
Segment information | |||||||||||
Total Sales | 142,500 | 136,263 | 138,601 | ||||||||
Operating segment | International Land | |||||||||||
Segment information | |||||||||||
Total Sales | 238,356 | 212,972 | 229,894 | ||||||||
Operating segment | Other | |||||||||||
Segment information | |||||||||||
Total Sales | 38,217 | 15,983 | 13,275 | ||||||||
Inter-Segment | |||||||||||
Segment information | |||||||||||
Total Sales | (2,215) | (862) | (855) | ||||||||
Inter-Segment | U.S. Land | |||||||||||
Segment information | |||||||||||
Total Sales | 1,189 | ||||||||||
Inter-Segment | Other | |||||||||||
Segment information | |||||||||||
Total Sales | $ 1,026 | $ 862 | $ 855 |
BUSINESS SEGMENT AND GEOGRAPH_4
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION - Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation of segment operating income to income from continuing operations before income taxes | |||||||||||
Segment operating income (loss) | $ 148,349 | $ (87,352) | $ 68,200 | ||||||||
Income from asset sales | 22,660 | 20,627 | 9,896 | ||||||||
Acquisition related costs | (8,153) | ||||||||||
Corporate general and administrative costs and corporate depreciation | (131,254) | (105,816) | (104,062) | ||||||||
Operating income (loss) from continuing operations | $ 23,118 | $ 6,217 | $ (1,253) | $ 3,520 | $ (29,677) | $ (28,028) | $ (65,672) | $ (49,164) | 31,602 | (172,541) | (25,966) |
Other income (expense) | |||||||||||
Interest and dividend income | 8,017 | 5,915 | 3,166 | ||||||||
Interest expense | (24,265) | (19,747) | (22,913) | ||||||||
Loss on investment securities | 1 | (25,989) | |||||||||
Other | 486 | 1,775 | (965) | ||||||||
Total other income (expense) | (15,761) | (12,057) | (46,701) | ||||||||
Income (loss) from continuing operations before income taxes | $ 15,841 | $ (184,598) | $ (72,667) |
BUSINESS SEGMENT AND GEOGRAPH_5
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION - Revenue from external customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment information | |||||||||||
Operating revenues | $ 696,825 | $ 648,872 | $ 577,484 | $ 564,087 | $ 532,304 | $ 498,564 | $ 405,283 | $ 368,590 | $ 2,487,268 | $ 1,804,741 | $ 1,624,232 |
Property, plant and equipment, net | 4,857,382 | 5,001,051 | 4,857,382 | 5,001,051 | 5,144,733 | ||||||
United States | |||||||||||
Segment information | |||||||||||
Operating revenues | 2,247,400 | 1,591,769 | 1,386,786 | ||||||||
Property, plant and equipment, net | 4,591,913 | 4,686,235 | 4,591,913 | 4,686,235 | 4,804,328 | ||||||
Argentina | |||||||||||
Segment information | |||||||||||
Operating revenues | 190,038 | 157,257 | 159,427 | ||||||||
Property, plant and equipment, net | 133,617 | 155,978 | 133,617 | 155,978 | 183,286 | ||||||
Colombia | |||||||||||
Segment information | |||||||||||
Operating revenues | 38,793 | 37,554 | 20,488 | ||||||||
Property, plant and equipment, net | 74,042 | 81,798 | 74,042 | 81,798 | 91,815 | ||||||
Ecuador | |||||||||||
Segment information | |||||||||||
Operating revenues | 6 | 4,948 | |||||||||
Property, plant and equipment, net | 10,781 | 22,298 | 10,781 | 22,298 | 438 | ||||||
Other Foreign | |||||||||||
Segment information | |||||||||||
Operating revenues | 11,037 | 18,155 | 52,583 | ||||||||
Property, plant and equipment, net | $ 47,029 | $ 54,742 | $ 47,029 | $ 54,742 | $ 64,866 |
GUARANTOR AND NON-GUARANTOR F_3
GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION - Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Mar. 19, 2015 | |
Financial Information | |||
Percentage ownership of subsidiary | 100.00% | ||
Debt issued | $ 500,000 | $ 500,000 | |
Unsecured senior notes issued March 19, 2015 | |||
Financial Information | |||
Debt issued | 500,000 | $ 500,000 | $ 500,000 |
Issuer Subsidiary | Unsecured senior notes issued March 19, 2015 | |||
Financial Information | |||
Debt issued | $ 500,000 |
GUARANTOR AND NON-GUARANTOR F_4
GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION - Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
Current assets: | ||||
Cash and cash equivalents | $ 284,355 | $ 521,375 | $ 905,561 | $ 729,384 |
Short-term investments | 41,461 | 44,491 | ||
Accounts receivable, net of allowance | 565,202 | 477,074 | ||
Inventories of materials and supplies, net | 158,134 | 137,204 | ||
Prepaid expenses and other | 66,398 | 55,123 | ||
Total current assets | 1,115,550 | 1,235,267 | ||
Investments | 98,696 | 84,026 | ||
Property, plant and equipment, net | 4,857,382 | 5,001,051 | 5,144,733 | |
Goodwill | 64,777 | 51,705 | 4,718 | |
Intangible assets, net | 73,207 | 50,785 | ||
Other assets | 5,255 | 17,154 | ||
Total Assets | 6,214,867 | 6,439,988 | ||
Current Liabilities: | ||||
Accounts payable | 132,664 | 135,628 | ||
Accrued liabilities | 244,504 | 208,757 | ||
Total current liabilities | 377,168 | 344,385 | ||
Noncurrent Liabilities: | ||||
Long-term debt | 493,968 | 492,902 | ||
Deferred income taxes | 853,136 | 1,332,689 | ||
Other | 93,606 | 101,409 | ||
Noncurrent liabilities - discontinued operations | 14,254 | 4,012 | ||
Total noncurrent liabilities | 1,454,964 | 1,931,012 | ||
Shareholders' Equity: | ||||
Common stock | 11,201 | 11,196 | ||
Additional paid-in capital | 500,393 | 487,248 | ||
Retained earnings | 4,027,779 | 3,855,686 | ||
Accumulated other comprehensive income (loss) | 16,550 | 2,300 | ||
Treasury stock, at cost, 3,015,243 shares and 3,352,828 shares as of September 30, 2018 and 2017, respectively | (173,188) | (191,839) | ||
Total shareholders' equity | 4,382,735 | 4,164,591 | 4,560,925 | 4,895,846 |
Total liabilities and shareholders' equity | 6,214,867 | 6,439,988 | ||
Eliminations | ||||
Current assets: | ||||
Accounts receivable, net of allowance | (272) | (5) | ||
Prepaid expenses and other | (573) | (442) | ||
Total current assets | (845) | (447) | ||
Intercompany receivables | (2,480,390) | (2,086,087) | ||
Investment in subsidiaries | (6,153,710) | (5,653,432) | ||
Total Assets | (8,634,945) | (7,739,966) | ||
Current Liabilities: | ||||
Accounts payable | (264) | |||
Accrued liabilities | (580) | (447) | ||
Total current liabilities | (844) | (447) | ||
Noncurrent Liabilities: | ||||
Intercompany payables | (2,480,290) | (2,085,987) | ||
Total noncurrent liabilities | (2,480,290) | (2,085,987) | ||
Shareholders' Equity: | ||||
Common stock | (100) | (100) | ||
Additional paid-in capital | (53,477) | (53,476) | ||
Retained earnings | (6,080,404) | (5,593,218) | ||
Accumulated other comprehensive income (loss) | (19,830) | (6,738) | ||
Total shareholders' equity | (6,153,811) | (5,653,532) | ||
Total liabilities and shareholders' equity | (8,634,945) | (7,739,966) | ||
Guarantor/Parent | Reportable Legal Entities | ||||
Current assets: | ||||
