Greetings and welcome to the Select Energy First Quarter Conference Call. It is now my pleasure to introduce your host, Chris George, Vice President, Investor Relations and Treasurer. Thank you. You may begin, sir.

Thank you, operator, and good morning, everyone. We appreciate you joining us for the Select Energy Services conference call and webcast to review our financial and operational results for the first quarter of 2020. With me today are Holli Ladhani, our President and Chief Executive Officer; and Nick Swyka, Senior Vice President and Chief Financial Officer. Before I turn the call over, I have a few housekeeping items to cover. A replay of today's call will be available by webcast and accessible from our website at selectenergyservices.com. There will also be a recorded telephonic replay available until May 20, 2020. The access information for this replay was also included in yesterday's earnings release. Please note that the information reported on this call speaks only as of today, May 6, 2020, and therefore time-sensitive information may no longer be accurate as of the time of the replay listening or transcript reading. In addition, the comments made by management during this conference call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of Select management. However, various risks, contingencies and uncertainties could cause our actual results, performance or achievements to differ materially from those expressed in the statements made by management. The listener is encouraged to read our annual report on Form 10-K for the year ended December 31, 2019, our subsequent quarterly reports on Form 10-Q and our current reports on Form 8-K, to understand those risks, uncertainties and contingencies. Also, please refer to our first quarter earnings announcement released yesterday for reconciliations of non-GAAP financial measures. And now, I would like to turn the call over to our President and CEO, Holli Ladhani.

Thanks, Chris. Good morning, everyone, and thanks for joining us today. The last couple of months have certainly been momentous, not just for our industry but for the entire world. First and foremost, we've been focused on keeping our people safe while continuing to support our customers' critical operations during this watershed event. While the first quarter's results marked a continuation of our successful cash generation efforts and solid operational execution, I'll let Nick review the quarter, and I'll focus my remarks on the actions we're taking to meet the challenges of today's market. Thanks to our financial philosophy and continued execution, both operationally and in terms of maintaining capital discipline, we entered this crisis with ample liquidity and no debt. We have no intention of using our strong balance sheet as a reason to not take swift action on our cost structure. The unprecedented speed and scale of the activity decline in our industry requires transformational, not incremental solutions, and these actions are already being taken by the team. The core of our strategy centers on protecting our strong balance sheet and liquidity and emerging on the other side of this downturn in a position to capitalize on the opportunities we expect will be there. Doing so requires difficult and far-reaching decisions. We started to aggressively manage cost downward in mid-March. The speed and immediate impact of these decisions can already be seen in our first quarter SG&A, which was down over 10% from the fourth quarter after adjusting for severance and nonrecurring costs. Cost mitigation is the top priority and we're attacking it across the board. In that vein, I'd like to follow-up on some of the items from our March 31 press release and update you on our latest actions and targets. First, we increased our annualized SG&A savings target and expect our third quarter 2020 annualized run rate to be down 30% relative to the 2019 fourth quarter run rate and down 40% relative to the 2019 total. We're lowering our net CapEx target further to no more than $20 million, and this $20 million will consist overwhelmingly of maintenance capital. Our employee headcount was reduced by 50% as of the end of April relative to the peak in the first quarter. To put more context to that effort, that's almost 2,000 people. These decisions are always the most difficult and include many fine people who served the company ably and professionally. We're resolute, however, in our commitment to align our workforce to our customers' activity in real time. We've reduced pay by at least 10% nearly across the board, with further reductions beyond that for executive management and our Board of Directors. In addition to these reductions, we're instituting furlough programs for several parts of our organization. We've made adjustments to our business to streamline reporting structures and remove layers while concentrating shared services across all segments and eliminating individual silos. This restructuring enables not just further cost reduction but a more comprehensive integrated sales and support effort. We've terminated dozens of leases for facilities and housing units as we consolidate our operations and have renegotiated payment terms across a number of our leased yards and facilities. As it pertains to our vendors and third-party service providers, we've negotiated millions of dollars in discounts and adjusted pricing terms to reflect the current environment. We certainly appreciate the spirit of partnership and shared sacrifice many have shown here. I've been humbled and honored to see our leaders throughout the organization rise to such an incredibly difficult challenge and not just implement these tough decisions, but oftentimes develop and initiate these actions independently. For this, I'd like to say thank you to all of our employees. While this market has many challenges, it's also reinforced many of our strengths, such as our disciplined balance sheet, diversified geographic presence and comprehensive business model, which will lead to opportunities ahead. Our national footprint, our exposure across the full water life cycle and our significant investments in technology in recent years are all proving to be advantageous in the current environment. Our strong franchises and gassier basins are holding up fairly well today, and we're able to ensure these areas and customers continue to get the best of what we have to offer, including our leading technology solutions. The rapid decline in activity driven by non-economic oil prices will certainly have a material negative impact on our 2020 earnings relative to last year. The lack of visibility today is driven by many factors outside our control, which makes it difficult to offer much forward-looking financial guidance at this time. The swiftness and magnitude of the revenue drop make margin preservation extraordinarily challenging, even as we make cost reductions in real time. That said, CapEx and SG&A are largely within our control, and we're committed to delivering the deep cuts we've outlined there. We'll do so while continuing to safely and effectively serve our customers through this period. With that, I'll hand it over to Nick to walk through our first quarter financial performance in more detail.

