NOTE 15 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. 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 STATEMENTS OF OPERATIONS
(in thousands)

	Year Ended September 30, 2016
	Guarantor/ Parent			Issuer Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Total 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			—

Income (loss) from continuing operations before income taxes		(60,880	)		(41,729	)		(31,696	)		61,638			(72,667	)
Income tax provision (benefit)		(4,052	)		5,127			(20,752	)		—			(19,677	)

Income (loss) from continuing operations		(56,828	)		(46,856	)		(10,944	)		61,638			(52,990	)
Income (loss) 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)
(in thousands)

	Year Ended September 30, 2016
	Guarantor/ Parent			Issuer Subsidiary			Non-Guarantor Subsidiaries			Eliminations		Total Consolidated
Net income (loss)	$	(56,828	)	$	(46,856	)	$	(14,782	)	$	61,638	$	(56,828	)
Other comprehensive loss, net of income taxes:
Unrealized (appreciation) depreciation 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 loss		(63	)		1,236			—			—		1,173

Comprehensive income	$	(56,891	)	$	(45,620	)	$	(14,782	)	$	61,638	$	(55,655	)

CONDENSED CONSOLIDATING STATEMENTS OF INCOME
(in thousands)

	Year Ended September 30, 2015, as adjusted
	Guarantor/ Parent			Issuer Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating revenue	$	—		$	2,735,863		$	425,914		$	(75	)	$	3,161,702
Operating costs and other		10,875			2,037,465			444,503			(3,104	)		2,489,739

Operating income (loss) from continuing operations		(10,875	)		698,398			(18,589	)		3,029			671,963
Other income (expense), net		(91	)		7,523			536			(3,029	)		4,939
Interest expense		(159	)		(8,955	)		(5,909	)		—			(15,023	)
Equity in net income of subsidiaries		427,342			(13,128	)		—			(414,214	)		—

Income (loss) from continuing operations before income taxes		416,217			683,838			(23,962	)		(414,214	)		661,879
Income tax provision		(4,210	)		258,536			(12,921	)		—			241,405

Income (loss) from continuing operations		420,427			425,302			(11,041	)		(414,214	)		420,474
Loss from discontinued operations before income taxes		—			—			(124	)		—			(124	)
Income tax benefit		—			—			(77	)		—			(77	)

Loss from discontinued operations		—			—			(47	)		—			(47	)

Net income (loss)	$	420,427		$	425,302		$	(11,088	)	$	(414,214	)	$	420,427

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)

	Year Ended September 30, 2015, as adjusted
	Guarantor/ Parent			Issuer Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net income (loss)	$	420,427		$	425,302		$	(11,088	)	$	(414,214	)	$	420,427
Other comprehensive loss, net of income taxes:
Unrealized depreciation on securities, net		—			(80,217	)		—			—			(80,217	)
Minimum pension liability adjustments, net		(666	)		(3,620	)		—			—			(4,286	)

Other comprehensive loss		(666	)		(83,837	)		—			—			(84,503	)

Comprehensive income (loss)	$	419,761		$	341,465		$	(11,088	)	$	(414,214	)	$	335,924

CONDENSED CONSOLIDATING STATEMENTS OF INCOME
(in thousands)

	Year Ended September 30, 2014, as adjusted
	Guarantor/ Parent			Issuer Subsidiary			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating revenue	$	—		$	3,325,039		$	391,081		$	(152	)	$	3,715,968
Operating costs and other		10,763			2,291,775			364,556			(4,300	)		2,662,794

Operating income (loss) from continuing operations		(10,763	)		1,033,264			26,525			4,148			1,053,174
Other income, net		57			48,108			2,124			(4,148	)		46,141
Interest expense		(42	)		(3,049	)		(1,566	)		—			(4,657	)
Equity in net income of subsidiaries		713,001			2,524			—			(715,525	)		—

Income from continuing operations before income taxes		702,253			1,080,847			27,083			(715,525	)		1,094,658
Income tax provision		(4,310	)		370,734			21,624			—			388,048

Income from continuing operations		706,563			710,113			5,459			(715,525	)		706,610
Income from discontinued operations before income taxes		—			—			2,758			—			2,758
Income tax provision		—			—			2,805			—			2,805

Loss from discontinued operations		—			—			(47	)		—			(47	)

Net income	$	706,563		$	710,113		$	5,412		$	(715,525	)	$	706,563

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)

	Year Ended September 30, 2014, as adjusted
	Guarantor/ Parent			Issuer Subsidiary			Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Net income	$	706,563		$	710,113		$	5,412	$	(715,525	)	$	706,563
Other comprehensive income (loss), net of income taxes:
Unrealized depreciation on securities, net		—			(19,006	)		—		—			(19,006	)
Reclassification of realized gains in net income, net		—			(27,737	)		—		—			(27,737	)
Minimum pension liability adjustments, net		(213	)		(2,448	)		—		—			(2,661	)

Other comprehensive income (loss)		(213	)		(49,191	)		—		—			(49,404	)