Accounts receivable, net of allowance | (29) | 766 | ||
Prepaid expenses and other | 20,783 | 12,200 | ||
Total current assets | 20,754 | 12,966 | ||
Investments | 16,200 | 13,853 | ||
Property, plant and equipment, net | 46,859 | 49,851 | ||
Intercompany receivables | 161,532 | 90,885 | ||
Other assets | 268 | 4,955 | ||
Investment in subsidiaries | 5,981,197 | 5,470,050 | ||
Total Assets | 6,226,810 | 5,642,560 | ||
Current Liabilities: | ||||
Accounts payable | 83,819 | 82,947 | ||
Accrued liabilities | 43,449 | 26,698 | ||
Total current liabilities | 127,268 | 109,645 | ||
Noncurrent Liabilities: | ||||
Deferred income taxes | (7,112) | (11,201) | ||
Intercompany payables | 1,701,694 | 1,354,068 | ||
Other | 22,225 | 25,457 | ||
Total noncurrent liabilities | 1,716,807 | 1,368,324 | ||
Shareholders' Equity: | ||||
Common stock | 11,201 | 11,196 | ||
Additional paid-in capital | 500,393 | 487,248 | ||
Retained earnings | 4,027,779 | 3,855,686 | ||
Accumulated other comprehensive income (loss) | 16,550 | 2,300 | ||
Treasury stock, at cost, 3,015,243 shares and 3,352,828 shares as of September 30, 2018 and 2017, respectively | (173,188) | (191,839) | ||
Total shareholders' equity | 4,382,735 | 4,164,591 | ||
Total liabilities and shareholders' equity | 6,226,810 | 5,642,560 | ||
Issuer Subsidiary | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 273,214 | 507,504 | 898,073 | 692,435 |
Short-term investments | 41,461 | 44,491 | ||
Accounts receivable, net of allowance | 499,644 | 411,599 | ||
Inventories of materials and supplies, net | 127,154 | 102,470 | ||
Prepaid expenses and other | 10,649 | 6,383 | ||
Total current assets | 952,122 | 1,072,447 | ||
Investments | 82,496 | 70,173 | ||
Property, plant and equipment, net | 4,515,077 | 4,609,144 | ||
Intercompany receivables | 2,024,652 | 1,746,662 | ||
Other assets | 907 | 3,839 | ||
Investment in subsidiaries | 172,513 | 183,382 | ||
Total Assets | 7,747,767 | 7,685,647 | ||
Current Liabilities: | ||||
Accounts payable | 43,626 | 48,092 | ||
Accrued liabilities | 164,542 | 148,491 | ||
Total current liabilities | 208,168 | 196,583 | ||
Noncurrent Liabilities: | ||||
Long-term debt | 493,968 | 492,902 | ||
Deferred income taxes | 834,714 | 1,286,381 | ||
Intercompany payables | 178,759 | 210,823 | ||
Other | 48,836 | 43,471 | ||
Total noncurrent liabilities | 1,556,277 | 2,033,577 | ||
Shareholders' Equity: | ||||
Common stock | 100 | 100 | ||
Additional paid-in capital | 52,437 | 52,437 | ||
Retained earnings | 5,910,955 | 5,396,212 | ||
Accumulated other comprehensive income (loss) | 19,830 | 6,738 | ||
Total shareholders' equity | 5,983,322 | 5,455,487 | ||
Total liabilities and shareholders' equity | 7,747,767 | 7,685,647 | ||
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 11,141 | 13,871 | $ 7,488 | $ 36,949 |
Accounts receivable, net of allowance | 65,859 | 64,714 | ||
Inventories of materials and supplies, net | 30,980 | 34,734 | ||
Prepaid expenses and other | 35,539 | 36,982 | ||
Total current assets | 143,519 | 150,301 | ||
Property, plant and equipment, net | 295,446 | 342,056 | ||
Intercompany receivables | 294,206 | 248,540 | ||
Goodwill | 64,777 | 51,705 | ||
Intangible assets, net | 73,207 | 50,785 | ||
Other assets | 4,080 | 8,360 | ||
Total Assets | 875,235 | 851,747 | ||
Current Liabilities: | ||||
Accounts payable | 5,483 | 4,589 | ||
