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Segment Information | 9 Months Ended
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Sep. 30, 2018
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 Company's 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 September 30, 2018
| International Services |  | U.S. Services |  | Tubular Sales |  | Blackhawk |  | Consolidated
United States | $ | — |  |  | $ | 38,292 |  |  | $ | 12,835 |  |  | $ | 19,096 |  |  | $ | 70,223 |
International | 53,891 |  |  | — |  |  | 36 |  |  | 4,836 |  |  | 58,763 |
Total Revenues | $ | 53,891 |  |  | $ | 38,292 |  |  | $ | 12,871 |  |  | $ | 23,932 |  |  | $ | 128,986 |
| Three Months Ended September 30, 2017
| International Services |  | U.S. Services |  | Tubular Sales |  | Blackhawk |  | Consolidated
United States | $ | — |  |  | $ | 29,065 |  |  | $ | 7,209 |  |  | $ | 17,432 |  |  | $ | 53,706 |
International | 53,742 |  |  | — |  |  | 492 |  |  | 143 |  |  | 54,377 |
Total Revenues | $ | 53,742 |  |  | $ | 29,065 |  |  | $ | 7,701 |  |  | $ | 17,575 |  |  | $ | 108,083 |
| Nine Months Ended September 30, 2018
| International Services |  | U.S. Services |  | Tubular Sales |  | Blackhawk |  | Consolidated
United States | $ | — |  |  | $ | 106,035 |  |  | $ | 41,939 |  |  | $ | 54,568 |  |  | $ | 202,542 |
International | 161,985 |  |  | — |  |  | 213 |  |  | 11,900 |  |  | 174,098 |
Total Revenues | $ | 161,985 |  |  | $ | 106,035 |  |  | $ | 42,152 |  |  | $ | 66,468 |  |  | $ | 376,640 |
| Nine Months Ended September 30, 2017
| International Services |  | U.S. Services |  | Tubular Sales |  | Blackhawk |  | Consolidated
United States | $ | — |  |  | $ | 89,936 |  |  | $ | 39,543 |  |  | $ | 51,374 |  |  | $ | 180,853 |
International | 153,851 |  |  | — |  |  | 1,244 |  |  | 525 |  |  | 155,620 |
Total Revenues | $ | 153,851 |  |  | $ | 89,936 |  |  | $ | 40,787 |  |  | $ | 51,899 |  |  | $ | 336,473 |
Revenue by geographic area was as follows (in thousands):
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
United States | $ | 70,223 |  |  | $ | 53,706 |  |  | $ | 202,542 |  |  | $ | 180,853 |
Europe/Middle East/Africa | 31,972 |  |  | 37,381 |  |  | 96,665 |  |  | 102,586 |
Latin America | 11,984 |  |  | 6,897 |  |  | 32,441 |  |  | 25,957 |
Asia Pacific | 7,026 |  |  | 5,302 |  |  | 20,689 |  |  | 14,791 |
Other countries | 7,781 |  |  | 4,797 |  |  | 24,303 |  |  | 12,286 |
Total Revenues | $ | 128,986 |  |  | $ | 108,083 |  |  | $ | 376,640 |  |  | $ | 336,473 |
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 income (loss) (in thousands):
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
Segment Adjusted EBITDA: |  |  |  |  |  |  |
International Services | $ | 7,848 |  |  | $ | 11,151 |  |  | $ | 23,894 |  |  | $ | 25,459 |
U.S. Services (1) | (846 | ) |  | (11,322 | ) |  | (16,526 | ) |  | (27,775 | )
Tubular Sales | 286 |  |  | (1,333 | ) |  | 2,644 |  |  | 1,736 |
Blackhawk | 4,328 |  |  | 3,477 |  |  | 10,398 |  |  | 7,653 |
| 11,616 |  |  | 1,973 |  |  | 20,410 |  |  | 7,073 |
Interest income, net | 866 |  |  | 1,019 |  |  | 2,419 |  |  | 2,170 |
Depreciation and amortization | (26,998 | ) |  | (30,650 | ) |  | (84,160 | ) |  | (92,700 | )
Income tax (expense) benefit | 7,461 |  |  | (87,613 | ) |  | 1,901 |  |  | (72,419 | )
Gain on disposal of assets | 2,242 |  |  | 829 |  |  | 1,790 |  |  | 2,091 |
Foreign currency gain (loss) | (879 | ) |  | 1,839 |  |  | (3,442 | ) |  | 3,184 |
TRA related adjustments | (1,170 | ) |  | 122,515 |  |  | (5,282 | ) |  | 122,515 |
Charges and credits (2) | (137 | ) |  | (7,616 | ) |  | (8,471 | ) |  | (22,231 | )
Net income (loss) | $ | (6,999 | ) |  | $ | 2,296 |  |  | $ | (74,835 | ) |  | $ | (50,317 | )
(1) | Includes all corporate general and administrative expenses.
