16. Segments

We manage our business segments primarily based upon the type of product or service provided. We have two segments which we operate within the U.S.: contract operations and aftermarket services. The contract operations segment primarily provides natural gas compression services to meet specific customer requirements. The aftermarket services segment provides a full range of services to support the compression needs of customers, from part sales and normal maintenance services to full operation of a customer’s owned assets.

We evaluate the performance of our segments based on gross margin for each segment. Revenue includes only sales to external customers.

The following table presents revenue and other financial information by segment during the three months ended March 31, 2018 and 2017 (in thousands):



	Contract Operations		Aftermarket Services		Segments Total
Three months ended March 31, 2018:
Revenue	$	161,197	$	50,843	$	212,040
Gross margin	96,602		8,506		105,108

Three months ended March 31, 2017:
Revenue	$	149,984	$	39,901	$	189,885
Gross margin	85,887		6,169		92,056

The following table reconciles total gross margin to income (loss) before income taxes (in thousands):



	Three Months Ended March 31,
	2018			2017
Total gross margin	$	105,108		$	92,056
Less:
Selling, general and administrative	27,508			27,553
Depreciation and amortization	44,455			47,772
Long-lived asset impairment	4,710			8,245
Restatement and other charges	485			801
Restructuring and other charges	—			457
Interest expense	22,547			21,421
Debt extinguishment costs	—			291
Merger-related costs	4,125			—
Other income, net	(1,145		)	(794		)
Income (loss) before income taxes	$	2,423		$	(13,690	)