Business Segment Information

9 Months Ended

Sep. 30, 2019

In the first quarter of 2019, the Company revised its reportable segments to combine its rig manufacturing business with its Contract Drilling segment, creating an Other Services segment. With this change, the Company's segments consist of: Well Servicing, Water Logistics, Completion & Remedial Services, and Other Services. These reporting segments, which are also the Company's operating segments, align with how the Chief Operating Decision Maker allocates resources and assesses performance against the Company’s key growth strategies. Costs related to other business activities, primarily corporate headquarter functions, are disclosed separately from the four operating segments as "Corporate." The Company evaluates segment performance on earnings before interest expense and income taxes. Products are transferred between segments and geographic areas on a basis intended to reflect as nearly as possible the “market value” of the products. Prior period segment information has been retrospectively revised to reflect Basic's current segmentation.

The following table sets forth certain financial information with respect to Basic’s reportable segments for the three and nine months ended September 30, 2019 and 2018 (in thousands):


	Completion
	& Remedial		Well		Water		Other
	Services		Servicing		Logistics		Services		Corporate		Total

Three Months Ended September 30, 2019 (Unaudited)
Operating revenues	$	70,002	$	57,094	$	48,451	$	2,818	$	—	$	178,365
Direct operating costs	(53,825)		(43,510)		(34,783)		(6,348)		—		(138,466)
Segment profits	$	16,177	$	13,584	$	13,668	$	(3,530)	$	—	$	39,899
Depreciation and amortization	$	13,930	$	5,608	$	7,774	$	64	$	1,803	$	29,179
Capital expenditures	$	2,494	$	1,622	$	7,273	$	—	$	212	$	11,601
Three Months Ended September 30, 2018 (Unaudited)
Operating revenues	$	115,978	$	64,314	$	59,539	$	6,503	$	—	$	246,334
Direct operating costs	(89,777)		(50,591)		(42,785)		(7,246)		—		(190,399)
Segment profits	$	26,201	$	13,723	$	16,754	$	(743)	$	—	$	55,935
Depreciation and amortization	$	16,563	$	6,533	$	7,214	$	314	$	2,130	$	32,754
Capital expenditures	$	10,664	$	4,921	$	6,710	$	43	$	804	$	23,142
Nine Months Ended September 30, 2019 (Unaudited)
Operating revenues	$	224,897	$	175,777	$	155,083	$	9,657	$	—	$	565,414
Direct operating costs	(176,918)		(135,752)		(107,611)		(13,191)		—		(433,472)
Segment profits	$	47,979	$	40,025	$	47,472	$	(3,534)	$	—	$	131,942
Depreciation and amortization	$	40,898	$	16,464	$	22,824	$	189	$	5,293	$	85,668
Capital expenditures	$	17,634	$	13,127	$	22,300	$	123	$	712	$	53,896
Identifiable assets	$	205,950	$	82,819	$	115,693	$	5,483	$	257,684	$	667,629
Nine Months Ended September 30, 2018 (Unaudited)
Operating revenues	$	360,523	$	184,533	$	175,727	$	13,585	$	—	$	734,368
Direct operating costs	(279,963)		(145,303)		(127,716)		(14,691)		—		(567,673)
Segment profits	$	80,560	$	39,230	$	48,011	$	(1,106)	$	—	$	166,695
Depreciation and amortization	$	45,638	$	18,196	$	22,978	$	1,097	$	6,241	$	94,150
Capital expenditures	$	32,002	$	17,227	$	17,488	$	553	$	1,558	$	68,828
Identifiable assets	$	245,273	$	105,287	$	115,803	$	5,203	$	307,404	$	778,970

The following table reconciles the segment profits reported above to the operating loss as reported in the consolidated statements of operations for the three and nine months ended September 30, 2019 and 2018 (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2019		2018		2019		2018

Segment profits	$	39,899	$	55,935	$	131,942	$	166,695
General and administrative expenses	(32,125)		(39,599)		(102,450)		(132,038)

Depreciation and amortization	(29,179)		(32,754)		(85,668)		(94,150)
Loss on disposal of assets	(837)		(191)		(2,634)		(3,891)
Asset impairment	(3,216)		$	—	(3,216)		—
Operating loss	$	(25,458)	$	(16,609)	$	(62,026)	$	(63,384)