04-HP-876_newMDA.qxd 12/15/04 3:04 PM Page 48 assumption on current yields on AA-rated corporate long-term bonds. The rate of compensation increase assumption reflects actual experience and future outlook. The expected r eturn on plan assets is determined based on historical portfolio results and future expectations of rates of return. Actual results that differ from estimated assumptions are  accumulated and amortized over the estimated future working life of  the plan participants and could ther efore affect expense recognized and  obligations recorded in future periods. Revenues and costs on daywor contracts are recognized daily as the work progresses. For certain contracts, we receive lump-sum payments for the mobilization of rigs and other drilling equipment. Revenues earned, net of direct costs incurred for the mobilization, are deferred and recognized over the term of the r elated drilling contract. Other lump-sum payments received from customers relating to specific con- tracts are deferred and amortized to income as services are performed. Costs incurred to relocate rigs and other drilling equipment to areas in which a contract has not been secur ed are expensed as incurred.  Foreign Currency Exchange Rate Risk The Company has international operations in Hungary and in several South American countries, as well as a labor contract for work in E quatorial Guinea and Russia. With the exception of Venezuela, the Company’s exposure to currency valuation losses is usually minimal due to the fact that virtually all invoice billings and receipts in other countries are in U.S. dollars. Even though the Company’s contract with its customers in Argentina was in U.S. dollars, the Company r ecorded a devaluation loss as Argentina experienced a dramatic economic collapse during 2002.  QUANTITATIVE AND QUALITATIVE DISCL OSURES ABOUT MARKET RISK 49