20. Segments

We manage our business segments primarily based upon 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 part 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, 2018 and 2017 (in thousands):



	Contract Operations		Aftermarket Services		Total
Three months ended September 30, 2018
Revenue	$	169,509	$	62,863	$	232,372
Gross margin	100,453		12,820		113,273
Three months ended September 30, 2017
Revenue	$	153,524	$	44,329	$	197,853
Gross margin	81,573		5,843		87,416

Nine months ended September 30, 2018
Revenue	$	496,156	$	175,126	$	671,282
Gross margin	294,696		31,953		326,649
Nine months ended September 30, 2017
Revenue	$	454,622	$	131,098	$	585,720
Gross margin	256,331		19,271		275,602

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



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Total gross margin	$	113,273		$	87,416		$	326,649		$	275,602
Less:
Selling, general and administrative	26,298			29,108			80,455			81,823
Depreciation and amortization	43,779			47,463			131,565			142,483
Long-lived asset impairment	6,660			7,105			18,323			20,858
Restatement and other charges	396			566			(195		)	3,287
Restructuring and other charges	—			422			—			1,245
Interest expense	23,518			22,892			69,402			66,817
Debt extinguishment loss	—			—			2,450			291
Merger-related costs	182			—			9,993			—
Other income, net	(660		)	(2,716		)	(3,449		)	(4,472		)
Income (loss) before income taxes	$	13,100		$	(17,424	)	$	18,105		$	(36,730	)