CLB 2018 Annual Report

19 The improvement in crude oil prices over this two-year period led to elevated levels in U.S. onshore activities associated with both the exploration and production of oil; however, levels of activity outside the U.S. have remained relatively flat. In North America, the land-based rig count increased 45% during 2017 and another 19% during 2018, which had a positive impact for both services and product sales to this market over this time period. Although the North America rig count had improved by the end of 2018 it still remained almost 50% below 2014 levels. The build in levels of activities on development projects and producing fields in the U.S. unconventional reservoirs during 2017 continued to strengthen during most of 2018, until October 2018 when the commodity price weakened significantly and activity levels decreased. Outside of North America, activities associated with the exploration for and production of oil dropped to current lower levels during the industry downturn which began at the end of 2014 and remained relatively flat during 2017 and 2018. Our clients' activities in the international and deepwater markets remained at these lower levels in 2017 and 2018, and although activities have not yet increased, we believe these markets have shown signs of recovery for 2019 and beyond as our clients have announced new capital investment projects throughout 2017 and 2018. Results of Operations Operating Results for the Year Ended December 31, 2018 Compared to the Years Ended December 31, 2017 and 2016 We evaluate our operating results by analyzing revenue, operating income and operating income margin (defined as operating income divided by total revenue). Since we have a relatively fixed cost structure, increases in revenue generally translate into higher operating income results. Results for the years ended December 31, 2018, 2017 and 2016 are summarized in the following chart: