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SEGMENT REPORTING
 9 Months Ended
Sep. 30, 2018
Segment Reporting [Abstract]  
SEGMENT REPORTING

NOTE 22—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 nine months ended September 30, 2018 and 2017 is as follows:  

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

(In millions)

 

Revenues (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NCSA

 

$

1,516

 

 

$

61

 

 

$

2,609

 

 

$

131

 

EARC

 

 

77

 

 

 

-

 

 

 

151

 

 

 

18

 

MENA

 

 

473

 

 

 

736

 

 

 

1,287

 

 

 

1,603

 

APAC

 

 

75

 

 

 

162

 

 

 

332

 

 

 

515

 

Technology

 

 

148

 

 

 

-

 

 

 

253

 

 

 

-

 

Total revenues

 

$

2,289

 

 

$

959

 

 

$

4,632

 

 

$

2,267

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NCSA

 

$

97

 

 

$

(3

)

 

$

148

 

 

$

(8

)

EARC

 

 

(13

)

 

 

(5

)

 

 

(24

)

 

 

(8

)

MENA

 

 

89

 

 

 

164

 

 

 

256

 

 

 

346

 

APAC

 

 

9

 

 

 

21

 

 

 

125

 

 

 

74

 

Technology

 

 

20

 

 

 

-

 

 

 

45

 

 

 

-

 

Total segment operating income

 

 

202

 

 

 

177

 

 

 

550

 

 

 

404

 

Corporate (2)

 

 

(73

)

 

 

(52

)

 

 

(308

)

 

 

(142

)

Total operating income

 

$

129

 

 

$

125

 

 

$

242

 

 

$

262

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NCSA

 

$

21

 

 

$

5

 

 

$

37

 

 

$

16

 

EARC

 

 

5

 

 

 

-

 

 

 

8

 

 

 

-

 

MENA

 

 

19

 

 

 

13

 

 

 

35

 

 

 

35

 

APAC

 

 

3

 

 

 

8

 

 

 

12

 

 

 

21

 

Technology

 

 

45

 

 

 

-

 

 

 

59

 

 

 

-

 

Corporate

 

 

14

 

 

 

2

 

 

 

36

 

 

 

6

 

Depreciation and amortization

 

$

107

 

 

$

28

 

 

$

187

 

 

$

78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NCSA

 

$

2

 

 

$

6

 

 

$

4

 

 

$

21

 

EARC

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

MENA

 

 

2

 

 

 

7

 

 

 

9

 

 

 

18

 

APAC

 

 

4

 

 

 

2

 

 

 

9

 

 

 

8

 

Technology

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Corporate (3)

 

 

11

 

 

 

1

 

 

 

40

 

 

 

50

 

Total Capital expenditures

 

$

19

 

 

$

16

 

 

$

62

 

 

$

97

 

 

 

(1)

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

 

(2)

Corporate operating results for the three and nine months ended September 30, 2018 include $31 million and $106 million of restructuring and integration costs, respectively. See Note 11, Restructuring and Integration Costs, for further discussion. Corporate operating results for the three and nine months ended September 30, 2018 also include $5 million and $45 million of transaction costs, respectively. See Note 3, Business Combination, for further discussion. Corporate operating results for the three and nine months ended September 30, 2017 includes approximately $3 million of gain on sale of assets.

 

(1)

Corporate and other capital expenditures in the first nine months of 2017 include the purchase of the Amazon, a pipelay and construction vessel described further in Note 13, Lease Obligations.

 

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

 

 

 

September 30, 2018

 

 

December 31, 2017

 

 

 

(In millions)

 

Segment assets:

 

 

 

 

 

 

 

 

NCSA

 

$

2,548

 

 

$

917

 

EARC

 

 

601

 

 

 

3

 

MENA

 

 

1,595

 

 

 

1,022

 

APAC

 

 

649

 

 

 

887

 

Technology

 

 

979

 

 

 

-

 

Corporate (1)

 

 

(30

)

 

 

394

 

Total tangible assets

 

 

6,342

 

 

 

3,223

 

Goodwill

 

 

4,708

 

 

 

-

 

Other intangibles, net

 

 

1,006

 

 

 

-

 

Total assets (2)

 

$

12,056

 

 

$

3,223

 

 

(1)

Corporate assets at September 30, 2018 include negative cash balances associated with our international cash pooling program.

(2)

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