Comprehensive income	$	706,350		$	660,922		$	5,412	$	(715,525	)	$	657,159

CONDENSED CONSOLIDATING BALANCE SHEETS
(in thousands)

	September 30, 2016
	Guarantor/ Parent			Issuer Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	(955	)	$	899,028	$	7,488	$	—		$	905,561
Short-term investments		—			44,148		—		—			44,148
Accounts receivable, net of reserve		2			325,325		51,121		(1,279	)		375,169
Inventories		—			87,946		36,379		—			124,325
Prepaid expenses and other		6,928			20,625		71,753		(21,239	)		78,067
Assets held for sale		—			18,471		26,881		—			45,352
Current assets of discontinued operations		—			—		64		—			64

Total current assets		5,975			1,395,543		193,686		(22,518	)		1,572,686
Investments		13,431			71,524		—		—			84,955
Property, plant and equipment, net		59,173			4,716,736		368,824		—			5,144,733
Intercompany		16,147			1,399,323		260,939		(1,676,409	)		—
Other assets		233			267		29,145					29,645
Investment in subsidiaries		5,579,713			208,118		—		(5,787,831	)		—

Total assets	$	5,674,672		$	7,791,511	$	852,594	$	(7,486,758	)	$	6,832,019


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	80,000		$	10,868	$	5,828	$	(1,274	)	$	95,422
Accrued liabilities		1,822			176,985		35,598		20,234			234,639
Current liabilities of discontinued operations		—			—		59		—			59

Total current liabilities		81,822			187,853		41,485		18,960			330,120
Noncurrent liabilities:
Long-term debt		—			491,847		—		—			491,847
Deferred income taxes		(5,930	)		1,303,324		45,062		—			1,342,456
Intercompany		1,016,673			209,276		491,838		(1,717,787	)		—
Other		21,182			36,379		45,220		—			102,781
Noncurrent liabilities of discontinued operations		—			—		3,890		—			3,890

Total noncurrent liabilities		1,031,925			2,040,826		586,010		(1,717,787	)		1,940,974
Shareholders' equity:
Common stock		11,140			100		—		(100	)		11,140
Additional paid-in capital		448,452			47,533		549		(48,082	)		448,452
Retained earnings		4,289,807			5,510,105		224,550		(5,734,655	)		4,289,807
Accumulated other comprehensive income (loss)		(204	)		5,094		—		(5,094	)		(204	)
Treasury stock, at cost		(188,270	)		—		—		—			(188,270	)

Total shareholders' equity		4,560,925			5,562,832		225,099		(5,787,931	)		4,560,925
Total liabilities and shareholders' equity	$	5,674,672		$	7,791,511	$	852,594	$	(7,486,758	)	$	6,832,019

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)
(in thousands)

	September 30, 2015, as adjusted
	Guarantor/ Parent			Issuer Subsidiary		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	(838	)	$	693,273	$	36,949	$	—		$	729,384
Short-term investments		—			45,543		—		—			45,543
Accounts receivable, net of reserve		152			374,383		71,418		(5	)		445,948
Inventories		—			88,010		40,531		—			128,541
Deferred income taxes		2,834			19,277		—		(4,905	)		17,206
Prepaid expenses and other		20,018			6,713		45,647		(7,903	)		64,475
Current assets of discontinued operations		—			—		8,097		—			8,097

Total current assets		22,166			1,227,199		202,642		(12,813	)		1,439,194
Investments		12,871			91,483		—		—			104,354
Property, plant and equipment, net		55,902			5,063,705		443,563		—			5,563,170
Intercompany		15,875			1,192,634		230,652		(1,439,161	)		—
Other assets		8,387			1,389		38,901		(8,153	)		40,524
Investment in subsidiaries		5,623,754			227,587		—		(5,851,341	)		—

Total assets	$	5,738,955		$	7,803,997	$	915,758	$	(7,311,468	)	$	7,147,242


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Long-term debt due within one year	$	—		$	39,094	$	—	$	—		$	39,094
Accounts payable		80,673			20,404		7,097		(5	)		108,169
Accrued liabilities		10,688			151,721		46,251		(11,103	)		197,557
Current liabilities of discontinued operations		—			—		3,377		—			3,377

Total current liabilities		91,361			211,219		56,725		(11,108	)		348,197
Noncurrent liabilities:
Long-term debt		—			492,443		—		—			492,443
Deferred income taxes		—			1,275,428		33,546		(13,058	)		1,295,916
Intercompany		733,008			186,784		516,169		(1,435,961	)		—
Other		18,740			31,560		59,820		—			110,120
Noncurrent liabilities of discontinued operations		—			—		4,720		—			4,720

Total noncurrent liabilities		751,748			1,986,215		614,255		(1,449,019	)		1,903,199
Shareholders' equity:
Common stock		11,099			100		—		(100	)		11,099
Additional paid-in capital		420,141			45,824		349		(46,173	)		420,141
Retained earnings		4,648,346			5,556,783		244,429		(5,801,212	)		4,648,346
Accumulated other comprehensive Income (loss)		(1,377	)		3,856		—		(3,856	)		(1,377	)
Treasury stock, at cost		(182,363	)		—		—		—			(182,363	)

