SEGMENT REPORTING

3 Months Ended

Mar. 31, 2019

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 presented for three months ended March 31, 2018 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.

Intersegment sales are recorded at prices we generally establish by reference to similar transactions with unaffiliated customers and were not material during the three months ended March 31, 2019 or 2018 and are eliminated upon consolidation.

Operating Information by Segment

	Three Months Ended March 31,
	2019			2018
	(In millions)
Revenues:
NCSA	$	1,380		$	98
EARC		148			16
MENA		380			345
APAC		155			149
Technology		148			-
Total revenues	$	2,211		$	608

Operating (loss) income:
Segment operating income:
NCSA	$	73		$	2
EARC		7			(3	)
MENA		66			70
APAC		13			73
Technology		35			-
Total segment operating income		194			142
Corporate ⁽¹⁾		(181	)		(77	)
Total operating income	$	13		$	65

Depreciation and amortization:
NCSA	$	17		$	7
EARC		4			-
MENA		12			6
APAC		5			7
Technology		19			-
Corporate		19			3
Total depreciation and amortization	$	76		$	23

Capital expenditures ⁽²⁾:
NCSA	$	3		$	2
EARC		-			-
MENA		4			3
APAC		5			3
Technology		-			-
Corporate		6			10
Total Capital expenditures	$	18		$	18

Assets by Segment

	Three Months Ended March 31,
	March 31, 2019			December 31, 2018
	(In millions)
Segment assets:
NCSA	$	3,596		$	3,257
EARC		1,221			1,169
MENA		1,565			1,472
APAC		1,198			1,147
Technology		2,757			2,752
Corporate ⁽³⁾		(308	)		(357	)
Total assets	$	10,029		$	9,440

⁽¹⁾

^{Corporate operating results for the three months ended March 31, 2019 include $69 million and $4 million of restructuring and integration costs and transaction costs, respectively. Corporate operating results for the three months ended March 31, 2018 include $12 million and $3 million of restructuring and integration costs and transaction costs, respectively. See Note 10, Restructuring and Integration Costs and Transaction Costs, for further discussion.}

⁽²⁾	^{Capital expenditures reported represent cash purchases. At March 31, 2019 and 2018, we had approximately $19 million and $10 million, respectively, of accrued and unpaid capital expenditures reported in PP&E and accrued liabilities.}

⁽³⁾	^{Corporate assets at March 31, 2019 and December 31, 2018 include negative cash balances associated with our international cash pooling program.}