Accrued liabilities | 37,093 | 34,015 | ||
Total current liabilities | 42,576 | 38,604 | ||
Noncurrent Liabilities: | ||||
Deferred income taxes | 25,534 | 57,509 | ||
Intercompany payables | 599,837 | 521,096 | ||
Other | 22,545 | 32,481 | ||
Noncurrent liabilities - discontinued operations | 14,254 | 4,012 | ||
Total noncurrent liabilities | 662,170 | 615,098 | ||
Shareholders' Equity: | ||||
Additional paid-in capital | 1,040 | 1,039 | ||
Retained earnings | 169,449 | 197,006 | ||
Total shareholders' equity | 170,489 | 198,045 | ||
Total liabilities and shareholders' equity | $ 875,235 | $ 851,747 |
GUARANTOR AND NON-GUARANTOR F_5
GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION - Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS | |||||||||||
Operating revenue | $ 696,825 | $ 648,872 | $ 577,484 | $ 564,087 | $ 532,304 | $ 498,564 | $ 405,283 | $ 368,590 | $ 2,487,268 | $ 1,804,741 | $ 1,624,232 |
Operating costs and other | 2,455,666 | 1,977,282 | 1,650,198 | ||||||||
Operating income (loss) from continuing operations | 23,118 | 6,217 | (1,253) | 3,520 | (29,677) | (28,028) | (65,672) | (49,164) | 31,602 | (172,541) | (25,966) |
Other (expense) income, net | 8,504 | 7,690 | (23,788) | ||||||||
Interest expense | (24,265) | (19,747) | (22,913) | ||||||||
Income (loss) from continuing operations before income taxes | 15,841 | (184,598) | (72,667) | ||||||||
Income tax (benefit) provision | (477,169) | (56,735) | (19,677) | ||||||||
Income (loss) from continuing operations | 2,175 | (8,174) | (1,633) | 500,642 | (21,711) | (23,125) | (48,473) | (34,554) | 493,010 | (127,863) | (52,990) |
Income from discontinued operations before income taxes | 23,389 | 3,285 | 2,360 | ||||||||
Income tax provision | 33,727 | 3,634 | 6,198 | ||||||||
Loss from discontinued operations | (10,338) | (349) | (3,838) | ||||||||
Net income (loss) | $ 2,453 | $ (8,008) | $ (11,879) | $ 500,106 | $ (22,532) | $ (21,799) | $ (48,818) | $ (35,063) | 482,672 | (128,212) | (56,828) |
Eliminations | |||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS | |||||||||||
Operating revenue | (87) | (67) | (70) | ||||||||
Operating costs and other | (938) | (882) | (1,323) | ||||||||
Operating income (loss) from continuing operations | 851 | 815 | 1,253 | ||||||||
Other (expense) income, net | (851) | (815) | (1,253) | ||||||||
Equity in net income (loss) of subsidiaries | (487,016) | 124,224 | 61,638 | ||||||||
Income (loss) from continuing operations before income taxes | (487,016) | 124,224 | 61,638 | ||||||||
Income (loss) from continuing operations | (487,016) | 124,224 | 61,638 | ||||||||
Net income (loss) | (487,016) | 124,224 | 61,638 | ||||||||
Guarantor/Parent | Reportable Legal Entities | |||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS | |||||||||||
Operating costs and other | 14,276 | 16,566 | 13,145 | ||||||||
Operating income (loss) from continuing operations | (14,276) | (16,566) | (13,145) | ||||||||
Other (expense) income, net | 526 | (240) | (194) | ||||||||
Interest expense | (499) | (398) | (375) | ||||||||
Equity in net income (loss) of subsidiaries | 498,055 | (116,212) | (47,166) | ||||||||
Income (loss) from continuing operations before income taxes | 483,806 | (133,416) | (60,880) | ||||||||
Income tax (benefit) provision | 1,134 | (5,204) | (4,052) | ||||||||