Thank you, Holli, and good morning, everyone. As Holli outlined, we're certainly in an entirely different environment today than we were in for much of the first quarter. We're relentlessly focused on driving costs out of the system and emerging from this downturn with our balance sheet and capabilities intact. Our ability to forecast is impaired in this market given the complexity of factors that work globally on both the demand and supply side, many of which are frankly outside of our ability to provide an educated perspective on, much less influence. With that in mind, I'll cover the current quarter's results more succinctly than I ordinarily do and refrain from offering any detailed financial guidance for subsequent quarters. Our $41 million of free cash flow in the first quarter, a quarter that's historically been challenging from a working capital perspective, increased our cash on hand to over $114 million at the end of the quarter, while still having 0 debt and a fully undrawn revolver. We kept net CapEx restrained to under $6 million and continue to execute on our share repurchase program, buying back a little over $5 million worth of shares. While this total free cash flow represents over 50% of the entry point of our initial 2020 target of $80 million to $100 million of free cash flow, we are withdrawing this guidance given the current economic uncertainty. However, rest assured that positive free cash flow and maintaining a strong balance sheet remain our core priorities and will influence every decision we continue to make during this time. Select generated total revenue of $278 million in the first quarter, a slight increase over the fourth quarter's $276 million. Within the quarter, we saw a solid recovery in January and February before March faltered in the face of the OPEC+ breakdown and the overall impact of COVID-19. Our segments were generally stable from a revenue perspective, with an increase in water infrastructure due to a full quarter of operations from the New Mexico pipeline. However, gross margins were impacted by severance and yard closure costs, along with some asset-specific challenges in water infrastructure. Adjusted EBITDA, which decreased to $24 million in the first quarter from $29 million in the fourth quarter, was comparably impacted by these gross margin declines as well as an additional bad debt accrual of just under $2 million. Adjustments this quarter were significant, most notably the impairment of the totality of our goodwill balance of $266 million, another $9 million impairment of an intangible value connected with the trademark and a tangible asset impairment of a little over $3 million. Other special items for the quarter included $3.5 million of severance expenses connected to workforce reductions during the quarter and $2 million of yard closure expense accruals. These special expenses led to a net loss for the quarter of $291 million. Water Services segment's revenues decreased 2% sequentially to $150 million in the first quarter from $153 million in the fourth. The segment generated gross profit before depreciation and amortization of $20 million in the first quarter compared to $27 million in the fourth, reflecting a decline in segment gross margin from 17% to 14%, driven mostly by severance and yard closure costs, along with some additional pricing pressure late in the quarter. The Water Infrastructure segment saw revenues increase by 10% to $58 million in the first quarter from $52 million in the fourth quarter. Gross profit before D&A decreased from $12 million to $10 million quarter-on-quarter, and gross margin before D&A decreased from 23% during the fourth quarter to 17% in the first quarter. A full quarter of operations from the New Mexico pipeline boosted overall revenue, but volume declines through our high-margin Bakken pipeline in March certainly impacted overall margins. We also took a $2 million non-cash write-down in relation to accelerating certain expenses relating to water rights, when combined with severance and other nonrecurring costs, lowered gross margin before D&A by about 6 percentage points. The Oilfield Chemicals segment held steady at $71 million of revenue in the fourth quarter, with a gross margin before D&A of 16% and gross profit before D&A of $11 million. The recently acquired WCS business took a big step forward following its fourth quarter integration, absorbing some of the hit from pricing challenges and operational inefficiencies seen elsewhere in the segment, with decreased manufacturing utilization that arrived in March, along with some impact from severance costs. Looking at our other corporate costs. Headline SG&A increased by $600,000 or about 3% during the quarter. However, adjusting out severance and other nonrecurring costs of $3.5 million paid or accrued during the quarter, SG&A decreased by 12% or $2.9 million. We expect these savings to grow in the second and third quarters, ultimately expecting to reach our target of a 30% reduction by the third quarter in terms of annualized run rate relative to our run rate entering 2020. In relation to our full year 2019 SG&A, this will represent a 40% reduction. Below the line, we accrued a slight tax benefit during Q1, while depreciation declined by about $2 million. We expect to see depreciation continue to decline modestly, given the CapEx reductions made, while our effective 2020 tax rate is difficult to forecast at this time. Given our legacy NOLs, we believe the net benefit from the CARES Act will be minimal beyond the deferral of 2020 cash payroll taxes. We have zero bank debt and anticipate that to continue, while enjoying a net cash position of $114 million as of March 31. We also anticipate generating positive free cash flow during the second quarter. During the first quarter, we continue to deploy free cash flow towards share repurchases, buying back approximately $5 million worth of shares. While returning capital to shareholders is an important part of our management philosophy, we will do so from within positive free cash flow and are less inclined to do so during times our cash flow is more uncertain. We've now posted positive free cash flow for 9 consecutive quarters since the Rockwater merger. Generating this free cash flow and maintaining a strong balance sheet are core to our philosophy regardless of the environment. This imperative will continue to drive our approach to cost reduction and resource allocation. With that, I'll turn it over to the operator, and we'll take your questions before Holli wraps up with some concluding remarks.

