Reportable Segment Information |
Reportable Segment Information
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 nine months ended September 30, 2019 was $30.1 million and $87.3 million, respectively. The corporate administrative expense for the three and nine months ended September 30, 2018 was $21.6 million and $59.6 million, respectively.
Our hydraulic fracturing operating segment revenue approximated 95.7% and 95.7% of our pressure pumping revenue during the three and nine months ended September 30, 2019, respectively. During the three and nine months ended September 30, 2018, our hydraulic fracturing operating segment revenue approximated 94.9% and 95.5% of our pressure pumping revenue, respectively.
Inter-segment revenues are not material and are not shown separately in the table below.
The Company manages and assesses the performance of the reportable segment by its adjusted EBITDA (earnings before other income (expense), interest, taxes, depreciation and amortization, stock-based compensation expense, severance, impairment expense, (gain)/loss on disposal of assets and other unusual or nonrecurring expenses or (income)). A reconciliation from segment level financial information to the consolidated statement of operations is provided in the table below ($ in thousands):
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Three Months Ended September 30, 2019 |
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|
Pressure Pumping |
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All Other |
|
Total |
Service revenue |
|
$ |
528,851 |
|
|
$ |
12,996 |
|
|
$ |
541,847 |
|
Adjusted EBITDA |
|
$ |
134,789 |
|
|
$ |
(2,894 |
) |
|
$ |
131,895 |
|
Depreciation and amortization |
|
$ |
36,110 |
|
|
$ |
1,543 |
|
|
$ |
37,653 |
|
Goodwill at September 30, 2019 |
|
$ |
9,425 |
|
|
$ |
— |
|
|
$ |
9,425 |
|
Capital expenditures |
|
$ |
83,770 |
|
|
$ |
3,189 |
|
|
$ |
86,959 |
|
Total assets at September 30, 2019 |
|
$ |
1,399,865 |
|
|
$ |
56,178 |
|
|
$ |
1,456,043 |
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Three Months Ended September 30, 2018 |
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|
Pressure Pumping |
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All Other |
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Total |
Service revenue |
|
$ |
421,436 |
|
|
$ |
12,605 |
|
|
$ |
434,041 |
|
Adjusted EBITDA |
|
$ |
105,069 |
|
|
$ |
(1,701 |
) |
|
$ |
103,368 |
|
Depreciation and amortization |
|
$ |
22,026 |
|
|
$ |
1,191 |
|
|
$ |
23,217 |
|
Goodwill at December 31, 2018 |
|
$ |
9,425 |
|
|
$ |
— |
|
|
$ |
9,425 |
|
Capital expenditures |
|
$ |
73,143 |
|
|
$ |
1,060 |
|
|
$ |
74,203 |
|
Total assets at December 31, 2018 |
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$ |
1,230,830 |
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|
$ |
43,692 |
|
|
$ |
1,274,522 |
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Nine Months Ended September 30, 2019 |
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|
Pressure Pumping |
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All Other |
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Total |
Service revenue |
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$ |
1,576,781 |
|
|
$ |
40,740 |
|
|
$ |
1,617,521 |
|
Adjusted EBITDA |
|
$ |
417,017 |
|
|
$ |
(8,283 |
) |
|
$ |
408,734 |
|
Depreciation and amortization |
|
$ |
101,916 |
|
|
$ |
4,336 |
|
|
$ |
106,252 |
|
Goodwill at September 30, 2019 |
|
$ |
9,425 |
|
|
$ |
— |
|
|
$ |
9,425 |
|
Capital expenditures |
|
$ |
322,347 |
|
|
$ |
11,978 |
|
|
$ |
334,325 |
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Total assets at September 30, 2019 |
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$ |
1,399,865 |
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|
$ |
56,178 |
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|
$ |
1,456,043 |
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Nine Months Ended September 30, 2018 |
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|
Pressure Pumping |
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All Other |
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Total |
Service revenue |
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$ |
1,242,286 |
|
|
$ |
36,862 |
|
|
$ |
1,279,148 |
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Adjusted EBITDA |
|
$ |
281,951 |
|
|
$ |
(5,871 |
) |
|
$ |
276,080 |
|
Depreciation and amortization |
|
$ |
59,830 |
|
|
$ |
3,598 |
|
|
$ |
63,428 |
|
Goodwill at December 31, 2018 |
|
$ |
9,425 |
|
|
$ |
— |
|
|
$ |
9,425 |
|
Capital expenditures |
|
$ |
218,113 |
|
|
$ |
6,586 |
|
|
$ |
224,699 |
|
Total assets at December 31, 2018 |
|
$ |
1,230,830 |
|
|
$ |
43,692 |
|
|
$ |
1,274,522 |
|
Reconciliation of net income (loss) to adjusted EBITDA ($ in thousands):
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Three Months Ended September 30, 2019 |
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Pressure Pumping |
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All Other |
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Total |