Income (loss) from continuing operations | 482,672 | (128,212) | (56,828) | ||||||||
Net income (loss) | 482,672 | (128,212) | (56,828) | ||||||||
Issuer Subsidiary | Reportable Legal Entities | |||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS | |||||||||||
Operating revenue | 2,210,695 | 1,575,787 | 1,373,511 | ||||||||
Operating costs and other | 2,120,465 | 1,707,473 | 1,358,269 | ||||||||
Operating income (loss) from continuing operations | 90,230 | (131,686) | 15,242 | ||||||||
Other (expense) income, net | 7,363 | 7,342 | (22,243) | ||||||||
Interest expense | (20,426) | (20,136) | (20,256) | ||||||||
Equity in net income (loss) of subsidiaries | (11,039) | (8,012) | (14,472) | ||||||||
Income (loss) from continuing operations before income taxes | 66,128 | (152,492) | (41,729) | ||||||||
Income tax (benefit) provision | (448,613) | (38,600) | 5,127 | ||||||||
Income (loss) from continuing operations | 514,741 | (113,892) | (46,856) | ||||||||
Net income (loss) | 514,741 | (113,892) | (46,856) | ||||||||
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS | |||||||||||
Operating revenue | 276,660 | 229,021 | 250,791 | ||||||||
Operating costs and other | 321,863 | 254,125 | 280,107 | ||||||||
Operating income (loss) from continuing operations | (45,203) | (25,104) | (29,316) | ||||||||
Other (expense) income, net | 1,466 | 1,403 | (98) | ||||||||
Interest expense | (3,340) | 787 | (2,282) | ||||||||
Income (loss) from continuing operations before income taxes | (47,077) | (22,914) | (31,696) | ||||||||
Income tax (benefit) provision | (29,690) | (12,931) | (20,752) | ||||||||
Income (loss) from continuing operations | (17,387) | (9,983) | (10,944) | ||||||||
Income from discontinued operations before income taxes | 23,389 | 3,285 | 2,360 | ||||||||
Income tax provision | 33,727 | 3,634 | 6,198 | ||||||||
Loss from discontinued operations | (10,338) | (349) | (3,838) | ||||||||
Net income (loss) | $ (27,725) | $ (10,332) | $ (14,782) |
GUARANTOR AND NON-GUARANTOR F_6
GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION - Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net income (loss) | $ 2,453 | $ (8,008) | $ (11,879) | $ 500,106 | $ (22,532) | $ (21,799) | $ (48,818) | $ (35,063) | $ 482,672 | $ (128,212) | $ (56,828) |
Other comprehensive income (loss), net of income taxes: | |||||||||||
Unrealized appreciation (depreciation) on securities, net | 9,001 | (829) | 2,772 | ||||||||
Reclassification of realized (gains) losses in net income, net | 926 | ||||||||||
Minimum pension liability adjustments, net | 5,249 | 3,333 | (2,525) | ||||||||
Other comprehensive income | 14,250 | 2,504 | 1,173 | ||||||||
Comprehensive income (loss) | 496,922 | (125,708) | (55,655) | ||||||||
Eliminations | |||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net income (loss) | (487,016) | 124,224 | 61,638 | ||||||||
Other comprehensive income (loss), net of income taxes: | |||||||||||
Comprehensive income (loss) | (487,016) | 124,224 | 61,638 | ||||||||
Guarantor/Parent | Reportable Legal Entities | |||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net income (loss) | 482,672 | (128,212) | (56,828) | ||||||||
Other comprehensive income (loss), net of income taxes: | |||||||||||
Minimum pension liability adjustments, net | 1,137 | 860 | (63) | ||||||||
Other comprehensive income | 1,137 | 860 | (63) | ||||||||
