BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

6 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

NOTE 14 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 oil and gas producing 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. We focus on offering our customers an integrated solutions-based approach by combining proprietary rig technology, automation software, and digital expertise into our rig operations rather than a product-based offering, such as a rig or separate technology package. Our drilling services operations are organized into the following reportable operating business segments: North America Solutions, Offshore Gulf of Mexico and International Solutions. 

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. Our real estate operations, our incubator program for new research and development projects, and our wholly-owned captive insurance companies are included in "Other." 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 reimbursement of drilling equipment, other (gain) loss on sale of assets, 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, other methods may be used which we believe to be a reasonable reflection of the utilization of services provided.

Summarized financial information of our reportable segments for the three and six months ended March 31, 2022 and 2021 is shown in the following tables:

	Three Months Ended March 31, 2022
(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total
External sales	$	408,814	$	29,147	$	27,422	$	2,214	$	—	$	467,597
Intersegment	—		—		—		13,204		(13,204)		—
Total sales	408,814		29,147		27,422		15,418		(13,204)		467,597
Segment operating income (loss)	1,297		5,278		(848)		3,167		(2,031)		6,863

	Three Months Ended March 31, 2021
(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total
External sales	$	249,939	$	29,274	$	14,813	$	2,145	$	—	$	296,171
Intersegment	—		—		—		8,680		(8,680)		—
Total sales	249,939		29,274		14,813		10,825		(8,680)		296,171
Segment operating income (loss)	(109,834)		2,978		(3,458)		(1,072)		(3,433)		(114,819)

	Six Months Ended March 31, 2022
(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total
External sales	$	749,848	$	58,461	$	64,581	$	4,489	$	—	$	877,379
Intersegment	—		—		—		26,852		(26,852)		—
Total sales	749,848		58,461		64,581		31,341		(26,852)		877,379
Segment operating income (loss)	(27,596)		10,744		7,201		7,096		(3,313)		(5,868)

	Six Months Ended March 31, 2021
(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total
External sales	$	451,929	$	61,547	$	25,331	$	3,741	$	—	$	542,548
Intersegment	—		—		—		15,802		(15,802)		—
Total sales	451,929		61,547		25,331		19,543		(15,802)		542,548
Segment operating income (loss)	(182,762)		5,720		(11,815)		3,039		(5,559)		(191,377)

The following table reconciles segment operating income (loss) per the tables above to loss from continuing operations before income taxes as reported on the Unaudited Condensed Consolidated Statements of Operations:

	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands)	2022		2021		2022		2021
Segment operating income (loss)	$	6,863	$	(114,819)	$	(5,868)	$	(191,377)
Gain on reimbursement of drilling equipment	6,448		3,748		11,702		5,939
Other gain (loss) on sale of assets	716		(22,263)		(313)		(12,118)
Corporate selling, general and administrative costs, corporate depreciation, and corporate restructuring charges	(36,644)		(27,589)		(70,749)		(56,590)
Operating loss from continuing operations	(22,617)		(160,923)		(65,228)		(254,146)
Other income (expense)
Interest and dividend income	3,399		4,819		5,988		6,698
Interest expense	(4,390)		(5,759)		(10,504)		(11,898)
Gain on investment securities	22,132		2,520		69,994		5,444
Loss on extinguishment of debt	—		—		(60,083)		—
Other	(476)		(577)		(1,018)		(2,057)
Total unallocated amounts	20,665		1,003		4,377		(1,813)
Loss from continuing operations before income taxes	$	(1,952)	$	(159,920)	$	(60,851)	$	(255,959)

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

(in thousands)	March 31, 2022		September 30, 2021
Total assets 1
North America Solutions	$	3,365,225	$	3,418,569
Offshore Gulf of Mexico	81,575		84,580
International Solutions	386,832		269,820
Other	105,630		95,398
	3,939,262		3,868,367
Investments and corporate operations	395,088		1,165,761
	$	4,334,350	$	5,034,128

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

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

	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands)	2022		2021		2022		2021
Operating revenues
United States	$	439,793	$	280,757	$	811,282	$	516,201
Argentina	15,450		6,979		44,601		8,532
Bahrain	4,826		6,921		12,459		14,470
United Arab Emirates	1,524		—		1,524		990
Colombia	5,622		946		5,997		1,375
Other Foreign	382		568		1,516		980
Total	$	467,597	$	296,171	$	877,379	$	542,548

Refer to Note 9—Revenue from Contracts with Customers for additional information regarding the recognition of revenue.