Quarterly report pursuant to Section 13 or 15(d)

Reportable Segment Information

Reportable Segment Information

6 Months Ended

Jun. 30, 2019

The Company has five operating segments for which discrete 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.

In accordance with Accounting Standards Codification ("ASC") 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 expense (inclusive of our total income tax expense and interest expense) are included in the ‘‘all other’’ category in the table below. Total corporate administrative expense for the three and six months ended June 30, 2019 was $27.5 million and $57.2 million, respectively. The corporate administrative expense for the three and six months ended June 30, 2018 was $21.2 million and $38.0 million, respectively.

Our hydraulic fracturing operating segment revenue approximated 95.6% and 95.8% of our pressure pumping revenue during the three and six months ended June 30, 2019, respectively. During the three and six months ended June 30, 2018, our hydraulic fracturing operating segment revenue approximated 95.7% and 95.8% of our pressure pumping revenue, respectively.

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 and 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):



	Three Months Ended June 30, 2019
	Pressure Pumping		All Other			Total
Service revenue	$	515,867	$	13,627		$	529,494
Adjusted EBITDA	$	131,187	$	(4,625	)	$	126,562
Depreciation and amortization	$	34,023	$	1,459		$	35,482
Goodwill at June 30, 2019	$	9,425	$	—		$	9,425
Capital expenditures	$	156,542	$	4,677		$	161,219
Total assets at June 30, 2019	$	1,415,187	$	55,370		$	1,470,557

	Three Months Ended June 30, 2018
	Pressure Pumping		All Other			Total
Service revenue	$	445,805	$	14,083		$	459,888
Adjusted EBITDA	$	97,818	$	(1,850	)	$	95,968
Depreciation and amortization	$	20,042	$	1,234		$	21,276
Goodwill at December 31, 2018	$	9,425	$	—		$	9,425
Capital expenditures	$	68,106	$	2,437		$	70,543
Total assets at December 31, 2018	$	1,230,830	$	43,692		$	1,274,522



	Six Months Ended June 30, 2019
	Pressure Pumping		All Other			Total
Service revenue	$	1,047,931	$	27,742		$	1,075,673
Adjusted EBITDA	$	282,228	$	(5,391	)	$	276,837
Depreciation and amortization	$	65,806	$	2,793		$	68,599
Goodwill at June 30, 2019	$	9,425	$	—		$	9,425
Capital expenditures	$	238,577	$	8,789		$	247,366
Total assets at June 30, 2019	$	1,415,187	$	55,370		$	1,470,557

	Six Months Ended June 30, 2018
	Pressure Pumping		All Other			Total
Service revenue	$	820,850	$	24,257		$	845,107
Adjusted EBITDA	$	176,881	$	(4,169	)	$	172,712
Depreciation and amortization	$	37,805	$	2,406		$	40,211
Goodwill at December 31, 2018	$	9,425	$	—		$	9,425
Capital expenditures	$	145,540	$	4,956		$	150,496
Total assets at December 31, 2018	$	1,230,830	$	43,692		$	1,274,522

Reconciliation of net income (loss) to adjusted EBITDA ($ in thousands):



	Three Months Ended June 30, 2019
	Pressure Pumping		All Other			Total
Net income (loss)	$	64,230	$	(28,097	)	$	36,133
Depreciation and amortization	34,023		1,459			35,482
Interest expense	22		2,004			2,026
Income tax expense	—		10,272			10,272
Loss on disposal of assets	31,117		81			31,198
Stock-based compensation	—		2,840			2,840
Other expense	—		276			276
Other general and administrative expense⁽¹⁾	—		6,540			6,540
Retention bonus expense	1,795		—			1,795
Adjusted EBITDA	$	131,187	$	(4,625	)	$	126,562

	Three Months Ended June 30, 2018
	Pressure Pumping		All Other			Total
Net income (loss)	$	57,524	$	(18,433	)	$	39,091
Depreciation and amortization	20,042		1,234			21,276
Interest expense	—		2,231			2,231
Income tax expense	—		12,052			12,052
Loss (gain) on disposal of assets	19,823		(833		)	18,990
Stock-based compensation	—		1,443			1,443
Other expense	—		182			182
Other general and administrative expense⁽¹⁾	2		16			18
Deferred IPO bonus expense	427		258			685
Adjusted EBITDA	$	97,818	$	(1,850	)	$	95,968



	Six Months Ended June 30, 2019
	Pressure Pumping		All Other			Total
Net income (loss)	$	162,324	$	(56,386	)	$	105,938
Depreciation and amortization	65,806		2,793			68,599
Interest expense	22		3,906			3,928
Income tax expense	—		32,164			32,164
Loss on disposal of assets	50,123		302			50,425
Stock-based compensation	—		4,669			4,669
Other expense	—		464			464
Other general and administrative expense ⁽¹⁾	—		6,540			6,540
Deferred IPO bonus and retention bonus expense	3,953		157			4,110
Adjusted EBITDA	$	282,228	$	(5,391	)	$	276,837

	Six Months Ended June 30, 2018
	Pressure Pumping		All Other			Total
Net income (loss)	$	110,458	$	(34,659	)	$	75,799
Depreciation and amortization	37,805		2,406			40,211
Interest expense	—		3,492			3,492
Income tax expense	—		22,406			22,406
Loss (gain) on disposal of assets	27,651		(996		)	26,655
Stock-based compensation	—		2,201			2,201
Other expense	—		412			412
Other general and administrative expense ⁽¹⁾	2		18			20
Deferred IPO bonus expense	965		551			1,516
Adjusted EBITDA	$	176,881	$	(4,169	)	$	172,712

(1)

Other general and administrative expense primarily relates to professional fees paid to external consultants in connection with the Company's expanded audit committee review and advisory services of $6.5 million in 2019, and legal settlement in 2018.