Business Segment Information

3 Months Ended

Mar. 31, 2020

Segment Reporting, Measurement Disclosures [Abstract]

Business Segment Information

BUSINESS SEGMENT INFORMATION

We are a global provider of engineered services and products, primarily to the offshore energy industry. Through the use of our applied technology expertise, we also serve the defense, aerospace and commercial theme park industries. Our Energy Services and Products business consists of ROVs, Subsea Products, Subsea Projects and Asset Integrity. Our ROV segment provides submersible vehicles operated from the surface to support offshore energy exploration, development and production activities. Our Subsea Products segment supplies a variety of specialty subsea hardware and related services. Our Subsea Projects segment provides multiservice subsea support shallow and deepwater vessels and offshore diving and support vessel operations, primarily for inspection, maintenance and repair and installation activities. We also provide survey, autonomous underwater vehicle and satellite-positioning services. For the renewable energy markets, we provide seabed preparation, route clearance and trenching services for submarine cables. Our Asset Integrity segment provides asset integrity management and assessment services, nondestructive testing and inspection. Our Advanced Technologies business provides project management, engineering services and equipment for applications in non-energy industries. Unallocated Expenses are those not associated with a specific business segment. These consist of expenses related to our incentive and deferred compensation plans, including restricted stock and bonuses, as well as other general expenses, including corporate administrative expenses.

There are no differences in the basis of segmentation or in the basis of measurement of segment profit or loss from those used in our consolidated financial statements for the year ended December 31, 2019.

The following table presents revenue, income (loss) from operations and depreciation and amortization expense by business segment for each of the periods indicated.

 

	Three Months Ended
(in thousands)	Mar 31, 2020			Mar 31, 2019			Dec 31, 2019
Revenue
Energy Services and Products
Remotely Operated Vehicles	$	111,780		$	100,346		$	116,020
Subsea Products	194,838			128,844			183,659
Subsea Projects	61,455			89,728			86,728
Asset Integrity	59,132			60,689			61,835
Total Energy Services and Products	427,205			379,607			448,242
Advanced Technologies	109,463			114,279			112,568
Total	$	536,668		$	493,886		$	560,810
Income (Loss) from Operations
Energy Services and Products
Remotely Operated Vehicles	$	9,066		$	1,418		$	(18,660	)
Subsea Products	(91,858		)	(476		)	(10,325		)
Subsea Projects	(145,290		)	2,892			(148,075		)
Asset Integrity	(109,441		)	(713		)	(48,919		)
Total Energy Services and Products	(337,523		)	3,121			(225,979		)
Advanced Technologies	(10,585		)	9,599			5,270
Unallocated Expenses	(32,649		)	(34,434		)	(33,461		)
Total	$	(380,757	)	$	(21,714	)	$	(254,170	)
Depreciation and Amortization, including Goodwill Impairment
Energy Services and Products
Remotely Operated Vehicles	$	25,725		$	27,990		$	32,043
Subsea Products	62,454			12,991			30,992
Subsea Projects	143,346			7,882			14,541
Asset Integrity	111,385			1,634			30,529
Total Energy Services and Products	342,910			50,497			108,105
Advanced Technologies	12,178			830			766
Unallocated Expenses	1,108			1,159			1,199
Total	$	356,196		$	52,486		$	110,070

We determine Income (Loss) from Operations for each business segment before interest income or expense, other income (expense) and provision for income taxes. We do not consider an allocation of these items to be practical.

Income (Loss) from Operations

Three Months Ended March 31, 2020—During the three months ended March 31, 2020, we recorded total adjustments of $386 million for:

• loss on impairment of $69 million in our Subsea Products, Subsea Projects and Advanced Technologies segments for long-lived assets;

• write-downs and write-offs of certain intangible assets as discussed below in "Depreciation and Amortization Expense" of $7.3 million;

• pre-tax goodwill impairment of $303 million in our Subsea Products, Subsea Projects, Asset Integrity and Advanced Technologies segments; and

• other expenses of $6.6 million.

These total adjustments of $386 million, attributable to each of our reporting segments, are summarized as follows:

• Remotely Operated Vehicles - $0.7 million;

• Subsea Products - $108 million;

• Subsea Projects - $146 million;

• Asset Integrity - $112 million; and

• Advanced Technologies - $18 million.

Three Months Ended December 31, 2019—During the three months ended December 31, 2019, we recorded total adjustments of $252 million for:

• loss on impairment of $143 million in our Subsea Projects segment for deepwater and shallow water vessels and Renewables and Special Projects long-lived assets;

• write-downs and write-offs of certain equipment and intangible assets as discussed below in "Depreciation and Amortization Expense" of $45 million;

• inventory write-downs of $21 million;

• impairment of long-lived assets of $17 million in our Asset Integrity segment;

• pre-tax goodwill impairment of $15 million in our Asset Integrity segment; and

• other expenses of $12 million.

These total adjustments of $252 million, attributable to each of our reporting segments, are summarized as follows:

• Remotely Operated Vehicles - $23 million;

• Subsea Products - $25 million;

• Subsea Projects - $153 million;

• Asset Integrity - $49 million; and

• Advanced Technologies - $1.6 million.

Depreciation and Amortization, including Goodwill Impairment

Depreciation expense on property and equipment, reflected in Depreciation and Amortization, including Goodwill Impairment in the table above, was $43 million, $49 million and $48 million in the three months ended March 31, 2020 and 2019 and December 31, 2019, respectively.

Amortization expense on long-lived intangible assets, reflected in Depreciation and Amortization, including Goodwill Impairment in the table above, was $2.6 million, $3.9 million and $3.0 million in the three months ended March 31, 2020 and 2019 and December 31, 2019, respectively.

Goodwill impairment expense, reflected in Depreciation and Amortization, including Goodwill Impairment in the table above, was $303 million, in the three months ended March 31, 2020, attributable to each reporting segment as follows:

• Subsea Products - $51 million;

• Subsea Projects - $130 million; and

• Asset Integrity - $111 million; and

• Advanced Technologies - $11 million.

Goodwill impairment expense, reflected in Depreciation and Amortization, including Goodwill Impairment in the table above, was $15 million in our Asset integrity segment in the three months ended December 31, 2019.

In the three months ended March 31, 2020, we also recorded the write-downs and write-offs of certain intangible assets of $7.3 million in our Subsea Projects segment, which is included in our first quarter 2020 Depreciation and Amortization, including Goodwill Impairment, of $356 million.

In the three months ended December 31, 2019, we also recorded the write-offs of certain equipment and intangible assets of $45 million, which is included in our fourth quarter 2019 Depreciation and Amortization, including Goodwill impairment of $110 million, attributable to each reporting segment as follows:

• Remotely Operated Vehicles - $5.7 million;

• Subsea Products - $19 million;

• Subsea Projects - $6.1 million; and

• Asset Integrity - $14 million.

Goodwill

The following table presents Goodwill by business segment:

(in thousands)	Mar 31, 2020		Dec 31, 2019
Goodwill
Energy Services and Products
Remotely Operated Vehicles	$	23,609	$	24,423
Subsea Products	39,924		99,409
Subsea Projects	—		131,768
Asset Integrity	—		127,637
Total Energy Services and Products	63,533		383,237
Advanced Technologies	10,454		21,842
Total	$	73,987	$	405,079