Total shareholders' equity		4,895,846			5,606,563		244,778		(5,851,341	)		4,895,846
Total liabilities and shareholders' equity	$	5,738,955		$	7,803,997	$	915,758	$	(7,311,468	)	$	7,147,242

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(in thousands)

	September 30, 2016
	Guarantor/ Parent			Issuer Subsidiary			Non-Guarantor Subsidiaries			Eliminations		Total Consolidated
Net cash provided by (used in) operating activities	$	3,521		$	776,364		$	(26,288	)	$	—	$	753,597
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	)
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	)
Exercise of stock options, net of tax withholding		1,040			—			—			—		1,040
Tax withholdings related to net share settlements of restricted stock		(3,912	)		—			—			—		(3,912	)
Excess tax benefit from stock-based compensation		(775	)		1,509			200			—		934

Net cash provided by (used in) financing activities		(3,647	)		(339,754	)		200			—		(343,201	)
Net increase (decrease) in cash and cash equivalents		(117	)		205,755			(29,461	)		—		176,177
Cash and cash equivalents, beginning of period		(838	)		693,273			36,949					729,384

Cash and cash equivalents, end of period	$	(955	)	$	899,028		$	7,488		$	—	$	905,561

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Continued)
(in thousands)

	September 30, 2015, as adjusted
	Guarantor/ Parent			Issuer Subsidiary			Non-Guarantor Subsidiaries			Eliminations		Total Consolidated
Net cash provided by operating activities	$	3,623		$	1,379,707		$	45,244		$	—	$	1,428,574
INVESTING ACTIVITIES:
Capital expenditures		(24,818	)		(1,064,288	)		(42,339	)		—		(1,131,445	)
Purchase of short-term investments		—			(45,607	)		—			—		(45,607	)
Intercompany transfers		24,818			(24,818	)		—			—		—
Proceeds from asset sales		1			21,329			1,313			—		22,643

Net cash provided by (used in) investing activities		1			(1,113,384	)		(41,026	)		—		(1,154,409	)
FINANCING ACTIVITIES:
Payments on long-term debt		—			(40,000	)		—			—		(40,000	)
Proceeds from senior notes, net of discount		—			497,125			—			—		497,125
Debt issuance costs		—			(5,474	)		—			—		(5,474	)
Proceeds on short-term debt		—			—			1,002			—		1,002
Payments on short-term debt		—			—			(1,002	)		—		(1,002	)
Repurchase of common stock		(59,654	)		—			—			—		(59,654	)
Intercompany transfers		358,021			(358,021	)		—			—		—
Dividends paid		(298,367	)		—			—			—		(298,367	)
Exercise of stock options, net of tax withholding		2,650			—			—			—		2,650
Tax withholdings related to net share settlements of restricted stock		(5,140	)		—			—			—		(5,140	)
Excess tax benefit from stock-based compensation		78			3,665			29			—		3,772

Net cash provided by (used in) financing activities		(2,412	)		97,295			29			—		94,912
Net increase in cash and cash equivalents		1,212			363,618			4,247			—		369,077
Cash and cash equivalents, beginning of period		(2,050	)		329,655			32,702			—		360,307

Cash and cash equivalents, end of period	$	(838	)	$	693,273		$	36,949		$	—	$	729,384

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Continued)
(in thousands)

	September 30, 2014, as adjusted
	Guarantor/ Parent			Issuer Subsidiary			Non-Guarantor Subsidiaries			Eliminations		Total Consolidated
Net cash provided by (used in) operating activities	$	(21,094	)	$	1,050,609		$	99,567		$	—	$	1,129,082
INVESTING ACTIVITIES:
Capital expenditures		(17,786	)		(840,341	)		(93,409	)		—		(951,536	)
Intercompany transfers		17,786			(17,786	)		—			—		—
Proceeds from asset sales		2			27,401			2,773			—		30,176
Proceeds from sale of investments		—			49,205			—			—		49,205

Net cash provided by (used in) investing activities		2			(781,521	)		(90,636	)		—		(872,155	)
FINANCING ACTIVITIES:
Payments on long-term debt		—			(115,000	)		—			—		(115,000	)
Intercompany transfers		264,386			(264,386	)		—			—		—
Dividends paid		(264,386	)		—			—			—		(264,386	)
Exercise of stock options, net of tax withholding		23,250			—			—			—		23,250
Tax withholdings related to net share settlements of restricted stock		(3,049	)		—			—			—		(3,049	)
Excess tax benefit from stock-based compensation		(957	)		27,357			216			—		26,616

Net cash provided by (used in) financing activities		19,244			(352,029	)		216			—		(332,569	)
Net increase (decrease) in cash and cash equivalents		(1,848	)		(82,941	)		9,147			—		(75,642	)
Cash and cash equivalents, beginning of period		(202	)		412,596			23,555			—		435,949

Cash and cash equivalents, end of period	$	(2,050	)	$	329,655		$	32,702		$	—	$	360,307