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Segment Information | 6 Months Ended
--- | ---
Mar. 31, 2016
Segment Information |
Segment Information | 11.Segment Information We operate principally in the contract drilling industry. Our contract drilling business includes the following reportable operating segments: U.S. Land, Offshore and International Land. The contract drilling operations consist mainly of contracting Company-owned drilling equipment primarily to large oil and gas exploration companies. To provide information about the different types of business activities in which we operate, we have included Offshore and International Land, along with our U.S. Land reportable operating segment, as separate reportable operating segments. Additionally, each reportable operating segment is a strategic business unit that is managed separately. Our primary international areas of operation include Colombia, Ecuador, Argentina, Bahrain, and the U.A.E. Other includes additional non-reportable operating segments. Revenues included in Other consist primarily of rental income. Consolidated revenues and expenses reflect the elimination of all material intercompany transactions. We evaluate segment performance based on income or loss from continuing operations (segment operating income) before income taxes which includes:
| · |  | revenues from external and internal customers
| · |  | direct operating costs
| · |  | depreciation and
| · |  | allocated general and administrative costs
but excludes corporate costs for other depreciation, income from asset sales and other corporate income and expense. General and administrative costs are allocated to the segments based primarily on specific identification and, to the extent that such identification is not practical, on other methods which we believe to be a reasonable reflection of the utilization of services provided. Segment operating income for all segments is a non-GAAP financial measure of our performance, as it excludes certain general and administrative expenses, corporate depreciation, income from asset sales and other corporate income and expense. We consider segment operating income to be an important supplemental measure of operating performance by presenting trends in our core businesses. We use this measure to facilitate period-to-period comparisons in operating performance of our reportable segments in the aggregate by eliminating items that affect comparability between periods. We believe that segment operating income is useful to investors because it provides a means to evaluate the operating performance of the segments on an ongoing basis using criteria that are used by our internal decision makers. Additionally, it highlights operating trends and aids analytical comparisons. However, segment operating income has limitations and should not be used as an alternative to operating income or loss, a performance measure determined in accordance with GAAP, as it excludes certain costs that may affect our operating performance in future periods. Summarized financial information of our reportable segments for the six months ended March 31, 2016 and 2015 is shown in the following tables:
|  |  |  |  |  |  |  | Segment |
|  | External |  | Inter- |  | Total |  | Operating |
(in thousands) |  | Sales |  | Segment |  | Sales |  | Income (Loss) |
March 31, 2016 |  |  |  |  |  |  |  |  |
Contract Drilling: |  |  |  |  |  |  |  |  |
U.S. Land |  | $ | 719,088 |  | $ | — |  | $ | 719,088 |  | $ | 118,053 |
Offshore |  | 76,205 |  | — |  | 76,205 |  | 11,021 |
International Land |  | 123,546 |  | — |  | 123,546 |  | (8,933 | )
|  | 918,839 |  | — |  | 918,839 |  | 120,141 |
Other |  | 7,199 |  | 429 |  | 7,628 |  | (2,653 | )
|  | 926,038 |  | 429 |  | 926,467 |  | 117,488 |
Eliminations |  | — |  | (429 | ) | (429 | ) | — |
Total |  | $ | 926,038 |  | $ | — |  | $ | 926,038 |  | $ | 117,488 |
|  |  |  |  |  |  |  | Segment |
|  | External |  | Inter- |  | Total |  | Operating |
(in thousands) |  | Sales |  | Segment |  | Sales |  | Income (Loss) |
March 31, 2015, as adjusted |  |  |  |  |  |  |  |  |
Contract Drilling: |  |  |  |  |  |  |  |  |
U.S. Land |  | $ | 1,608,510 |  | $ | — |  | $ | 1,608,510 |  | $ | 542,988 |
Offshore |  | 132,315 |  | — |  | 132,315 |  | 40,702 |
International Land |  | 197,711 |  | — |  | 197,711 |  | 21,140 |
|  | 1,938,536 |  | — |  | 1,938,536 |  | 604,830 |
Other |  | 7,921 |  | 442 |  | 8,363 |  | (5,116 | )
