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BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended
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Sep. 30, 2018
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION |
BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION | NOTE 16 BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION Description of the Business We are a global contract drilling company based in Tulsa, Oklahoma with operations in all major U.S. onshore basins as well as South America and the Middle East. Our contract drilling operations consist mainly of contracting Company-owned drilling equipment primarily to large oil and gas exploration companies. We are the recognized industry leader in drilling as well as technological innovation. At September 30, 2018, our contract drilling business includes the following reportable operating segments:
| · |  | U.S. Land
| · |  | Offshore
| · |  | International Land
Each reportable operating segment is a strategic business unit that is managed separately and consolidated revenues and expenses reflect the elimination of all material intercompany transactions. Other includes additional non-reportable operating segments. Revenues included in “other” consist of revenue from our drilling technology services as well as rental income. Segment Performance 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 acquisition related costs, 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.
Summarized financial information of our reportable segments for continuing operations for each of the fiscal years ended September 30, 2018, 2017 and 2016 is shown in the following table: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | September 30, 2018
|  |  |  |  |  | International |  |  |  |  |  |
(in thousands) |  | U.S. Land |  | Offshore |  | Land |  | Other |  | Eliminations |  | Total
External Sales |  | $ | 2,068,195 |  | $ | 142,500 |  | $ | 238,356 |  | $ | 38,217 |  | $ | - |  | $ | 2,487,268
Intersegment |  |  | 1,189 |  |  | — |  |  | — |  |  | 1,026 |  | $ | (2,215) |  |  | -
Total Sales |  |  | 2,069,384 |  |  | 142,500 |  |  | 238,356 |  |  | 39,243 |  |  | (2,215) |  |  | 2,487,268
Segment Operating Income (Loss) |  |  | 150,698 |  |  | 26,124 |  |  | (683) |  |  | (27,790) |  |  | — |  |  | 148,349
Depreciation and Amortization |  |  | 505,112 |  |  | 10,392 |  |  | 46,826 |  |  | 21,472 |  |  | — |  |  | 583,802
Total Assets |  |  | 5,012,378 |  |  | 105,439 |  |  | 362,033 |  |  | 735,017 |  |  | — |  |  | 6,214,867
Additions to Long-Lived Assets |  |  | 441,624 |  |  | 4,326 |  |  | 4,424 |  |  | 18,456 |  |  | — |  |  | 468,830
|  | September 30, 2017
|  |  |  |  |  | International |  |  |  |  |  |
(in thousands) |  | U.S. Land |  | Offshore |  | Land |  | Other |  | Eliminations |  | Total
External Sales |  | $ | 1,439,523 |  | $ | 136,263 |  | $ | 212,972 |  | $ | 15,983 |  | $ | — |  | $ | 1,804,741
Intersegment |  |  | — |  |  | — |  |  | — |  |  | 862 |  |  | (862) |  |  | —
Total Sales |  |  | 1,439,523 |  |  | 136,263 |  |  | 212,972 |  |  | 16,845 |  |  | (862) |  |  | 1,804,741
Segment Operating Income (Loss) |  |  | (94,880) |  |  | 24,201 |  |  | (7,224) |  |  | (9,449) |  |  | — |  |  | (87,352)
Depreciation and Amortization |  |  | 499,486 |  |  | 11,764 |  |  | 53,622 |  |  | 20,671 |  |  | — |  |  | 585,543
Total Assets |  |  | 4,967,074 |  |  | 99,533 |  |  | 413,392 |  |  | 959,986 |  |  | — |  |  | 6,439,985
