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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to            
Commission file number 1-4221
hpunifiedlogocolorlarge.jpg
HELMERICH & PAYNE, INC.
(Exact name of registrant as specified in its charter)
Delaware73-0679879
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

1437 South Boulder Avenue, Suite 1400, Tulsa, Oklahoma 74119
(Address of principal executive offices) (Zip Code)
(918) 742-5531
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock ($0.10 par value)HPNew York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐  No 

CLASS
OUTSTANDING AT April 18, 2024
Common Stock, $0.10 par value98,724,737




HELMERICH & PAYNE, INC.
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INDEX TO FORM 10‑Q

hpunifiedlogocolorlarge.jpg Q2FY24 FORM 10-Q | 2

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,September 30,
(in thousands except share data)20242023
ASSETS
Current Assets:
Cash and cash equivalents$193,636 $257,174 
Restricted cash68,547 59,064 
Short-term investments83,390 93,600 
Accounts receivable, net of allowance of $2,769 and $2,688, respectively
431,681 404,188 
Inventories of materials and supplies, net107,210 94,227 
Prepaid expenses and other, net64,316 97,727 
Assets held-for-sale 645 
Total current assets948,780 1,006,625 
Investments274,446 264,947 
Property, plant and equipment, net2,993,825 2,921,695 
Other Noncurrent Assets:
Goodwill45,653 45,653 
Intangible assets, net57,360 60,575 
Operating lease right-of-use assets59,730 50,400 
Other assets, net45,054 32,061 
Total other noncurrent assets207,797 188,689 
Total assets$4,424,848 $4,381,956 
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable$158,296 $130,852 
Dividends payable42,047 25,194 
Accrued liabilities238,494 262,885 
Total current liabilities438,837 418,931 
Noncurrent Liabilities:
Long-term debt, net545,441 545,144 
Deferred income taxes502,088 517,809 
Other135,408 128,129 
Total noncurrent liabilities1,182,937 1,191,082 
Commitments and Contingencies (Note 11)
Shareholders' Equity:
Common stock, $0.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of March 31, 2024 and September 30, 2023, and 98,752,018 and 99,426,526 shares outstanding as of March 31, 2024 and September 30, 2023, respectively
11,222 11,222 
Preferred stock, no par value, 1,000,000 shares authorized, no shares issued
  
Additional paid-in capital502,586 525,369 
Retained earnings2,786,495 2,707,715 
Accumulated other comprehensive loss(7,713)(7,981)
Treasury stock, at cost, 13,470,847 shares and 12,796,339 shares as of March 31, 2024 and September 30, 2023, respectively
(489,516)(464,382)
Total shareholders’ equity2,803,074 2,771,943 
Total liabilities and shareholders' equity$4,424,848 $4,381,956 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
hpunifiedlogocolorlarge.jpg Q2FY24 FORM 10-Q | 3

HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
Six Months Ended
March 31,
(in thousands, except per share amounts)2024202320242023
OPERATING REVENUES
Drilling services$685,131 $766,682 $1,359,696 $1,483,852 
Other2,812 2,540 5,394 5,007 
687,943 769,222 1,365,090 1,488,859 
OPERATING COSTS AND EXPENSES
Drilling services operating expenses, excluding depreciation and amortization401,851 449,110 805,154 877,361 
Other operating expenses1,026 1,188 2,163 2,314 
Depreciation and amortization104,545 96,255 198,536 192,910 
Research and development12,942 8,702 21,550 15,635 
Selling, general and administrative62,037 52,855 118,614 101,310 
Asset impairment charges   12,097 
Gain on reimbursement of drilling equipment(7,461)(11,574)(14,955)(27,298)
Other (gain) loss on sale of assets2,431 (2,519)(12)(4,898)
577,371 594,017 1,131,050 1,169,431 
OPERATING INCOME 110,572 175,205 234,040 319,428 
Other income (expense)
Interest and dividend income6,567 5,055 17,301 9,760 
Interest expense(4,261)(4,239)(8,633)(8,594)
Gain (loss) on investment securities3,747 39,752 (287)24,661 
Other400 (604)(143)(546)
6,453 39,964 8,238 25,281 
Income before income taxes 117,025 215,169 242,278 344,709 
Income tax expense32,194 51,129 62,274 83,524 
NET INCOME$84,831 $164,040 $180,004 $261,185 
Basic earnings per common share$0.85 $1.55 $1.79 $2.46 
Diluted earnings per common share:$0.84 $1.55 $1.79 $2.46 
Weighted average shares outstanding:
Basic98,774 103,968 98,960 104,615 
Diluted99,046 104,363 99,216 105,003 
    
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended
March 31,
Six Months Ended
March 31,
(in thousands)2024202320242023
Net income$84,831 $164,040 $180,004 $261,185 
Other comprehensive income, net of income taxes:
Net change related to employee benefit plans, net of income taxes of $(39.5) thousand and $(79.0) thousand for the three and six months ended March 31, 2024, respectively, and $(75.0) thousand and $(150.1) thousand for the three and six months ended March 31, 2023, respectively
134 256 268 512 
Other comprehensive income134 256 268 512 
Comprehensive income$84,965 $164,296 $180,272 $261,697 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Three and Six Months Ended March 31, 2024
Common StockAdditional
 Paid-In
 Capital
Retained EarningsAccumulated
 Other
 Comprehensive
 Income (Loss)
Treasury Stock
(in thousands, except per share amounts)SharesAmountSharesAmountTotal
Balance at September 30, 2023
