BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

12 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

NOTE 18 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 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 19—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 former U.S. Land and H&P Technologies operating and reportable segments 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 drilling services operations are organized into the following reportable operating business segments: North America Solutions, Offshore Gulf of Mexico and International Solutions. All prior period 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 fiscal years ended September 30, 2020, 2019 and 2018 is shown in the following tables:

	September 30, 2020
(in thousands)	North America Solutions			Offshore Gulf of Mexico		International Solutions			Other		Eliminations			Total
External sales	$	1,474,380		$	143,149	$	144,185		$	12,213	$	—		$	1,773,927
Intersegment	—			—		—			36,901		(36,901		)	—
Total sales	1,474,380			143,149		144,185			49,114		(36,901		)	1,773,927
Segment operating income (loss)	(393,902		)	7,478		(162,368		)	4,403		—			(544,389		)
Depreciation and amortization	438,039			11,681		17,531			1,241		—			468,492

	September 30, 2019
(in thousands)	North America Solutions (1)		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total
External sales	$	2,426,191	$	147,635	$	211,731	$	12,933	$	—	$	2,798,490
Intersegment	—		—		—		—		—		—
Total sales	2,426,191		147,635		211,731		12,933		—		2,798,490
Segment operating income	80,898		19,594		5,366		3,375		—		109,233
Depreciation and amortization	504,466		10,010		35,466		1,523		—		551,465

(1) Operations previously reported within the H&P Technologies reportable segment are now managed and presented within the North America Solutions reportable segment.

	September 30, 2018
(in thousands)	North America Solutions (1)		Offshore Gulf of Mexico		International Solutions			Other		Eliminations		Total
External sales	$	2,093,601	$	142,500	$	238,356		$	12,811	$	—	$	2,487,268
Intersegment	—		—		—			—		—		—
Total sales	2,093,601		142,500		238,356			12,811		—		2,487,268
Segment operating income (loss)	108,697		26,124		(683		)	5,883		—		140,021
Depreciation and amortization	511,958		10,392		46,826			1,486		—		570,662

(1) Operations previously reported within the H&P Technologies reportable segment are now managed and presented within 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 Consolidated Statements of Operations:

	Year Ended September 30,
(in thousands)	2020			2019			2018
Segment operating income (loss)	$	(544,389	)	$	109,233		$	140,021
Gain on sale of assets	46,775			39,691			22,660
Corporate selling, general and administrative costs, corporate depreciation and corporate restructuring charges	(122,573		)	(128,342		)	(129,717		)
Operating income (loss) from continuing operations	(620,187		)	20,582			32,964
Other income (expense)
Interest and dividend income	7,304			9,468			8,017
Interest expense	(24,474		)	(25,188		)	(24,265		)
Gain (loss) on investment securities	(8,720		)	(54,488		)	1
Gain on sale of subsidiary	14,963			—			—
Other	(5,384		)	(1,596		)	(876		)
Total unallocated amounts	(16,311		)	(71,804		)	(17,123		)
Income (loss) from continuing operations before income taxes	$	(636,498	)	$	(51,222	)	$	15,841

The following table reconciles segment total assets to total assets as reported on the Consolidated Balance Sheets:

	Year Ended September 30,
(in thousands)	2020		2019
Total assets (1)
North America Solutions (2)	$	3,812,718	$	5,284,141
Offshore Gulf of Mexico	93,501		102,442
International Solutions	181,181		217,094
Other	22,144		32,532
	4,109,544		5,636,209
Investments and corporate operations	720,077		203,306
Total assets from continuing operations	4,829,621		5,839,515
Discontinued operations	—		—
	$	4,829,621	$	5,839,515

(1) Assets by segment exclude investments in subsidiaries and intersegment activity.

(2) Operations previously reported within the H&P Technologies reportable segment are now managed and presented within the North America Solutions reportable segment.

The following table presents revenues from external customers by country based on the location of service provided:

	Year Ended September 30,
(in thousands)	2020		2019		2018
Operating revenues
United States	$	1,626,407	$	2,585,008	$	2,247,400
Argentina	84,402		165,718		190,038
Bahrain	28,653		11,528		9,525
United Arab Emirates	24,716		4,728		—
Colombia	6,414		29,757		38,793
Other Foreign	3,335		1,751		1,512
Total	$	1,773,927	$	2,798,490	$	2,487,268

The following table presents property, plant and equipment by country based on the location of service provided:

	Year Ended September 30,
(in thousands)	2020		2019
Property, plant and equipment, net
United States	$	3,562,525	$	4,269,405
Argentina	49,419		132,321
Colombia	21,740		61,757
Other Foreign	12,657		38,601
Total	$	3,646,341	$	4,502,084