Annual report pursuant to Section 13 and 15(d)

REPORTABLE SEGMENT INFORMATION

v3.10.0.1
REPORTABLE SEGMENT INFORMATION
12 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]  
REPORTABLE SEGMENT INFORMATION
REPORTABLE SEGMENT INFORMATION
The Company has five operating segments for which discreet financial information is readily available: hydraulic fracturing (inclusive of acidizing), cementing, coil tubing, flowback, and drilling. These operating segments represent how the Chief Operating Decision Maker evaluates performance and allocates resources.
On August 31, 2018, we divested our surface air drilling operations, included in our "all other" category, in order to continue to focus and position ourselves as a Permian Basin-focused pressure pumping business because we believe the pressure pumping market in the Permian Basin offers more supportive long-term growth fundamentals. The divestiture of our surface air drilling operations did not qualify for presentation and disclosure as discontinued operations, and accordingly, we have recorded the resulting loss on disposal of our surface air drilling of $0.3 million as part of our loss on disposal of asset in our consolidated statement of operations. The divestiture of our surface air drilling operations resulted in a reduction in the number of our current operating segments to five. The change in the number of our operating segments did not impact our reportable segment information reported for the years ended December 31, 2018, 2017 and 2016.
In accordance with Accounting Standards Codification 280—Segment Reporting, the Company has one reportable segment (pressure pumping) comprised of the hydraulic fracturing and cementing operating segments. All other operating segments and corporate administrative expenses are included in the ‘‘all other’’ category in the table below. Inter-segment revenues are not material and are not shown separately in the table below.
The Company manages and assesses the performance of the reportable segment by its adjusted EBITDA (earnings before other income (expense), interest, taxes, depreciation & amortization, stock-based compensation expense, impairment expense, (gain)/loss on disposal of assets and other unusual or nonrecurring expenses or income). A reconciliation from segment level financial information to the consolidated statement of operations is provided in the table below.
($ in thousands)
 
 
 
 
 
 
Pressure
Pumping
 
All Other
 
Total
Year ended and as of December 31, 2018
 
 
 
 
 
Service revenue
$
1,658,403

 
$
46,159

 
$
1,704,562

Adjusted EBITDA
$
398,396

 
$
(9,873
)
 
$
388,523

Depreciation and amortization
$
83,404

 
$
4,734

 
$
88,138

Capital expenditures
$
577,171

 
$
15,431

 
$
592,602

Goodwill
$
9,425

 
$

 
$
9,425

Total assets
$
1,230,830

 
$
43,692

 
$
1,274,522

 
 
 
 
 
 
 
Pressure
Pumping
 
All Other
 
Total
Year ended and as of December 31, 2017
 
 
 
 
 
Service revenue
$
945,040

 
$
36,825

 
$
981,865

Adjusted EBITDA
$
145,122

 
$
(7,679
)
 
$
137,443

Depreciation and amortization
$
51,155

 
$
4,473

 
$
55,628

Capital expenditures
$
300,406

 
$
4,893

 
$
305,299

Goodwill
$
9,425

 
$

 
$
9,425

Total assets
$
688,279

 
$
30,753

 
$
719,032

 
 
 
 
 
 
 
Pressure
Pumping
 
All Other
 
Total
Year ended and as of December 31, 2016
 
 
 
 
 
Service revenue
$
409,014

 
$
27,906

 
$
436,920

Adjusted EBITDA
$
15,656

 
$
(7,840
)
 
$
7,816

Depreciation and amortization
$
37,282

 
$
6,260

 
$
43,542

Property and equipment impairment expense
$

 
$
6,305

 
$
6,305

Goodwill impairment expense
$

 
$
1,177

 
$
1,177

Capital expenditures
$
45,473

 
$
535

 
$
46,008

Goodwill
$
9,425

 
$

 
$
9,425

Total assets
$
501,906

 
$
39,516

 
$
541,422

Reconciliation of net income (loss) to adjusted EBITDA:
($ in thousands)
Pressure
Pumping
 
All Other
 
Total
Year ended December 31, 2018
 
 
 
 
 
Net income (loss)
$
253,196

 
$
(79,334
)
 
$
173,862

Depreciation and amortization
83,404

 
4,734

 
88,138

Interest expense

 
6,889

 
6,889

Income tax expense

 
51,255

 
51,255

Loss (gain) on disposal of assets
59,962

 
(742
)
 
59,220

Stock‑based compensation

 
5,482

 
5,482

Other expense

 
663

 
663

Other general and administrative expense (1)
2

 
203

 
205

Deferred IPO Bonus
1,832

 
977

 
2,809

Adjusted EBITDA
$
398,396

 
$
(9,873
)
 
$
388,523

 
 
 
 
 
 
Year ended December 31, 2017
Pressure
Pumping
 
All Other
 
Total
Net income (loss)
$
50,417

 
$
(37,804
)
 
$
12,613

Depreciation and amortization
51,155

 
4,473

 
55,628

Interest expense

 
7,347

 
7,347

Income tax expense

 
3,128

 
3,128

Loss on disposal of assets
38,059

 
1,027

 
39,086

Stock‑based compensation

 
9,489

 
9,489

Other expense

 
1,025

 
1,025

Other general and administrative expense (1)

 
722

 
722

Deferred IPO Bonus
5,491

 
2,914

 
8,405

Adjusted EBITDA
$
145,122

 
$
(7,679
)
 
$
137,443

 
 
 
 
 
 
 
Pressure
Pumping
 
All Other
 
Total
Year ended December 31, 2016
 
 
 
 
 
Net loss
$
(45,316
)
 
$
(7,831
)
 
$
(53,147
)
Depreciation and amortization
37,282

 
6,260

 
43,542

Interest expense

 
20,387

 
20,387

Income tax benefit

 
(27,972
)
 
(27,972
)
Loss on disposal of assets
23,690

 
(1,161
)
 
22,529

Property and equipment impairment expense

 
6,305

 
6,305

Goodwill impairment expense

 
1,177

 
1,177

Gain on extinguishment of debt

 
(6,975
)
 
(6,975
)
Stock‑based compensation

 
1,649

 
1,649

Other expense

 
321

 
321

Adjusted EBITDA
$
15,656

 
$
(7,840
)
 
$
7,816

                        
(1) Other general and administrative expense relates to legal settlement expense.
Major Customers
For the years ended December 31, 2018, 2017 and 2016, the Company had revenue from the following significant customers that accounted for the following percentages of the Company’s total revenue:
 
2018
 
2017
 
2016
Customer A
24.1
%
 
15.0
%
 
18.0
%
Customer B
16.5
%
 
13.8
%
 
12.5
%
Customer C
12.2
%
 
12.7
%
 
8.7
%
Customer D
8.9
%
 
12.6
%
 
7.0
%
Customer E
7.1
%
 
11.8
%
 
%

For the year ended December 31, 2018, pressure pumping made up 97.4% of Customer A, 98.3% of Customer B, 100.0% of Customer C, 100.0% of Customer D and 100.0% of customer E. For the year ended December 31, 2017, pressure pumping made up 99.9% of Customer A, 99.2% of Customer B, 99.9% of Customer C, 99.8% of Customer D and 95.5% of customer E. For the year ended December 31, 2016, pressure pumping made up 96.0% of Customer A, 99.0% of Customer B, 100.0% of Customer C and 99.0% of Customer D.