BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

3 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

NOTE 13 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 months ended December 31, 2022 and 2021 is shown in the following tables:

	Three Months Ended December 31, 2022
(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total
External sales	$	627,163	$	35,164	$	54,801	$	2,509	$	—	$	719,637
Intersegment	—		—		—		16,402		(16,402)		—
Total sales	627,163		35,164		54,801		18,911		(16,402)		719,637
Segment operating income	145,297		6,746		1,574		4,677		2,310		160,604

	Three Months Ended December 31, 2021
(in thousands)	North America Solutions		Offshore Gulf of Mexico		International Solutions		Other		Eliminations		Total
External sales	$	341,034	$	29,314	$	37,159	$	2,275	$	—	$	409,782
Intersegment	—		—		—		13,648		(13,648)		—
Total sales	341,034		29,314		37,159		15,923		(13,648)		409,782
Segment operating income (loss)	(28,893)		5,466		8,049		3,929		(1,282)		(12,731)

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 December 31,
(in thousands)	2022		2021
Segment operating income (loss)	$	160,604	$	(12,731)
Gain on reimbursement of drilling equipment	15,724		5,254
Other gain (loss) on sale of assets	2,379		(1,029)
Corporate selling, general and administrative costs, corporate depreciation and corporate restructuring charges	(34,484)		(34,105)
Operating income (loss) from continuing operations	144,223		(42,611)
Other income (expense)
Interest and dividend income	4,705		2,589
Interest expense	(4,355)		(6,114)
Gain (loss) on investment securities	(15,091)		47,862
Loss on extinguishment of debt	—		(60,083)
Other	(660)		(542)
Total unallocated amounts	(15,401)		(16,288)
Income (loss) from continuing operations before income taxes	$	128,822	$	(58,899)

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

(in thousands)	December 31, 2022		September 30, 2022
Total assets1
North America Solutions	$	3,457,551	$	3,406,824
Offshore Gulf of Mexico	81,135		80,993
International Solutions	336,671		330,974
Other	138,735		120,305
	4,014,092		3,939,096
Investments and corporate operations	397,756		416,435
	$	4,411,848	$	4,355,531

(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 December 31,
(in thousands)	2022		2021
Operating revenues
United States	$	664,173	$	371,488
Argentina	33,834		29,152
Bahrain	2,269		7,632
United Arab Emirates	2,337		—
Colombia	16,369		375
Other Foreign	655		1,135
Total	$	719,637	$	409,782