SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2019

SEGMENT INFORMATION

SEGMENT INFORMATION

NOTE 17—SEGMENT INFORMATION

Select Inc. is an oilfield services company that provides solutions to the onshore oil and natural gas industry in the U.S. The Company’s services are offered through three operating segments. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the CODM in deciding how to allocate resources and assess performance. The Company’s CODM assesses performance and allocates resources on the basis of the three reportable segments. Corporate and other expenses that do not individually meet the criteria for segment reporting are reported separately as Corporate or Other. Each operating segment reflects a reportable segment led by separate managers that report directly to the Company’s CODM.

In connection with the wind down of certain operations within the Company’s former Wellsite Services segment, the Company realigned its reporting segments in 2019. Accordingly, prior period segment information has been retrospectively revised to conform with current period presentation.

The Company’s CODM assesses performance and allocates resources on the basis of the following three reportable segments:

Water Services — The Water Services segment consists of the Company’s services businesses including water transfer, flowback and well testing, fluids hauling, water containment, water treatment and water network automation, primarily serving E&P companies. Additionally, this segment includes the operations of our accommodations and rentals business, which were previously a part of the former Wellsite Services segment. 

Water Infrastructure — The Water Infrastructure segment consists of the Company’s infrastructure assets and ongoing infrastructure development projects, including operations associated with our water sourcing and pipelines, produced water gathering systems and salt water disposal wells, primarily serving E&P companies.

Oilfield Chemicals — The Oilfield Chemicals segment provides technical solutions and expertise related to chemical applications in the oil and gas industry. The Company also has significant capabilities in supplying logistics for chemical applications. This segment develops, manufacturers and provides a full suite of chemicals used in hydraulic fracturing, stimulation, cementing, production, pipelines and well completions, including polymer slurries, crosslinkers, friction reducers, biocides, scale inhibitors corrosion inhibitors, buffers, breakers and other chemical technologies. Our customer interaction and expertise is spread along many facets of the industry from well bore completion to initial flowback and production. Our customers range from pressure pumpers to major integrated and independent U.S. and international oil and gas producers. We also utilize our chemical experience and lab testing capabilities to customize tailored water treatment solutions designed to maximize the effectiveness of and optimize the efficiencies of the fracturing fluid system in conjunction with the quality of water used in well completions.

The results of our divested service lines that were previously a part of the former Wellsite Services segment, including the operations of our Affirm subsidiary, our and hauling operations and our Canadian operations, are combined in the “Other” category.

Financial information by segment for the years ended December 31, 2019, 2018 and 2017 is as follows:

	For the year ended December 31, 2019
			Income (loss)		Depreciation and		Capital
	Revenue		before taxes		Amortization		Expenditures
	(in thousands)
Water services	$	773,946	$	51,185	$	80,664	$	37,692
Water infrastructure		221,661		15,103		25,665		53,839
Oilfield chemicals		268,963		17,942		8,766		11,110
Other		33,365		(8,066)		1,714		64
Eliminations		(6,346)		—		—		—
Income from operations				76,164
Corporate		—		(53,090)		3,860		—
Interest expense, net		—		(2,688)		—		—
Other income, net		—		(14,301)		—		—
	$	1,291,589	$	6,085	$	120,669	$	102,705

	For the year ended December 31, 2018
			Income (loss)		Depreciation and		Capital
	Revenue		before taxes		Amortization		Expenditures
	(in thousands)
Water services	$	897,160	$	89,826	$	82,875	$	120,883
Water infrastructure		230,130		31,579		23,042		33,372
Oilfield chemicals		260,281		(7,107)		10,496		10,832
Other		144,499		(14,021)		14,124		7,045
Eliminations		(3,140)		—		—		—
Income from operations				100,277
Corporate		—		(38,603)		3,176		—
Interest expense, net		—		(5,311)		—		—
Other income, net		—		(360)		—		—
	$	1,528,930	$	56,003	$	133,713	$	172,132

	For the year ended December 31, 2017
			Income (loss)		Depreciation and		Capital
	Revenue		before taxes		Amortization		Expenditures
	(in thousands)
Water Services	$	420,757	$	1,823	$	70,839	$	82,127
Water Infrastructure		163,386		11,723		22,481		15,264
Oilfield Chemicals		41,586		663		2,040		3,063
Other		69,382		(2,649)		6,286		7,823
Eliminations		(2,620)		—		—		—
Loss from operations				11,560
Corporate		—		(41,559)		1,803		—
Interest expense, net		—		(6,629)		—		—
Other income, net		—		650		—		—
	$	692,491	$	(35,978)	$	103,449	$	108,277

Total assets by segment as of December 31, 2019 and 2018 is as follows:

	As of December 31,
	2019		2018
	(in thousands)
Water services	$	831,123	$	865,992
Water infrastructure		314,026		250,207
Oilfield chemicals		192,224		173,762
Other		10,247		70,644
	$	1,347,620	$	1,360,605

Revenue by groups of similar products and services are as follows:

	For the year ended December 31,
	2019		2018		2017
	(in thousands)
Water transfer	$	355,535	$	443,650	$	193,314
Oilfield chemicals		268,963		260,281		41,586
Flowback and well testing		208,572		223,828		90,107
Accommodations and rentals		150,793		153,013		63,107
Water sourcing		120,517		129,958		97,898
Pipeline logistics and disposal		101,145		100,172		65,488
Fluid hauling		63,156		79,568		75,273
Other		22,908		138,460		65,718
	$	1,291,589	$	1,528,930	$	692,491

In connection with the Rockwater Merger in November 2017, the Company expanded into Canada and during 2019, the Company divested and wound down Canadian operations. The Company attributed revenue to the U.S. and Canada based on the location where services were performed or the destination of the products or equipment sold or rented. Long-lived assets consisted of property and equipment and are attributed to the U.S. and Canada based on the physical location of the asset at the end of the period. The Company’s revenue attributed to the U.S. was $1,283.4 million or 99.4%, $1,480.4 million or 96.8% and $680.9 million or 98.3% of total revenue during the years ended December 31, 2019, 2018 and 2017, respectively. The Company’s revenue attributed to Canada was $8.2 million or 0.6%, $48.6 million or 3.2% and $11.6 million or 1.7% of total revenue during the years ended December 31, 2019, 2018 and 2017, respectively. The Company’s net long-lived assets attributed to the U.S. was $452.4 million or 99.8%, $492.4 million or 97.9% and $451.7 million or 95.3% of total net long-lived assets as of December 31, 2019, December 31, 2018 and December 31, 2017, respectively. The Company’s net long-lived assets attributed to Canada was $0.9 million or 0.2%, $10.5 million or 2.1% and $22.4 million or 4.7% of total net long-lived assets as of December 31, 2019, December 31, 2018 and December 31, 2017, respectively.