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BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION | 9 Months Ended
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Jun. 30, 2019
Segment Reporting [Abstract] |
BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION | 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 believe we are the recognized industry leader in drilling as well as technological innovation. Effective October 1, 2018, we implemented organizational changes, consistent with the manner in which our chief operating decision maker evaluates performance and allocates resources. Certain operations previously reported in “other” within our segment disclosures are now managed and presented within the new H&P Technologies reportable segment. As a result, beginning with the reporting of first quarter 2019, our operations are organized into the following reportable business segments: U.S. Land, Offshore, International Land and H&P Technologies. Certain other corporate activities and our real estate operations are included in Other. All segment disclosures have been recast for these segment changes. Consolidated revenues and expenses reflect the elimination of intercompany transactions. 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
• | Asset impairment charges
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. Summarized financial information of our reportable segments for the three months ended June 30, 2019 and 2018 is shown in the following tables:
| Three Months Ended June 30, 2019
(in thousands) | U.S. Land (1) |  | Offshore |  | International Land |  | H&P Technologies |  | Other |  | Eliminations |  | Total
External Sales | $ | 593,297 |  |  | $ | 37,674 |  |  | $ | 46,283 |  |  | $ | 7,534 |  |  | $ | 3,186 |  |  | $ | — |  |  | $ | 687,974 |
Intersegment | — |  |  | — |  |  | — |  |  | 1,842 |  |  | 8 |  |  | $ | (1,850 | ) |  | — |
Total Sales | 593,297 |  |  | 37,674 |  |  | 46,283 |  |  | 9,376 |  |  | 3,194 |  |  | (1,850 | ) |  | 687,974 |
Segment Operating Income (Loss) | (138,205 | ) |  | 5,078 |  |  | (5,023 | ) |  | (8,810 | ) |  | (731 | ) |  | — |  |  | (147,691 | )
| Three Months Ended June 30, 2018
(in thousands) | U.S. Land |  | Offshore |  | International Land |  | H&P Technologies (2) |  | Other (2) |  | Eliminations |  | Total
External Sales | $ | 536,582 |  |  | $ | 37,669 |  |  | $ | 63,297 |  |  | $ | 7,693 |  |  | $ | 3,631 |  |  | $ | — |  |  | $ | 648,872 |
Intersegment | 599 |  |  | — |  |  | — |  |  | — |  |  | 303 |  |  | (902 | ) |  | — |
Total Sales | 537,181 |  |  | 37,669 |  |  | 63,297 |  |  | 7,693 |  |  | 3,934 |  |  | (902 | ) |  | 648,872 |
Segment Operating Income (Loss) | 34,339 |  |  | 3,780 |  |  | 4,332 |  |  | (9,052 | ) |  | 1,826 |  |  | — |  |  | 35,225 |
(1) | Includes $9.1 million of technology related sales, of which $1.8 million is fulfilled by the H&P Technologies business segment.
(2) | Prior period information has been recast to reflect the change in operating segments.
Summarized financial information of our reportable segments for the nine months ended June 30, 2019 and 2018 is shown in the following tables:
| Nine Months Ended June 30, 2019
(in thousands) | U.S. Land (1) |  | Offshore |  | International Land |  | H&P Technologies |  | Other |  | Eliminations |  | Total
External Sales | $ | 1,842,054 |  |  | $ | 109,167 |  |  | $ | 163,378 |  |  | $ | 25,199 |  |  | $ | 9,642 |  |  | $ | — |  |  | $ | 2,149,440 |
Intersegment | — |  |  | — |  |  | — |  |  | 4,154 |  |  | 23 |  |  | (4,177 | ) |  | — |
Total Sales | 1,842,054 |  |  | 109,167 |  |  | 163,378 |  |  | 29,353 |  |  | 9,665 |  |  | (4,177 | ) |  | 2,149,440 |
Segment Operating Income (Loss) | 47,602 |  |  | 16,778 |  |  | 9,575 |  |  | (27,088 | ) |  | 1,988 |  |  | — |  |  | 48,855 |
| Nine Months Ended June 30, 2018
(in thousands) | U.S. Land |  | Offshore |  | International Land |  | H&P Technologies (2) |  | Other (2) |  | Eliminations |  | Total
External Sales | $ | 1,480,951 |  |  | $ | 104,018 |  |  | $ | 178,970 |  |  | $ | 16,842 |  |  | $ | 9,662 |  |  | $ | — |  |  | $ | 1,790,443 |
Intersegment | 634 |  |  | — |  |  | — |  |  | — |  |  | 775 |  |  | (1,409 | ) |  | — |
Total Sales | 1,481,585 |  |  | 104,018 |  |  | 178,970 |  |  | 16,842 |  |  | 10,437 |  |  | (1,409 | ) |  | 1,790,443 |
Segment Operating Income (Loss) | 86,159 |  |  | 17,954 |  |  | 7,171 |  |  | (26,400 | ) |  | 4,842 |  |  | — |  |  | 89,726 |
(1) | Includes $20.9 million of technology related sales, of which $4.2 million is fulfilled by the H&P Technologies business segment.
