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FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS | 3 Months Ended
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Dec. 31, 2021
Fair Value Disclosures [Abstract] |
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 Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Recurring Fair Value Measurements The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis and indicate the level in the fair value hierarchy in which we classify the fair value measurement.
| December 31, 2021
(in thousands) | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |
Short-term investments: |  |  |  |  |  |  |
Corporate debt securities | $ | 203,401 |  |  | $ | — |  |  | $ | 203,401 |  |  | $ | — |
U.S. government and federal agency securities | 3,667 |  |  | 3,667 |  |  | — |  |  | — |
Total short-term investments | 207,068 |  |  | 3,667 |  |  | 203,401 |  |  | — |
Investments: |  |  |  |  |  |  |
Non-qualified supplemental savings plan | 19,455 |  |  | 19,455 |  |  | — |  |  | — |
Equity and debt securities | 17,502 |  |  | 14,002 |  |  | — |  |  | 3,500 |
Equity investment in ADNOC Drilling | 147,786 |  |  | 147,786 |  |  | — |  |  | — |
Total investments | 184,743 |  |  | 181,243 |  |  | — |  |  | 3,500 |
Liabilities |  |  |  |  |  |  |
Contingent consideration | $ | 3,096 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,096 |
| September 30, 2021
(in thousands) | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |
Short-term investments: |  |  |  |  |  |  |
Corporate debt securities | $ | 192,950 |  |  | $ | — |  |  | $ | 192,950 |  |  | $ | — |
U.S. government and federal agency securities | 5,750 |  |  | 5,750 |  |  | — |  |  | — |
Total short-term investments | 198,700 |  |  | 5,750 |  |  | 192,950 |  |  | — |
Investments: |  |  |  |  |  |  |
Non-qualified supplemental savings plan | 18,221 |  |  | 18,221 |  |  | — |  |  | — |
Equity and debt securities | 14,358 |  |  | 13,858 |  |  | — |  |  | 500 |
Cornerstone investment in ADNOC Drilling | 100,000 |  |  | 100,000 |  |  | — |  |  | — |
Total investments | 132,579 |  |  | 132,079 |  |  | — |  |  | 500 |
Liabilities |  |  |  |  |  |  |
Contingent consideration | $ | 2,996 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,996 |
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 Unaudited Condensed Consolidated Statements of Operations. The securities are recorded at fair value. Level 1 inputs include U.S. agency issued debt securities with active markets and money market funds. For these items, quoted current market prices are readily available. Level 2 inputs included corporate bonds measured using broker quotations that utilize observable market inputs. Our long-term investments include debt and equity securities and assets held in a Non-Qualified Supplemental Savings Plan ("Savings Plan"). Our assets that we hold in the Savings Plan are comprised of mutual funds that are measured using Level 1 inputs. Additionally we hold equity securities in Schlumberger, Ltd., which is classified as Level 1 and based on the quoted stock price. Our long-term debt securities are classified as available-for-sale and considered a Level 3 input based on the absence of market activity. During September 2021, the Company made a $100.0 million cornerstone investment in ADNOC Drilling in advance of its announced IPO, representing 159.7 million shares of ADNOC Drilling, equivalent to a one percent ownership stake and subject to a three-year lockup period. ADNOC Drilling's IPO was completed on October 3, 2021 and its shares are listed and traded on the Abu Dhabi Securities Exchange (ADX). Our investment is classified as a long-term equity investment within Investments in our Unaudited Condensed Consolidated Balance Sheets. We have applied the guidance in Topic 820, Fair Value Measurement, in the initial accounting of the transaction and the subsequent revaluation of the investment balance, concluding that a contractual restriction on the sale of an equity security that is publicly traded is not considered in measuring fair value. During the three months ended December 31, 2021, we recognized a gain of $47.8 million in our Unaudited Condensed Consolidated Statement of Operations. As of December 31, 2021, this investment is classified as a Level 1 investment and based on the quoted stock price on the Abu Dhabi Securities Exchange, without applying a discount factor. Our financial liabilities measured using Level 3 unobservable inputs primarily consist of potential earnout payments associated with our business acquisitions in fiscal year 2019. The contingent considerations are recorded in Accrued Liabilities and Other Noncurrent Liabilities in the Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the milestone achievement. The following table reconciles changes in the fair value for the periods presented below:
