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Guarantor and Non-Guarantor Financial Information | 3 Months Ended
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Dec. 31, 2015
Guarantor and Non-Guarantor Financial Information |
Guarantor and Non-Guarantor Financial Information | 16.Guarantor and Non-Guarantor Financial Information In March 2015, Helmerich & Payne International Drilling Co. (“the issuer”), a wholly-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 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 obligations under the notes. In connection with the notes, we are providing the following condensed consolidating financial information for the issuer, Helmerich & Payne International Drilling Co. and parent/guarantor, Helmerich & Payne, Inc., in accordance with the Commission disclosure requirements. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements. CONSOLIDATED CONDENSED STATEMENTS OF INCOME (in thousands)
|  | Three Months Ended December 31, 2015 |
|  | Guarantor/ |  | Issuer |  | Non-Guarantor |  |  |  | Total |
|  | Parent |  | Subsidiary |  | Subsidiaries |  | Eliminations |  | Consolidated |
Operating revenue |  | $ | — |  | $ | 405,537 |  | $ | 82,327 |  | $ | (17 | ) | $ | 487,847 |
Operating costs and other |  | 2,705 |  | 356,751 |  | 90,122 |  | (401 | ) | 449,177 |
Operating income (loss) from continuing operations |  | (2,705 | ) | 48,786 |  | (7,795 | ) | 384 |  | 38,670 |
Other income |  | 20 |  | 656 |  | 180 |  | (384 | ) | 472 |
Interest expense |  | (62 | ) | (4,718 | ) | 256 |  | — |  | (4,524 | )
Equity in net income (loss) of subsidiaries |  | 17,549 |  | (8,197 | ) | — |  | (9,352 | ) | — |
Income (loss) from continuing operations before income taxes |  | 14,802 |  | 36,527 |  | (7,359 | ) | (9,352 | ) | 34,618 |
Income tax provision |  | (1,200 | ) | 19,227 |  | 693 |  | — |  | 18,720 |
Income (loss) from continuing operations |  | 16,002 |  | 17,300 |  | (8,052 | ) | (9,352 | ) | 15,898 |
Income from discontinued operations before income taxes |  | — |  | — |  | 104 |  | — |  | 104 |
Income tax provision |  | — |  | — |  | — |  | — |  | — |
Income from discontinued operations |  | — |  | — |  | 104 |  | — |  | 104 |
Net income (loss) |  | $ | 16,002 |  | $ | 17,300 |  | $ | (7,948 | ) | $ | (9,352 | ) | $ | 16,002 |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (in thousands)
|  | Three Months Ended December 31, 2015 |
|  | Guarantor/ |  | Issuer |  | Non-Guarantor |  |  |  | Total |
|  | Parent |  | Subsidiary |  | Subsidiaries |  | Eliminations |  | Consolidated |
Net income (loss) |  | $ | 16,002 |  | $ | 17,300 |  | $ | (7,948 | ) | $ | (9,352 | ) | $ | 16,002 |
Other comprehensive income (loss), net of income taxes: |  |  |  |  |  |  |  |  |  |  |
Unrealized depreciation on securities, net |  | — |  | (11,010 | ) | — |  | — |  | (11,010 | )
Minimum pension liability adjustments, net |  | 107 |  | 206 |  | — |  | — |  | 313 |
Other comprehensive income (loss) |  | 107 |  | (10,804 | ) | — |  | — |  | (10,697 | )
Comprehensive income (loss) |  | $ | 16,109 |  | $ | 6,496 |  | $ | (7,948 | ) | $ | (9,352 | ) | $ | 5,305 |
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (in thousands)
|  | Three Months Ended December 31, 2014, as adjusted |
|  | Guarantor/ |  | Issuer |  | Non-Guarantor |  |  |  | Total |
|  | Parent |  | Subsidiary |  | Subsidiaries |  | Eliminations |  | Consolidated |
Operating revenue |  | $ | — |  | $ | 952,109 |  | $ | 108,694 |  | $ | (16 | ) | $ | 1,060,787 |
Operating costs and other |  | 3,021 |  | 629,038 |  | 99,389 |  | (1,032 | ) | 730,416 |
Operating income (loss) from continuing operations |  | (3,021 | ) | 323,071 |  | 9,305 |  | 1,016 |  | 330,371 |
Other income |  | 1 |  | 921 |  | 703 |  | (1,016 | ) | 609 |
Interest expense |  | (7 | ) | 18 |  | (601 | ) | — |  | (590 | )
Equity in net income of subsidiaries |  | 205,359 |  | 6,718 |  | — |  | (212,077 | ) | — |
Income from continuing operations before income taxes |  | 202,332 |  | 330,728 |  | 9,407 |  | (212,077 | ) | 330,390 |
Income tax provision |  | (1,276 | ) | 126,122 |  | 1,921 |  | — |  | 126,767 |
Income from continuing operations |  | 203,608 |  | 204,606 |  | 7,486 |  | (212,077 | ) | 203,623 |
Loss from discontinued operations before income taxes |  | — |  | — |  | (15 | ) | — |  | (15 | )
