Discontinued Operations

9 Months Ended

Sep. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

During the third and fourth quarters of 2019, the Company's management decided to divest all of its contract drilling rigs, and a majority of pressure pumping equipment and related ancillary equipment, respectively, assets having a combined net book value of $91.8 million. The majority of the real estate and equipment was sold during late 2019 and the first half of 2020, with the remaining pumping and related assets classified as Assets Held for Sale on our Consolidated Balance Sheet. The Company is pursuing additional transactions to divest the remainder of these non-strategic assets later during 2020, however the Company recorded an impairment on the remaining assets of $2.3 million at March 31, 2020. A complete summary of our discontinued operations is included in Note 2. Discontinued Operations of the Financial Statements and Supplementary Data in our most recent Annual Report on Form 10-K.

The operating results of the pressure pumping operations and contract drilling operations, which were historically included in the Completions & Remedial Services and Other Services segments, respectively, have been reclassified as discontinued operations in the Consolidated Statement of Operations for the three and nine month periods ended September 30, 2020 and 2019, and are detailed in the table below (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019





Revenues	$	—	$	34,202	$	120	$	120,086

Direct expenses	2,304		29,886		4,714		104,710
General and administrative	400		3,605		6,567		11,994
Depreciation and amortization	—		14,576		—		37,586
Impairment expense	—		—		2,330		—
Loss (gain) on disposal of assets	24		99		2,833		620
Total expenses	2,728		48,166		16,444		154,910

Operating loss	(2,728)		(13,964)		(16,324)		(34,824)
Other income (expense):
Interest expense	(201)		(146)		(64)		(448)

Other income	3		10		138		21
Loss from discontinued operations	$	(2,926)	$	(14,100)	$	(16,250)	$	(35,251)

Interest expense in discontinued operations is related to interest expense on finance lease assets that operated in the discontinued Completions & Remedial Services and Other Services segments. Impairment expense was recorded during the three month period ended March 31, 2020, associated with certain non-strategic assets with carrying values that were in excess of current estimated selling price. General and administrative expense consisted primarily of bad debt expense recorded on customer receivables from discontinued operations.

During the nine month period ended September 30, 2020, a portion of the assets identified as of December 31, 2019, were disposed. Remaining assets and liabilities related to the divested operations are included in the consolidated balance sheets and consist as follows (in thousands):


	September 30, 2020		December 31, 2019
Assets-held-for-sale
Inventories	$	—	$	2,069
Right of use assets	860		1,659
Property, plant and equipment, net	7,582		50,496
Total assets-held-for-sale-future-use	$	8,442	$	54,224
Liabilities related to Assets-held-for-sale
Right of use liabilities	$	869	$	1,659
Capital leases	—		3,589
Total Liabilities related to Assets-held-for-sale discontinued operations	$	869	$	5,248

Applicable Consolidated Statements of Cash Flow information related to the discontinued operations for the nine months ended September 30, 2020, and 2019 are detailed in the table below (in thousands):


	Nine Months Ended September 30,
	2020		2019
Cash Flows from Discontinued Operations
Net cash provided (used) by operating activities	$	(11,087)	$	2,955
Net cash provided (used) in investing activities	$	41,106	$	(7,950)

Cash capital expenditures and finance lease additions related to discontinued operations were $9.7 million and $1.5 million, respectively, for the nine months ended September 30, 2019. The Company did not have any cash or lease additions related to discontinued operations for the nine months ended September 30, 2020. Proceeds from sale of assets related to discontinued operations totaled $41.1 million and $1.7 million for the nine months ended September 30, 2020 and 2019, respectively.