Segments

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Segments

22. Segments

We manage our business segments primarily based on the type of product or service provided. We have two segments which we operate within the U.S.: contract operations and aftermarket services. The contract operations segment primarily provides natural gas compression services to meet specific customer requirements. The aftermarket services segment provides a full range of services to support the compression needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets.

We evaluate the performance of our segments based on gross margin for each segment. Revenue includes only sales to external customers.

The following table presents revenue and gross margin by segment during the three and six months ended June 30, 2020 and 2019 (in thousands):

	Contract		Aftermarket
	Operations		Services		Total
Three months ended June 30, 2020
Revenue	$	187,949	$	32,367	$	220,316
Gross margin		124,559		3,681		128,240
Three months ended June 30, 2019
Revenue	$	186,258	$	52,132	$	238,390
Gross margin		115,737		9,917		125,654
Six months ended June 30, 2020
Revenue	$	394,923	$	75,090	$	470,013
Gross margin		252,882		11,413		264,295
Six months ended June 30, 2019
Revenue	$	368,765	$	105,784	$	474,549
Gross margin		223,509		19,667		243,176

The following table reconciles total gross margin to income (loss) before income taxes (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Total gross margin	$	128,240	$	125,654	$	264,295	$	243,176
Less:
Selling, general and administrative		28,745		28,618		59,371		57,607
Depreciation and amortization		48,849		45,482		98,671		89,588
Long-lived asset impairment		55,210		8,632		61,405		11,724
Goodwill impairment		—		—		99,830		—
Restatement and other charges		—		24		—		445
Restructuring charges		2,408		—		4,136		—
Interest expense		25,778		25,954		55,443		49,571
Debt extinguishment loss		3,971		3,653		3,971		3,653
Transaction-related costs		—		2,687		—		2,867
(Gain) loss on sale of assets, net		2,189		(1,801)		(1,927)		(1,785)
Other income, net		(438)		(209)		(993)		(430)
Income (loss) before income taxes	$	(38,472)	$	12,614	$	(115,612)	$	29,936