Segments

9 Months Ended

Sep. 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 nine months ended September 30, 2020 and 2019 (in thousands):

	Contract		Aftermarket
	Operations		Services		Total
Three months ended September 30, 2020
Revenue	$	175,223	$	30,408	$	205,631
Gross margin		114,779		4,699		119,478
Three months ended September 30, 2019
Revenue	$	198,337	$	46,612	$	244,949
Gross margin		122,396		8,987		131,383
Nine months ended September 30, 2020
Revenue	$	570,146	$	105,498	$	675,644
Gross margin		367,661		16,112		383,773
Nine months ended September 30, 2019
Revenue	$	567,102	$	152,396	$	719,498
Gross margin		345,905		28,654		374,559

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Total gross margin	$	119,478	$	131,383	$	383,773	$	374,559
Less:
Selling, general and administrative		18,681		29,526		78,052		87,133
Depreciation and amortization		47,279		48,409		145,950		137,997
Long-lived and other asset impairment		10,727		7,097		72,132		18,821
Goodwill impairment		—		—		99,830		—
Restatement and other charges		—		—		—		445
Restructuring charges		2,900		—		7,036		—
Interest expense		25,221		27,401		80,664		76,972
Debt extinguishment loss		—		—		3,971		3,653
Transaction-related costs		—		4,905		—		7,772
Gain on sale of assets, net		(9,146)		(7,859)		(11,073)		(9,644)
Other (income) loss, net		(324)		49		(1,317)		(381)
Income (loss) before income taxes	$	24,140	$	21,855	$	(91,472)	$	51,791