Our first question comes from J.B. Lowe with Citi.

Hope you all are doing well. I guess I appreciate that the clarity on activity is pretty opaque. I guess I was just curious on the Water Services side if there are any business lines that you guys are contemplating shutting down completely and not restarting once recovery kicks in? Just trying to think about your kind of portfolio optimization strategy.

Sure, J.B. What I would tell you is that we're committed to our service lines and the regions in which we're operating. Now that doesn't mean we won't scale back to prepare for lower activity levels, which again is a regional decision and does depend on the service that you're providing in that region. What we have done is we've consolidated operations in particular regions and brought service lines together because, frankly, the key is going to be to position ourselves to manage the cost structure, and there are clearly going to be basins out there that will have some fairly low revenue opportunities for us in the near term. So by consolidating those offerings, that should help keep our field margins where we need them. But keeping a nationwide footprint, keeping a diverse set of service lines is going to be important to us. And we're seeing the benefit of that now. As an example, the Northeast was not the most loved region 6, 12 months ago, but it's certainly helping us today as we do have a strong position up there. And as a gassier basin, it's continuing to prove to be a bit more resilient. So I'd say we're committed to the service lines, and we're committed to the footprint.

Okay. Great. And my other question was on the infrastructure side. Maybe a tiny bit more visibility there. Can you just walk through what you're seeing from your anchor customer on the Permian pipeline? Have they given any indications of their intentions moving forward? And how would that contract work if they were to pull back activity to a significant extent?

