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Reportable Segments and Geographic Information
 12 Months Ended
Dec. 31, 2013
Reportable Segments and Geographic Information  
Reportable Segments and Geographic Information

22.  Reportable Segments and Geographic Information

 

We manage our business segments primarily based upon the type of product or service provided. We have four reportable segments: North America contract operations, international contract operations, aftermarket services and fabrication. The North America and international contract operations segments primarily provide natural gas compression services, production and processing equipment services and maintenance services to meet specific customer requirements on Exterran-owned assets. The aftermarket services segment provides a full range of services to support the surface production, compression and processing needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets. The fabrication segment provides (i) design, engineering, fabrication, installation and sale of natural gas compression units and accessories and equipment used in the production, treating and processing of crude oil and natural gas and (ii) engineering, procurement and fabrication services related to the manufacturing of critical process equipment for refinery and petrochemical facilities, the fabrication of tank farms and evaporators and brine heaters for desalination plants.

 

We evaluate the performance of our segments based on gross margin for each segment. Revenue includes only sales to external customers. We do not include intersegment sales when we evaluate our segments’ performance.

 

During each of the years ended December 31, 2013, 2012 and 2011, no individual customer accounted for more than 10% of our consolidated revenues.

 

The following table presents sales and other financial information by reportable segment during the years ended December 31, 2013, 2012 and 2011 (in thousands):

 

 

 

North

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

America

 

International

 

 

 

 

 

Reportable

 

 

 

 

 

 

 

Contract

 

Contract

 

Aftermarket

 

 

 

Segments

 

 

 

 

 

 

 

Operations

 

Operations

 

Services

 

Fabrication

 

Total

 

Other(1)

 

Total(2)

 

2013:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from external customers

 

$

627,844

 

$

476,016

 

$

395,600

 

$

1,660,944

 

$

3,160,404

 

$

—

 

$

3,160,404

 

Gross margin(3)

 

345,355

 

279,072

 

86,182

 

252,397

 

963,006

 

—

 

963,006

 

Total assets

 

1,907,097

 

820,686

 

101,667

 

456,536

 

3,285,986

 

919,811

 

4,205,797

 

Capital expenditures

 

275,408

 

66,116

 

2,082

 

27,032

 

370,638

 

21,087

 

391,725

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from external customers

 

$

596,011

 

$

463,957

 

$

385,861

 

$

1,348,417

 

$

2,794,246

 

$

—

 

$

2,794,246

 

Gross margin(3)

 

311,308

 

279,349

 

82,271

 

156,480

 

829,408

 

—

 

829,408

 

Total assets

 

1,841,755

 

918,187

 

98,104

 

469,520

 

3,327,566

 

876,934

 

4,204,500

 

Capital expenditures

 

247,021

 

138,694

 

3,304

 

23,518

 

412,537

 

16,194

 

428,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from external customers

 

$

570,780

 

$

445,059

 

$

371,327

 

$

1,225,459

 

$

2,612,625

 

$

—

 

$

2,612,625

 

Gross margin(3)

 

276,971

 

260,654

 

59,567

 

123,222

 

720,414

 

—

 

720,414

 

Total assets

 

1,958,306

 

887,046

 

92,169

 

384,099

 

3,321,620

 

854,951

 

4,176,571

 

Capital expenditures

 

182,143

 

58,767

 

1,768

 

22,077

 

264,755

 

7,395

 

272,150

 

 

(1)                  Includes corporate related items.

 

(2)                  Totals exclude assets, capital expenditures and the operating results of discontinued operations.

 

(3)                  Gross margin, a non-GAAP financial measure, is reconciled, in total, to net income (loss), its most directly comparable measure calculated and presented in accordance with U.S. GAAP, below.

 

The following table presents assets from reportable segments to total assets as of December 31, 2013 and 2012 (in thousands):

 

 

 

Years Ended December 31,

 

 

 

2013

 

2012

 

Assets from reportable segments

 

$

3,285,986

 

$

3,327,566

 

Other assets(1)

 

919,811

 

876,934

 

Assets associated with discontinued operations

 

21,360

 

50,347

 

Consolidated assets

 

$

4,227,157

 

$

4,254,847

 

 

(1)                  Includes corporate related items.

 

The following table presents geographic data as of and during the years ended December 31, 2013, 2012 and 2011 (in thousands):

 

 

 

U.S.

 

International

 

Consolidated

 

2013:

 

 

 

 

 

 

 

Revenues from external customers

 

$

1,911,425

 

$

1,248,979

 

$

3,160,404

 

Property, plant and equipment, net

 

$

1,945,991

 

$

874,281

 

$

2,820,272

 

 

 

 

 

 

 

 

 

2012:

 

 

 

 

 

 

 

Revenues from external customers

 

$

1,810,713

 

$

983,533

 

$

2,794,246

 

Property, plant and equipment, net

 

$

1,879,268

 

$

959,451

 

$

2,838,719

 

 

 

 

 

 

 

 

 

2011:

 

 

 

 

 

 

 

Revenues from external customers

 

$

1,436,504

 

$

1,176,121

 

$

2,612,625

 

Property, plant and equipment, net

 

$

1,970,129

 

$

941,582

 

$

2,911,711

 

 

We define gross margin as total revenue less cost of sales (excluding depreciation and amortization expense). Gross margin is included as a supplemental disclosure because it is a primary measure used by our management to evaluate the results of revenue and cost of sales (excluding depreciation and amortization expense), which are key components of our operations. As an indicator of our operating performance, gross margin should not be considered an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP. Our gross margin may not be comparable to a similarly titled measure of another company because other entities may not calculate gross margin in the same manner.

 

The following table reconciles net income (loss) to gross margin (in thousands):

 

 

 

Years Ended December 31,

 

 

 

2013

 

2012

 

2011

 

Net income (loss)

 

$

155,742

 

$

(37,169

)

$

(339,618

)

Selling, general and administrative

 

358,173

 

375,647

 

352,096

 

Depreciation and amortization

 

327,505

 

346,177

 

352,793

 

Long-lived asset impairment

 

28,637

 

136,614

 

6,068

 

Restructuring charges

 

—

 

6,471

 

11,594

 

Goodwill impairment

 

—

 

—

 

196,807

 

Interest expense

 

115,745

 

134,376

 

149,473

 

Equity in (income) loss of non-consolidated affiliates

 

(19,000

)

(51,483

)

471

 

Other (income) expense, net

 

(24,501

)

506

 

(5,597

)

Provision for (benefit from) income taxes

 

84,719

 

(45,755

)

(11,717

)

(Income) loss from discontinued operations, net of tax

 

(64,014

)

(35,976

)

8,044

 

Gross margin

 

$

963,006

 

$

829,408

 

$

720,414