Income tax provision |  | — |  | — |  | — |  | — |  | — |
Loss from discontinued operations |  | — |  | — |  | (15 | ) | — |  | (15 | )
Net income |  | $ | 203,608 |  | $ | 204,606 |  | $ | 7,471 |  | $ | (212,077 | ) | $ | 203,608 |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (in thousands)
|  | Three Months Ended December 31, 2014, as adjusted |
|  | Guarantor/ |  | Issuer |  | Non-Guarantor |  |  |  | Total |
|  | Parent |  | Subsidiary |  | Subsidiaries |  | Eliminations |  | Consolidated |
Net income |  | $ | 203,608 |  | $ | 204,606 |  | $ | 7,471 |  | $ | (212,077 | ) | $ | 203,608 |
Other comprehensive income (loss), net of income taxes: |  |  |  |  |  |  |  |  |  |  |
Unrealized depreciation on securities, net |  | — |  | (42,244 | ) | — |  | — |  | (42,244 | )
Minimum pension liability adjustments, net |  | 82 |  | 114 |  | — |  | — |  | 196 |
Other comprehensive income (loss) |  | 82 |  | (42,130 | ) | — |  | — |  | (42,048 | )
Comprehensive income |  | $ | 203,690 |  | $ | 162,476 |  | $ | 7,471 |  | $ | (212,077 | ) | $ | 161,560 |
CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands)
|  | December 31, 2015 |
|  | Guarantor/ |  | Issuer |  | Non-Guarantor |  |  |  | Total |
|  | Parent |  | Subsidiary |  | Subsidiaries |  | Eliminations |  | Consolidated |
ASSETS |  |  |  |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | (705 | ) | $ | 816,342 |  | $ | 32,593 |  | $ | — |  | $ | 848,230 |
Short-term investments |  | — |  | 47,708 |  | — |  | — |  | 47,708 |
Accounts receivable, net of reserve |  | (8 | ) | 309,127 |  | 64,782 |  | (5 | ) | 373,896 |
Inventories |  | — |  | 86,889 |  | 40,353 |  | — |  | 127,242 |
Prepaid expenses and other |  | 26,550 |  | 7,133 |  | 43,825 |  | (6,357 | ) | 71,151 |
Current assets of discontinued operations |  | — |  | — |  | 8,449 |  | — |  | 8,449 |
Total current assets |  | 25,837 |  | 1,267,199 |  | 190,002 |  | (6,362 | ) | 1,476,676 |
Investments |  | 11,748 |  | 73,528 |  | — |  | — |  | 85,276 |
Property, plant and equipment, net |  | 62,282 |  | 5,038,560 |  | 429,975 |  | — |  | 5,530,817 |
Intercompany |  | 15,821 |  | 1,233,222 |  | 253,557 |  | (1,502,600 | ) | — |
Other assets |  | 10,304 |  | 1,023 |  | 36,248 |  | (10,070 | ) | 37,505 |
Investment in subsidiaries |  | 5,631,533 |  | 219,311 |  | — |  | (5,850,844 | ) | — |
Total assets |  | $ | 5,757,525 |  | $ | 7,832,843 |  | $ | 909,782 |  | $ | (7,369,876 | ) | $ | 7,130,274 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |  |  |  |
Long-term debt due within one year |  | $ | — |  | $ | 39,092 |  | $ | — |  | $ | — |  | $ | 39,092 |
Accounts payable |  | 79,879 |  | 10,922 |  | 5,646 |  | (5 | ) | 96,442 |
Accrued liabilities |  | 11,610 |  | 218,527 |  | 46,166 |  | (6,357 | ) | 269,946 |
Current liabilities of discontinued operations |  | — |  | — |  | 3,310 |  | — |  | 3,310 |
Total current liabilities |  | 91,489 |  | 268,541 |  | 55,122 |  | (6,362 | ) | 408,790 |
Noncurrent liabilities: |  |  |  |  |  |  |  |  |  |  |
Long-term debt |  | — |  | 492,668 |  | — |  | — |  | 492,668 |
Deferred income taxes |  | — |  | 1,268,943 |  | 36,728 |  | (10,070 | ) | 1,295,601 |
Intercompany |  | 818,406 |  | 164,173 |  | 520,021 |  | (1,502,600 | ) | — |
Other |  | 17,337 |  | 24,425 |  | 56,021 |  | — |  | 97,783 |
Noncurrent liabilities of discontinued operations |  | — |  | — |  | 5,139 |  | — |  | 5,139 |
Total noncurrent liabilities |  | 835,743 |  | 1,950,209 |  | 617,909 |  | (1,512,670 | ) | 1,891,191 |
Shareholders’ equity: |  |  |  |  |  |  |  |  |  |  |
Common stock |  | 11,130 |  | 100 |  | — |  | (100 | ) | 11,130 |
Additional paid-in capital |  | 427,590 |  | 46,856 |  | 374 |  | (47,230 | ) | 427,590 |
Retained earnings |  | 4,589,597 |  | 5,574,085 |  | 236,377 |  | (5,810,462 | ) | 4,589,597 |
Accumulated other comprehensive loss |  | (12,074 | ) | (6,948 | ) | — |  | 6,948 |  | (12,074 | )
Treasury stock, at cost |  | (185,950 | ) | — |  | — |  | — |  | (185,950 | )
Total shareholders’ equity |  | 4,830,293 |  | 5,614,093 |  | 236,751 |  | (5,850,844 | ) | 4,830,293 |
Total liabilities and shareholders’ equity |  | $ | 5,757,525 |  | $ | 7,832,843 |  | $ | 909,782 |  | $ | (7,369,876 | ) | $ | 7,130,274 |

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