Segment and Geographic Information

During the first quarter of 2019, the Company consolidated its operating segments from three into two, eliminating the separate presentation of its Ocean Bottom Integrated Technologies segment. This consolidation aligns with the Company’s asset light business model and evolved strategy to commercialize components of the Company’s next generation ocean bottom nodal system, 4Sea, instead of operating a crew. The Company is offering 4Sea components more broadly to the growing number of OBS service providers under recurring revenue commercial strategies. The Company may also license the right to manufacture and use the 4Sea nodal technology to a service provider on a value-based pricing model, such as a royalty stream. Revenues from 4Sea are being recognized through the relevant segment, either E&P Technology & Services or Operations Optimization.

Accordingly, as of first quarter 2019, the Company evaluates and reviews its results based on two reporting segments: E&P Technology & Services and Operations Optimization.

The segments represent components of the Company for which separate financial information is available that is utilized on a regular basis by the Chief Operating Decision Maker in determining how to allocate resources and evaluate performance. The Company measures segment operating results based on income (loss) from operations.

Previously reported segment information has been retrospectively revised throughout the consolidated financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reporting segments. These changes did not have an impact on the Company’s consolidated financial statements. These changes did not affect the Company’s reporting units used for allocating and testing goodwill for impairment.

A summary of segment information follows (in thousands):



	Years Ended December 31,
	2019				2018				2017
Net revenues:
E&P Technology & Services:
New Venture ^(a)	$	31,188			$	69,685			$	100,824
Data Library	71,847				47,095				40,016
Total multi-client revenues ^(b)	103,035				116,780				140,840
Imaging Services	22,543				19,740				16,409
Total	$	125,578			$	136,520			$	157,249
Operations Optimization:
Optimization Software & Services	$	23,140			$	21,129			$	16,695
Devices	25,961				22,396				23,610
Total	$	49,101			$	43,525			$	40,305
Total net revenues	$	174,679			$	180,045			$	197,554
Gross profit (loss):
E&P Technology & Services	$	35,699			$	43,369			$	65,196
Operations Optimization	24,323				22,293				20,076
Segment gross profit	60,022				65,662				85,272
Other	—				(6,042		)	(c)	(9,633		)	(c)
Total gross profit	$	60,022			$	59,620			$	75,639
Gross margin:
E&P Technology & Services	28		%		32		%		41		%
Operations Optimization	50		%		51		%		50		%
Segment gross margin	34		%		36		%		43		%
Other	—		%		(3		)%		(5		)%
Total	34		%		33		%		38		%
Income (loss) from operations:
E&P Technology & Services	$	8,833			$	21,758			$	42,505
Operations Optimization	8,189				7,295				8,022
Support and other	(41,481		)	(d)	(83,325		)	(d)	(59,226		)	(d)
Loss from operations	(24,459		)		(54,272		)		(8,699		)
Interest expense, net	(13,074		)		(12,972		)		(16,709		)
Other expense, net	(1,617		)		(436		)		(3,945		)
Loss before income taxes	$	(39,150	)		$	(67,680	)		$	(29,353	)

^(a) Includes net revenues generated by the E&P Advisors group.

^(b) Excluding item (a) above, this represents net revenues generated by the Ventures group.

^(c) Relates to gross loss primarily related to depreciation expense of previously reported Ocean Bottom Integrated Technologies segment.

^(d) Includes loss from operations of previously reported Ocean Bottom Integrated Technologies segment of $1.7 million, $11.1 million and $16.3 million for 2019, 2018 and 2017, respectively, which includes item (b) above, operating expenses of $1.7 million, $5.1 million and $6.7 million for 2019, 2018 and 2017 and includes a charge of $36.6 million to write-down the cable-based ocean bottom acquisition technologies associated with the previously reported Ocean Bottom Integrated Technologies segment. Remaining balance primarily relates to operating expenses.

Intersegment sales are insignificant for all periods presented.



	Years Ended December 31,
	2019		2018		2017
Depreciation and amortization expense (including multi-client data library) :
E&P Technology & Services	$	41,813	$	51,673	$	53,663
Operations Optimization	940		995		1,349
Support and other ^(a)	445		5,083		8,682
Total	$	43,198	$	57,751	$	63,694

^(a) Includes depreciation and amortization of previously reported Ocean Bottom Integrated Technologies segment of zero, $4.2 million and $7.0 million for 2019, 2018 and 2017, respectively.

Depreciation and amortization expense recorded within cost of services and operating expenses in the consolidated statements of operations is allocated to segments based upon use of the underlying assets.



	December 31,
	2019		2018
Total assets:
E&P Technology & Services	$	133,787	$	191,207
Operations Optimization	56,927		54,933
Support and other ^(a)	42,480		46,412
Total	$	233,194	$	292,552

^(a) Support and other assets include all assets specifically related to support personnel and operations and the majority of cash and cash equivalents.

A summary of total assets by geographic area follows (in thousands):



	December 31,
	2019		2018
North America	$	104,808	$	127,084
Latin America	34,633		69,673
Middle East	48,932		52,037
Europe	37,946		38,463
Other	6,875		5,295
Total	$	233,194	$	292,552

A summary of property, plant and equipment and multi-client data library, net of accumulated depreciation, amortization and impairment, by geographic area follows (in thousands):



	December 31,
	2019		2018
North America	$	56,566	$	67,283
Latin America	14,826		18,067
Europe	2,095		1,140
Middle East	73		36
Other	12		59
Total	$	73,572	$	86,585

A summary of net revenues by geographic area follows (in thousands):



	Years Ended December 31,
	2019		2018		2017
Latin America	$	60,684	$	68,871	$	68,241
North America	46,684		44,474		48,120
Europe	30,722		31,077		44,930
Asia Pacific	13,242		17,817		18,896
Africa	10,083		10,837		6,837
Middle East	7,347		5,526		2,308
Other	5,917		1,443		8,222
Total	$	174,679	$	180,045	$	197,554

Net revenues are attributed to geographic areas on the basis of the ultimate destination of the equipment or service, if known, or the geographic area imaging services are provided. If the ultimate destination of such equipment is not known, net revenues are attributed to the geographic area of initial shipment.