112,222 $11,222 $525,369 $2,707,715 $(7,981)12,796 $(464,382)$2,771,943 
Comprehensive income:
Net income— — — 95,173 — — — 95,173 
Other comprehensive income— — — — 134 — — 134 
Dividends declared ($0.25 base per share, $0.34 supplemental per share)
— — — (59,094)— — — (59,094)
Vesting of restricted stock awards, net of shares withheld for employee taxes— — (26,661)— — (495)17,841 (8,820)
Stock-based compensation— — 7,672 — — — — 7,672 
Share repurchases— — — — — 1,298 (47,654)(47,654)
Other— — 292 — — — — 292 
Balance at December 31, 2023112,222 $11,222 $506,672 $2,743,794 $(7,847) 13,599 $(494,195)$2,759,646 
Comprehensive income:
Net income— — — 84,831 — — — 84,831 
Other comprehensive income— — — — 134 — — 134 
Dividends declared ($0.25 base per share, $0.17 supplemental per share)
— — — (42,130)— — — (42,130)
Vesting of restricted stock awards, net of shares withheld for employee taxes— — (12,012)— — (230)8,656 (3,356)
Stock-based compensation— — 8,429 — — — — 8,429 
Share repurchases— — — — — 102 (3,977)(3,977)
Other— — (503)— — — — (503)
Balance at March 31, 2024112,222 $11,222 $502,586 $2,786,495 $(7,713) 13,471 $(489,516)$2,803,074 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Three and Six Months Ended March 31, 2023
Common StockAdditional
 Paid-In
 Capital
Retained EarningsAccumulated
 Other
 Comprehensive
 Income (Loss)
Treasury Stock
(in thousands, except per share amounts)SharesAmountSharesAmountTotal
Balance at September 30, 2022
112,222 $11,222 $528,278 $2,473,572 $(12,072)6,929 $(235,528)$2,765,472 
Comprehensive income:
Net income— — — 97,145 — — — 97,145 
Other comprehensive income— — — — 256 — — 256 
Dividends declared ($0.25 base per share, $0.47 supplemental per share)
— — — (76,611)— — — (76,611)
Vesting of restricted stock awards, net of shares withheld for employee taxes— — (22,776)— — (449)13,293 (9,483)
Stock-based compensation— — 8,273 — — — — 8,273 
Share repurchases— — — — — 844 (39,060)(39,060)
Other— — (847)— — — — (847)
Balance at December 31, 2022112,222 $11,222 $512,928 $2,494,106 $(11,816) 7,324 $(261,295)$2,745,145 
Comprehensive income:
Net income— — — 164,040 — — — 164,040 
Other comprehensive income— — — — 256 — — 256 
Dividends declared ($0.25 base per share, $0.235 supplemental per share)
— — — (50,046)— — — (50,046)
Vesting of restricted stock awards, net of shares withheld for employee taxes— (11,769)— — (229)6,842 (4,927)
Stock-based compensation— — 7,431 — — — — 7,431 
Share repurchases— — — — — 2,543 (106,708)(106,708)
Other— — 615 — — — 615 
Balance at March 31, 2023112,222 $11,222 $509,205 $2,608,100 $(11,560) 9,638 $(361,161)$2,755,806 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended March 31,
(in thousands)20242023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $180,004 $261,185 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization198,536 192,910 
Asset impairment charges 12,097 
Provision for credit loss90 3,222 
Stock-based compensation16,101 15,704 
(Gain) loss on investment securities287 (24,661)
Gain on reimbursement of drilling equipment(14,955)(27,298)
Other gain on sale of assets(12)(4,898)
Deferred income tax expense (benefit)(15,933)3,165 
Other1,630 1,780 
Change in assets and liabilities
Accounts receivable(23,060)(70,680)
Inventories of materials and supplies(13,796)(12,116)
Prepaid expenses and other2,862 (16,387)
Other noncurrent assets(9,369)(1,060)
Accounts payable17,505 33,610 
Accrued liabilities(15,851)(42,614)
Deferred income tax liability133 (711)
Other noncurrent liabilities(5,655)3,006 
Net cash provided by operating activities318,517 326,254 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(254,711)(181,479)
Purchase of short-term investments(74,749)(64,418)
Purchase of long-term investments(8,013)(18,771)
Proceeds from sale of short-term investments87,122 97,744 
Insurance proceeds from involuntary conversion
4,980  
Proceeds from asset sales20,898 47,718 
Net cash used in investing activities(224,473)(119,206)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid(84,371)(102,941)
Payments for employee taxes on net settlement of equity awards(12,176)(14,410)
Share repurchases(51,302)(145,013)
Other(250)(790)
Net cash used in financing activities(148,099)(263,154)
Net decrease in cash and cash equivalents and restricted cash
(54,055)(56,106)
Cash and cash equivalents and restricted cash, beginning of period316,238 269,009 
Cash and cash equivalents and restricted cash, end of period$262,183 $212,903 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid/(received) during the period:
Interest paid$8,047 $8,919 
Income tax paid81,294 118,090 
Income tax received (25,687)
Cash paid for amounts included in the measurement of lease liabilities:
Payments for operating leases6,714 5,970 
Non-cash operating and investing activities:
Change in accounts payable and accrued liabilities related to purchases of property, plant and equipment(15,716)601 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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HELMERICH & PAYNE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 NATURE OF OPERATIONS
Helmerich & Payne, Inc. (“H&P,” 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 solutions and technologies that are intended to make hydrocarbon recovery safer and more economical for oil and gas exploration and production companies.
