Business Segment Information

9 Months Ended

Sep. 30, 2011

Business Segment Information

Business Segment Information

 Note 12 Business Segment Information

Our operations are conducted through two lines of business: contracting services and oil and gas.  We have disaggregated our contracting services operations into two reportable segments.  As a result, our reportable segments consist of the following: Contracting Services, Production Facilities and Oil and Gas. Contracting Services operations include subsea construction, deepwater pipelay, well operations and robotics.  The Production Facilities segment includes our consolidated investment in the HP I and Kommandor LLC, as well as the retainer fee related to the HFRS and our equity investments in Deepwater Gateway and Independence Hub that are accounted for under the equity method of accounting.

We evaluate our performance based on income before income taxes of each segment. Segment assets are comprised of all assets attributable to the reportable segment.  All material intercompany transactions between the segments have been eliminated.

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
		(in thousands)
Revenues
Contracting Services	$	229,967		$	238,531		$	532,857		$	595,048
Production Facilities		19,986			74,458			56,101			97,169
Oil and Gas		159,218			95,566			500,535			288,867
Intercompany elimination		(36,675	)		(15,886	)		(87,071	)		(87,583	)
Total	$	372,496		$	392,669		$	1,002,422		$	893,501
Income (loss) from operations
Contracting Services	$	47,363		$	31,015		$	81,194		$	102,282
Production Facilities (1)		10,983			44,520			28,859			57,460
Oil and Gas		48,622			(4,384	)		144,926			(159,991	)
Corporate (2)		(6,227	)		(10,767	)		(25,780	)		(46,242	)
Intercompany elimination		(528	)		(286	)		(457	)		(18,705	)
Total	$	100,213		$	60,098		$	228,742		$	(65,196	)
Equity in earnings of equity investments (Note 6)	$	4,906		$	6,221		$	16,443		$	12,932

(1)   In April 2009, Kommandor LLC commenced leasing the HP I to us under terms of a charter arrangement following the completion of the initial conversion of the vessel (Note 8 of our 2010 Form10-K).  The HP I was certified as a floating oil and gas production unit in June 2010 following the completion of installation of oil and gas processing facilities on the vessel.

(2)   The nine-month period ended September 30, 2010, included $13.8 million of $17.5 million settlement of a third party claim against us in March 2010 (Note 14).

Intercompany segment revenues during the three- and nine-month periods ended September 30, 2011 and 2010 were as follows:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2011		2010		2011		2010
		(in thousands)
Contracting Services	$	25,410	$	15,886	$	52,574	$	84,053
Production Facilities		11,265				34,497		3,530
Total	$	36,675	$	15,886	$	87,071	$	87,583

Intercompany segment gross profit (losses) during the three- and nine-month periods ended September 30, 2011 and 2010 were as follows:

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
		(in thousands)
Contracting Services	$	606		$	330		$	645		$	15,473
Production Facilities		(78	)		(44	)		(188	)		3,249
Total	$	528		$	286		$	457		$	18,722

Our identifiable assets as of September 30, 2011 and December 31, 2010 were as follows:

	September 30, 2011		December 31, 2010
		(in thousands)
Identifiable Assets
Contracting Services	$	1,871,004	$	1,856,016
Production Facilities		513,586		512,990
Oil and Gas		1,167,419		1,223,014
Total	$	3,552,009	$	3,592,020