Sure. So we did see volume move up through the end of April on that contract that worked down the obligation. And there's a 15 million barrel a year obligation under the contract. I'd say we didn't quite get — we didn't get to 1/3 of the volumes in the first 4 months, as you might have expected, given the falloff in March and April. But we do currently have visibility to some plans in the back half of the year to take volumes off of the system under that contract. Now obviously, jobs can push, and in this particular environment, nothing is guaranteed. So if that were to happen, the way the contract will work is that you'll get to the end of the year, you'll measure the actual volumes delivered relative to the $15 million commitment. And if there's a shortfall in the first quarter of 2021, we would settle up in cash. One thing to keep in mind, though, is that while we would receive the cash, we won't actually book the earnings until we've delivered the water. So we would have a deferred liability on our books. So we won't — we wouldn't be able to show the benefit of any shortfall under the take-or-pay in 2020, only in 2021 when we actually deliver the volumes. But the cash will — we will settle up on a cash basis in Q1 of next year if the volumes don't get delivered this year.

Okay. Perfect. That's great detail. Last one for me was just on the Bakken system. Your some large customers in the Bakken have really pulled back activity to a pretty significant extent. Just any ideas on — I know, obviously, 3Q, 4Q is probably out the window in terms of outlook. But 2Q, how much could we see volumes down in the Bakken?

Yes. We're not expecting volumes of any size in the second quarter up in the Bakken. You've seen the pricing differentials, it just doesn't make sense for those producers to be putting oil on the market. So we're planning to hunker down in the Bakken. And again, we'll protect our position there. We'll drive the cost structure down so that we can bridge until activity levels do improve. But we're not forecasting any meaningful volumes in Q2.

Our next question comes from Kurt Hallead with RBC.

Hope everybody in your respective families are healthy and well. So Holli, I understand and appreciate the dynamics at play where it's difficult to provide any sort of insights and visibility on earnings and other dynamics. But I am kind of curious on this front, right? When you just take a look at the business, the individual businesses, water, Water Services, infrastructure and chemicals, I was hoping that you can give us at least some color as to how to think about maybe decremental margins as we go through this process. And maybe you can kind of help us address that in the context of maybe a pre-cost savings decremental progression and maybe a post-cost savings decremental progression. We'll handle the top line estimates on our end, but if you can give us some sense on the decrementals, that would be great.

Yes. Maybe talking directionally, certainly, all of our businesses are highly completions oriented, so directionally on that top line, to your point, you can make your adjustments. We do have some production exposure in each of the segments, but it's 10% to 15%. So you can think through that piece. When you think about incrementals and decrementals, I'd say the two that stand out — and Nick can clarify here a little bit. But if you think about the chemicals business, because of the operating leverage and the fixed cost basis of the manufacturing business, it will have higher decrementals in a downturn like this, but then obviously higher incrementals which is what we were seeing from the business over the back half of last year. And then also on the infrastructure front, partially because of the take-or-pay that we were just talking about, but also just the lower cost associated with operating your pipeline systems, you do have higher margins on those. So for example, we're not forecasting any meaningful Bakken volumes across that Charleston line that will lead to lower — I'm sorry, to higher decrementals, lower margins. But again, on the other side of that, higher incrementals.

Yes. And I think to fill you in on the actions we're taking at the field level, we've consolidated yards, closed a lot of yards, renegotiated leases to both reduce the absolute cost and push out the cash payments or at least a portion of the cash payments, of course, the headcount reductions and compensation reductions, lower insurance. But there is a certain amount of fixed overhead you can think of with running a yard and maintaining operations, and that's why the revenue estimate there is really important for us to be able to offer educated guidance on decrementals there.

Okay. I appreciate that dynamic. And maybe if I take it one step further. And again, I appreciate that you're not providing any specific guidance. So just generally and directionally here, would you expect to be EBITDA and free cash flow positive on a full year basis?

