| Reportable Segment Information |
Reportable Segment Information
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 and six months ended June 30, 2020 was $10.6 million and $20.9 million, respectively. The corporate administrative expense for the three and six months ended June 30, 2019 was $27.5 million and $57.2 million, respectively.
Our hydraulic fracturing operating segment revenue approximated 89.7% and 93.7% of our pressure pumping revenue during the three and six months ended June 30, 2020, respectively. During the three and six months ended June 30, 2019, our hydraulic fracturing operating segment revenue approximated 95.6% and 95.8% of our pressure pumping revenue, respectively.
Inter-segment revenues are not material and are not shown separately in the table below.
The Company manages and assesses the performance of the reportable segment by its adjusted EBITDA (earnings before other income (expense), interest, taxes, depreciation and amortization, stock-based compensation expense, severance, impairment expense, (gain)/loss on disposal of assets and other unusual or nonrecurring expenses or (income)). A reconciliation from segment level financial information to the consolidated statement of operations is provided in the table below ($ in thousands):
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Three Months Ended June 30, 2020 |
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Pressure Pumping |
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All Other |
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Total |
Service revenue |
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$ |
103,815 |
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$ |
2,294 |
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$ |
106,109 |
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Adjusted EBITDA |
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$ |
34,030 |
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$ |
(8,620 |
) |
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$ |
25,410 |
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Depreciation and amortization |
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$ |
38,910 |
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$ |
1,263 |
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$ |
40,173 |
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Capital expenditures |
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$ |
10,034 |
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$ |
1,846 |
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$ |
11,880 |
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Total assets at June 30, 2020 |
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$ |
1,052,915 |
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$ |
40,687 |
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$ |
1,093,602 |
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Three Months Ended June 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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$ |
515,867 |
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$ |
13,627 |
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$ |
529,494 |
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Adjusted EBITDA |
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$ |
131,187 |
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$ |
(4,625 |
) |
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$ |
126,562 |
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Depreciation and amortization |
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$ |
34,023 |
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$ |
1,459 |
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$ |
35,482 |
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Goodwill at December 31, 2019 |
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$ |
9,425 |
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$ |
— |
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$ |
9,425 |
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Capital expenditures |
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$ |
156,542 |
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$ |
4,677 |
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$ |
161,219 |
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Total assets at December 31, 2019 |
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$ |
1,381,811 |
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$ |
54,300 |
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$ |
1,436,111 |
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Six Months Ended June 30, 2020 |
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Pressure Pumping |
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All Other |
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Total |
Service revenue |
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$ |
490,735 |
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$ |
10,443 |
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$ |
501,178 |
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Adjusted EBITDA |
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$ |
112,696 |
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$ |
(12,362 |
) |
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$ |
100,334 |
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Depreciation and amortization |
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$ |
77,879 |
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$ |
2,498 |
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$ |
80,377 |
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Capital expenditures |
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$ |
49,301 |
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$ |
2,674 |
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$ |
51,975 |
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Total assets at June 30, 2020 |
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$ |
1,052,915 |
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$ |
40,687 |
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$ |
1,093,602 |
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Six Months Ended June 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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$ |
1,047,931 |
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$ |
27,742 |
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$ |
1,075,673 |
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Adjusted EBITDA |
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$ |
282,228 |
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$ |
(5,391 |
) |
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$ |
276,837 |
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Depreciation and amortization |
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$ |
65,806 |
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$ |
2,793 |
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$ |
68,599 |
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Goodwill at December 31, 2019 |
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$ |
9,425 |
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$ |
— |
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$ |
9,425 |
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Capital expenditures |
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$ |
238,577 |
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$ |
8,789 |
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$ |
247,366 |
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Total assets at December 31, 2019 |
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$ |
1,381,811 |
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$ |
54,300 |
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$ |
1,436,111 |
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Reconciliation of net income (loss) to adjusted EBITDA ($ in thousands):
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Three Months Ended June 30, 2020 |
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Pressure Pumping |
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All Other |
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Total |
Net loss |
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$ |
(13,528 |
) |
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$ |
(12,392 |
) |
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$ |
(25,920 |
) |
Depreciation and amortization |
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38,910 |
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1,263 |
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40,173 |
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Interest expense |
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— |
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|
791 |
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|
791 |
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Income tax benefit |
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— |
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(6,460 |
) |
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(6,460 |
) |
Loss on disposal of assets |
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8,587 |
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147 |
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8,734 |
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Stock-based compensation |
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— |
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2,962 |
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2,962 |
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Other expense |
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— |
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267 |
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267 |
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Other general and administrative expense(1)
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— |
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4,802 |
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4,802 |
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Retention bonus and severance expense |
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61 |
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— |
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61 |
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Adjusted EBITDA |
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$ |
34,030 |
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$ |
(8,620 |
) |
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$ |
25,410 |
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Three Months Ended June 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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$ |
64,230 |
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$ |
(28,097 |
) |
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$ |
36,133 |
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Depreciation and amortization |
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34,023 |
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1,459 |
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35,482 |
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Interest expense |
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22 |
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2,004 |
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|
2,026 |
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Income tax expense |
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— |
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10,272 |
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10,272 |
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Loss on disposal of assets |
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31,117 |
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81 |
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31,198 |
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Stock-based compensation |
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— |
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2,840 |
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2,840 |
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Other expense |
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— |
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276 |
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276 |
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Other general and administrative expense(1)
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— |
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6,540 |
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6,540 |
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Retention bonus expense |
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1,795 |
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— |
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1,795 |
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Adjusted EBITDA |
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$ |
131,187 |
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$ |
(4,625 |
) |
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$ |
126,562 |
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Six Months Ended June 30, 2020 |
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Pressure Pumping |
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All Other |
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Total |
Net loss |
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$ |
(9,220 |
) |
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$ |
(24,504 |
) |
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$ |
(33,724 |
) |
Depreciation and amortization |
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77,879 |
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2,498 |
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80,377 |
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Impairment expense |
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15,559 |
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1,095 |
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16,654 |
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Interest expense |
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1 |
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2,071 |
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2,072 |
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Income tax benefit |
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— |
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(7,370 |
) |
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(7,370 |
) |
Loss on disposal of assets |
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28,402 |
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186 |
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28,588 |
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Stock-based compensation |
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— |
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3,433 |
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3,433 |
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Other expense |
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— |
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|
271 |
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|
271 |
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Other general and administrative expense (1)
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— |
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9,937 |
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9,937 |
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Retention bonus and severance expense |
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75 |
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21 |
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|
96 |
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Adjusted EBITDA |
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$ |
112,696 |
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$ |
(12,362 |
) |
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$ |
100,334 |
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Six Months Ended June 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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$ |
162,324 |
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$ |
(56,386 |
) |
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$ |
105,938 |
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Depreciation and amortization |
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65,806 |
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|
2,793 |
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68,599 |
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Interest expense |
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22 |
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3,906 |
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|
3,928 |
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Income tax expense |
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— |
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32,164 |
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32,164 |
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Loss on disposal of assets |
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50,123 |
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|
302 |
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50,425 |
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Stock-based compensation |
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— |
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4,669 |
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4,669 |
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Other expense |
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— |
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|
464 |
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|
464 |
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Other general and administrative expense (1)
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— |
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6,540 |
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6,540 |
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Deferred IPO and retention bonus expense |
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$ |
3,953 |
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$ |
157 |
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$ |
4,110 |
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Adjusted EBITDA |
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$ |
282,228 |
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$ |
(5,391 |
) |
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$ |
276,837 |
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(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, SEC investigation and shareholders' litigation.
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