Our drilling services operations are organized into the following reportable operating business segments: North America Solutions, Offshore Gulf of Mexico and International Solutions. Our real estate operations, our incubator program for new research and development projects and our wholly-owned captive insurance companies are included in "Other." Refer to Note 12—Business Segments and Geographic Information for further details on our reportable segments.
Our North America Solutions operations are primarily located in Texas, but also traditionally operate in other states, depending on demand. Such states include: Colorado, Louisiana, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Utah, West Virginia, and Wyoming. Additionally, Offshore Gulf of Mexico operations are conducted in Louisiana and in U.S. federal waters in the Gulf of Mexico and our International Solutions operations have rigs and/or services primarily located in five international locations: Argentina, Australia, Bahrain, Colombia, and the United Arab Emirates.
We also own and operate a limited number of commercial real estate properties located in Tulsa, Oklahoma. Our real estate investments include a shopping center and undeveloped real estate.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, RELATED RISKS AND UNCERTAINTIES
Interim Financial Information
The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) pertaining to interim financial information. Accordingly, these interim financial statements do not include all information or footnote disclosures required by U.S. GAAP for complete financial statements and, therefore, should be read in conjunction with the Consolidated Financial Statements and notes thereto in our 2023 Annual Report on Form 10-K and other current filings with the SEC. In the opinion of management, all adjustments, consisting of those of a normal recurring nature, necessary to present fairly the results of the periods presented have been included. The results of operations for the interim periods presented may not necessarily be indicative of the results to be expected for the full year.
Income from discontinued operations was presented as a separate line item on our Unaudited Condensed Consolidated Statements of Operations during the three and six months ended March 31, 2023. To conform with the current fiscal year presentation, we reclassified amounts previously presented in Income from discontinued operations, which were not material, to Other within Other income (expense) on our Unaudited Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2023.
Principles of Consolidation
The Unaudited Condensed Consolidated Financial Statements include the accounts of H&P and its domestic and foreign subsidiaries. Consolidation of a subsidiary begins when the Company gains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income, expenses and other comprehensive income or loss of a subsidiary acquired or disposed of during the fiscal year are included in the Unaudited Condensed Consolidated Statements of Operations and Unaudited Condensed Consolidated Statements of Comprehensive Income from the date the Company gains control until the date when the Company ceases to control the subsidiary. All intercompany accounts and transactions have been eliminated upon consolidation.
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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 recorded restricted cash of $68.5 million and $53.2 million at March 31, 2024 and 2023, respectively, and $59.1 million and $36.9 million at September 30, 2023 and 2022, respectively. All restricted cash at March 31, 2024 represents an amount management has elected to restrict for the purpose of potential insurance claims in our wholly-owned captive insurance companies. Of the total at September 30, 2023, $0.7 million is related to the acquisition of drilling technology companies, and $58.4 million represents an amount management has elected to restrict for the purpose of potential insurance claims in our wholly-owned captive insurance companies. The restricted amounts are primarily invested in short-term money market securities.
Cash, cash equivalents, and restricted cash are reflected on the Unaudited Condensed Consolidated Balance Sheets as follows:
March 31,September 30,
(in thousands)20242023    20232022
Cash and cash equivalents$193,636 $159,672 $257,174 $232,131 
Restricted cash68,547 53,231 59,064 36,246 
Restricted cash - long-term:
Other assets, net   632 
Total cash, cash equivalents, and restricted cash$262,183 $212,903 $316,238 $269,009 
Related Party Transactions
In October 2022, we made a $14.1 million equity investment, representing 106.0 million common shares in Tamboran Resources Limited ("Tamboran Resources"). In December 2023, all shares of Tamboran Resources were transferred to Tamboran Resources Corporation ("Tamboran Corp.") in exchange for depository interests in Tamboran Corp. Tamboran Corp. is publicly traded on the Australian Securities Exchange under the ticker "TBN" and is focused on developing a natural gas resource in Australia's Beetaloo Sub-basin. One of our executive officers serves as a director of Tamboran Corp. pursuant to nomination rights in the investment agreement. Refer to Note 10—Fair Value Measurement of Financial Instruments for additional information related to our investment.
Concurrent with the investment agreement, we entered into a fixed-term drilling services agreement with Tamboran Resources. As of March 31, 2024, we recorded $2.7 million in receivables, $8.1 million in other assets and $5.1 million in contract liabilities on our Unaudited Condensed Consolidated Balance Sheets. As of September 30, 2023, we recorded $2.8 million in receivables, $8.0 million in other assets and $6.6 million in contract liabilities on our Consolidated Balance Sheets. We recorded $2.7 million and $7.0 million in revenue on our Unaudited Condensed Consolidated Statement of Operations during the three and six months ended March 31, 2024, respectively, related to the drilling services agreement with Tamboran Resources, which commenced drilling services during the fourth fiscal quarter of 2023. We expect to earn $33.7 million in revenue over the remaining contract term, and, as such, this amount is included within our contract backlog as of March 31, 2024.
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Recently Issued Accounting Updates
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates ("ASUs") to the FASB Accounting Standards Codification ("ASC"). We consider the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable, clarifications of ASUs listed below, immaterial, or already adopted by the Company.