(2) | Prior period information has been recast to reflect the change in operating segments.
The following table reconciles segment operating income (loss) per the tables above to income from continuing operations before income taxes as reported on the Unaudited Condensed Consolidated Statements of Operations:
| Three Months Ended June 30, |  | Nine Months Ended June 30,
(in thousands) | 2019 |  | 2018 |  | 2019 |  | 2018
|  |  | As adjusted |  |  |  | As adjusted
Segment operating income (loss) | $ | (147,691 | ) |  | $ | 35,225 |  |  | $ | 48,855 |  |  | $ | 89,726 |
Gain on sale of assets | 9,960 |  |  | 4,313 |  |  | 27,050 |  |  | 15,133 |
Corporate selling, general and administrative costs and corporate depreciation | (30,143 | ) |  | (33,232 | ) |  | (94,344 | ) |  | (96,108 | )
Operating income (loss) from continuing operations | (167,874 | ) |  | 6,306 |  |  | (18,439 | ) |  | 8,751 |
Other income (expense) |  |  |  |  |  |  |
Interest and dividend income | 2,349 |  |  | 2,109 |  |  | 6,861 |  |  | 5,680 |
Interest expense | (6,257 | ) |  | (5,993 | ) |  | (17,145 | ) |  | (17,794 | )
Loss on investment securities | (13,271 | ) |  | — |  |  | (50,228 | ) |  | — |
Other | (1,599 | ) |  | (61 | ) |  | (1,051 | ) |  | 170 |
Total unallocated amounts | (18,778 | ) |  | (3,945 | ) |  | (61,563 | ) |  | (11,944 | )
Income (loss) from continuing operations before income taxes | $ | (186,652 | ) |  | $ | 2,361 |  |  | $ | (80,002 | ) |  | $ | (3,193 | )
The following table presents total assets by reportable segment:
(in thousands) | June 30, 2019 |  | September 30, 2018
Total assets |  |  |
U.S. Land | $ | 4,742,605 |  |  | $ | 5,012,378 |
Offshore | 100,490 |  |  | 105,439 |
International Land | 318,195 |  |  | 362,033 |
H&P Technologies | 149,712 |  |  | 146,957 |
Other | 31,232 |  |  | 29,525 |
| 5,342,234 |  |  | 5,656,332 |
Investments and corporate operations | 555,145 |  |  | 558,535 |
Total assets from continuing operations | 5,897,379 |  |  | 6,214,867 |
Discontinued operations | — |  |  | — |
| $ | 5,897,379 |  |  | $ | 6,214,867 |
The following table presents revenues from external customers by country based on the location of service provided:
| Three Months Ended June 30, |  | Nine Months Ended June 30,
(in thousands) | 2019 |  | 2018 |  | 2019 |  | 2018
Operating revenues |  |  |  |  |  |  |
United States | 641,270 |  |  | 585,126 |  |  | 1,984,695 |  |  | 1,610,319 |
Argentina | 40,977 |  |  | 50,272 |  |  | 123,666 |  |  | 148,901 |
Colombia | 3,451 |  |  | 10,639 |  |  | 28,075 |  |  | 22,872 |
Other Foreign | $ | 2,276 |  |  | $ | 2,835 |  |  | $ | 13,004 |  |  | $ | 8,351 |
Total | $ | 687,974 |  |  | $ | 648,872 |  |  | $ | 2,149,440 |  |  | $ | 1,790,443 |
Refer to Note 9—Revenue from Contracts with Customers for additional information regarding the recognition of revenue upon adoption of ASC 606.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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