12.Segment Information

We operate principally in the contract drilling industry. The contract drilling operations consist mainly of contracting Company-owned drilling equipment primarily to large oil and gas exploration companies. Our contract drilling business includes the following reportable operating segments: U.S. Land, Offshore and International Land. Each reportable operating segment is a strategic business unit that is managed separately. Our primary international areas of operation include Colombia, Ecuador, Argentina, Bahrain, U.A.E. and other South American and Middle Eastern countries. Other includes additional non-reportable operating segments. Revenues included in Other consist primarily of rental income. Consolidated revenues and expenses reflect the elimination of all material intercompany transactions.

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

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.

Segment operating income for all segments is a non-GAAP financial measure of our performance, as it excludes certain general and administrative expenses, corporate depreciation, income from asset sales and other corporate income and expense. We consider segment operating income to be an important supplemental measure of operating performance by presenting trends in our core businesses. We use this measure to facilitate period-to-period comparisons in operating performance of our reportable segments in the aggregate by eliminating items that affect comparability between periods. We believe that segment operating income is useful to investors because it provides a means to evaluate the operating performance of the segments on an ongoing basis using criteria that are used by our internal decision makers. Additionally, it highlights operating trends and aids analytical comparisons. However, segment operating income has limitations and should not be used as an alternative to operating income or loss, a performance measure determined in accordance with GAAP, as it excludes certain costs that may affect our operating performance in future periods.

Summarized financial information of our reportable segments for the nine months ended June 30, 2017 and 2016 is shown in the following tables:


							Segment
	External		Inter-		Total		Operating
(in thousands)	Sales		Segment		Sales		Income (Loss)
June 30, 2017
Contract Drilling
U.S. Land	$	1,000,119	$	—	$	1,000,119	$	(90,718)
Offshore		103,758		—		103,758		19,152
International Land		157,863		—		157,863		(5,225)
		1,261,740		—		1,261,740		(76,791)
Other		10,697		638		11,335		(5,752)
		1,272,437		638		1,273,075		(82,543)
Eliminations		—		(638)		(638)		—
Total	$	1,272,437	$	—	$	1,272,437	$	(82,543)

							Segment
	External		Inter-		Total		Operating
(in thousands)	Sales		Segment		Sales		Income (Loss)
June 30, 2016
Contract Drilling
U.S. Land	$	1,004,116	$	—	$	1,004,116	$	143,855
Offshore		106,697		—		106,697		13,105
International Land		171,529		—		171,529		(13,924)
		1,282,342		—		1,282,342		143,036
Other		10,182		635		10,817		(4,839)
		1,292,524		635		1,293,159		138,197
Eliminations		—		(635)		(635)		—
Total	$	1,292,524	$	—	$	1,292,524	$	138,197

Summarized financial information of our reportable segments for the three months ended June 30, 2017 and 2016 is shown in the following tables:


							Segment
	External		Inter-		Total		Operating
(in thousands)	Sales		Segment		Sales		Income (Loss)
June 30, 2017
Contract Drilling
U.S. Land	$	405,516	$	—	$	405,516	$	(7,980)
Offshore		33,711		—		33,711		6,456
International Land		55,075		—		55,075		4,927
		494,302		—		494,302		3,403
Other		4,262		222		4,484		(2,569)
		498,564		222		498,786		834
Eliminations		—		(222)		(222)		—
Total	$	498,564	$	—	$	498,564	$	834

							Segment
	External		Inter-		Total		Operating
(in thousands)	Sales		Segment		Sales		Income (Loss)
June 30, 2016
Contract Drilling
U.S. Land	$	285,028	$	—	$	285,028	$	25,802
Offshore		30,492		—		30,492		2,084
International Land		47,983		—		47,983		(4,991)
		363,503		—		363,503		22,895
Other		2,983		206		3,189		(2,186)
		366,486		206		366,692		20,709
Eliminations		—		(206)		(206)		—
Total	$	366,486	$	—	$	366,486	$	20,709

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


	Three Months Ended				Nine Months Ended
	June 30,				June 30,

	2017		2016		2017		2016
	(in thousands)

Segment operating income (loss)	$	834	$	20,709	$	(82,543)	$	138,197
Income from asset sales		1,862		547		17,593		7,820
Corporate general and administrative costs and corporate depreciation		(30,724)		(34,512)		(77,914)		(78,982)
Operating income (loss)		(28,028)		(13,256)		(142,864)		67,035
Other income (expense)
Interest and dividend income		1,700		778		4,028		2,310
Interest expense		(6,364)		(6,407)		(17,503)		(16,652)
Other		(911)		534		(350)		926
Total unallocated amounts		(5,575)		(5,095)		(13,825)		(13,416)
Income (loss) from continuing operations before income taxes	$	(33,603)	$	(18,351)	$	(156,689)	$	53,619

The following table presents total assets by reportable segment:


	June 30,		September 30,
	2017		2016
	(in thousands)

Total assets
U.S. Land	$	4,974,364	$	5,005,299
Offshore		98,568		105,152
International Land		417,241		487,181
Other		134,804		36,141
		5,624,977		5,633,773
Investments and corporate operations		888,907		1,198,182
Total assets from continued operations		6,513,884		6,831,955
Discontinued operations		7		64
	$	6,513,891	$	6,832,019

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


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
	(in thousands)

Operating Revenues
United States	$	443,489	$	318,059	$	1,114,574	$	1,113,542
Argentina		43,167		33,208		114,516		118,365
Colombia		9,356		3,831		27,579		15,176
Ecuador		3		481		5		4,948
Other Foreign		2,549		10,907		15,763		40,493
Total	$	498,564	$	366,486	$	1,272,437	$	1,292,524