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 Company's chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance. We are comprised of four reportable segments: International Services, U.S. Services, Tubular Sales and Blackhawk.

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, and other oilfield services companies.

The U.S. Services segment provides tubular services in the active onshore oil and gas drilling regions in the U.S., including the Permian Basin, Eagle Ford Shale, Haynesville Shale, Marcellus/Utica Shale, Niobrara Shale, Woodford Shale, Green River Basin and Uintah Basin, as well as in the U.S. Gulf of Mexico.

The Tubular Sales segment designs, manufactures 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.

The Blackhawk segment provides well construction and well intervention services and products, in addition to cementing tool expertise, in the U.S. and Mexican Gulf of Mexico, onshore U.S. and other select international locations. Blackhawk’s customer base consists primarily of major and independent oil and gas companies as well as other oilfield services companies.

Revenues

We disaggregate our revenue from contracts with customers by geography for each of our segments, as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following tables presents our revenues disaggregated by geography based on the location where our services were provided and products sold (in thousands):



	Three Months Ended June 30, 2018
	International Services		U.S. Services		Tubular Sales		Blackhawk		Consolidated
United States	$	—	$	35,136	$	14,001	$	18,418	$	67,555
International	59,361		—		60		5,109		64,530
Total Revenues	$	59,361	$	35,136	$	14,061	$	23,527	$	132,085



	Three Months Ended June 30, 2017
	International Services		U.S. Services		Tubular Sales		Blackhawk		Consolidated
United States	$	—	$	29,905	$	15,775	$	17,791	$	63,471
International	53,499		—		366		323		54,188
Total Revenues	$	53,499	$	29,905	$	16,141	$	18,114	$	117,659



	Six Months Ended June 30, 2018
	International Services		U.S. Services		Tubular Sales		Blackhawk		Consolidated
United States	$	—	$	67,743	$	29,105	$	35,472	$	132,320
International	108,094		—		176		7,064		115,334
Total Revenues	$	108,094	$	67,743	$	29,281	$	42,536	$	247,654



	Six Months Ended June 30, 2017
	International Services		U.S. Services		Tubular Sales		Blackhawk		Consolidated
United States	$	—	$	60,871	$	32,334	$	33,942	$	127,147
International	100,109		—		752		382		101,243
Total Revenues	$	100,109	$	60,871	$	33,086	$	34,324	$	228,390

Revenue by geographic area was as follows (in thousands):



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
United States	$	67,555	$	63,471	$	132,320	$	127,147
Europe/Middle East/Africa	34,447		36,719		64,693		65,205
Latin America	12,983		9,128		20,457		19,060
Asia Pacific	7,669		4,926		13,663		9,489
Other countries	9,431		3,415		16,521		7,489
Total Revenues	$	132,085	$	117,659	$	247,654	$	228,390

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss) before interest income, net, depreciation and amortization, income tax benefit or expense, asset impairments, gain or loss on disposal of assets, foreign currency gain or loss, equity-based compensation, unrealized and realized gain or loss, the effects of the TRA, other non-cash adjustments and other 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), income tax, foreign currency exchange rates and other charges and credits. Adjusted EBITDA has limitations as an analytical tool and should not be considered as an alternative to net income (loss), operating income (loss), cash flow from operating activities or any other measure of financial performance presented in accordance with 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 loss (in thousands):



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Segment Adjusted EBITDA:
International Services	$	13,458		$	9,022		$	16,046		$	14,308
U.S. Services ⁽¹⁾	(6,379		)	(9,238		)	(15,680		)	(16,453		)
Tubular Sales	170			815			2,358			3,069
Blackhawk	3,704			2,965			6,070			4,176
	10,953			3,564			8,794			5,100
Interest income, net	609			753			1,553			1,151
Depreciation and amortization	(28,862		)	(30,951		)	(57,162		)	(62,050		)
Income tax (expense) benefit	815			6,076			(5,560		)	15,194
Gain (loss) on disposal of assets	(217		)	(210		)	(452		)	1,262
Foreign currency gain (loss)	(4,267		)	599			(2,563		)	1,345
TRA related adjustments	(1,171		)	—			(4,112		)	—
Charges and credits ⁽²⁾	(3,623		)	(5,781		)	(8,334		)	(14,615		)
Net loss	$	(25,763	)	$	(25,950	)	$	(67,836	)	$	(52,613	)


⁽¹⁾	Includes all corporate general and administrative expenses.

⁽²⁾

Comprised of Equity-based compensation expense (for the three months ended June 30, 2018 and 2017: $2,888 and $3,415, respectively, and for the six months ended June 30, 2018 and 2017: $5,168 and $9,116, respectively), Mergers and acquisition expense (for the three months ended June 30, 2018 and 2017: none and $10, respectively, and for the six months ended June 30, 2018 and 2017: $58 and $459, respectively), Severance and other charges (for the three months ended June 30, 2018 and 2017: $1,115 and $(299), respectively, and for the six months ended June 30, 2018 and 2017: $2,369 and $738, respectively), Unrealized and realized gains (losses) (for the three months ended June 30, 2018 and 2017: $1,561 and $(1,088), respectively, and for the six months ended June 30, 2018 and 2017: $1,161 and $(1,696), respectively) and Investigation-related matters (for the three months ended June 30, 2018 and 2017: $1,181 and $1,567, respectively, and for the six months ended June 30, 2018 and 2017: $1,900 and $2,606, respectively).

The following tables set forth certain financial information with respect to our reportable segments (in thousands):



	International Services			U.S. Services			Tubular Sales			Blackhawk			Eliminations			Total
Three Months Ended June 30, 2018
Revenue from external customers	$	59,361		$	35,136		$	14,061		$	23,527		$	—		$	132,085
Inter-segment revenue	(56		)	4,639			96			344			(5,023		)	—
Operating income (loss)	(2,052		)	(19,920		)	(829		)	(981		)	—			(23,782		)
Adjusted EBITDA	13,458			(6,379		)	170			3,704			—			*

Three Months Ended June 30, 2017
Revenue from external customers	$	53,499		$	29,905		$	16,141		$	18,114		$	—		$	117,659
Inter-segment revenue	12			4,543			3,564			72			(8,191		)	—
Operating income (loss)	(6,980		)	(24,292		)	805			(3,499		)	—			(33,966		)
Adjusted EBITDA	9,022			(9,238		)	815			2,965			—			*

Six Months Ended June 30, 2018
Revenue from external customers	$	108,094		$	67,743		$	29,281		$	42,536		$	—		$	247,654
Inter-segment revenue	(79		)	8,855			193			554			(9,523		)	—
Operating income (loss)	(13,773		)	(41,900		)	436			(3,452		)	—			(58,689		)
Adjusted EBITDA	16,046			(15,680		)	2,358			6,070			—			*

Six Months Ended June 30, 2017
Revenue from external customers	$	100,109		$	60,871		$	33,086		$	34,324		$	—		$	228,390
Inter-segment revenue	15			8,828			7,239			72			(16,154		)	—
Operating income (loss)	(16,493		)	(47,639		)	3,185			(9,629		)	—			(70,576		)
Adjusted EBITDA	14,308			(16,453		)	3,069			4,176			—			*

* Non-GAAP financial measure not disclosed.