NOTE 21—SEGMENT REPORTING

We disclose the results of each of our reportable segments in accordance with ASC 280, Segment Reporting. Each of the reportable segments is separately managed by a senior executive who is a member of our Executive Committee (“EXCOM”). Our EXCOM is led by our Chief Executive Officer, who is the chief operating decision maker (“CODM”). Discrete financial information is available for each of the segments, and the EXCOM uses the operating results of each of the reportable segments for performance evaluation and resource allocation.

Upon completion of the Combination, during the second quarter of 2018, we reorganized our operations around five operating segments. This reorganization is intended to better serve our global clients, leverage our workforce, help streamline operations, and provide enhanced growth opportunities. Our five operating groups are: NCSA; EARC; MENA; APAC; and Technology. The segment information for the prior periods presented has been recast to conform to the current presentation. We also report certain corporate and other non-operating activities under the heading “Corporate and Other.” Corporate and Other primarily reflects corporate expenses, certain centrally managed initiatives (such as restructuring charges), impairments, year-end mark-to-market pension actuarial gains and losses, costs not attributable to a particular reportable segment and unallocated direct operating expenses associated with the underutilization of vessels, fabrication facilities and engineering resources.

Summarized financial information for the three and six months ended June 30, 2018 and 2017 is as follows:

	Three months ended June 30,						Six months ended June 30,
	2018			2017			2018			2017
	(In millions)
Revenues ⁽¹⁾ :
NCSA	$	995		$	42		$	1,093		$	70
EARC		58			2			74			18
MENA		469			557			814			867
APAC		108			188			257			353
Technology		105			-			105			-
Total revenues	$	1,735		$	789		$	2,343		$	1,308

Operating income
Segment operating income:
NCSA	$	49		$	(7	)	$	51		$	(5	)
EARC		(8	)		(5	)		(11	)		(3	)
MENA		97			118			167			182
APAC		43			31			116			53
Technology		25			-			25			-
Total segment operating income		206			137			348			227
Corporate ⁽²⁾		(157	)		(52	)		(235	)		(90	)
Total operating income		49			85			113			137

Depreciation and amortization:
NCSA	$	9		$	7		$	16		$	11
EARC		3			-			3			-
MENA		10			14			16			22
APAC		2			5			9			13
Technology		14			-			14			-
Corporate		20			2			22			4
Depreciation and amortization	$	58		$	28		$	80		$	50

Capital expenditures⁽³⁾:
NCSA	$	-		$	10		$	2		$	15
EARC		-			-			-			-
MENA		4			5			7			11
APAC		2			2			5			6
Technology		-			-			-
Corporate ⁽⁴⁾		18			1			29			49
Total Capital expenditures	$	24		$	18		$	43		$	81

⁽¹⁾

Intercompany transactions were not significant for the three and six months ended June 30, 2018 and 2017, respectively.

⁽²⁾

Corporate operating results for the three and six months ended June 30, 2018 include $63 million and $75 million of restructuring and integration costs, respectively. See Note 11, Restructuring and Integration Costs, for further discussion. Corporate operating results for the three and six months ended June 30, 2018 also include $37 million and $40 million of transaction costs, respectively. See Note 3, Business Combination, for further discussion. Corporate operating results for the three and six months ended June 30, 2017 includes approximately $3 million of gain on sale of assets.

⁽¹⁾

Liabilities associated with assets acquired during the first six months of 2018 and 2017 were $14 million and $3 million, respectively.

⁽¹⁾

Corporate and other capital expenditures in the first half of 2017 include the purchase of the Amazon, a pipelay and construction vessel. Following the purchase, we sold this vessel to an unrelated party and simultaneously entered into an 11-year bareboat charter agreement.

Our assets by segment at June 30, 2018 and December 31, 2017 were as follows:

	June 30, 2018		December 31, 2017
	(In millions)
Segment assets:
NCSA	$	2,080	$	917
EARC		641		3
MENA		1,494		1,022
APAC		1,158		887
Technology		944		-
Corporate		146		394
Total tangible assets		6,463		3,223
Goodwill		3,926		-
Other intangibles, net		1,039		-
Total assets ⁽¹⁾	$	11,428	$	3,223

⁽¹⁾	Our marine vessels are included in the area in which they were located as of the reporting date.