Reportable Segments and Geographic Information
 12 Months Ended
Dec. 31, 2016
Segment Reporting [Abstract]  
Reportable Segments and Geographic Information
22. Reportable Segments and Geographic Information

We manage our business segments primarily based upon the type of product or service provided. We have four reportable segments: contract operations, aftermarket services, oil and gas product sales and Belleli EPC product sales. The contract operations segment primarily provides natural gas compression services, production and processing equipment services and maintenance services to meet specific customer requirements on assets owned by us. The aftermarket services segment provides a full range of services to support the surface production, compression and processing needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets. The oil and gas product sales segment provides design, engineering, manufacturing, installation and sale of natural gas compression units and accessories and equipment used in the production, treating and processing of crude oil and natural gas. The Belleli EPC product sales segment, which comprises the operations of our Belleli EPC subsidiary that we are exiting, has historically provided engineering, procurement and construction for the manufacture of tanks for tank farms and the manufacture of evaporators and brine heaters for desalination plants.

In the third quarter of 2016, we changed our reporting segments to better align with the Company’s organizational structure and reflect the way in which the Chief Operating Decision Maker now reviews the Company’s operating results. The change in structure had the impact of splitting our previously disclosed product sales segment into the following two new reportable segments: “oil and gas product sales” and “Belleli EPC product sales.” The contract operations and aftermarket services segments were not impacted by this change. The changes in our reportable segments, including the reclassification of the related revenues and costs of sales (excluding depreciation and amortization) in our statements of operations, have been made to all periods presented within this Annual Report on Form 10-K.

We evaluate the performance of our segments based on gross margin for each segment. Revenue includes sales to external customers and affiliates. We do not include intersegment sales when we evaluate our segments’ performance.

During the year ended December 31, 2016, Petroleo Brasileiro S.A. accounted for approximately 10% of our total revenues. During the years ended December 31, 2015 and 2014, Archrock Partners and Archrock accounted for approximately 11% of our total revenues. See Note 16 for further discussion on transactions with affiliates. No other customer accounted for more than 10% of our total revenues in 2016, 2015 and 2014.

The following table presents revenues and other financial information by reportable segment during the years ended December 31, 2016, 2015 and 2014 (in thousands):
 

Contract
Operations
 
Aftermarket
Services
 
Oil and Gas Product Sales
 
Belleli EPC Product Sales
 
Reportable
Segments
Total
 
Other (1)
 
Total (2)(3)
2016:
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
$
392,463

 
$
120,550

 
$
392,384

 
$
123,856

 
$
1,029,253

 
$
—

 
$
1,029,253

Gross margin (4)
248,793

 
33,208

 
26,990

 
(2,466
)
 
306,525

 
—

 
306,525

Total assets
745,752

 
28,421

 
159,172

 
27,928

 
961,273

 
413,491

 
1,374,764

Capital expenditures
69,946

 
332

 
790

 
1,236

 
72,304

 
2,021

 
74,325

 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015:
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
$
469,900

 
$
127,802

 
$
1,089,562

 
$
103,221

 
$
1,790,485

 
$
—

 
$
1,790,485

Gross margin (4)
297,509

 
36,569

 
163,825

 
(31,625
)
 
466,278

 
—

 
466,278

Total assets
790,957

 
31,614

 
230,947

 
46,592

 
1,100,110

 
617,082

 
1,717,192

Capital expenditures
138,171

 
709

 
5,001

 
1,713

 
145,594

 
11,151

 
156,745

 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014:
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
$
493,853

 
$
162,724

 
$
1,329,607

 
$
115,479

 
$
2,101,663

 
$
—

 
$
2,101,663

Gross margin (4)
308,445

 
42,543

 
240,189

 
(33,391
)
 
557,786

 
—

 
557,786

Total assets
809,122

 
37,200

 
334,401

 
63,304

 
1,244,027

 
686,083

 
1,930,110

Capital expenditures
130,248

 
1,095

 
10,954

 
10,462

 
152,759

 
3,843

 
156,602

 
(1)
Includes corporate related items.
(2)
Totals exclude assets, capital expenditures and the operating results of discontinued operations.
(3)
Total gross margin, a non-GAAP financial measure, is reconciled, in total, to income (loss) before income taxes, its most directly comparable measure calculated and presented in accordance with GAAP, below.
(4)
Gross margin is defined as total revenue less cost of sales (excluding depreciation and amortization expense).

The following table presents assets from reportable segments to total assets as of December 31, 2016 and 2015 (in thousands):
 
December 31,
 
2016
 
2015
Assets from reportable segments
$
961,273

 
$
1,100,110

Other assets (1)
413,491

 
617,082

Assets associated with discontinued operations
14

 
71,204

Total assets
$
1,374,778

 
$
1,788,396

 
(1)
Includes corporate related items.

The following tables present geographic data as of and during the years ended December 31, 2016, 2015 and 2014 (in thousands):
 
Years Ended December 31,
 
2016
 
2015
 
2014
Revenue:
 
 
 
 
 
U.S.
$
335,268

 
$
858,409

 
$
1,051,824

United Arab Emirates
137,247

 
135,623

 
131,392

Argentina
151,374

 
172,004

 
172,492

Brazil
85,831

 
68,578

 
91,433

Mexico
90,876

 
125,972

 
119,953

Other international
228,657

 
429,899

 
534,569

Total
$
1,029,253

 
$
1,790,485

 
$
2,101,663


 
December 31,
 
2016
 
2015
 
2014
Property, plant and equipment, net:
 
 
 
 
 
U.S.
$
84,669

 
$
90,976

 
$
87,093

Argentina
222,548

 
239,226

 
246,410

Brazil
157,139

 
128,032

 
119,795

Mexico
167,279

 
198,641

 
238,661

Other international
166,174

 
201,313

 
216,631

Total
$
797,809

 
$
858,188

 
$
908,590



We evaluate the performance of each of our segments based on gross margin. Total gross margin is included as a supplemental disclosure because it is a primary measure used by our management to evaluate the results of revenue and cost of sales (excluding depreciation and amortization expense), which are key components of our operations. We believe gross margin is important because it focuses on the current operating performance of our operations and excludes the impact of the prior historical costs of the assets acquired or constructed that are utilized in those operations, the indirect costs associated with our selling, general and administrative activities, the impact of our financing methods and income taxes. Depreciation and amortization expense may not accurately reflect the costs required to maintain and replenish the operational usage of our assets and therefore may not portray the costs from current operating activity. As an indicator of our operating performance, total gross margin should not be considered an alternative to, or more meaningful than, income (loss) before income taxes as determined in accordance with GAAP. Our gross margin may not be comparable to a similarly titled measure of another company because other entities may not calculate gross margin in the same manner.

The following table reconciles income (loss) before income taxes to total gross margin (in thousands):
 
Years Ended December 31,
 
2016
 
2015
 
2014
Income (loss) before income taxes
$
(69,606
)
 
$
11,420

 
$
127,151

Selling, general and administrative
165,985

 
220,396

 
263,170

Depreciation and amortization
137,974

 
154,801

 
170,088

Long-lived asset impairment
15,146

 
20,788

 
3,851

Restatement charges
18,879

 
—

 
—

Restructuring and other charges
27,457

 
31,315

 
—

Interest expense
34,181

 
7,272

 
1,878

Equity in income of non-consolidated affiliates
(10,403
)
 
(15,152
)
 
(14,553
)
Other (income) expense, net
(13,088
)
 
35,438

 
6,201

Total gross margin
$
306,525

 
$
466,278

 
$
557,786