Comprehensive income (loss) | 483,809 | (127,352) | (56,891) | ||||||||
Issuer Subsidiary | Reportable Legal Entities | |||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net income (loss) | 514,741 | (113,892) | (46,856) | ||||||||
Other comprehensive income (loss), net of income taxes: | |||||||||||
Unrealized appreciation (depreciation) on securities, net | 9,001 | (829) | 2,772 | ||||||||
Reclassification of realized (gains) losses in net income, net | 926 | ||||||||||
Minimum pension liability adjustments, net | 4,112 | 2,473 | (2,462) | ||||||||
Other comprehensive income | 13,113 | 1,644 | 1,236 | ||||||||
Comprehensive income (loss) | 527,854 | (112,248) | (45,620) | ||||||||
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net income (loss) | (27,725) | (10,332) | (14,782) | ||||||||
Other comprehensive income (loss), net of income taxes: | |||||||||||
Comprehensive income (loss) | $ (27,725) | $ (10,332) | $ (14,782) |
GUARANTOR AND NON-GUARANTOR F_7
GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION - Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS | |||
Net cash (used in) provided by operating activities | $ 544,531 | $ 361,631 | $ 754,531 |
Cash flows from investing activities: | |||
Capital expenditures | (466,584) | (397,567) | (257,169) |
Purchase of short-term investments | (71,049) | (69,866) | (57,276) |
Payment for acquisition of business, net of cash acquired | (47,886) | (70,416) | |
Proceeds from sale of short-term investments | 68,776 | 69,449 | 58,381 |
Proceeds from asset sales | 44,381 | 23,412 | 21,845 |
Net cash used in investing activities | (472,362) | (444,988) | (234,219) |
Cash flows from financing activities: | |||
Payments on long-term debt | (40,000) | ||
Debt issuance costs | (1,111) | ||
Dividends paid | (308,430) | (305,515) | (300,152) |
Payments for employee taxes on net settlement of equity awards | (7,114) | (6,599) | (5,646) |
Proceeds from stock option exercises | 6,355 | 11,285 | 2,774 |
Net cash used in financing activities | (309,189) | (300,829) | (344,135) |
Net increase (decrease) in cash and cash equivalents | (237,020) | (384,186) | 176,177 |
Cash and cash equivalents, beginning of period | 521,375 | 905,561 | 729,384 |
Cash and cash equivalents, end of period | 284,355 | 521,375 | 905,561 |
Guarantor/Parent | Reportable Legal Entities | |||
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS | |||
Net cash (used in) provided by operating activities | 759 | (4,686) | 2,863 |
Cash flows from investing activities: | |||
Capital expenditures | (12,723) | (4,264) | (16,119) |
Payment for acquisition of business, net of cash acquired | (47,886) | (70,416) | |
Intercompany transfers | 60,609 | 74,680 | 16,119 |
Proceeds from asset sales | 9 | ||
Net cash used in investing activities | 9 | ||
Cash flows from financing activities: | |||
Intercompany transfers | 308,430 | 305,515 | 300,152 |
Dividends paid | (308,430) | (305,515) | (300,152) |
Payments for employee taxes on net settlement of equity awards | (7,114) | (6,599) | (5,646) |
Proceeds from stock option exercises | 6,355 | 11,285 | 2,774 |
Net cash used in financing activities | (759) | 4,686 | (2,872) |
Issuer Subsidiary | Reportable Legal Entities | |||
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS | |||
Net cash (used in) provided by operating activities | 539,476 | 354,711 | 777,756 |
