REPORTABLE SEGMENT INFORMATION
|12 Months Ended|
Dec. 31, 2020
|Segment Reporting [Abstract]|
|REPORTABLE SEGMENT INFORMATION||REPORTABLE SEGMENT INFORMATION
The Company has three operating segments for which discrete financial information is readily available: hydraulic fracturing, cementing and coiled tubing. These operating segments represent how the Chief Operating Decision Maker evaluates performance and allocates resources.
In September 2020, the Company shut down its drilling operations and disposed of all of its drilling rigs and ancillary assets for approximately $0.5 million. In March 2020, the Company shut down its flowback operating segment and subsequently disposed of the assets for approximately $1.6 million. Our drilling and flowback operations were included in our “all other” category. In August 2018, we divested our surface air drilling operations, included in our “all other” category. The divestiture or disposal of our surface drilling assets did not qualify for presentation and disclosure as discontinued operations, and accordingly, during the year ended December 31, 2018, we recorded the resulting loss associated with the asset disposal of $0.3 million as part of our loss on disposal of asset in our consolidated statement of operations. The shutdown of these operations resulted in a reduction in the number of our current operating segments to three. The change in the number of our operating segments did not impact our reportable segment information reported for the years presented.
In accordance with 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 stock-based compensation expense, income tax expense and interest expense) are included in the ‘‘all other’’ category in the tables below. Total corporate administrative expense for the years ended December 31, 2020, 2019 and 2018 was $31.6 million, $113.0 million and $83.9 million, respectively.
Our hydraulic fracturing operating segment revenue approximated 94.2%, 95.6% and 95.4% of our pressure pumping revenue for the years ended December 31, 2020, 2019 and 2018, respectively.
Inter-segment revenues are not material and are not shown separately in the table below.
The Company manages and assesses the performance of the reportable segment by its adjusted EBITDA. We define Adjusted EBITDA as earnings before interest expense, income taxes, depreciation and amortization (EBITDA), plus (i) loss/(gain) on disposal of assets, (ii) loss/(gain) on extinguishment of debt, (iii) stock-based compensation, and (iv) other unusual or nonrecurring (income)/expenses, such as impairment charges, severance, costs related to our initial public offering (“IPO”), costs related to asset acquisitions, costs related to SEC investigation and class action lawsuits and one-time professional fees.
A reconciliation from segment level financial information to the consolidated statement of operations is provided in the table below ($ in thousands):
Reconciliation of net income (loss) to adjusted EBITDA ($ in thousands):
(1)During the years ended December 31, 2020 and 2019, other general and administrative expense primarily relates to nonrecurring professional fees paid to external consultants in connection with the Company’s expanded audit committee review, SEC investigation and shareholder litigation. All nonrecurring professional fees incurred after the end of June 2020 are in connection with the pending SEC investigation and shareholder litigation. The other general and administrative expense during the year ended December 31, 2018 primarily relates to legal settlements.
The Company had revenue from the following significant customers that accounted for the following percentages of the Company’s total revenue:
The above significant customers’ revenue that relates to pressure pumping is below:
The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef