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BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION
 9 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION
NOTE 17 BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION
Description of the Business
We are a performance-driven drilling solutions and technologies 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.
During the third quarter of fiscal year 2020, as part of our restructuring efforts (see Note 18—Restructuring Charges) and consistent with the manner in which our chief operating decision maker evaluates performance and allocates resources we implemented organizational changes. We are moving from a product-based offering, such as a rig or separate technology package, to an integrated solution-based approach by combining proprietary rig technology, automation software, and digital expertise into our rig operations. Operations previously reported within the H&P Technologies reportable segment are now managed and presented within the North America Solutions reportable segment. As a result, beginning with the third quarter of fiscal year 2020, our contract drilling services operations are organized into the following reportable operating business segments: North America Solutions, Offshore Gulf of Mexico and International Solutions. All segment disclosures have been recast for these segment changes. Our real estate operations, our incubator program for new research and development projects, and our wholly-owned captive insurance companies are included in "Other." Consolidated revenues and expenses reflect the elimination of intercompany transactions.
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. External revenues included in “Other” primarily consist of rental income.
Segment Performance
We evaluate segment performance based on income or loss from continuing operations (segment operating income (loss)) before income taxes which includes:
•
Revenues from external and internal customers
•
Direct operating costs
•
Depreciation and amortization
•
Allocated general and administrative costs
•
Asset impairment charges
•
Restructuring charges
but excludes gain on sale of assets and corporate selling, general and administrative costs, corporate depreciation, and corporate restructuring charges.
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, 2020 and 2019 is shown in the following tables:
 
Three Months Ended June 30, 2020
(in thousands)
North America Solutions
 
Offshore Gulf of Mexico
 
International
Solutions
 
Other
 
Eliminations
 
Total
External Sales
$
254,434

 
$
37,494

 
$
22,477

 
$
2,959

 
$
—

 
$
317,364

Intersegment
—

 
—

 
—

 
10,384

 
(10,384
)
 
—

Total Sales
254,434

 
37,494

 
22,477

 
13,343

 
(10,384
)
 
317,364

 
 
 
 
 
 
 
 
 
 
 
 
Segment Operating Income (Loss)
(25,157
)
 
3,013

 
(9,540
)
 
4,389

 
—

 
(27,295
)
 
Three Months Ended June 30, 2019
(in thousands)
North America Solutions (1)
 
Offshore Gulf of Mexico
 
International
Solutions
 
Other
 
Eliminations
 
Total
External Sales
$
600,831

 
$
37,674

 
$
46,283

 
$
3,186

 
$
—

 
$
687,974

Intersegment
—

 
—

 
—

 
—

 
—

 
—

Total Sales
600,831

 
37,674

 
46,283

 
3,186

 
—

 
687,974

 
 
 
 
 
 
 
 
 
 
 
 
Segment Operating Income (Loss)
(147,015
)
 
5,078

 
(5,023
)
 
(731
)
 
—

 
(147,691
)

(1)
Prior period information has been restated to reflect the transition of the H&P Technologies reportable segment to the North America Solutions reportable segment.
Summarized financial information of our reportable segments for the nine months ended June 30, 2020 and 2019 is shown in the following tables:
 
Nine Months Ended June 30, 2020
(in thousands)
North America Solutions
 
Offshore Gulf of Mexico
 
International
Solutions
 
Other
 
Eliminations
 
Total
External Sales
$
1,325,076

 
$
110,828

 
$
120,189

 
$
9,567

 
$
—

 
$
1,565,660

Intersegment
—

 
—

 
—

 
28,927

 
(28,927
)
 
—

Total Sales
1,325,076

 
110,828

 
120,189

 
38,494

 
(28,927
)
 
1,565,660

 
 
 
 
 
 
 
 
 
 
 
 
Segment Operating Income (Loss)
(315,705
)
 
6,022

 
(158,894
)
 
3,704

 
—

 
(464,873
)
 
Nine Months Ended June 30, 2019
(in thousands)
North America Solutions (1)
 
Offshore Gulf of Mexico
 
International
Solutions
 
Other
 
Eliminations
 
Total
External Sales
$
1,867,253

 
$
109,167

 
$
163,378

 
$
9,642

 
$
—

 
$
2,149,440

Intersegment
—

 
—

 
—

 
—

 
—

 
—

Total Sales
1,867,253

 
109,167

 
163,378

 
9,642

 
—

 
2,149,440

 
 
 
 
 
 
 
 
 
 
 
 
Segment Operating Income
20,514

 
16,778

 
9,575

 
1,988

 
—

 
48,855

(1)
Prior period information has been restated to reflect the transition of the H&P Technologies reportable segment to the North America Solutions reportable segment.
The following table reconciles segment operating income (loss) per the tables above to income (loss) 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)
2020
 
2019
 
2020
 
2019
Segment operating income (loss)
$
(27,295
)
 
$
(147,691
)
 
$
(464,873
)
 
$
48,855

Gain on sale of assets
4,201

 
9,960

 
18,790

 
27,050

Corporate selling, general and administrative costs, corporate depreciation and corporate restructuring charges
(34,490
)
 
(30,143
)
 
(98,674
)
 
(94,344
)
Operating loss from continuing operations
(57,584
)
 
(167,874
)
 
(544,757
)
 
(18,439
)
Other income (expense)
 
 
 
 
 
 
 
Interest and dividend income
771

 
2,349

 
6,551

 
6,861

Interest expense
(6,125
)
 
(6,257
)
 
(18,320
)
 
(17,145
)
Gain (loss) on investment securities
2,267

 
(13,271
)
 
(7,325
)
 
(50,228
)
Gain on sale of subsidiary
—

 
—

 
14,963

 
—

Other
(2,914
)
 
(1,599
)
 
(3,711
)
 
(1,051
)
Total unallocated amounts
(6,001
)
 
(18,778
)
 
(7,842
)
 
(61,563
)
Loss from continuing operations before income taxes
$
(63,585
)
 
$
(186,652
)
 
$
(552,599
)
 
$
(80,002
)

The following table presents total assets by reportable segment:
(in thousands)
June 30,
2020
 
September 30,
2019
Total assets (1)
 
 
 
North America Solutions (2)
$
3,990,736

 
$
5,284,141

Offshore Gulf of Mexico
104,262

 
102,442

International Solutions
188,126

 
217,094

Other
33,655

 
32,532

 
4,316,779

 
5,636,209

Investments and corporate operations
645,547

 
203,306

Total assets from continuing operations
4,962,326

 
5,839,515

Discontinued operations
—

 
—

 
$
4,962,326

 
$
5,839,515


(1)
Assets by segment exclude investments in subsidiaries and intersegment activity.
(2)
Prior period information has been restated to reflect the transition of the H&P Technologies reportable segment to the North America Solutions reportable segment.
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)
2020
 
2019
 
2020
 
2019
Operating revenues
 
 
 
 
 
 
 
United States
$
294,335

 
$
641,270

 
$
1,442,670

 
$
1,984,695

Argentina
7,231

 
40,977

 
77,522

 
123,666

Bahrain
6,430

 
1,855

 
21,497

 
6,909

United Arab Emirates
8,403

 
—

 
14,857

 
4,728

Colombia
413

 
3,451

 
6,313

 
28,075

Other Foreign
552

 
421

 
2,801

 
1,367

Total
$
317,364

 
$
687,974

 
$
1,565,660

 
$
2,149,440


Refer to Note 11—Revenue from Contracts with Customers for additional information regarding the recognition of revenue upon adoption of ASC 606.