I'll maybe start, and again, Nick can add on, Kurt. But clearly, our goal is to remain EBITDA positive, but it will depend on how low activity levels go. As Nick just mentioned, you have some fixed costs at a yard level, property taxes or facility leases, those sorts of things. And then, obviously, as a public company, we have certain requirements, regulatory and legally, and obviously, we have other commitments that we have to deal with. But I'll tell you, we are absolutely managing costs on a daily basis and trying to match that up with our activity levels. And every dollar of spend gets scrutinized. So we, by no means, have given up on maintaining that EBITDA neutral to positive. But we will have to track to see how low revenues go relative to activity levels. When we think about the cash flow, obviously, we were able to generate a strong free cash flow in the first quarter, and are confident over the last 9 months of this year, we'll add to that cash balance. And so it's just — it's going to be incredibly important to us to make sure that we essentially defend the balance sheet that we work so hard to create, and you should expect swift action from us.

Our next question comes from Thomas Curran with B. Riley FBR.

I just want to echo the sentiments of my peers in expressing my well wishes to you and all your loved ones. For Water Infrastructure in Q1, what were the revenue percentage shares of the Bakken pipeline in GRR network? What did each of those systems account for as a percentage of the top line?

Yes, Tom, it's a little difficult to kind of separate out each individual asset there. When you're talking about the Bakken infrastructure network, the New Mexico pipeline, the GRR system and then the transfers off those — each of those systems. That one's, I think, to a great extent, pretty interdependent in some cases on each other. But overall, that bucket accounts for about 90% of the infrastructure there, when you include the transfers off the systems and then general sourcing that may or may not be directly connected to those systems there.

How about just for the Bakken then in its entirety as a geographic market for that division?

Yes. The Bakken, as Holli said, was — definitely took a pretty steep decline in March there. So you can think of that as down about 33% to 40% from last quarter.

Sequentially, so the Bakken for Q1 in its entirety down that amount relative to Q4?

Correct.

Great. And then sticking with Water Infrastructure, given the Darwinian competitive landscape out there and your growing number of financially struggling to distressed rivals, how would you characterize the evolution and attractiveness of your post-frac investment opportunity set versus your pre-frac one? And on the inorganic side, how would you also compare the deal flow and dynamics for customer divestiture opportunities versus just standard bolt-on acquisition prospects?

Yes. I think when you think about infrastructure in particular, Tom, it's one of those that operators — maybe I'll back up a little bit. Operators are certainly thinking through this downturn maybe differently than they have the past few. And they are taking deep cuts internally versus looking to manage their variable costs just through the service providers. And that will clearly have implications as we work through what the new world is going to look like. And more and more — and we were starting to see this trend actually leading into the downturn, is that operators were focusing their efforts on, obviously, their core expertise, which is understanding the rock and drilling and creating the production out of that and less so on some of the more ancillary services, water being one of those. And I think we were making good progress in advancing conversations and how we can help manage that in its totality for our customers. Obviously, with what's happened in the market today, everybody is very internally focused and just trying to drive out those obvious costs and not really looking at making strategic moves in how they think about managing some parts of the business. I also think there were a lot of water infrastructure assets on the market coming into the downturn, that there's just no buyers to speak of out there. So that market has dried up. So I don't expect you to see systems changing hands in the very near term. But I do think the momentum we were starting to see in how water was managed, that will come back to us when we start to see the markets pick up again. Because as I mentioned in my prepared remarks, these aren't incremental changes that are going on in the industry. They really are going to be transformational and I think how water is managed to be one of those.

Agreed. No. Yes. So it sounds like operationally, react first and then strategically reassessing portfolio rationalized later. Last one for me, then I'll re-queue. For Water Services, how much was temporary transfer pricing down sequentially and year-over-year in Q1?

I don't have an exact number on it, but I will tell you there has been pricing pressure. In an environment like this, the competitive landscape starts to get obviously strained, if not desperate. And so the pricing discipline has not been there. What we'll see, however, is that those folks will eventually price themselves out of business, and we've already started seeing competitors falling out, either regionally or in their totality of closing up shops. So this is something that will probably take a quarter or two to really run its course. But I do think the competitive landscape looks pretty different on the back side of this. But until then, we are going to continue to have that pricing pressure, which requires us to look very carefully and question our cost structure, not only at the corporate level but at the field level to ensure that we can continue to deliver positive field margins. And what I would say is, again, this is one where our technology has helped us, right, by being able to eliminate some of the labor that goes into providing our services. That automation allows us and positions us to be able to execute at a lower, I'll say, ticket than some of our competitors who don't have that similar technology.

