Segments

6 Months Ended

Jun. 30, 2022

Segments

Segments

20. 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.

	Contract		Aftermarket
(in thousands)	Operations		Services		Total
Three months ended June 30, 2022
Revenue	$	166,298	$	49,530	$	215,828
Gross margin		97,943		7,820		105,763
Three months ended June 30, 2021
Revenue	$	163,865	$	31,750	$	195,615
Gross margin		102,478		4,260		106,738
Six months ended June 30, 2022
Revenue	$	329,954	$	83,075	$	413,029
Gross margin		197,098		12,727		209,825
Six months ended June 30, 2021
Revenue	$	329,899	$	61,147	$	391,046
Gross margin		207,147		7,874		215,021

The following table reconciles total gross margin to income before income taxes:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2022		2021		2022		2021
Total gross margin	$	105,763	$	106,738	$	209,825	$	215,021
Less:
Selling, general and administrative		27,691		26,077		55,464		51,161
Depreciation and amortization		41,356		44,193		84,395		89,905
Long-lived and other asset impairment		4,647		2,960		12,063		10,033
Restructuring charges		—		743		—		1,640
Interest expense		24,456		25,958		49,702		57,203
Gain on sale of assets, net		(18,948)		(3,124)		(21,060)		(14,156)
Other (income) expense, net		497		(82)		533		(1,971)
Income before income taxes	$	26,064	$	10,013	$	28,728	$	21,206