| Three Months Ended December 31, |  |
(in thousands) | 2021 |  | 2020 |  |  |  |
Liabilities at beginning of period | $ | 2,996 |  |  | $ | 9,123 |  |  |  |  |
Additions | 500 |  |  | — |  |  |  |  |
Total gains or losses: |  |  |  |  |  |  |
Included in earnings | (150) |  |  | 100 |  |  |  |  |
Settlements 1 | (250) |  |  | (250) |  |  |  |  |
Liabilities at end of period | $ | 3,096 |  |  | $ | 8,973 |  |  |  |  |
(1)Settlements represent earnout payments that have been paid or earned during the period. Nonrecurring Fair Value Measurements We have certain assets that are subject to measurement at fair value on a nonrecurring basis. For these nonfinancial assets, measurement at fair value in periods subsequent to their initial recognition is applicable if they are determined to be impaired. These assets generally include assets held-for-sale, property, plant and equipment, goodwill, intangible assets, and operating lease right-of-use assets. If measured at fair value in the Unaudited Condensed Consolidated Balance Sheets, these would generally be classified within Level 2 or 3 of the fair value hierarchy. Further details on any changes in valuation of these assets is provided in their respective footnotes. We also hold various other equity securities without readily determinable fair values that are classified as Level 3. These equity securities are measured at cost, less any impairments on a nonrecurring basis. As of December 31, 2021, the carrying value of these assets were equal to their fair value as no impairments have been taken to date. The following tables summarize our financial assets measured at fair value on a non-recurring basis:
| December 31, 2021
(in thousands) | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Investments: |  |  |  |  |  |  |
Equity securities | $ | 8,881 |  |  | $ | — |  |  | $ | — |  |  | $ | 8,881 |
| September 30, 2021
(in thousands) | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Investments: |  |  |  |  |  |  |
Equity securities | $ | 2,865 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,865 |
As of December 31, 2021 and September 30, 2021 the aggregate balance of our debt and equity security investments in geothermal was $11.8 million and $2.7 million, respectively. These investments include assets measured on both a recurring and nonrecurring basis. The following table reconciles changes in the fair value for our equity securities without readily determinable fair values that are classified as Level 3 for the periods presented below:
| Three Months Ended December 31, |  |
(in thousands) | 2021 |  | 2020 |  |  |  |
Assets at beginning of period | $ | 2,865 |  |  | $ | — |  |  |  |  |
Purchases | 6,016 |  |  | 1,000 |  |  |  |  |
Assets at end of period | $ | 8,881 |  |  | $ | 1,000 |  |  |  |  |
Other Financial Instruments The carrying amount of cash and cash equivalents and restricted cash approximates fair value due to the short-term nature of these items. 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 and in federally insured deposit accounts. The carrying value of accounts receivables, other current and noncurrent assets, accounts payable, accrued liabilities and other liabilities approximated fair value at December 31, 2021 and September 30, 2021. The following information presents the supplemental fair value information about long-term fixed-rate debt at December 31, 2021 and September 30, 2021:
(in millions) | December 31, 2021 1 |  | September 30, 2021
Current portion of long-term debt |  |  |
Carrying value | $ | — |  |  | $ | 483.5 |
Fair value | — |  |  | 541.6 |
Long-term debt, net |  |  |
Carrying value | 542.2 |  |  | 542.0 |
Fair value | 542.5 |  |  | 554.3 |
(1)On October 27, 2021 we redeemed the outstanding 2025 Notes. See Note 6—Debt to our Consolidated Financial Statements The fair values of the current and long-term fixed-rate debt is based on broker quotes as of December 31, 2021 and September 30, 2021. The notes are classified within Level 2 of the fair value hierarchy as they are not actively traded in markets.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
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