Additions to Long-Lived Assets |  |  | 394,508 |  |  | 2,847 |  |  | 3,400 |  |  | 7,351 |  |  | — |  |  | 408,106
|  | September 30, 2016
|  |  |  |  |  | International |  |  |  |  |  |
(in thousands) |  | U.S. Land |  | Offshore |  | Land |  | Other |  | Eliminations |  | Total
External Sales |  | $ | 1,242,462 |  | $ | 138,601 |  | $ | 229,894 |  | $ | 13,275 |  | $ | — |  | $ | 1,624,232
Intersegment |  |  | — |  |  | — |  |  | — |  |  | 855 |  |  | (855) |  |  | —
Total Sales |  |  | 1,242,462 |  |  | 138,601 |  |  | 229,894 |  |  | 14,130 |  |  | (855) |  |  | 1,624,232
Segment Operating Income (Loss) |  |  | 74,118 |  |  | 15,659 |  |  | (14,086) |  |  | (7,491) |  |  | — |  |  | 68,200
Depreciation and Amortization |  |  | 508,237 |  |  | 12,495 |  |  | 57,102 |  |  | 20,753 |  |  | — |  |  | 598,587
Total Assets |  |  | 5,005,299 |  |  | 105,152 |  |  | 487,181 |  |  | 1,234,323 |  |  | — |  |  | 6,831,955
Additions to Long-Lived Assets |  |  | 209,156 |  |  | 9,694 |  |  | 2,364 |  |  | 20,076 |  |  | — |  |  | 241,290
The following table reconciles segment operating income (loss) to income from continuing operations before income taxes as reported on the Consolidated Statements of Operations:
|  | Year Ended September 30,
|  | 2018 |  | 2017 |  | 2016
|  | (in thousands)
Segment operating income (loss) |  | $ | 148,349 |  | $ | (87,352) |  | $ | 68,200
Income from asset sales |  |  | 22,660 |  |  | 20,627 |  |  | 9,896
Acquisition related costs |  |  | (8,153) |  |  | — |  |  | —
Corporate selling, general and administrative costs and corporate depreciation |  |  | (131,254) |  |  | (105,816) |  |  | (104,062)
Operating income (loss) |  |  | 31,602 |  |  | (172,541) |  |  | (25,966)
Other income (expense) |  |  |  |  |  |  |  |  |
Interest and dividend income |  |  | 8,017 |  |  | 5,915 |  |  | 3,166
Interest expense |  |  | (24,265) |  |  | (19,747) |  |  | (22,913)
Gain (loss) on investment securities |  |  | 1 |  |  | — |  |  | (25,989)
Other |  |  | 486 |  |  | 1,775 |  |  | (965)
Total unallocated amounts |  |  | (15,761) |  |  | (12,057) |  |  | (46,701)
Income (loss) from continuing operations before income taxes |  | $ | 15,841 |  | $ | (184,598) |  | $ | (72,667)
The following table presents revenues from external customers and long-lived assets by country based on the location of service provided:
|  | Year Ended September 30,
|  | 2018 |  | 2017 |  | 2016
|  | (in thousands)
Operating revenues |  |  |  |  |  |  |  |  |
United States |  | $ | 2,247,400 |  | $ | 1,591,769 |  | $ | 1,386,786
Argentina |  |  | 190,038 |  |  | 157,257 |  |  | 159,427
Colombia |  |  | 38,793 |  |  | 37,554 |  |  | 20,488
Ecuador |  |  | — |  |  | 6 |  |  | 4,948
Other Foreign |  |  | 11,037 |  |  | 18,155 |  |  | 52,583
Total |  | $ | 2,487,268 |  | $ | 1,804,741 |  | $ | 1,624,232
Property, plant and equipment, net |  |  |  |  |  |  |  |  |
United States |  | $ | 4,591,913 |  | $ | 4,686,235 |  | $ | 4,804,328
Argentina |  |  | 133,617 |  |  | 155,978 |  |  | 183,286
Colombia |  |  | 74,042 |  |  | 81,798 |  |  | 91,815
Ecuador |  |  | 10,781 |  |  | 22,298 |  |  | 438
Other Foreign |  |  | 47,029 |  |  | 54,742 |  |  | 64,866
Total |  | $ | 4,857,382 |  | $ | 5,001,051 |  | $ | 5,144,733

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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 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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