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REVENUE | 6 Months Ended
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Jun. 30, 2019
REVENUE |
REVENUE | NOTE 4—REVENUE Effective for the year ended December 31, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), using the modified retrospective adoption method. There was no impact on the consolidated financial statements and no cumulative effect adjustment was recognized. Although most revenue recognition is governed by the new standard, the accommodations and rentals revenue continued to be guided by ASC 842 - Leases, discussed further below. The core principle of Topic 606 is that revenue is recognized when goods or services are transferred to customers in an amount that reflects consideration for which entitlement is expected in exchange for those goods or services. ASU 2014-09 provides a five-step model for determining revenue recognition for arrangements that are within the scope of the standard: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that we will collect the consideration the Company is entitled to in exchange for the goods or services the Company transfers to the customer. The Company elected practical expedients (i) not to access whether immaterial promised goods or services are performance obligations, (ii) not to provide disclosures on remaining performance obligations for contracts that have an original expected duration of one year or less and (iii) to exclude transaction price taxes assessed by governmental authorities as revenue. The following factors are applicable to all three of the Company’s segments for the first six months of 2019 and 2018, respectively:
| ● | The vast majority of customer agreements are short-term, lasting less than one year
| ● | Contracts are seldom combined together as virtually all of our customer agreements constitute separate performance obligations. Each job is typically distinct, thereby not interdependent or interrelated with other customer agreements.
| ● | Most contracts allow either party to terminate at any time without substantive penalties. If the customer terminates the contract, the Company is unconditionally entitled to the payments for the products delivered to date.
| ● | Contract terminations before the end of the agreement are rare
| ● | Sales returns are rare and no sales return assets have been recognized on the balance sheet
| ● | There are no volume discounts
| ● | There are no service-type warranties
| ● | There is no long-term customer financing
In the Water Services and Water Infrastructure segments, performance obligations arise in connection with services provided to customers in accordance with contractual terms, in an amount the Company expects to collect. Services are generally sold based upon customer orders or contracts with customers that include fixed or determinable prices. Revenues are generated by services rendered and measured based on output generated, which is usually simultaneously received and consumed by customers at their job sites. As a multi-job site organization, contract terms, including pricing for the Company’s services, are negotiated on a job site level on a per-job basis. Most jobs completed in a short period of time, usually between one day and one month. Revenue is recognized as performance obligations are completed on a daily, hourly or per unit basis with unconditional rights to consideration for services rendered reflected as accounts receivable trade, net of allowance for doubtful accounts. In cases where a prepayment is received before the Company satisfies its performance obligations, a contract liability is recorded in accrued expenses and other current liabilities. Final billings generally occur once all of the proper approvals are obtained. No revenue is associated with mobilization or demobilization of personnel and equipment. Rather, mobilization and demobilization are factored into pricing for services. Billings and costs related to mobilization and demobilization is not material for customer agreements that start in one period and end in another. As of June 30, 2019, the Company had two contracts in place lasting over a year. In the Oilfield Chemicals segment, the typical performance obligation is to provide a specific quantity of chemicals to customers in accordance with the customer agreement in an amount the Company expects to collect. Products and services are generally sold based upon customer orders or contracts with customers that include fixed or determinable prices. Revenue is recognized as the customer takes title to chemical products in accordance with the agreement. Products may be provided to customers in packaging or delivered to the customers’ containers through a hose. In some cases, the customer takes title to the chemicals upon consumption from storage containers on their property, where the chemicals are considered inventory until customer usage. In cases where the Company delivers products and recognizes revenue before collecting payment, the Company usually has an unconditional right to payment reflected in accounts receivable trade, net of allowance for doubtful accounts. Customer returns are rare and immaterial and there were no in-process customer agreements as of June 30, 2019 lasting greater than one year. The Company accounts for accommodations and rentals agreements as an operating lease. The Company recognizes revenue from renting equipment on a straight-line basis. Accommodations and rental contract periods are generally daily, weekly or monthly. The average lease term is less than three months and as of June 30, 2019, no rental agreements lasted more than a year. The following table sets forth certain financial information with respect to the Company’s disaggregation of revenues by geographic location: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended June 30, | ​ | Six months ended June 30,
​ | ​ | 2019 | ​ | 2018 | ​ | 2019 | ​ | 2018
​ | ​ | (in thousands)
Geographic Region | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Permian Basin | ​ | $ | 148,118 | ​ | $ | 154,422 | ​ | $ | 310,783 | ​ | $ | 282,783
MidCon | ​ | ​ | 48,515 | ​ | ​ | 67,425 | ​ | ​ | 106,978 | ​ | ​ | 129,024
Eagle Ford | ​ | ​ | 41,033 | ​ | ​ | 42,486 | ​ | ​ | 79,759 | ​ | ​ | 89,028
Bakken | ​ | ​ | 20,361 | ​ | ​ | 39,487 | ​ | ​ | 46,143 | ​ | ​ | 79,261
Marcellus/Utica | ​ | ​ | 28,292 | ​ | ​ | 34,533 | ​ | ​ | 58,451 | ​ | ​ | 69,019
Rockies | ​ | ​ | 21,494 | ​ | ​ | 28,221 | ​ | ​ | 43,936 | ​ | ​ | 62,680
Haynesville/E. Texas | ​ | ​ | 18,314 | ​ | ​ | 13,129 | ​ | ​ | 35,596 | ​ | ​ | 30,009
All other/eliminations | ​ | ​ | (2,240) | ​ | ​ | 13,544 | ​ | ​ | 4,887 | ​ | ​ | 27,838
Total | ​ | $ | 323,887 | ​ | $ | 393,247 | ​ | $ | 686,533 | ​ | $ | 769,642
​ In the Water Services segment, the top three revenue producing regions are the Permian Basin, MidCon and Eagle Ford, which collectively comprised 74%, 73%, 74% and 70% of segment revenue for the Current Quarter, Prior Quarter, Current Period and Prior Period, respectively. In the Water Infrastructure segment, the top two revenue producing regions are the Permian Basin and Bakken, which collectively comprised 81%, 82%, 82% and 83% of segment revenue for the Current Quarter, Prior Quarter, Current Period and Prior Period, respectively. In the Oilfield Chemicals segment, the top two revenue producing regions are the Permian Basin and MidCon, which collectively comprised 75%, 78%, 76% and 74% of segment revenue for the Current Quarter, Prior Quarter, Current Period and Prior Period, respectively.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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