Segment Information

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

Reporting Segments

Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. We are comprised of three reportable segments: International Services, U.S. Services and Tubular Sales.

The International Services segment provides tubular services in international offshore markets and in several onshore international regions. Our customers in these international markets are primarily large exploration and production companies, including integrated oil and gas companies and national oil and gas companies.

The U.S. Services segment provides tubular services in almost all of the active onshore oil and gas drilling regions in the U.S., including the Permian Basin, Bakken Shale, Barnett Shale, Eagle Ford Shale, Haynesville Shale, Marcellus Shale and Utica Shale, as well as in the U.S. Gulf of Mexico.

The Tubular Sales segment designs, manufactures and distributes large outside diameter ("OD") pipe, connectors and casing attachments. We also provide specialized fabrication and welding services in support of offshore projects, including drilling and production risers, flowlines and pipeline end terminations, as well as long length tubulars (up to 300 feet in length) for use as caissons or pilings. This segment also designs and manufactures proprietary equipment for use in our International and U.S. Services segments.

Adjusted EBITDA

We define Adjusted EBITDA as income from continuing operations before net interest income or expense, depreciation and amortization, income tax benefit or expense, asset impairments, gain or loss on sale of assets, foreign currency gain or loss, stock-based compensation, other non-cash adjustments and unusual or non-recurring charges. We review Adjusted EBITDA on both a consolidated basis and on a segment basis. We use Adjusted EBITDA to assess our financial performance because it allows us to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization) and items outside the control of our management team (such as income tax rates). Adjusted EBITDA has limitations as an analytical tool and should not be considered as an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with generally accepted accounting principles in the U.S. ("GAAP").

Our CODM uses Adjusted EBITDA as the primary measure of segment reporting performance.

The following table presents a reconciliation of Segment Adjusted EBITDA to income from continuing operations (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Segment Adjusted EBITDA:
International Services	$	55,311		$	48,873		$	107,596		$	99,902
U.S. Services	16,684			44,968			61,577			86,846
Tubular Sales	7,978			9,311			11,097			18,685
Corporate and other	31			—			24			—
Adjusted EBITDA Total	80,004			103,152			180,294			205,433
Interest income (expense), net	(31		)	80			(23		)	36
Income tax expense	(10,629		)	(15,852		)	(21,891		)	(31,821		)
Depreciation and amortization	(27,710		)	(21,895		)	(51,711		)	(43,088		)
(Loss) gain on sale of assets	(687		)	(154		)	(871		)	87
Foreign currency gain (loss)	(2,767		)	65			(1,234		)	—
Stock-based compensation expense	(8,278		)	(15,347		)	(16,288		)	(20,236		)
Severance and other charges	(1,049		)	—			(13,022		)	—
Income from continuing operations	$	28,853		$	50,049		$	75,254		$	110,411

The following tables set forth certain financial information with respect to our reportable segments. Included in “Corporate and Other” are intersegment eliminations and costs associated with activities of a general nature (in thousands):

	International Services		U.S. Services		Tubular Sales		Corporate and Other			Total
Three Months Ended June 30, 2015
Revenue from external customers	$	122,640	$	78,418	$	53,246	$	—		$	254,304
Inter-segment revenues	229		6,644		10,544		(17,417		)	—
Adjusted EBITDA	55,311		16,684		7,978		31			80,004
Three Months Ended June 30, 2014
Revenue from external customers	$	129,456	$	105,564	$	37,917	$	—		$	272,937
Inter-segment revenues	230		5,624		19,575		(25,429		)	—
Adjusted EBITDA	48,873		44,968		9,311		—			103,152
Six Months Ended June 30, 2015
Revenue from external customers	$	246,841	$	187,704	$	97,196	$	—		$	531,741
Inter-segment revenues	606		14,558		22,435		(37,599		)	—
Adjusted EBITDA	107,596		61,577		11,097		24			180,294
Six Months Ended June 30, 2014
Revenue from external customers	$	248,041	$	209,319	$	80,069	$	—		$	537,429
Inter-segment revenues	371		10,724		35,671		(46,766		)	—
Adjusted EBITDA	99,902		86,846		18,685		—			205,433