04-HP-876_newMDA.qxd 12/15/04 3:04 PM Page 61 At September 30, 2004, minimum future rental income to be received on noncancelable operating leases were as follows (in thousands): The cost of securities used in determining realized gains and losses is based on the average cost basis of the security sold. Net income in 2004 includes appr oximately $1.5 million, $0.03 per share on a diluted basis, on gains related to non-monetary transactions within the Company’s available-for-sale investment  portfolio which wer accounted for at fair value. Net income in 2002 includes a loss of approximately $0.5 million, $0.01 per share on a diluted basis, resulting fr om the Company’s assessment that the decline in  market value of certain available-for-sale securities below their financial cost basis was other than temporary. There were no losses in 2004 and 2003 as the result of a decline in market values that were considered other than temporary by the Company. Investments in companies owned from 20 to 50 percent are accounted for using the equity method with the Company recognizing its proportionate shar of the income or loss of each investee. The Company owned approximately 21.7 percent of Atwood Oceanics, Inc. (Atwood) at both September 30, 2004 and 2003. The quoted market value of the Company's investment was $142.6 million and $72 million at September 30, 2004 and 2003, respectively Retained earnings at September 30, 2004 and 2003 includes approximately $29 million and $28 million, respectively, of undistributed earnings of Atwood. In October 2004, the Company sold 1,000,000 shares of its position in Atwood as part of a 2,175,000 share public offering of Atwood. The sale generated appr oximately $16.5 million ($0.32 per diluted share) of net income for the first quarter of fiscal 2005. With its r emaining 2,000,000 shares of Atwood, the Company will own approximately 13.3 percent of Atwood. The Company will continue to account for Atwood on the equity method as the Company continues to have significant influence through its board of director seats. INVESTMENTS Fiscal Year Amount 2005 $ 6,525 2006 5,654 2007 5,103  2008 4,092 2009 3,175 Thereafter 7,765 Total $ 32,314 62