SEGMENT REPORTING

9 Months Ended

Sep. 30, 2012

SEGMENT REPORTING

NOTE 8 – SEGMENT REPORTING

We report our financial results under a geographic-based reporting structure, which coincides with how our financial information is reviewed and evaluated on a regular basis by our chief operating decision maker. We operate in four primary operating segments, which consist of Asia Pacific, Atlantic, Caspian and the Middle East. The Caspian and Middle East operating segments are aggregated into the Middle East reporting segment due to the proximity of regions and similarities in the nature of services provided, economic characteristics and oversight responsibilities. Accordingly, we have three reporting segments consisting of Asia Pacific, Atlantic and the Middle East. We also report certain corporate and other non-operating activities under the heading “Corporate and Other.”

Reporting segments are measured based on operating income, which is defined as revenues reduced by total costs and expenses and equity in income (loss) of unconsolidated affiliates. Summarized financial information is shown in the following tables:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(Unaudited) (In thousands)
Revenues(1):
Asia Pacific	$	468,200		$	528,453		$	1,103,699		$	1,551,099
Atlantic		125,317			74,683			335,225			167,129
Middle East		435,228			276,758			1,206,747			910,707
Total revenues	$	1,028,745		$	879,894		$	2,645,671		$	2,628,935
Operating income (loss):
Asia Pacific	$	52,192		$	44,960		$	156,231		$	142,350
Atlantic		(10,714	)		(37,020	)		(36,749	)		(71,264	)
Middle East		41,003			27,276			122,557			148,207
Total operating income	$	82,481		$	35,216		$	242,039		$	219,293
Capital expenditures(2):
Asia Pacific	$	14,908		$	20,924		$	53,139		$	59,341
Atlantic		16,454			46,649			80,944			129,549
Middle East		15,286			17,522			41,997			31,014
Corporate and Other		975			5,095			3,204			11,968
Total capital expenditures	$	47,623		$	90,190		$	179,284		$	231,872
Depreciation and amortization:
Asia Pacific	$	5,375		$	6,621		$	15,467		$	18,973
Atlantic		3,554			3,494			16,849			10,735
Middle East		6,929			7,600			21,977			21,529
Corporate and Other		4,224			2,086			11,663			8,663
Total depreciation and amortization	$	20,082		$	19,801		$	65,956		$	59,900
Drydock amortization:
Asia Pacific	$	2,241		$	2,817		$	8,230		$	8,153
Atlantic		4,971			2,595			11,284			8,291
Middle East		787			625			2,092			1,892
Total drydock amortization	$	7,999		$	6,037		$	21,606		$	18,336

⁽¹⁾  Intersegment transactions included in revenues were not significant for the periods presented.

⁽²⁾  Total capital expenditures exclude accrued capital expenditures of approximately $1.2 million and $9.5 million for the nine months ended September 30, 2012 and 2011, respectively.

	September 30, 2012		December 31, 2011
	(Unaudited)
	(In thousands)
Segment assets:
Asia Pacific	$	1,303,595	$	934,134
Atlantic		545,897		419,258
Middle East		1,124,358		1,065,478
Corporate and Other		390,193		515,176
Total continuing operations		3,364,043		2,934,046
Total discontinued operations		—		58,768
Total assets	$	3,364,043	$	2,992,814