Segment Information

Reporting Segments

In the first quarter of 2015, we changed our business structure to better align with management’s current view and future growth objectives. This involved separating our Land Drilling Rigs business into a reportable segment resulting in a total of five reportable segments which are North America, MENA/Asia Pacific, Europe/SSA/Russia, Latin America and Land Drilling Rigs. The operational performance of our segments is reviewed and managed primarily on a geographic basis, and we report the regional segments as separate, distinct reporting segments. In addition, our Land Drilling Rigs business, which we intend to divest, is reviewed and managed apart from our regional segments. Our corporate and other expenses that do not individually meet the criteria for segment reporting continue to be reported separately as Corporate and Research and Development. Each business reflects a reportable segment led by separate business segment management that reports directly or indirectly to our chief operating decision maker (“CODM”). Our CODM assesses performance and allocates resources on the basis of the five reportable segments. We have revised our business segment reporting to reflect our current management approach and recast prior periods to conform to the current business segment presentation.

Financial information by segment is summarized below. Revenues are attributable to countries based on the ultimate destination of the sale of products or performance of services. The accounting policies of the segments are the same as those described in “Note 1 – Summary of Significant Accounting Policies”. Included in the income (loss) from operations in MENA/Asia Pacific are losses related to our long-term early production facility construction contracts in Iraq accounted for under the percentage-of-completion method as described in “Note 5 – Percentage of Completion Contracts”.



	Year Ended December 31, 2015
(Dollars in millions)	Net Operating Revenues		Income (Loss) from Operations ^(a)			Depreciation and Amortization		Capital Expenditures
North America	$	3,494	$	(308	)	$	362	$	161
MENA/Asia Pacific	1,947		(28		)	254		75
Europe/SSA/Russia	1,533		173			201		132
Latin America	1,746		254			249		227
Subtotal	8,720		91			1,066		595
Land Drilling Rigs	713		(13		)	110		68
	9,433		78			1,176		663
Corporate and Research and Development			(425		)	24		19
Long-Lived Asset Impairment and Other Related Charges ^(b)			(768		)
Equity Investment Impairment			(25		)
Severance and Restructuring Charges ^(c)			(232		)
Litigation Charges			(116		)
Loss on Sale of Businesses and Investments, Net			(6		)
Other Items ^(d)			(52		)
Total	$	9,433	$	(1,546	)	$	1,200	$	682

(a)

During 2015, we recognized inventory write-downs of $223 million attributable to each reporting segment as follows: $73 million in North America, $54 million in Latin America, $38 million in MENA/Asia Pacific, $32 million in Europe/SSA/Russia, and $26 million for Land Drilling Rigs. We recognized a charge for bad debt expense of $48 million of which $31 million was taken in the fourth quarter. The charges attributable to our reporting segments are as follows: $20 million in North America, $12 million for Europe/SSA/Russia, $9 million in Latin America, and $7 million in MENA/Asia Pacific.


(b)	Includes asset impairment charges of $638 million, supply agreement charges related to a non-core business divestiture of $67 million, and pressure pumping business related charges of $63 million.


(c)	We recognized 2015 Plan severance and restructuring charges of $232 million: $52 million in North America, $56 million in MENA/Asia Pacific, $56 million in Europe/SSA/Russia, $40 million in Latin America, $12 million in Land Drilling Rigs and $16 million in Corporate and Research and Development.


(d)	Includes $17 million in professional and other fees, $11 million in divestiture related charges and facility closures and $24 million in other charges.



	Year Ended December 31, 2014
(Dollars in millions)	Net Operating Revenues		Income (Loss) from Operations			Depreciation and Amortization		Capital Expenditures
North America	$	6,852	$	1,005		$	430	$	454
MENA/Asia Pacific	2,406		115			280		183
Europe/SSA/Russia	2,129		367			218		282
Latin America	2,282		339			241		311
Subtotal	13,669		1,826			1,169		1,230
Land Drilling Rigs	1,242		(103		)	179		158
	14,911		1,723			1,348		1,388
Corporate and Research and Development			(468		)	23		62
Long-Lived Asset Impairments			(495		)
Goodwill Impairment			(161		)
Severance and Restructuring Charges ^(e)			(331		)
Gain on Sale of Businesses and Investments, Net			349
Other Items ^(f)			(112		)
Total	$	14,911	$	505		$	1,371	$	1,450


(e)	We recognized 2014 and 2015 Plan severance and restructuring charges of $331 million: $76 million in North America, $133 million in MENA/Asia Pacific, $35 million in Europe/SSA/Russia, $48 million in Latin America, $9 million in Land Drilling Rigs and $30 million in Corporate and Research and Development.


