Business Segments

In the first quarter 2019, we changed our reportable segments in order to align with business activity drivers and the manner in which management reviews and evaluates operating performance. Forum now operates in the following three reportable segments: Drilling & Downhole, Completions and Production. This move better aligns with the key phases of the well cycle and provides improved operating efficiencies. Historically, we operated in three reportable segments: Drilling & Subsea, Completions, and Production & Infrastructure. We have moved the Downhole product line from Completions to Drilling & Subsea to form the new Drilling & Downhole segment. Completions retains the Stimulation & Intervention and Coiled Tubing product lines. Finally, we renamed Production & Infrastructure as the Production segment. Our historical results of operations have been recast to retrospectively reflect these changes in accordance with GAAP.

The Drilling & Downhole segment designs and manufactures products and provides related services to the drilling, well construction and subsea energy construction and services markets as well as other markets such as alternative energy, defense and communications. The Completions segment designs, manufactures and supplies products and provides related services to the completion, stimulation and intervention markets. The Production segment designs, manufactures and supplies products, and provides related equipment and services for production and infrastructure markets.

The Company’s reportable segments are strategic units that offer distinct products and services. They are managed separately since each business segment requires different marketing strategies. Operating segments have not been aggregated as part of a reportable segment. The Company evaluates the performance of its reportable segments based on operating income. This segmentation is representative of the manner in which our Chief Operating Decision Maker and our board of directors view the business. We consider the Chief Operating Decision Maker to be the Chief Executive Officer.

The amounts indicated below as “Corporate” relate to costs and assets not allocated to the reportable segments. Summary financial data by segment follows (in thousands):



	Year ended December 31,
	2018			2017			2016
Revenue:
Drilling & Downhole	$	334,019		$	310,523		$	283,010
Completions	373,107			184,182			72,241
Production	361,407			327,287			233,754
Eliminations	(4,314		)	(3,372		)	(1,370		)
Total revenue	$	1,064,219		$	818,620		$	587,635

Segment operating income (loss):
Drilling & Downhole	$	(33,335	)	$	(47,106	)	$	(62,439	)
Completions	31,924			8,797			(36,225		)
Production	6,022			7,811			655
Corporate	(35,079		)	(33,427		)	(27,440		)
Total segment operating loss	(30,468		)	(63,925		)	(125,449		)
Goodwill and intangible asset impairments	363,522			69,062			—
Transaction expenses	3,446			6,511			865
Loss (gain) on disposal of assets and other	(438		)	2,097			2,638
Operating loss	$	(396,998	)	$	(141,595	)	$	(128,952	)

Depreciation and amortization
Drilling & Downhole	$	31,985		$	38,463		$	41,231
Completions	33,943			17,631			13,145
Production	8,407			8,608			6,738
Corporate	173			427			646
Total depreciation and amortization	$	74,508		$	65,129		$	61,760

A summary of capital expenditures by reportable segment is as follows (in thousands):



	Year ended December 31,
Capital expenditures	2018		2017		2016
Drilling & Downhole	$	8,067	$	7,093	$	8,232
Completions	4,997		4,789		2,099
Production	4,877		6,855		1,953
Corporate	6,102		7,972		4,544
Total capital expenditures	$	24,043	$	26,709	$	16,828

A summary of consolidated assets by reportable segment is as follows (in thousands):



	Year ended December 31,
Assets	2018		2017		2016
Drilling & Downhole	$	663,414	$	1,057,378	$	1,145,426
Completions	872,731		790,255		317,016
Production	243,354		251,685		175,940
Corporate	50,153		95,910		196,810
Total assets	$	1,829,652	$	2,195,228	$	1,835,192

Corporate assets primarily include deferred tax assets and deferred loan costs.

A summary of long-lived assets by country is as follows (in thousands):



	Year ended December 31,
Long-lived assets:	2018		2017		2016
United States	$	868,295	$	1,087,381	$	809,545
Europe & Africa	100,451		213,008		184,768
Canada	87,221		88,280		79,403
Asia-Pacific	984		7,984		7,855
Middle East	6,049		7,362		3,175
Latin America	635		832		730
Total long-lived assets	$	1,063,635	$	1,404,847	$	1,085,476

The following table presents our revenues disaggregated by geography based on shipping destination (in thousands):



	Year ended December 31,
	2018				2017				2016
Revenue:	$		%		$		%		$		%
United States	$	811,724	76.3	%	$	621,445	76.0	%	$	361,941	61.7	%
Canada	68,635		6.4	%	60,898		7.4	%	42,520		7.2	%
Europe & Africa	57,632		5.4	%	61,134		7.5	%	77,847		13.2	%
Middle East	54,541		5.1	%	25,634		3.1	%	25,975		4.4	%
Asia-Pacific	46,503		4.4	%	28,694		3.5	%	51,880		8.8	%
Latin America	25,184		2.4	%	20,815		2.5	%	27,472		4.7	%
Total Revenue	$	1,064,219	100.0	%	$	818,620	100.0	%	$	587,635	100.0	%

The following table presents our revenues disaggregated by product line (in thousands):



	Year ended December 31,
	2018					2017					2016
Revenue:	$			%		$			%		$			%
Drilling Technologies	$	178,260		16.6	%	$	168,816		20.6	%	$	135,051		23.3	%
Downhole Technologies	104,974			9.9	%	76,010			9.3	%	59,545			10.1	%
Subsea Technologies	50,785			4.8	%	65,697			8.0	%	88,414			15.0	%
Stimulation and Intervention	228,721			21.5	%	148,666			18.2	%	72,241			12.3	%
Coiled Tubing	144,386			13.6	%	35,516			4.3	%	—			—	%
Production Equipment	141,169			13.3	%	124,323			15.2	%	77,166			13.1	%
Valve Solutions	220,238			20.7	%	202,964			24.8	%	156,588			26.6	%
Eliminations	(4,314		)	(0.4	)%	(3,372		)	(0.4	)%	(1,370		)	(0.4	)%
Total revenue	$	1,064,219		100.0	%	$	818,620		100.0	%	$	587,635		100.0	%