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Note 5 - Business Segment Reporting
 12 Months Ended
Dec. 31, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
5.Business segment reporting

 

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”), which is our chief executive officer (“CEO”), in deciding how to allocate resources and assess performance. Our operations are comprised of four operating segments which also represent our reportable segments and are aligned with our geographic regions as below:

 

 

●

North and Latin America (“NLA”),

 

●

Europe and Sub-Saharan Africa (“ESSA”),

 

●

Middle East and North Africa (“MENA”), and

 

●

Asia-Pacific (“APAC”).

 

Each reportable segment provides products and services in well construction, well flow management, subsea well access and well intervention and integrity to operators within their respective geographic regions. The reportable segments are separately managed business units consistent with the way our CODM manages the business. Activity in each region may vary and may not be responsive to changes in the broader global oil and gas market, and demand for our various offerings will generally benefit all product lines in that region. Assets used in support of our operations can in many instances be moved from country to country within a region, with relative ease as compared to moving between regions, in order to address demand.

 

The accounting policies of the segments are the same as those described in Note 2 “Basis of presentation and significant accounting policies.” 

 

Our CODM regularly evaluates the performance of our operating segments using Segment EBITDA, which we define as income (loss) before income taxes adjusted for corporate costs, equity in income of joint ventures, depreciation and amortization expense, impairment expense, severance and other expense, gain (loss) on disposal of assets, foreign exchange (gains) losses, merger and integration expense, other income (expenses), net, interest and finance expense, net and stock-based compensation expense.

 

The CODM uses Segment EBITDA to allocate resources (including employees, property and capital resources) to each segment predominantly in the annual budget and forecasting process. Our CODM assesses the performance using Segment EBITDA to compare the results of each segment with one another and considers budget-to-actual variances on a monthly basis. Our CODM also uses segment EBITDA to evaluate product pricing and determine the compensation of certain employees.

 

The following tables presents our revenue, significant segment expenses and Segment EBITDA disaggregated by our operating segments and reconciliation to income before income taxes (in thousands):

 

  

Year Ended December 31, 2024

 
  

NLA

  

ESSA

  

MENA

  

APAC

  

Consolidated

 

Revenue

 $566,048  $564,440  $332,216  $250,098  $1,712,802 

Compensation and related cost

  (214,182)  (194,237)  (119,892)  (94,514)    

Cost of product, materials, and supplies

  (157,197)  (181,415)  (72,598)  (82,483)    

Other (1)

  (52,692)  (43,413)  (23,954)  (15,421)    

Total Segment EBITDA

 $141,977  $145,375  $115,772  $57,680  $460,804 

Corporate costs (2)

                  (129,823)

Equity in income of joint ventures

                  16,422 

Depreciation and amortization expense

                  (163,468)

Merger and integration expense

                  (16,334)

Severance and other expense

                  (17,048)

Stock-based compensation expense

                  (26,352)

Foreign exchange losses

                  (13,613)

Other expenses, net

                  (105)

Interest and finance expense, net

                  (12,517)

Income before income taxes

                 $97,966 

 

  

Year Ended December 31, 2023

 
  

NLA

  

ESSA

  

MENA

  

APAC

  

Consolidated

 

Revenue

 $511,800  $520,951  $233,528  $246,485  $1,512,764 

Compensation and related cost

  (186,449)  (171,110)  (85,447)  (94,655)    

Cost of product, materials, and supplies

  (139,228)  (172,670)  (55,739)  (133,773)    

Other (1)

  (53,254)  (41,164)  (21,141)  (16,252)    

Total Segment EBITDA

 $132,869  $136,007  $71,201  $1,805  $341,882 

Corporate costs (2)

                  (105,855)

Equity in income of joint ventures

                  12,853 

Depreciation and amortization expense

                  (172,260)

Merger and integration expense

                  (9,764)

Severance and other expense

                  (14,388)

Stock-based compensation expense

                  (19,574)

Foreign exchange losses

                  (9,238)

Other income, net

                  1,234 

Interest and finance expense, net

                  (3,943)

Income before income taxes

                 $20,947 

 

  

Year Ended December 31, 2022

 
  

NLA

  

ESSA

  

MENA

  

APAC

  

Consolidated

 

Revenue

 $499,813  $389,342  $201,495  $188,768  $1,279,418 

Compensation and related cost

  (183,326)  (168,737)  (71,185)  (77,883)    

Cost of product, materials, and supplies

  (136,876)  (110,771)  (43,672)  (90,588)    

Other (1)

  (44,375)  (35,153)  (23,323)  (15,447)    

Total Segment EBITDA

 $135,236  $74,681  $63,315  $4,850  $278,082 

Corporate costs (2)

                  (87,580)

Equity in income of joint ventures

                  15,731 

Depreciation and amortization expense

                  (139,767)

Merger and integration expense

                  (13,620)

Severance and other expense

                  (7,825)

Stock-based compensation expense

                  (18,486)

Foreign exchange losses

                  (8,341)

Other income, net

                  3,149 

Interest and finance expense, net

                  (241)

Income before income taxes

                 $21,102 

(1)

Other segment expenses consists primarily of facilities, sales and purchase tax, motor vehicles, insurance, professional and other costs.

(2)Corporate costs include the costs of running our corporate head office and other central functions that support the operating segments but are not attributable to a particular operating segment, including central product line management, research, engineering and development, logistics, sales and marketing and health and safety.

 

We are a Netherlands based company and we derive our revenue from services and product sales to customers primarily in the oil and gas industry. One customer in our ESSA segment accounted for 10.5% and 12.5% of our revenue in the years ended December 31, 2024 and 2023, respectively. No single customer accounted for more than 10% of our revenue for the year ended December 31, 2022. The revenue generated in the Netherlands was immaterial for the years ended December 31, 2024, 2023 and 2022. The revenue generated in the U.S. was 17.6%, 18.4% and 21.2% of total revenue for the years ended December 31, 2024, 2023 and 2022, respectively. Other than the U.S., no individual country represented more than 10% of our revenue for the years ended December 31, 2024, 2023 and 2022.

 

The following table presents total assets by geographic region and assets held centrally. Assets held centrally includes certain property plant and equipment, investments in joint ventures, collateral deposits, income tax related balances, corporate cash and cash equivalents, accounts receivable and other current and non-current assets, which are not included in the measure of segment assets reviewed by the CODM:

 

  

December 31,

 
  

2024

  

2023

 

NLA

 $793,666  $709,600 

ESSA

  581,866   519,939 

MENA

  425,266   351,379 

APAC

  221,601   190,398 

Assets held centrally

  311,142   241,691 

Total

 $2,333,541  $2,013,007 

 

The following table presents our capital expenditures disaggregated by our operating segments (in thousands):

 

  

Year Ended December 31,

 
  

2024

  

2023

 

NLA

 $63,719  $34,955 

ESSA

  28,226   25,232 

MENA

  33,518   38,673 

APAC

  12,073   18,056 

Assets held centrally

  6,040   5,194 

Total

 $143,576  $122,110