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Reportable Segments and Geographic Information
 12 Months Ended
Dec. 31, 2014
Reportable Segments and Geographic Information  
Reportable Segments and Geographic Information

 

24.  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, 2014, 2013 and 2012, 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, 2014, 2013 and 2012 (in thousands):

 

 

 

North

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

America

 

International

 

 

 

 

 

Reportable

 

 

 

 

 

 

 

Contract

 

Contract

 

Aftermarket

 

 

 

Segments

 

 

 

 

 

 

 

Operations

 

Operations

 

Services

 

Fabrication

 

Total

 

Other(1)

 

Total(2)

 

2014:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from external customers

 

$
729,103 

 

$
493,853 

 

$
392,774 

 

$
1,284,008 

 

$
2,899,738 

 

$

—

 

$
2,899,738 

 

Gross margin(3)

 
412,961 

 
308,445 

 
84,342 

 
225,546 

 
1,031,294 

 

—

 
1,031,294 

 

Total assets

 
2,446,633 

 
811,831 

 
99,685 

 
432,726 

 
3,790,875 

 
1,048,266 

 
4,839,141 

 

Capital expenditures

 
371,734 

 
130,248 

 
1,920 

 
22,668 

 
526,570 

 
15,125 

 
541,695 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 

 

 

(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, 2014 and 2013 (in thousands):

 

 

 

December 31,

 

 

 

2014

 

2013

 

Assets from reportable segments

 

$
3,790,875 

 

$
3,285,986 

 

Other assets(1)

 
1,048,266 

 
919,811 

 

Assets associated with discontinued operations

 
18,006 

 
21,360 

 

Consolidated assets

 

$
4,857,147 

 

$
4,227,157 

 

 

(1)

Includes corporate related items.

 

The following table presents geographic data as of and during the years ended December 31, 2014, 2013 and 2012 (in thousands):

 

 

 

U.S.

 

International

 

Consolidated

 

2014:

 

 

 

 

 

 

 

Revenues from external customers

 

$
1,778,808 

 

$
1,120,930 

 

$
2,899,738 

 

Property, plant and equipment, net

 

$
2,471,674 

 

$
855,218 

 

$
3,326,892 

 

 

 

 

 

 

 

 

 

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 

 

 

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,

 

 

 

2014

 

2013

 

2012

 

Net income (loss) 

 

$
125,882

 

$
155,742

 

$
(37,169

)

Selling, general and administrative

 
377,754

 
358,173

 
375,647

 

Depreciation and amortization

 
386,071

 
327,505

 
346,177

 

Long-lived asset impairment

 
46,679

 
28,637

 
136,614

 

Restructuring charges

 
7,553

 

—

 
6,471

 

Interest expense

 
114,178

 
115,745

 
134,376

 

Equity in income of non-consolidated affiliates

 
(14,553

)
(19,000

)
(51,483

)

Other (income) expense, net

 
1,747

 
(24,501

)
506

 

Provision for (benefit from) income taxes

 
58,657

 
84,719

 
(45,755

)

Income from discontinued operations, net of tax

 
(72,674

)
(64,014

)
(35,976

)

Gross margin 

 

$
1,031,294

 

$
963,006

 

$
829,408