Net income (loss) |
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$ |
65,961 |
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|
$ |
(31,564 |
) |
|
$ |
34,397 |
|
Depreciation and amortization |
|
36,110 |
|
|
1,543 |
|
|
37,653 |
|
Interest expense |
|
21 |
|
|
1,728 |
|
|
1,749 |
|
Income tax expense |
|
— |
|
|
12,340 |
|
|
12,340 |
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Loss on disposal of assets |
|
30,987 |
|
|
166 |
|
|
31,153 |
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Stock-based compensation |
|
— |
|
|
577 |
|
|
577 |
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Other expense |
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— |
|
|
75 |
|
|
75 |
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Other general and administrative expense(1)
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|
— |
|
|
10,786 |
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|
10,786 |
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Retention bonus and severance expense |
|
1,710 |
|
|
1,455 |
|
|
3,165 |
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Adjusted EBITDA |
|
$ |
134,789 |
|
|
$ |
(2,894 |
) |
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$ |
131,895 |
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|
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Three Months Ended September 30, 2018 |
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Pressure Pumping |
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All Other |
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Total |
Net income (loss) |
|
$ |
66,493 |
|
|
$ |
(20,208 |
) |
|
$ |
46,285 |
|
Depreciation and amortization |
|
22,026 |
|
|
1,191 |
|
|
23,217 |
|
Interest expense |
|
— |
|
|
1,480 |
|
|
1,480 |
|
Income tax expense |
|
— |
|
|
13,592 |
|
|
13,592 |
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Loss on disposal of assets |
|
16,117 |
|
|
290 |
|
|
16,407 |
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Stock-based compensation |
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— |
|
|
1,631 |
|
|
1,631 |
|
Other expense |
|
— |
|
|
93 |
|
|
93 |
|
Deferred IPO bonus expense |
|
433 |
|
|
230 |
|
|
663 |
|
Adjusted EBITDA |
|
$ |
105,069 |
|
|
$ |
(1,701 |
) |
|
$ |
103,368 |
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Nine Months Ended September 30, 2019 |
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Pressure Pumping |
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All Other |
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Total |
Net income (loss) |
|
$ |
228,285 |
|
|
$ |
(87,950 |
) |
|
$ |
140,335 |
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Depreciation and amortization |
|
101,916 |
|
|
4,336 |
|
|
106,252 |
|
Interest expense |
|
43 |
|
|
5,635 |
|
|
5,678 |
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Income tax expense |
|
— |
|
|
44,504 |
|
|
44,504 |
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Loss on disposal of assets |
|
81,110 |
|
|
468 |
|
|
81,578 |
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Stock-based compensation |
|
— |
|
|
5,246 |
|
|
5,246 |
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Other expense |
|
— |
|
|
539 |
|
|
539 |
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Other general and administrative expense (1)
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|
— |
|
|
17,326 |
|
|
17,326 |
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Deferred IPO, retention bonus and severance expense |
|
5,663 |
|
|
1,613 |
|
|
7,276 |
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Adjusted EBITDA |
|
$ |
417,017 |
|
|
$ |
(8,283 |
) |
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$ |
408,734 |
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Nine Months Ended September 30, 2018 |
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Pressure Pumping |
|
All Other |
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Total |
Net income (loss) |
|
$ |
176,952 |
|
|
$ |
(54,868 |
) |
|
$ |
122,084 |
|
Depreciation and amortization |
|
59,830 |
|
|
3,598 |
|
|
63,428 |
|
Interest expense |
|
— |
|
|
4,973 |
|
|
4,973 |
|
Income tax expense |
|
— |
|
|
35,998 |
|
|
35,998 |
|
Loss (gain) on disposal of assets |
|
43,768 |
|
|
(707 |
) |
|
43,061 |
|
Stock-based compensation |
|
— |
|
|
3,832 |
|
|
3,832 |
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Other expense |
|
— |
|
|
505 |
|
|
505 |
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Other general and administrative expense (1)
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|
2 |
|
|
18 |
|
|
20 |
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Deferred IPO bonus expense |
|
1,399 |
|
|
780 |
|
|
2,179 |
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Adjusted EBITDA |
|
$ |
281,951 |
|
|
$ |
(5,871 |
) |
|
$ |
276,080 |
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(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 in 2019, and legal settlement in 2018.
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