The following table provides a brief description of recent accounting pronouncements and our analysis of the effects on our financial statements:

StandardDescriptionDate of
Adoption
Effect on the Financial 
Statements or Other Significant Matters
Standards that are not yet adopted as of March 31, 2024
ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this update enhance annual and interim disclosure requirements, determine significant segment expense, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. This update is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption of the amendments is permitted. Upon adoption, the amendments shall be applied retrospectively to all prior periods presented in the financial statements.
October 1, 2024We plan to adopt this ASU, as required, during fiscal year 2025. We are currently evaluating the impact of this ASU on our Consolidated Financial Statements and disclosures.
ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax DisclosuresThis ASU enhances income tax disclosure requirements. Under the ASU, public business entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). Specific categories that must be included in the reconciliation for each annual reporting period are specified in the amendment. This update is effective for annual periods beginning after December 15, 2024. Early adoption of the amendments is permitted. Upon adoption, the amendments shall be applied on a prospective basis. Retrospective application is permitted. October 1, 2025We plan to adopt this ASU, as required, during fiscal year 2026. We are currently evaluating the impact of this ASU on our Consolidated Financial Statements and disclosures.
Self-Insurance
We continue to use our captive insurance companies to insure the deductibles for our domestic workers’ compensation, general liability, automobile liability claims programs, and medical stop-loss program and to insure the deductibles from the Company's international casualty and property programs. Our operating subsidiaries are paying premiums to the Captives, typically on a monthly basis, for the estimated losses based on an external actuarial analysis. These premiums are currently held in a restricted cash account, resulting in a transfer of risk from our operating subsidiaries to the Captives. Direct operating costs primarily consisted of adjustments of $1.6 million and $1.7 million to accruals for estimated losses for the three months ended March 31, 2024 and 2023, respectively, and $5.1 million and $4.7 million for the six months ended March 31, 2024 and 2023, respectively, and rig and casualty insurance premiums of $9.9 million and $10.9 million during the three months ended March 31, 2024 and 2023, respectively, and $19.0 million and $20.9 million for the six months ended March 31, 2024 and 2023, respectively. These operating costs were recorded within Drilling services operating expenses in our Unaudited Condensed Consolidated Statement of Operations. Intercompany premium revenues recorded by the Captives during the three months ended March 31, 2024 and 2023 amounted to $15.8 million and $17.7 million, respectively, and $31.0 million and $34.1 million during the six months ended March 31, 2024 and 2023, respectively, which were eliminated upon consolidation. These intercompany insurance premiums are reflected as segment operating expenses within the North America Solutions, International Solutions, and Offshore Gulf of Mexico reportable operating segments and are reflected as intersegment sales within "Other." Our medical stop loss operating expenses for the three months ended March 31, 2024 and 2023 were $3.2 million and $2.5 million, respectively, and $7.3 million and $5.3 million for the six months ended March 31, 2024 and 2023, respectively.
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International Solutions Drilling Risks
International Solutions 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 Solutions operations will be subject to numerous contingencies, some of which are beyond management’s control. These contingencies include general and regional economic conditions, geopolitical developments and tensions, war and uncertainty in oil-producing countries, 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.
We have also experienced certain risks specific to our Argentine operations. In Argentina, while our dayrate is denominated in U.S. dollars, we are paid the equivalent in Argentine pesos. The Central Bank of Argentina maintains certain currency controls that limit our ability to access U.S. dollars and remit funds from our Argentine operations. In the past, the Argentine government has also instituted price controls on crude oil, diesel and gasoline prices and instituted an exchange rate freeze in connection with those prices. These price controls and an exchange rate freeze could be instituted again in the future. Further, there are additional concerns regarding Argentina's debt burden, notwithstanding Argentina's restructuring deal with international bondholders in August 2020, as Argentina attempts to manage its substantial sovereign debt issues. These concerns could further negatively impact Argentina's economy and adversely affect our Argentine operations. 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.
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.
We recorded aggregate foreign currency losses of $0.6 million and $2.4 million for the three and six months ended March 31, 2024, respectively, and $0.1 million and $0.3 million for the three and six months ended March 31, 2023, respectively. The aggregate foreign currency loss for three and six months ended March 31, 2024 was primarily due to Argentina's devaluation of its peso relative to the U.S. dollar by approximately 55 percent in December 2023. In the future, we may incur larger currency devaluations, foreign exchange restrictions or other difficulties repatriating U.S. dollars from Argentina or elsewhere, which could have a material adverse impact on our business, financial condition and results of operations. As of March 31, 2024, our cash balance in Argentina was the U.S. dollar equivalent of $13.0 million in Argentine Pesos.
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.
Although we attempt to minimize the potential impact of such risks by operating in more than one geographical area, during the three and six months ended March 31, 2024, approximately 6.9 percent and 7.5 percent of our operating revenues were generated from international locations compared to 7.4 percent and 7.5 percent during the three and six months ended March 31, 2023, respectively. During the three and six months ended March 31, 2024, approximately 74.6 percent and 76.7 percent of operating revenues from international locations were from operations in South America compared to 86.3 percent and 88.4 percent during the three and six months ended March 31, 2023, respectively. Substantially all of the South American operating revenues were from Argentina and Colombia. The future occurrence of one or more international events arising from the types of risks described above could have a material adverse impact on our business, financial condition and results of operations.
