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Segment Information
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Segment Information
Segment Information

Reporting Segments

Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. We are comprised of three reportable segments: International Services, U.S. Services and Tubular Sales.

The International Services segment provides tubular services in international offshore markets and in several onshore international regions. Our customers in these international markets are primarily large exploration and production companies, including integrated oil and gas companies and national oil and gas companies.

The U.S. Services segment provides tubular services in almost all of the active onshore oil and gas drilling regions in the U.S., including the Permian Basin, Bakken Shale, Barnett Shale, Eagle Ford Shale, Haynesville Shale, Marcellus Shale and Utica Shale, as well as in the U.S. Gulf of Mexico.

The Tubular Sales segment designs and distributes large outside diameter ("OD") pipe, connectors and casing attachments and sells large OD pipe originally manufactured by various pipe mills. We also provide specialized fabrication and welding services in support of offshore projects, including drilling and production risers, flowlines and pipeline end terminations, as well as long length tubulars (up to 300 feet in length) for use as caissons or pilings. This segment also designs and manufactures proprietary equipment for use in our International and U.S. Services segments.

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss) before net interest income or expense, depreciation and amortization, income tax benefit or expense, asset impairments, gain or loss on sale of assets, foreign currency gain or loss, equity-based compensation, unrealized and realized gain or loss, other non-cash adjustments and unusual charges. We review Adjusted EBITDA on both a consolidated basis and on a segment basis. We use Adjusted EBITDA to assess our financial performance because it allows us to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization) and items outside the control of our management team (such as income tax rates). Adjusted EBITDA has limitations as an analytical tool and should not be considered as an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance presented in accordance with generally accepted accounting principles in the U.S. ("GAAP").

Our CODM uses Adjusted EBITDA as the primary measure of segment reporting performance.

The following table presents a reconciliation of Segment Adjusted EBITDA to net income (loss) (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2016
 
2015
 
2016
 
2015
Segment Adjusted EBITDA:
 
 
 
 
 
 
 
International Services
$
4,532

 
$
39,157

 
$
31,752

 
$
146,752

U.S. Services
(7,933
)
 
18,251

 
(18,433
)
 
79,914

Tubular Sales
165

 
15,985

 
1,343

 
27,082

Corporate and other
159

 
12

 
361

 
37

Adjusted EBITDA Total
(3,077
)
 
73,405

 
15,023

 
253,785

Interest income, net
646

 
173

 
1,050

 
150

Income tax benefit (expense)
6,800

 
(10,771
)
 
15,311

 
(32,662
)
Depreciation and amortization
(26,545
)
 
(29,032
)
 
(84,278
)
 
(80,743
)
Gain on sale of assets
46

 
1,392

 
1,095

 
521

Foreign currency loss
(1,696
)
 
(5,329
)
 
(5,907
)
 
(6,563
)
Equity-based compensation expense
(3,828
)
 
(6,096
)
 
(12,356
)
 
(22,470
)
Severance and other charges
(14,534
)
 
(1,186
)
 
(18,858
)
 
(14,208
)
Change in value of contingent consideration
—

 
1,532

 
—

 
1,532

Unrealized and realized gains (losses)
(10
)
 
—

 
(973
)
 
—

Net income (loss)
$
(42,198
)
 
$
24,088

 
$
(89,893
)
 
$
99,342



The following tables set forth certain financial information with respect to our reportable segments. Included in “Corporate and Other” are intersegment eliminations and costs associated with activities of a general nature (in thousands):
 
International
Services
 
U.S.
Services
 
Tubular Sales
 
Corporate
and Other
 
Total
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2016
 
 
 
 
 
 
 
 
 
Revenue from external customers
$
51,028

 
$
34,057

 
$
20,029

 
$
—

 
$
105,114

Inter-segment revenues
(1
)
 
3,641

 
5,036

 
(8,676
)
 
—

Adjusted EBITDA
4,532

 
(7,933
)
 
165

 
159

 
(3,077
)
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2015
 
 
 
 
 
 
 
 
 
Revenue from external customers
$
103,076

 
$
74,417

 
$
62,390

 
$
—

 
$
239,883

Inter-segment revenues
102

 
5,654

 
7,188

 
(12,944
)
 
—

Adjusted EBITDA
39,157

 
18,251

 
15,985

 
12

 
73,405

 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2016
 
 
 
 
 
 
 
 
 
Revenue from external customers
$
191,440

 
$
119,955

 
$
68,151

 
$
—

 
$
379,546

Inter-segment revenues
45

 
11,691

 
15,053

 
(26,789
)
 
—

Adjusted EBITDA
31,752

 
(18,433
)
 
1,343

 
361

 
15,023

 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2015
 
 
 
 
 
 
 
 
 
Revenue from external customers
$
349,918

 
$
262,120

 
$
159,586

 
$
—

 
$
771,624

Inter-segment revenues
709

 
20,211

 
29,622

 
(50,542
)
 
—

Adjusted EBITDA
146,752

 
79,914

 
27,082

 
37

 
253,785