Cash flows from investing activities: | |||
Capital expenditures | (443,743) | (387,392) | (235,078) |
Purchase of short-term investments | (71,049) | (69,866) | (57,276) |
Proceeds from sale of short-term investments | 68,776 | 69,449 | 58,381 |
Intercompany transfers | (60,609) | (74,680) | (16,119) |
Proceeds from asset sales | 41,289 | 22,724 | 19,237 |
Net cash used in investing activities | (465,336) | (439,765) | (230,855) |
Cash flows from financing activities: | |||
Payments on long-term debt | (40,000) | ||
Debt issuance costs | (1,111) | ||
Intercompany transfers | (308,430) | (305,515) | (300,152) |
Net cash used in financing activities | (308,430) | (305,515) | (341,263) |
Net increase (decrease) in cash and cash equivalents | (234,290) | (390,569) | 205,638 |
Cash and cash equivalents, beginning of period | 507,504 | 898,073 | 692,435 |
Cash and cash equivalents, end of period | 273,214 | 507,504 | 898,073 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS | |||
Net cash (used in) provided by operating activities | 4,296 | 11,606 | (26,088) |
Cash flows from investing activities: | |||
Capital expenditures | (10,118) | (5,911) | (5,972) |
Proceeds from asset sales | 3,092 | 688 | 2,599 |
Net cash used in investing activities | (7,026) | (5,223) | (3,373) |
Cash flows from financing activities: | |||
Net increase (decrease) in cash and cash equivalents | (2,730) | 6,383 | (29,461) |
Cash and cash equivalents, beginning of period | 13,871 | 7,488 | 36,949 |
Cash and cash equivalents, end of period | $ 11,141 | $ 13,871 | $ 7,488 |
SELECTED QUARTERLY FINANCIAL _3
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||
Operating revenues | $ 696,825 | $ 648,872 | $ 577,484 | $ 564,087 | $ 532,304 | $ 498,564 | $ 405,283 | $ 368,590 | $ 2,487,268 | $ 1,804,741 | $ 1,624,232 |
Operating income (loss) | 23,118 | 6,217 | (1,253) | 3,520 | (29,677) | (28,028) | (65,672) | (49,164) | 31,602 | (172,541) | (25,966) |
Income (loss) from continuing operations | 2,175 | (8,174) | (1,633) | 500,642 | (21,711) | (23,125) | (48,473) | (34,554) | 493,010 | (127,863) | (52,990) |
Net income (loss) | $ 2,453 | $ (8,008) | $ (11,879) | $ 500,106 | $ (22,532) | $ (21,799) | $ (48,818) | $ (35,063) | $ 482,672 | $ (128,212) | $ (56,828) |
Basic earnings per common share: | |||||||||||
Income (loss) from continuing operations (in dollars per share) | $ 0.02 | $ (0.08) | $ (0.03) | $ 4.57 | $ (0.20) | $ (0.22) | $ (0.45) | $ (0.33) | $ 4.49 | $ (1.20) | $ (0.50) |
Net income (loss) (in dollars per share) | 0.02 | (0.08) | (0.12) | 4.57 | (0.21) | (0.21) | (0.45) | (0.33) | 4.39 | (1.20) | (0.54) |
Diluted earnings per common share: | |||||||||||
Income (loss) from continuing operations (in dollars per share) | 0.02 | (0.08) | (0.03) | 4.55 | (0.20) | (0.22) | (0.45) | (0.33) | 4.47 | (1.20) | (0.50) |
Net income (in dollars per share) | $ 0.02 | $ (0.08) | $ (0.12) | $ 4.55 | $ (0.21) | $ (0.21) | $ (0.45) | $ (0.33) | $ 4.37 | $ (1.20) | $ (0.54) |
Income tax expense (benefit) related to new tax act | $ 502,100 | $ 502,100 | |||||||||
Diluted earnings per share related to Tax Cuts and Jobs Act of 2017 (in dollars per share) | $ 4.59 | ||||||||||
Gain (loss) from the sale of assets, net | $ 5,500 | $ 3,100 | $ 3,800 | $ 4,200 | $ 2,300 | $ 1,300 | $ 10,100 | $ 600 | |||