Tom, from a year-on-year perspective, most of that pricing decrease would have come last year. January and February were solid and then March began to crack a bit, but probably on the lines of 15% to 20% year-on-year, but the majority of that took place in the past there.

Our next question comes from Ian MacPherson with Simmons.

Holli, regarding the potential recovery and its effects on the market, how do you think this will influence the balance between fresh and recycled water in frac applications? We've noticed a trend toward increasing recycling in programs, driven by customer demand. However, freshwater will likely be less scarce in the future. Do you believe that your asset footprint will need adjustments based on how the balance between recycled and freshwater sourcing might evolve over the next year?

That's a really good and interesting question, Ian. Certainly, maybe one clarification I would make on behalf of all of our customers is that, very seldom is freshwater being used. It's brackish or industrial or some other waste stream versus using freshwater, but that's obviously different from produced water. But one of the things that will make it very challenging over the next year is the ability to leverage the opportunity to use large volumes of produced water. Just when your completion program, I'll say, is out of sync, and it's a bit more haphazard, it's more challenging to prepare, it's more challenging to make sure you have water in all the right spots. And so interestingly enough, I think in the near term, our — the way that we'll support our customers will be a little different in that we'll be satisfying their needs probably by accessing more water sources other than just their produced water. So I do think it's possible that in the near term, we see the amount of produced water that's utilized as a percentage of the total water could go down. I don't have any reason to believe, however, that operators aren't continued to be committed to maximizing the use of produced water over the longer term. And so when I think about our footprint, obviously, we have our systems that we use to deliver completion water in the Bakken and in New Mexico that are not movable. But when you think about the rest of our assets and the water rights we have, they're quite spread out, and we have a large inventory of those to be able to satisfy those needs in the near term. So I don't see any meaningful adjustments to how we think about it strategically or footprint-wise, frankly, in the near term or the long term. But you probably will see a shift in the volume of produced water that the industry is able to utilize here in the near term.

That makes sense. I wanted to ask a follow-up of you, Nick, just with regard to the cash flow levers. You had good working capital release in the first quarter, and you've — one of the few guidance almost you provided is another positive working capital and ultimately, free cash flow aspiration for Q2. But when we look at your reduced CapEx for this year, when we look at what your exit rate CapEx will be in the second half, is that a level that is sustainable? Or do you think that we should think about that as an artificially low CapEx level that will need — require some catch-up from deferred maintenance spending within the next two quarters?

Sure, Ian. So it is sustainable within this environment, with an environment that's enjoying a recovery, then our CapEx would need to move higher. I think an attractive thing about this business, you have a lot of discrete, more small dollar items than you do in a more capital intensive, fixed asset heavy type of business. In that business, typically, you need to spend money on those assets to ensure they're in working order when a recovery would return. That's often significant money when we talk about integrated drilling systems and software packages and things like that. Our assets are generally lighter than that and lower dollar and cost less to maintain when they're in a storage state. So you're not spending that money to, for example, keep lay flat hose in prime working order every week when you have it rolled up in the yard, waiting for the next job. So yes, that is sustainable in this environment. We're not deferring a lot of maintenance that we'll need to pay extra for in coming years, but an environment that looks more like January and February, then you would expect that CapEx to move higher.

Our next question comes from Sean Meakim with JPMorgan.

So this is somewhat related to the topic of maintenance capital, but for the broader market. You mentioned the desperation of your competitors with some falling out of basins or even altogether. I'm curious where that late flat inventory goes. Do we see the capacity of the industry shrink? Or irrespective of the current state of competitors, what are the factors that will drive what supply looks like on the other side?