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NOTE 3 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of March 31, 2024 and September 30, 2023 consisted of the following:
(in thousands)Estimated Useful LivesMarch 31, 2024September 30, 2023
Drilling services equipment
4 - 15 years
$6,529,103 $6,396,612 
Tubulars
4 years
570,981 564,032 
Real estate properties
10 - 45 years
48,463 47,313 
Other
2 - 23 years
455,147 443,366 
Construction in progress1
131,171 97,374 
7,734,865 7,548,697 
Accumulated depreciation(4,741,040)(4,627,002)
Property, plant and equipment, net$2,993,825 $2,921,695 
Assets held-for-sale$ $645 
(1)Included in construction in progress are costs for projects in progress to upgrade or refurbish certain rigs in our existing fleet. Additionally, we include other advances for capital maintenance purchase-orders that are open/in process. As these various projects are completed, the costs are then classified to their appropriate useful life category.
Depreciation
Depreciation expense during the three months ended March 31, 2024 and 2023 was $102.9 million and $94.6 million, including abandonments of $2.6 million and $1.0 million, respectively. During the three months ended March 31, 2024, depreciation expense included $7.3 million of accelerated depreciation for components on rigs that are scheduled for conversion in fiscal year 2024 as compared to $0.8 million for three months ended March 31, 2023. Depreciation expense during the six months ended March 31, 2024 and 2023 was $195.3 million and $189.5 million, including abandonments of $3.1 million and $2.1 million, respectively. During the six months ended March 31, 2024, depreciation expense included $8.2 million of accelerated depreciation for components on rigs that are scheduled for conversion in fiscal year 2024 as compared to $1.7 million for six months ended March 31, 2023. These expenses are recorded within Depreciation and amortization on our Unaudited Condensed Consolidated Statements of Operations.
In November 2022, a fire at a wellsite caused substantial damage to one of our super-spec rigs within our North America Solutions segment. The major components were destroyed beyond repair and considered a total loss, and, as a result, these assets were written off and the rig was removed from our available rig count. At the time of the loss, the rig was fully insured under replacement cost insurance. The loss of $9.2 million was recorded as abandonment expense within Depreciation and amortization in our Unaudited Condensed Consolidated Statement of Operations for the six months ended March 31, 2023 and was offset by an insurance recovery that was also recognized within Depreciation and amortization for the same amount as the loss. During the fiscal year ended September 30, 2023, we collected $9.2 million of the total expected insurance proceeds. During the three months ended March 31, 2024, we recognized a gain on involuntary conversion of the rig of $5.5 million. We collected $5.0 million of insurance proceeds during the period, with an outstanding receivable of $0.5 million as of March 31, 2024. The total insurance proceeds received during the period exceeds the recognized loss and therefore was recognized as a gain within operating income during the three months ended March 31, 2024.
Impairment Charges
Fiscal Year 2024 Activity
We did not record any impairment charges during the three and six months ended March 31, 2024.
Fiscal Year 2023 Activity
During the six months ended March 31, 2023, our North America Solutions assets that were previously classified as Assets held-for-sale at September 30, 2022 were either sold or written down to scrap value. The aggregate net book value of these remaining assets was $3.0 million, which exceeded the estimated scrap value of $0.3 million, resulting in a non-cash impairment charge of $2.7 million during the six months ended March 31, 2023. During the same period, we also identified additional equipment that met the asset held-for-sale criteria and was reclassified as Assets held-for-sale on our Unaudited Condensed Consolidated Balance Sheets. The aggregate net book value of the equipment of $1.4 million was written down to its estimated scrap value of $0.1 million, resulting in a non-cash impairment charge of $1.3 million during the six months ended March 31, 2023. These impairment charges are recorded within our North America Solutions segment in our Unaudited Condensed Consolidated Statement of Operations.
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During the six months ended March 31, 2023, the Company initiated a plan to decommission and scrap four international FlexRig® drilling rigs and four conventional drilling rigs located in Argentina that are not suitable for unconventional drilling. As a result, these rigs were reclassified to Assets held-for-sale on our Unaudited Condensed Consolidated Balance Sheets as of March 31, 2023. The rigs’ aggregate net book value of $8.8 million was written down to the estimated scrap value of $0.7 million, which resulted in a non-cash impairment charge of $8.1 million within our International Solutions segment and recorded in our Unaudited Condensed Consolidated Statement of Operations during the six months ended March 31, 2023.
Gain on Reimbursement of Drilling Equipment
We recognized gains of $7.5 million and $15.0 million during the three and six months ended March 31, 2024, respectively, and $11.6 million and $27.3 million during the three and six months ended March 31, 2023, respectively, related to customer reimbursement for the current replacement value of lost or damaged drill pipe. Gains related to these asset sales are recorded in Gains on reimbursement of drilling equipment within our Unaudited Condensed Consolidated Statements of Operations.
NOTE 4 GOODWILL AND INTANGIBLE ASSETS
Goodwill
During the three and six months ended March 31, 2024, we had no additions or impairments to goodwill. As of March 31, 2024 and September 30, 2023, the goodwill balance was $45.7 million.