Gain (loss) from the sale of assets, per diluted share (in dollars per share) | $ 0.05 | $ 0.02 | $ 0.04 | $ 0.04 | $ 0.02 | $ 0.01 | $ 0.09 | $ 0.01 | |||
Asset impairment, net of tax | $ 17,200 | ||||||||||
Asset impairment charge, net of tax per diluted share (in dollars per share) | $ 0.16 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Jul. 13, 2016USD ($) | Nov. 13, 2018USD ($) | Sep. 30, 2018USD ($)letter |
2016 Credit Facility | |||
Subsequent Event | |||
Maximum borrowing capacity | $ 300,000,000 | ||
Commitment fee (as a percent) | 0.15% | ||
Borrowing amount outstanding | $ 0 | ||
Available borrowing capacity | $ 260,700,000 | ||
2016 Credit Facility | Minimum | |||
Subsequent Event | |||
Commitment fee (as a percent) | 0.15% | ||
2016 Credit Facility | Maximum | |||
Subsequent Event | |||
Commitment fee (as a percent) | 0.30% | ||
Total debt to total capitalization (as a percent) | 50.00% | ||
2016 Credit Facility | London Interbank Offered Rate (LIBOR) | |||
Subsequent Event | |||
Interest spread on borrowings (as a percent) | 1.125% | ||
2016 Credit Facility | London Interbank Offered Rate (LIBOR) | Minimum | |||
Subsequent Event | |||
Interest spread on borrowings (as a percent) | 1.125% | ||
2016 Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | |||
Subsequent Event | |||
Interest spread on borrowings (as a percent) | 1.75% | ||
2016 Credit Facility | Letters of credit | |||
Subsequent Event | |||
Maximum borrowing capacity | $ 75,000,000 | ||
Number of letters of credit outstanding | letter | 3 | ||
Letters of credit outstanding/issued | $ 39,300,000 | ||
Subsequent Event | 2018 Credit Facility | |||
Subsequent Event | |||
Maximum borrowing capacity | $ 750,000,000 | ||
Contingent increase | 300,000,000 | ||
Borrowing amount outstanding | 0 | ||
Letters of credit outstanding/issued | 3 | ||
Available borrowing capacity | $ 712,000,000 | ||
Subsequent Event | 2018 Credit Facility | Forecast | |||
Subsequent Event | |||
Commitment fee (as a percent) | 0.125% | ||
Subsequent Event | 2018 Credit Facility | Minimum | |||
Subsequent Event | |||
Commitment fee (as a percent) | 0.075% | ||
Subsequent Event | 2018 Credit Facility | Maximum | |||
Subsequent Event | |||
Commitment fee (as a percent) | 0.20% | ||
Total debt to total capitalization (as a percent) | 50.00% | ||
Priority debt to net worth of entity (as a percent) | 17.50% | ||
Subsequent Event | 2018 Credit Facility | London Interbank Offered Rate (LIBOR) | Forecast | |||
Subsequent Event | |||
Interest spread on borrowings (as a percent) | 1.125% | ||
Subsequent Event | 2018 Credit Facility | London Interbank Offered Rate (LIBOR) | Minimum | |||
Subsequent Event | |||
Interest spread on borrowings (as a percent) | 0.875% | ||
Subsequent Event | 2018 Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | |||
Subsequent Event | |||
Interest spread on borrowings (as a percent) | 1.50% | ||
Subsequent Event | 2018 Credit Facility | Letters of credit | |||
Subsequent Event | |||
Maximum borrowing capacity | $ 75,000,000 | ||
Letters of credit outstanding/issued | 38,000,000 | ||
Subsequent Event | 2016 Credit Facility | |||
Subsequent Event | |||
Available borrowing capacity | 262,000,000 | ||
Decrease in credit facility | 300,000,000 | ||
Subsequent Event | 2016 Credit Facility | Letters of credit | |||
Subsequent Event | |||
Decrease in credit facility | $ 1,300,000 |