(f)	Includes professional fees of $107 million related to the divestiture of our non-core businesses, restatement related litigation, the settlement of the U.S. government investigations, and our 2014 redomestication from Switzerland to Ireland and other charges of $5 million.



	Year Ended December 31, 2013
(Dollars in millions)	Net Operating Revenues		Income (Loss) from Operations ^(g)			Depreciation and Amortization		Capital Expenditures
North America	$	6,390	$	827		$	424	$	434
MENA/Asia Pacific	2,746		(62		)	284		278
Europe/SSA/Russia	1,947		266			207		228
Latin America ^(h)	2,635		320			254		245
Subtotal	13,718		1,351			1,169		1,185
Land Drilling Rigs	1,545		(33		)	213		327
	15,263		1,318			1,382		1,512
Corporate and Research and Development			(466		)	20		63
Litigation Charges			(153		)
Gain on Sale of Businesses and Investments, Net			24
Other Items ⁽ⁱ⁾			(200		)
Total	$	15,263	$	523		$	1,402	$	1,575

(g)

We recognized a charge for bad debt expense of $98 million attributable to our reporting segments as follows: $51 million in Latin America, $26 million in Land Drilling Rigs, $10 million for Europe/SSA/Russia, $9 million in MENA/Asia Pacific, and $2 million in North America. During 2013, we recognized a charge for excess and obsolete inventory of $62 million attributable to each reporting segment as follows: $35 million in North America, $13 million in Europe/SSA/Russia, $7 million in MENA/Asia Pacific, $6 million in Latin America and $1 million for Land Drilling Rigs.


(h)	On December 17, 2013, we accepted bonds with a face value of $127 million from PDVSA in full settlement of $127 million in trade receivables. Upon receipt, we immediately sold these bonds in a series of transactions recognizing a loss of $58 million.


(i)	Includes $67 million of professional fees and expenses for U.S. government investigations and the remediation of our material weakness related to income taxes, $94 million of severance and $39 million of other items.

The following table presents total assets by segment at December 31:



	Total Assets at December 31,
(Dollars in millions)	2015		2014
North America	$	5,100	$	7,297
MENA/Asia Pacific	2,536		3,022
Europe/SSA/Russia	2,480		3,106
Latin America	2,683		3,211
Land Drilling Rigs	1,516		1,907
Corporate and Research and Development	472		346
Total	$	14,787	$	18,889

Total assets in the United States, which is part of our North America segment, were $4.4 billion and $6.1 billion as of December 31, 2015 and 2014, respectively. The remaining North America total assets balance of $731 million and $1.2 billion, respectively as of December 31, 2015 and 2014, is related to our operations in Canada.

Products and Services

We are one of the world’s leading providers of equipment and services used in the drilling, evaluation, completion, production and intervention of oil and natural gas wells. The composition of our consolidated revenues by product service line group is as follows:



	Year Ended December 31,
	2015		2014		2013
Formation Evaluation and Well Construction	55	%	52	%	52	%
Completion and Production	37		40		38
Land Drilling Rigs	8		8		10
Total	100	%	100	%	100	%

Geographic Areas

Financial information by geographic area is summarized below. Revenues from customers and long-lived assets in Ireland were insignificant in each of the years presented. Long-lived assets exclude goodwill and intangible assets as well as deferred tax assets of $207 million and $129 million at December 31, 2015 and 2014, respectively.



	Revenues						Long-lived Assets
(Dollars in millions)	2015		2014		2013		2015		2014
United States	$	2,864	$	5,567	$	5,147	$	1,505	$	2,114
Middle East and North Africa	1,843		2,038		2,197		1,686		1,987
Latin America	1,782		2,381		2,835		1,143		1,226
Europe/SSA/Russia	1,613		2,584		2,693		862		1,158
Asia Pacific	701		1,057		1,148		471		616
Canada	630		1,284		1,243		191		264
	$	9,433	$	14,911	$	15,263	$	5,858	$	7,365