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.