Intangible Assets
Our intangible assets are recorded within our North America Solutions reportable segment and consist of the following:
March 31, 2024September 30, 2023
(in thousands) Weighted Average Estimated Useful LivesGross Carrying AmountAccumulated AmortizationNetGross Carrying AmountAccumulated AmortizationNet
Finite-lived intangible asset:
Developed technology15 years$89,096 $37,070 $52,026 $89,096 $34,092 $55,004 
Intellectual property13 years2,000 582 1,418 2,000 503 1,497 
Trade name20 years5,865 1,949 3,916 5,865 1,791 4,074 
$96,961 $39,601 $57,360 $96,961 $36,386 $60,575 
Amortization expense in the Unaudited Condensed Consolidated Statements of Operations was $1.6 million for the three months ended March 31, 2024 and 2023, respectively and $3.2 million and $3.4 million for the six months ended March 31, 2024 and 2023, respectively. Amortization expense is estimated to be approximately $3.2 million for the remainder of fiscal year 2024, and approximately $6.4 million for fiscal year 2025 through 2028.
NOTE 5 DEBT
We have the following unsecured long-term debt outstanding with maturity shown in the following table:
March 31, 2024September 30, 2023
(in thousands)Face Amount    Unamortized Discount and Debt Issuance Cost    Book Value    Face Amount    Unamortized Discount and Debt Issuance Cost    Book Value
Unsecured senior notes:
Due September 29, 2031$550,000 $(4,559)$545,441 $550,000 $(4,856)$545,144 
Long-term debt$550,000 $(4,559)$545,441 $550,000 $(4,856)$545,144 
2.90% Senior Notes due 2031 On September 29, 2021, we issued $550.0 million aggregate principal amount of the 2.90 percent 2031 Notes in an offering to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act (“Rule 144A”) and to certain non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act (“Regulation S”). Interest on the 2031 Notes is payable semi-annually on March 29 and September 29 of each year, commencing on March 29, 2022.
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In June 2022, we settled a registered exchange offer (the “Registered Exchange Offer”) to exchange the 2031 Notes for new, SEC-registered notes that are substantially identical to the terms of the 2031 Notes, except that the offer and issuance of the new notes have been registered under the Securities Act and certain transfer restrictions, registration rights and additional interest provisions relating to the 2031 Notes do not apply to the new notes. All of the 2031 Notes were exchanged in the Registered Exchange Offer.
The indenture governing the 2031 Notes contains certain covenants that, among other things and subject to certain exceptions, limit the ability of the Company and its subsidiaries to incur certain liens; engage in sale and lease-back transactions; and consolidate, merge or transfer all or substantially all of the assets of the Company. The indenture governing the 2031 Notes also contains customary events of default with respect to the 2031 Notes.
Credit Facility
On November 13, 2018, we entered into a credit agreement by and among the Company, as borrower, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto, which was amended on November 13, 2019, providing for an unsecured revolving credit facility (as amended, the “2018 Credit Facility”), that was set to mature on November 13, 2024. On April 16, 2021, lenders with $680.0 million of commitments under the 2018 Credit Facility exercised their option to extend the maturity of the 2018 Credit Facility from November 13, 2024 to November 12, 2025. No other terms of the 2018 Credit Facility were amended in connection with this extension. On March 8, 2022, we entered into the second amendment to the 2018 Credit Facility, which, among other things, raised the number of potential future extensions of the maturity date applicable to extending lenders from one to two such potential extensions and replaced provisions in respect of interest rate determinations that were based on the London Interbank Offered Rate with provisions based on the Secured Overnight Financing Rate. Additionally, lenders with $680.0 million of commitments under the 2018 Credit Facility exercised their option to extend the maturity of the 2018 Credit Facility from November 12, 2025 to November 11, 2026. On February 10, 2023, lenders with $680.0 million of commitments under the 2018 Credit Facility exercised their option to extend the maturity of the 2018 Credit Facility from November 11, 2026 to November 12, 2027. The remaining $70.0 million of commitments under the 2018 Credit Facility will expire on November 13, 2024, unless extended by the applicable lender before such date.
The 2018 Credit Facility has $750.0 million in aggregate availability with a maximum of $75.0 million available for use as letters of credit. As of March 31, 2024, there were no borrowings or letters of credit outstanding, leaving $750.0 million available to borrow under the 2018 Credit Facility. For a full description of the 2018 Credit Facility, see Note 6—Debt to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K.
As of March 31, 2024, we had $95.0 million in uncommitted bilateral credit facilities, for the purpose of obtaining the issuance of international letters of credit, bank guarantees, and performance bonds. Of the $95.0 million, $40.0 million was outstanding as of March 31, 2024. Separately, we had $5.0 million in standby letters of credit and bank guarantees outstanding. In total, we had $45.0 million outstanding as of March 31, 2024.
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 March 31, 2024, we were in compliance with all debt covenants.
NOTE 6 INCOME TAXES
We use an estimated annual effective tax rate for purposes of determining the income tax provision during interim reporting periods. In calculating our estimated annual effective tax rate, we consider forecasted annual pre-tax income and estimated permanent book versus tax differences. Adjustments to the effective tax rate and estimates could occur during the year as information and assumptions change which could include, but are not limited to, changes to the forecasted amounts, estimates of permanent book versus tax differences, and changes to tax laws and rates.
Our income tax expense for the three months ended March 31, 2024 and 2023 was $32.2 million and $51.1 million, respectively, resulting in effective tax rates of 27.5 percent and 23.8 percent, respectively. Our income tax expense for the six months ended March 31, 2024 and 2023 was $62.3 million and $83.5 million, respectively, resulting in effective tax rates of 25.7 percent and 24.2 percent, respectively. Effective tax rates differ from the U.S. federal statutory rate of 21.0 percent for the three and six months ended March 31, 2024 primarily due to state and foreign income taxes, and permanent non-deductible items. Additionally, the effective tax rate for the six months ended March 31, 2024 differs from U.S. federal statutory rate of 21.0 percent due to a discrete tax benefit of $0.9 million related to equity compensation.
