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BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION
 9 Months Ended
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.