Property And Equipment

6 Months Ended

Mar. 31, 2012

4. PROPERTY AND EQUIPMENT

A summary of property and equipment by classification is as follows (in thousands):


(In thousands)	March 31, 2012			September 30, 2011
Drilling vessels and equipment	$	1,580,714		$	1,578,592
Construction work in progress		1,061,157			736,827
Drill pipe		18,703			18,182
Office equipment and other		12,750			8,800

Cost		2,673,324			2,342,401
Less: Accumulated depreciation		(485,853	)		(455,080	)

Drilling and other property and equipment, net	$	2,187,471		$	1,887,321

Property and equipment are recorded at costs. Interest incurred related to property under construction is capitalized as a component of construction costs. Interest capitalized during the six months ended March 31, 2012 and 2011, was approximately $15.9 million and $2.4 million, respectively.

New Construction Projects

As of March 31, 2012, we had expended approximately $1.0 billion towards the construction of our six drilling units currently under construction. Total remaining firm commitments for our six drilling units currently under construction are approximately $1.3 billion.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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