Yes. I think one thing to keep in mind is that people have probably been fairly capital constrained or disciplined over the course of the last year. It didn't just start now. So I think when we look at the lives remaining on various assets across the services that we supply, you're probably getting to a little — some of these assets are getting a little longer in the tooth or the fact that is it the right size of asset anymore. That was the other thing we were seeing that, be it 8-inch, 10-inch, 12-inch hose or the size of the separators or test units we use in our well testing or all these various areas that, as completions were becoming larger, more integrated, more complex, the equipment needs have been changing. And my sense is that what we will see happen, Sean, is that there will be smaller, undersized, older equipment that doesn't necessarily make it back into the space and in the recovery. So I would expect there to be less capacity on the other side.

Well, I think you make a good point there about the mix changing. Could you maybe give us — just take a stab at how you would describe the mix within your inventory of, call it, smaller, less favorable versus larger, more favorable, and how that is distinguished from the overall capacity of the industry?

I'll say it's a little harder to speak to what everybody else's inventory looks like other than, more anecdotally that I feel like we have been making investments to upgrade and upsize our capacity over the last couple of years, maybe more aggressively than some because we have had the cash flow to support that. And when I look at our fleet, I was very confident in the way we were executing last year with the right kind of equipment. So if that provides you some level of perspective on how we were able to fully support our business last year with advanced and the right-sized equipment. So when you look at activity levels today, that we have a meaningful amount of unutilized but right-sized equipment.

Our next question comes from Tommy Moll with Stephens.

Nick, I wanted to double back to a comment you made about a 15% to 20% decline for Water Services pricing. I didn't quite catch all the details there. So if you could just run through that again. And then...

Yes. Tommy, we'll take that one first. That was in relation to year-on-year pricing specifically, not pricing today. I think the question was to take it back to the first quarter of 2019 and how much has pricing deteriorated since then.

Okay. So that's Q1 '20 versus Q1 '19?

Correct.

Okay. And then for Water Services and the other segments, if you can comment. Can you remind us what your peak-to-trough pricing looked like in the last downturn? And I anticipate that your answer is going to be that it was less volatile than a lot of other completion-oriented service lines. But if you could frame that for us, it would be helpful. And then also, is there any reason to think that the range might be better or worse this time around?

At a high level, Tommy, I would say through the last downturn, sort of the '14, then bottoming out in '16, and that we would have seen a 30% to 35% reduction in pricing across the business. I would say our mix today is a little different given the addition of some of the infrastructure. We have a similar amount of our business that's production oriented and protected. But I would say that given — we're reaching a point, however, today that pricing, there's really not much further that we see it going in a way that we would be willing to support. Just because, as I mentioned earlier, we're going to protect positive field margins. And if you go materially below where we are today, that certainly becomes probably untenable in certain regions and in certain service lines. And that will then, of course, lead to driving the service providers out of the market. And so any pricing at that level, I think, will be temporary because people can't sustain it. And then obviously, as we think through this, as I mentioned earlier, maybe one silver lining of sorts for the whole industry is that I think operators, in addition to looking to service costs, they're looking internally to drive out costs. So I think that, that will be more of this — be a larger contributor to the solution through this downturn than it was in prior downturns.

Tommy, I'd point out that in 2014, the industry had much higher margins, a much higher starting point from which to reduce pricing than we entered this downturn with. So I think it's also unrealistic from that perspective to expect the same level of pricing decrease.

This concludes our Q&A session. I would like to turn it back to Ms. Holli Ladhani for closing comments.

Thank you. Obviously, this is going to be a tough year on all of us in the industry, but I do believe Select is unique in terms of our debt-free balance sheet and the large cash position that we've built. And I hope what you take away from us is our priority is to protect and enhance that flexibility rather than somehow allowing it to breed some level of complacency. The coming quarters, they're going to be challenging, and we know that. But we also know that the industry won't stay in this state forever. And the future is going to belong to the companies who are the most efficient, the companies that are best capitalized and those that act the fastest to transform their businesses to match the current market that we're operating in. And you have our commitment that we're going to take every action to position ourselves to lead that group of companies. So thanks again for joining us this morning, and you guys have a good day.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.