Business Segment Information

12 Months Ended

Dec. 31, 2019

Basic’s reportable business segments are Well Servicing, Water Logistics, and Completion & Remedial Services. These segments have been selected based on changes in management’s resource allocation and performance assessment in making decisions regarding the Company. Prior to December 2019, the Company operated an Other Services segment, which was comprised of contract drilling services and manufacturing and rig servicing. Contract drilling was discontinued as a service in the third quarter of 2019, and manufacturing rig servicing was realigned with Well Servicing. Our Pumping Services Division, which was included in the Completion & Remedial Services segment was discontinued in the fourth quarter of 2019. The following is a description of our business segments included in continuing operations:

Well Servicing: This segment encompasses a full range of services performed with a mobile well servicing rig, including the installation and removal of downhole equipment and elimination of obstructions in the well bore to facilitate the flow of oil and natural gas. These services are performed to establish, maintain and improve production throughout the productive life of an oil and natural gas well and to plug and abandon a well at the end of its productive life. Basic’s well servicing equipment and capabilities also facilitate most other services performed on a well. This segment also includes the manufacture and servicing of mobile well servicing rigs.

Water Logistics: This segment utilizes a fleet of trucks and related assets, including specialized tank trucks, storage tanks, water wells, disposal facilities water treatment and related equipment. Basic employs these assets to provide, transport, store and dispose of a variety of fluids. These services are required in most workover, completion and remedial projects as well as part of daily producing well operations. Also included in this segment are our construction services which provide services for the construction and maintenance of oil and natural gas production infrastructures.

Completion & Remedial Services: This segment utilizes coiled tubing services, air compressor packages specially configured for underbalanced drilling operations, an array of specialized rental equipment and fishing tools, thru-tubing and snubbing units.

Basic’s management evaluates the performance of its operating segments based on operating revenues and segment profits. Corporate expenses include general corporate expenses associated with managing all reportable operating segments. Corporate assets consist principally of working capital and debt financing costs.

The following table sets forth certain financial information with respect to Basic’s reportable segments (in thousands):




	Well Servicing		Water Logistics		Completion & Remedial Services		Corporate and Other		Continuing Operations Total		Discontinued Operations
Year ended December 31, 2019
Operating revenues	$	226,966	$	199,816	$	140,468	$	—	$	567,250	$	142,885
Direct operating costs	(186,782)		(141,379)		(98,654)		—		(426,815)		(134,778)
Segment profits	40,184		58,437		41,814		—		140,435		8,107
Depreciation and amortization	18,766		26,143		19,964		4,616		69,489		45,168
Capital expenditures	14,525		26,209		7,033		654		48,421		12,067
Identifiable assets	$	78,686	$	118,960	$	42,560	$	256,044	$	496,250	$	54,224

Year ended December 31, 2018
Operating revenues	$	250,982	$	231,283	$	171,300	$	—	$	653,565	$	311,154
Direct operating costs	(203,785)		(166,907)		(109,713)		—		(480,405)		(266,011)
Segment profits	47,197		64,376		61,587		—		173,160		45,143
Depreciation and amortization	18,470		25,250		27,903		6,550		78,173		48,244
Capital expenditures	22,212		24,737		10,128		1,396		58,473		29,970
Identifiable assets	$	89,813	$	98,717	$	125,123	$	293,506	$	607,159	$	154,618

The following table reconciles the segment profits reported above to the operating income as reported in the consolidated statements of operations (in thousands):



	Year ended December 31,
	2019		2018
Segment profits	$	140,435	$	173,160
General and administrative expenses	(118,460)		(145,725)
Depreciation and amortization	(69,489)		(78,173)
Gain (Loss) on disposal of assets	(2,135)		4,918


Operating loss	$	(49,649)	$	(45,820)