Effective tax rates differ from the U.S. federal statutory rate of 21.0 percent for the three and six months ended March 31, 2023 primarily due to state and foreign income taxes, and permanent non-deductible items. Additionally, the effective tax rate for the six months ended March 31, 2023 differs from the U.S. federal statutory rate of 21.0 percent due to a discrete tax expense of $0.2 million related to equity compensation.
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As of March 31, 2024, we have recorded unrecognized tax benefits and related interest and penalties of approximately $3.4 million. We believe it is reasonably possible that up to $2.8 million of the unrecognized tax benefits, interest and penalties will be recognized as of June 30, 2024 as a result of a lapse of the statute of limitations. We cannot predict with certainty if we will achieve ultimate resolution of any additional uncertain tax positions associated with our U.S. and international operations resulting in any additional material increases or decreases of our unrecognized tax benefits for the next twelve months.
NOTE 7 SHAREHOLDERS’ EQUITY
The Company has an evergreen authorization from the Board of Directors ("the Board") 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. During the three and six months ended March 31, 2024, we repurchased 0.1 million and 1.4 million common shares at an aggregate cost of $4.0 million and $51.6 million, respectively, including excise tax of $0.3 million for the six months ended March 31, 2024. During the three and six months ended March 31, 2023, we repurchased 2.5 million and 3.4 million common shares at an aggregate cost of $106.7 million and $145.8 million (including excise tax of $0.8 million in both periods), respectively.
During the three and six months ended March 31, 2024, we declared $42.1 million and $101.2 million, respectively, in cash dividends. A base cash dividend of $0.25 per share and a supplemental dividend of $0.17 per share was declared on February 28, 2024 for shareholders of record on May 17, 2024, payable on May 31, 2024. As a result, we recorded a Dividend payable of $42.0 million on our Unaudited Condensed Consolidated Balance Sheets as of March 31, 2024.
Accumulated Other Comprehensive Loss
Components of accumulated other comprehensive loss were as follows:
March 31,September 30,
(in thousands)20242023
Pre-tax amounts:
Unrealized pension actuarial loss$(10,059)$(10,407)
$(10,059)$(10,407)
After-tax amounts:
Unrealized pension actuarial loss$(7,713)$(7,981)
$(7,713)$(7,981)
Fluctuations in actuarial gains and losses are primarily due to changes in the discount rate and investment returns related to the defined benefit pension plan.
The following is a summary of the changes in accumulated other comprehensive loss, net of tax, related to the defined benefit pension plan for the three and six months ended March 31, 2024:
(in thousands)Three Months Ended March 31, 2024Six Months Ended March 31, 2024
Balance at beginning of period$(7,847)$(7,981)
Activity during the period:
Net current-period other comprehensive income134 268 
134 268 
Balance at March 31, 2024$(7,713)$(7,713)
NOTE 8 REVENUE FROM CONTRACTS WITH CUSTOMERS
Drilling Services Revenue
The majority of our drilling services are performed on a “daywork” contract basis, under which we charge a rate per day, with the price determined by the location, depth and complexity of the well to be drilled, operating conditions, the duration of the contract, and the competitive forces of the market. These drilling services, including our technology solutions, represent a series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. Because our customers benefit equally throughout the service period and our efforts in providing drilling services are incurred relatively evenly over the period of performance, revenue is recognized over time using a time-based input measure as we provide services to the customer. For any contracts that include a provision for pooled term days at contract inception, followed by the assignment of days to specific rigs throughout the contract term, we have elected, as a practical expedient, to recognize revenue in the amount for which the entity has a right to invoice, as permitted by ASC 606.
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Performance-based contracts are contracts pursuant to which we are compensated partly based upon our performance against a mutually agreed upon set of predetermined targets. These types of contracts are relatively new to the industry and typically have a lower base dayrate, but give us the opportunity to receive additional compensation by meeting or exceeding certain performance targets agreed to by our customers. The variable consideration that we expect to receive is estimated at the most likely amount, and constrained to an amount such that it is probable a significant reversal of revenue previously recognized will not occur based on the performance targets. Total revenue recognized from performance contracts, including performance bonuses, was $287.8 million and $586.0 million, of which $10.4 million and $25.6 million was related to performance bonuses recognized due to the achievement of performance targets during the three and six months ended March 31, 2024, respectively. Total revenue recognized from performance contracts, including performance bonuses, was $297.2 million and $567.2 million, of which $11.5 million and $21.6 million was related to performance bonuses recognized due to the achievement of performance targets during the three and six months ended March 31, 2023, respectively.
Contract Costs
We had capitalized fulfillment costs of $10.6 million and $11.4 million as of March 31, 2024 and September 30, 2023, respectively.
Remaining Performance Obligations
The total aggregate transaction price allocated to the unsatisfied performance obligations, commonly referred to as backlog, as of March 31, 2024 was approximately $1.7 billion, of which approximately $0.6 billion is expected to be recognized during the remainder of fiscal year 2024, approximately $0.5 billion during fiscal year 2025, and approximately $0.6 billion in fiscal year 2026 and thereafter. These amounts do not include anticipated contract renewals or expected performance bonuses as part of its calculation. Additionally, contracts that currently contain month-to-month terms are represented in our backlog as one month of unsatisfied performance obligations. Our contracts are subject to cancellation or modification at the election of the customer; however, due to the level of capital deployed by our customers on underlying projects, we have not been materially adversely affected by contract cancellations or modifications in the past.
Contract Assets and Liabilities
The following tables summarize the balances of our contract assets (net of allowance for estimated credit losses) and liabilities at the dates indicated:
(in thousands)March 31, 2024September 30, 2023
Contract assets, net$4,772 $6,560 
(in thousands)March 31, 2024
Contract liabilities balance at September 30, 2023$28,882 
Payment received/accrued and deferred29,242 
Revenue recognized during the period(31,320)
Contract liabilities balance at March 31, 2024$26,804 
NOTE 9 EARNINGS PER COMMON SHARE
ASC 260, Earnings per Share, requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividends or dividend equivalents as a separate class of securities in calculating earnings per share. 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.  As such, we are required to include these grants in the calculation of our basic earnings per share and calculate basic earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings.
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, non-vested restricted stock and performance units.
Under the two-class method of calculating earnings per share, dividends paid and a portion of undistributed net income, but not losses, are allocated to unvested restricted stock grants that receive dividends, which are considered participating securities.
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During the second quarter of fiscal year 2023, Income from discontinued operations was presented as a separate line item on our Unaudited Condensed Consolidated Statements of Operations. To conform with the current fiscal year presentation, we reclassified amounts previously presented in Income from discontinued operations, which were not material, to Other within Other income (expense) on our Unaudited Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2023. To conform with the current fiscal year presentation, basic and diluted earnings per share for continuing and discontinued operations are presented in the aggregate, for the three and six months ended March 31, 2023, as presented below.
The following table sets forth the computation of basic and diluted earnings per share:
Three Months Ended
March 31,
Six Months Ended
March 31,
(in thousands, except per share amounts)2024202320242023
Numerator:
Net income $84,831 $164,040 $180,004 261,185 
Adjustment for basic earnings per share
Earnings allocated to unvested shareholders(1,242)(2,237)(2,489)(3,511)
Numerator for basic earnings per share83,589 161,803 177,515 257,674 
Adjustment for diluted earnings per share
Effect of reallocating undistributed earnings of unvested shareholders2 6 3 6 
Numerator for diluted earnings per share$83,591 $161,809 $177,518 $257,680 
Denominator:
Denominator for basic earnings per share - weighted-average shares98,774 103,968 98,960 104,615 
Effect of dilutive shares from restricted stock and performance share units272 395 256 388 
Denominator for diluted earnings per share - adjusted weighted-average shares99,046 104,363 99,216 105,003 
Basic earnings per common share:$0.85 $1.55 $1.79 $2.46 
Diluted earnings per common share:$0.84 $1.55 $1.79 $2.46 
The following potentially dilutive average shares attributable to outstanding equity awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive:
Three Months Ended
March 31,
Six Months Ended
March 31,
(in thousands, except per share amounts)2024202320242023
Potentially dilutive shares excluded as anti-dilutive2,684 2,426 2,388 2,516 
Weighted-average price per share$57.93 $62.03 $60.63 $61.74 
NOTE 10 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 following 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.
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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.
Fair Value Measurements
The following tables summarize our financial assets and liabilities measured at fair value and indicate the level in the fair value hierarchy in which we classify the fair value measurement as of the dates indicated below:
March 31, 2024
(in thousands)Fair Value    Level 1    Level 2    Level 3
Assets
Short-term investments:
Corporate and municipal debt securities$38,756 $ $38,756 $ 
U.S. government and federal agency securities 44,634 44,634   
Total83,390 44,634 38,756  
Long-term Investments:
Recurring fair value measurements:
Equity securities:
Non-qualified supplemental savings plan16,165 16,165   
Investment in ADNOC Drilling172,620 172,620   
Investment in Tamboran11,734 11,734   
Debt securities:
Investment in Galileo36,301   36,301 
Geothermal debt securities2,000   2,000 
Other debt securities
5,250 5,000  250 
Total244,070 205,519  38,551 
Nonrecurring fair value measurements1:
Other equity securities
2,965   2,965 
Total2,965   2,965 
Total247,035 205,519  41,516 
Liabilities
Contingent consideration$14,000 $ $ $14,000 
(1)As of March 31, 2024, our equity security investments in geothermal energy totaled $27.2 million and our debt security investments in held to maturity bonds totaled $0.2 million. None of these investments were marked to fair value during the period. The investments are measured at cost, less any impairments.
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September 30, 2023
(in thousands)Fair Value    Level 1    Level 2    Level 3
Assets
Short-term investments:
Corporate debt securities$48,764 $ $48,764 $ 
U.S. government and federal agency securities44,836 44,836   
Total93,600 44,836 48,764  
Long-term investments:
Recurring fair value measurements:
Equity securities:
Non-qualified supplemental savings plan14,597 14,597   
Investment in ADNOC Drilling174,758 174,758   
Investment in Tamboran9,920 9,920   
Debt securities:
Investment in Galileo35,434   35,434 
Geothermal debt securities2,006   2,006 
Total236,715 199,275  37,440 
Nonrecurring fair value measurements1:
Other equity securities2
2,430   2,430 
Total2,430   2,430 
Total$239,145 $199,275 $ $39,870 
Liabilities
Contingent consideration$9,455 $ $