(2) | Comprised of Equity-based compensation expense (for the three months ended September 30, 2018 and 2017: $3,008 and $2,342, respectively, and for the nine months ended September 30, 2018 and 2017: $8,176 and $11,458, respectively), Mergers and acquisition expense (for the three months ended September 30, 2018 and 2017: none and none, respectively, and for the nine months ended September 30, 2018 and 2017: $58 and $459, respectively), Severance and other (charges) credits, net (for the three months ended September 30, 2018 and 2017: $4,852 and $(1,648), respectively, and for the nine months ended September 30, 2018 and 2017: $2,483 and $(2,386), respectively), Unrealized and realized gains (losses) (for the three months ended September 30, 2018 and 2017: $360 and $(1,123), respectively, and for the nine months ended September 30, 2018 and 2017: $1,521 and $(2,819), respectively) and Investigation-related matters (for the three months ended September 30, 2018 and 2017: $2,341 and $2,503, respectively, and for the nine months ended September 30, 2018 and 2017: $4,241 and $5,109, 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 September 30, 2018 |  |  |  |  |  |  |  |  |  |  |
Revenue from external customers | $ | 53,891 |  |  | $ | 38,292 |  |  | $ | 12,871 |  |  | $ | 23,932 |  |  | $ | — |  |  | $ | 128,986 |
Inter-segment revenue | (44 | ) |  | 4,694 |  |  | 92 |  |  | 2,036 |  |  | (6,778 | ) |  | — |
Operating income (loss) | 1,423 |  |  | (14,482 | ) |  | (493 | ) |  | (39 | ) |  | — |  |  | (13,591 | )
Adjusted EBITDA | 7,848 |  |  | (846 | ) |  | 286 |  |  | 4,328 |  |  | — |  |  | *
Three Months Ended September 30, 2017 |  |  |  |  |  |  |  |  |  |  |
Revenue from external customers | $ | 53,742 |  |  | $ | 29,065 |  |  | $ | 7,701 |  |  | $ | 17,575 |  |  | $ | — |  |  | $ | 108,083 |
Inter-segment revenue | 3 |  |  | 4,062 |  |  | 3,111 |  |  | 33 |  |  | (7,209 | ) |  | — |
Operating loss | (2,647 | ) |  | (25,453 | ) |  | (3,967 | ) |  | (3,013 | ) |  | — |  |  | (35,080 | )
Adjusted EBITDA | 11,151 |  |  | (11,322 | ) |  | (1,333 | ) |  | 3,477 |  |  | — |  |  | *
Nine Months Ended September 30, 2018 |  |  |  |  |  |  |  |  |  |  |
Revenue from external customers | $ | 161,985 |  |  | $ | 106,035 |  |  | $ | 42,152 |  |  | $ | 66,468 |  |  | $ | — |  |  | $ | 376,640 |
Inter-segment revenue | (123 | ) |  | 13,549 |  |  | 285 |  |  | 2,590 |  |  | (16,301 | ) |  | — |
Operating loss | (12,350 | ) |  | (56,382 | ) |  | (57 | ) |  | (3,491 | ) |  | — |  |  | (72,280 | )
Adjusted EBITDA | 23,894 |  |  | (16,526 | ) |  | 2,644 |  |  | 10,398 |  |  | — |  |  | *
Nine Months Ended September 30, 2017 |  |  |  |  |  |  |  |  |  |  |
Revenue from external customers | $ | 153,851 |  |  | $ | 89,936 |  |  | $ | 40,787 |  |  | $ | 51,899 |  |  | $ | — |  |  | $ | 336,473 |
Inter-segment revenue | 18 |  |  | 12,890 |  |  | 10,350 |  |  | 105 |  |  | (23,363 | ) |  | — |
Operating loss | (19,140 | ) |  | (73,092 | ) |  | (782 | ) |  | (12,642 | ) |  | — |  |  | (105,656 | )
Adjusted EBITDA | 25,459 |  |  | (27,775 | ) |  | 1,736 |  |  | 7,653 |  |  | — |  |  | *
* Non-GAAP financial measure not disclosed.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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