Note 4 - Segment Reporting

The Company identifies its reportable segments and disclose segment inform-ation under IFRS8 Operating Segments which requires Siem Offshore Inc to identify its segments according to the organization and reporting structure used by management. Operating Segments are components of a business that are evaluated regularly by the chief operating decision maker for the purpose of assessing performance and allocating resources. The Company’s chief operating decision maker is the management board, comprised of the CEO, CFO, COO, and CCO.

Generally, financial information is required to be disclosed on the same basis that is used by the chief operating decision maker. The Company’s operating segments represent separately managed business areas with unique products serving different markets. The reportable business areas are OSV with the segments PSV, OSCV, AHTS Vessels and Other Vessels in Brazil, and Industrial with the segments Combat Management Systems, Submarine Power Cable Installation, Scientific Core Drilling and Siem WIS. The PSV segment includes 12 Platform Supply Vessels. The OSCV segment includes four Offshore Subsea Construction Vessels and two Multipurpose field and ROV Support Vessels. The ATHS segment includes ten Anchor Handling and Tug Supply Vessels. The Segment of Other Vessels in Brazil consists of one Oilspill Recovery Vessel and eight smaller Platform Supply Vessels.

Combat Management Systems is the activity of supplying software for a management system to the Brazilian Navy. Submarine Power Cable Installation comprises the activities of installation and maintenance of subsea power cables for offshore windfarms. Scientific Core-Drilling is comprised of the activity of a scientific drillship which performs coredrilling. The segment Other is comprised of the ownership of Siem WIS that develops applications for managed pressure drilling (“MPD”), and certain other activities. Siem Offshore Inc uses three measures of segment results, Operating Revenue, Operating Margin and Net Profit.

Intersegment sales and transfers reflect arm’s length prices as if sold or transferred to third parties at the time of inception of the internal contract, which may cover several years. Transfers of business or fixed assets within or between the segments are reported without recognizing gains or losses. Results of activities not considered part of Siem Offshore Inc.’s main operations as well as unallocated revenues, expenses, liabilities and assets are reported together with Other under the Caption Other and eliminations.

The following tables include information about the Company’s operating segments.

   

CONSOLIDATED

(Amounts in USD 1,000)

 

2015

2014

       

Operating revenue by business area

     

PSV

 

76,455

104,423

OSCV

 

111,315

104,844

AHTS Vessels

 

54,692

142,480

Other Vessels in Brazil

 

21,326

19,351

Other/Intercompany elimination

 

-9,323

-15,854

Operating revenue OSV segment

 

254,465

355,244

       

Combat Management Systems

 

4,741

6,075

Submarine Power Cable Installation

 

132,307

101,479

Scientific Core-Drilling

 

26,164

25,914

Siem WIS

 

4,773

2,601

Other

     

Operating revenue Industial segment

 

167,984

136,069

       

Total

 

422,449

491,312

   

CONSOLIDATED

(Amounts in USD 1,000)

 

2015

2014

       

Depreciation and amortization by business area

PSV

 

28,169

23,434

OSCV

 

24,744

23,121

AHTS Vessels

 

40,534

38,230

Other Vessels in Brazil

 

3,579

2,864

Other

 

3,199

2,574

Depreciation and amortization OSV segment

 

100,225

90,223

       

Submarine Power Cable Installation

 

1,601

1,530

Scientific Core-Drilling

 

3,538

3,490

Siem WIS

 

1,660

1,639

Depreciation and amortization Industial segment

6,800

6,660

       

Total

 

107,025

96,883

Impairment by business area

 

2015

2014

PSV (1)

 

39,507

-

OSCV (1)

 

24,849

-

AHTS Vessels

 

95,109

-

Other Vessels in Brazil (1)

 

-

29,000

Impairment OSV Segment

 

159,465

29,000

       

Siem WIS

 

6,705

-

Impairment Industrial Segment

 

6,705

-

Total

 

166,170

29,000

Operating profit/(loss) by business area

     

PSV

 

-28,980

35,437

OSCV

 

19,998

48,073

AHTS Vessels

 

-134,230

39,232

Other Vessels in Brazil

 

3,478

-35,343

Other

 

-3,413

2,521

Operating profit OSV segment

 

-143,147

89,919

       

Combat Management Systems

 

-208

-8

Submarine Power Cable Installation

 

15,856

15,581

Scientific Core-Drilling

 

10,709

9,429

Siem WIS

 

720

355

Operating profit industrial segment

 

27,076

25,357

       

Administration expenses

 

-38,575

-47,033

Sale assistance, CIRR, Currency derivative contracts

 

-14,089

16,074

Total

 

-168,735

84,316

Other operating profit/(loss) includes, among others, gain of sale of interest rate derivatives (CIRR), gain/(loss) on currency exchange forward contracts and general and administration expenses.

Capital expenditures by business area

(Amounts in USD 1,000)

2015

2014

PSV (1)

 

60,872

85,269

OSCV (1)

 

330

282,786

AHTS Vessels

 

18,079

11,856

WIV (1)

 

58,354

57,356

Other Vessels in Brazil (1)

 

11,257

79,944

Other

 

1,407

3,949

OSV Segment

 

150,299

521,159

Combat Management Systems

 

-

-

Submarine Power Cable Installation

 

168

1,452

Scientific Core-Drilling

 

306

271

Siem WIS

 

142

2,791

Industrial Segment

 

606

4,514

Total

 

150,915

525,674

       

(1) Includes newbuilding program, in total:

 

122,614

337,157

       

Book value by business area

(Amounts in USD 1,000)

2015

2014

PSV (1)

 

405,391

385,870

OSCV (1)

 

357,596

569,040

AHTS Vessels

 

557,679

664,385

WIV (1)

 

115,710

57,356

Other Vessels in Brazil (1)

 

41,274

105,880

Other

 

81,838

54,906

OSV Segment

 

1,559,488

1,837,437

Submarine Power Cable Installation

 

3,483

15,310

Scientific Core-Drilling

 

14,761

26,567

Siem WIS

 

4,408

5,859

Industrial Segment

 

22,652

47,736

Total

 

1,582,140

1,885,173