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SEGMENT REPORTING
 6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]  
SEGMENT REPORTING

NOTE 23—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. 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 and six months ended June 30, 2019 or 2018 and are eliminated upon consolidation.

Operating Information by Segment

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(In millions)

 

 

(In millions)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NCSA

 

$

1,259

 

 

$

995

 

 

$

2,639

 

 

$

1,093

 

EARC

 

 

192

 

 

 

58

 

 

 

340

 

 

 

74

 

MENA

 

 

399

 

 

 

469

 

 

 

779

 

 

 

814

 

APAC

 

 

133

 

 

 

108

 

 

 

288

 

 

 

257

 

Technology

 

 

154

 

 

 

105

 

 

 

302

 

 

 

105

 

Total revenues

 

$

2,137

 

 

$

1,735

 

 

$

4,348

 

 

$

2,343

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income: (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NCSA

 

$

15

 

 

$

49

 

 

$

88

 

 

$

51

 

EARC

 

 

4

 

 

 

(8

)

 

 

11

 

 

 

(11

)

MENA

 

 

29

 

 

 

97

 

 

 

95

 

 

 

167

 

APAC

 

 

2

 

 

 

43

 

 

 

15

 

 

 

116

 

Technology

 

 

35

 

 

 

25

 

 

 

70

 

 

 

25

 

Total segment operating income

 

 

85

 

 

 

206

 

 

 

279

 

 

 

348

 

Corporate

 

 

(146

)

 

 

(157

)

 

 

(327

)

 

 

(235

)

Total operating (loss) income

 

$

(61

)

 

$

49

 

 

$

(48

)

 

$

113

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NCSA

 

$

14

 

 

$

9

 

 

$

31

 

 

$

16

 

EARC

 

 

3

 

 

 

3

 

 

 

7

 

 

 

3

 

MENA

 

 

13

 

 

 

10

 

 

 

25

 

 

 

16

 

APAC

 

 

2

 

 

 

2

 

 

 

7

 

 

 

9

 

Technology

 

 

18

 

 

 

14

 

 

 

37

 

 

 

14

 

Corporate

 

 

11

 

 

 

20

 

 

 

30

 

 

 

22

 

Total depreciation and amortization

 

$

61

 

 

$

58

 

 

$

137

 

 

$

80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NCSA

 

$

2

 

 

$

-

 

 

$

5

 

 

$

2

 

EARC

 

 

1

 

 

 

-

 

 

 

1

 

 

 

-

 

MENA

 

 

4

 

 

 

4

 

 

 

8

 

 

 

7

 

APAC

 

 

-

 

 

 

2

 

 

 

5

 

 

 

5

 

Technology

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Corporate

 

 

8

 

 

 

18

 

 

 

14

 

 

 

29

 

Total Capital expenditures

 

$

15

 

 

$

24

 

 

$

33

 

 

$

43

 

 

Assets by Segment

 

 

 

 

 

 

 

June 30, 2019

 

 

December 31, 2018

 

 

 

(In millions)

 

Segment assets:

 

 

 

 

 

 

 

 

NCSA

 

$

3,489

 

 

$

3,257

 

EARC

 

 

1,238

 

 

 

1,169

 

MENA

 

 

1,583

 

 

 

1,472

 

APAC

 

 

1,200

 

 

 

1,147

 

Technology

 

 

2,726

 

 

 

2,752

 

Corporate (3)

 

 

(238

)

 

 

(357

)

Total assets

 

$

9,998

 

 

$

9,440

 

 

(1)    NCSA operating results for the three and six months ended June 30, 2019 included $101 million loss on the sale of APP, discussed in Note 4, Disposition of Alloy Piping Products, LLC.

Corporate operating results for the three and six months ended June 30, 2019 included:

 

•

$20 million and $89 million of restructuring and integration costs, respectively; and

 

•

$11 million and $15 million of transaction costs, respectively.

Corporate operating results for the six months ended June 30, 2018 included:

 

•

$63 million and $75 million of restructuring and integration costs, respectively; and

 

•

$37 million and $40 million of transaction costs, respectively.

See Note 11, Restructuring and Integration Costs and Transaction Costs, for further discussion.

 

(2)    Capital expenditures reported represent cash purchases. At June 30, 2019 and 2018, we had approximately $47 million and $14 million, respectively, of accrued and unpaid capital expenditures reported in property, plant and equipment and accrued liabilities.

 

(3)    Corporate assets at June 30, 2019 and December 31, 2018 include negative cash balances associated with our international cash pooling program.