|  | 1,946,457 |  | 442 |  | 1,946,899 |  | 599,714 |
Eliminations |  | — |  | (442 | ) | (442 | ) | — |
Total |  | $ | 1,946,457 |  | $ | — |  | $ | 1,946,457 |  | $ | 599,714 |
Summarized financial information of our reportable segments for the three months ended March 31, 2016 and 2015 is shown in the following tables:
|  |  |  |  |  |  |  | Segment |
|  | External |  | Inter- |  | Total |  | Operating |
(in thousands) |  | Sales |  | Segment |  | Sales |  | Income (Loss) |
March 31, 2016 |  |  |  |  |  |  |  |  |
Contract Drilling: |  |  |  |  |  |  |  |  |
U.S. Land |  | $ | 349,283 |  | $ | — |  | $ | 349,283 |  | $ | 62,521 |
Offshore |  | 34,325 |  | — |  | 34,325 |  | 3,299 |
International Land |  | 51,352 |  | — |  | 51,352 |  | (2,268 | )
|  | 434,960 |  | — |  | 434,960 |  | 63,552 |
Other |  | 3,231 |  | 210 |  | 3,441 |  | (1,349 | )
|  | 438,191 |  | 210 |  | 438,401 |  | 62,203 |
Eliminations |  | — |  | (210 | ) | (210 | ) | — |
Total |  | $ | 438,191 |  | $ | — |  | $ | 438,191 |  | $ | 62,203 |
|  |  |  |  |  |  |  | Segment |
|  | External |  | Inter- |  | Total |  | Operating |
(in thousands) |  | Sales |  | Segment |  | Sales |  | Income (Loss) |
March 31, 2015, as adjusted |  |  |  |  |  |  |  |  |
Contract Drilling: |  |  |  |  |  |  |  |  |
U.S. Land |  | $ | 718,463 |  | $ | — |  | $ | 718,463 |  | $ | 224,859 |
Offshore |  | 62,428 |  | — |  | 62,428 |  | 19,040 |
International Land |  | 101,038 |  | — |  | 101,038 |  | 10,579 |
|  | 881,929 |  | — |  | 881,929 |  | 254,478 |
Other |  | 3,741 |  | 220 |  | 3,961 |  | (3,217 | )
|  | 885,670 |  | 220 |  | 885,890 |  | 251,261 |
Eliminations |  | — |  | (220 | ) | (220 | ) | — |
Total |  | $ | 885,670 |  | $ | — |  | $ | 885,670 |  | $ | 251,261 |
The following table reconciles segment operating income per the table above to income from continuing operations before income taxes as reported on the Consolidated Condensed Statements of Income:
|  | Three Months Ended March 31, |  | Six Months Ended March 31, |
|  |  |  | 2015 |  |  |  | 2015 |
|  | 2016 |  | (as adjusted) |  | 2016 |  | (as adjusted) |
|  | (in thousands) |  | (in thousands) |
Segment operating income |  | $ | 62,203 |  | $ | 251,261 |  | $ | 117,488 |  | $ | 599,714 |
Income from asset sales |  | 2,684 |  | 2,855 |  | 7,273 |  | 7,028 |
Corporate general and administrative costs and corporate depreciation |  | (23,266 | ) | (22,790 | ) | (44,470 | ) | (45,045 | )
Operating income |  | 41,621 |  | 231,326 |  | 80,291 |  | 561,697 |
Other income (expense): |  |  |  |  |  |  |  |  |
Interest and dividend income |  | 799 |  | 2,564 |  | 1,532 |  | 2,859 |
Interest expense |  | (5,721 | ) | (2,600 | ) | (10,245 | ) | (3,190 | )
Other |  | 653 |  | 55 |  | 392 |  | 369 |
Total other income (expense) |  | (4,269 | ) | 19 |  | (8,321 | ) | 38 |
Income from continuing operations before income taxes |  | $ | 37,352 |  | $ | 231,345 |  | $ | 71,970 |  | $ | 561,735 |
The following table presents total assets by reportable segment:
|  |  |  | September 30, |
|  | March 31, 2016 |  | 2015 (as adjusted) |
|  | (in thousands) |
Total assets |  |  |  |  |
U.S. Land |  | $ | 5,210,465 |  | $ | 5,429,179 |
Offshore |  | 110,446 |  | 118,852 |
International Land |  | 530,310 |  | 565,712 |
Other |  | 37,117 |  | 38,397 |
|  | 5,888,338 |  | 6,152,140 |
Investments and corporate operations |  | 1,136,537 |  | 987,005 |
Total assets from continued operations |  | 7,024,875 |  | 7,139,145 |
Discontinued operations |  | 230 |  | 8,097 |
|  | $ | 7,025,105 |  | $ | 7,147,242 |
The following table presents revenues from external customers by country based on the location of service provided:
|  | Three Months Ended March 31, |  | Six Months Ended March 31, |
|  | 2016 |  | 2015 (as adjusted) |  | 2016 |  | 2015 (as adjusted) |
|  | (in thousands) |  | (in thousands) |
Operating revenues |  |  |  |  |  |  |  |  |
United States |  | $ | 385,977 |  | $ | 778,637 |  | $ | 795,483 |  | $ | 1,734,918 |
Argentina |  | 35,371 |  | 46,273 |  | 85,157 |  | 74,749 |
Colombia |  | 4,602 |  | 22,691 |  | 11,345 |  | 46,628 |
Ecuador |  | 527 |  | 5,510 |  | 4,467 |  | 19,400 |
Other foreign |  | 11,714 |  | 32,559 |  | 29,586 |  | 70,762 |
Total |  | $ | 438,191 |  | $ | 885,670 |  | $ | 926,038 |  | $ | 1,946,457 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8906-108599 + Details
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