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Business Segments
 3 Months Ended
Mar. 31, 2016
Segment Reporting [Abstract]  
Business Segments

6. Business Segments

Operating results by segment are as follows (in millions):

 

     Three Months Ended
March 31,		  
     2016     2015  

Revenue:

     

Rig Systems

    $ 926      $ 2,523   

Rig Aftermarket

      391        719   

Wellbore Technologies

      631        1,171   

Completion & Production Solutions

      558        948   

Eliminations

      (317 )      (541 ) 
  

 

 

    

 

 

  

Total revenue

    $ 2,189      $ 4,820   
  

 

 

    

 

 

  

Operating profit (loss):

     

Rig Systems

    $ 67      $ 477   

Rig Aftermarket

      69        204   

Wellbore Technologies

      (91 )      95   

Completion & Production Solutions

      (38 )      88   

Eliminations and corporate costs

      (196 )      (294 ) 
  

 

 

    

 

 

  

Total operating profit (loss)

    $ (189 )    $ 570   
  

 

 

    

 

 

  

Operating profit (loss)%:

     

Rig Systems

      7.2 %      18.9 % 

Rig Aftermarket

      17.6 %      28.4 % 

Wellbore Technologies

      (14.4 %)      8.1 % 

Completion & Production Solutions

      (6.8 %)      9.3 % 

Total operating profit (loss) %

      (8.6 %)      11.8 % 

On January 1, 2016, to provide a clearer measurement of segment performance, the Company will no longer allocate certain corporate overhead costs to its segments and is now capturing those costs in “Eliminations and corporate costs.” Prior period amounts have been reclassified to make the segment performance comparable. For the three months ended March 31, 2016 and 2015, the corporate costs were $50 million and $67 million, respectively.

Sales from one segment to another generally are priced at estimated equivalent commercial selling prices; however, segments originating an external sale are credited with the full profit to the Company. Eliminations include intercompany transactions conducted between the four reporting segments that are eliminated in consolidation. Intercompany transactions within each reporting segment are eliminated within each reporting segment.

Included in operating profit are certain restructuring and other items primarily related to costs associated with Voluntary Early Retirement Plans (“VERP”) established by the Company during the first quarters of 2016 and 2015. In 2016 and 2015, VERP costs included $45 million and $58 million in severance, respectively, $35 million and $45 million in postretirement medical benefits, respectively, and $5 million and $18 million related to stock-based compensation, respectively. Severance payments related to the VERP were made during the quarter in which the Company established the plan. As of March 31, 2016, the Company had approximately $73 million accrued for the VERP postretirement medical benefits. Other costs incurred of $56 million in 2016 related primarily to severance and facility closures. Other items by segment are as follows (in millions):

 

     Three Months Ended
March 31,		  
     2016      2015  

Other items:

      

Rig Systems

    $ 52       $ 40   

Rig Aftermarket

      8         8   

Wellbore Technologies

      38         45   

Completion & Production Solutions

      34         29   

Eliminations and corporate costs

      9         —     
  

 

 

     

 

 

  

Total other items

    $ 141       $ 122