Quarterly report pursuant to Section 13 or 15(d)

Reportable Segment Information

Reportable Segment Information

3 Months Ended

Mar. 31, 2020

The Company has four operating segments for which discrete financial information is readily available: hydraulic fracturing (inclusive of acidizing), cementing, coiled tubing and drilling. In March 2020, the Company shut down its flowback operating segment and subsequently disposed of the assets for approximately $1.6 million. 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 months ended March 31, 2020 and 2019 was $10.3 million and $29.7 million, respectively.

Our hydraulic fracturing operating segment revenue approximated 94.8% and 95.9% of our pressure pumping revenue during the three months ended March 31, 2020 and and 2019, 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):




	Three Months Ended March 31, 2020
	Pressure Pumping		All Other			Total
Service revenue	$	386,919	$	8,150		$	395,069
Adjusted EBITDA	$	78,664	$	(3,741	)	$	74,923
Depreciation and amortization	$	38,969	$	1,236		$	40,205
Capital expenditures	$	39,268	$	828		$	40,096
Total assets at March 31, 2020	$	1,347,189	$	52,701		$	1,399,890

	Three Months Ended March 31, 2019
	Pressure Pumping		All Other			Total
Service revenue	$	532,064	$	14,115		$	546,179
Adjusted EBITDA	$	151,040	$	(765	)	$	150,275
Depreciation and amortization	$	31,783	$	1,334		$	33,117
Goodwill at December 31, 2019	$	9,425	$	—		$	9,425
Capital expenditures	$	82,035	$	4,112		$	86,147
Total assets at December 31, 2019	$	1,381,811	$	54,300		$	1,436,111

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




	Three Months Ended March 31, 2020
	Pressure Pumping		All Other			Total
Net income (loss)	$	4,308	$	(12,112	)	$	(7,804	)
Depreciation and amortization	38,969		1,236			40,205
Impairment expense	15,559		1,095			16,654
Interest expense	1		1,280			1,281
Income tax expense	—		(909		)	(909		)
Loss on disposal of assets	19,815		39			19,854
Stock-based compensation	—		471			471
Other expense	—		3			3
Other general and administrative expense⁽¹⁾	—		5,135			5,135
Retention bonus and severance expense	12		21			33
Adjusted EBITDA	$	78,664	$	(3,741	)	$	74,923

	Three Months Ended March 31, 2019
	Pressure Pumping		All Other			Total
Net income (loss)	$	98,094	$	(28,289	)	$	69,805
Depreciation and amortization	31,783		1,334			33,117
Interest expense	—		1,903			1,903
Income tax expense	—		21,892			21,892
Loss on disposal of assets	19,006		222			19,228
Stock-based compensation	—		1,829			1,829
Other expense	—		187			187
Deferred IPO bonus expense	2,157		157			2,314
Adjusted EBITDA	$	151,040	$	(765	)	$	150,275

(1)

Other general and administrative expense relates to nonrecurring professional fees paid to external consultants in connection with the Company's expanded audit committee review.