Annual report pursuant to Section 13 and 15(d)

REPORTABLE SEGMENT INFORMATION

v3.20.4
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):
Pressure
Pumping
All Other
Total
Year ended and as of December 31, 2020
Service revenue
$ 773,474  $ 15,758  $ 789,232 
Adjusted EBITDA
$ 174,030  $ (32,567) $ 141,463 
Depreciation and amortization
$ 148,659  $ 4,631  $ 153,290 
Impairment expense
$ 36,907  $ 1,095  $ 38,002 
Capital expenditures
$ 78,154  $ 3,091  $ 81,245 
Total assets
$ 1,009,631  $ 41,108  $ 1,050,739 
Pressure
Pumping
All Other
Total
Year ended and as of December 31, 2019
Service revenue
$ 2,001,627  $ 50,687  $ 2,052,314 
Adjusted EBITDA
$ 533,760  $ (14,691) $ 519,069 
Depreciation and amortization
$ 139,348  $ 5,956  $ 145,304 
Impairment expense
$ —  $ 3,405  $ 3,405 
Capital expenditures
$ 387,119  $ 13,552  $ 400,671 
Goodwill
$ 9,425  $ —  $ 9,425 
Total assets $ 1,381,811  $ 54,300  $ 1,436,111 
Pressure
Pumping
All Other
Total
Year ended and as of December 31, 2018
Service revenue
$ 1,658,403  $ 46,159  $ 1,704,562 
Adjusted EBITDA
$ 398,396  $ (9,873) $ 388,523 
Depreciation and amortization
$ 83,404  $ 4,734  $ 88,138 
Capital expenditures
$ 577,171  $ 15,431  $ 592,602 
Goodwill
$ 9,425  $ —  $ 9,425 
Total assets
$ 1,230,830  $ 43,692  $ 1,274,522 
Reconciliation of net income (loss) to adjusted EBITDA ($ in thousands):
Pressure
Pumping
All Other
Total
Year ended December 31, 2020
Net income (loss)
$ (68,271) $ (38,749) $ (107,020)
Depreciation and amortization
148,659  4,631  153,290 
Interest expense
2,382  2,383 
Income tax benefit —  (27,480) (27,480)
Loss on disposal of assets
56,659  1,477  58,136 
Impairment expense 36,907  1,095  38,002 
Stock‑based compensation
—  9,100  9,100 
Other expense
—  874  874 
Other general and administrative expense (1)
—  13,038  13,038 
Retention bonus and severance expense 75  1,065  1,140 
Adjusted EBITDA
$ 174,030  $ (32,567) $ 141,463 
Pressure
Pumping
All Other Total
Year ended December 31, 2019
Net income (loss)
$ 281,090  $ (118,080) $ 163,010 
Depreciation and amortization
139,348  5,956  145,304 
Interest expense
51  7,090  7,141 
Income tax expense
—  50,494  50,494 
Loss on disposal of assets
106,178  633  106,811 
Impairment expense —  3,405  3,405 
Stock‑based compensation
—  7,776  7,776 
Other expense
—  717  717 
Other general and administrative expense (1)
—  25,208  25,208 
Deferred IPO bonus, retention bonus and severance expense 7,093  2,110  9,203 
Adjusted EBITDA
533,760  (14,691) 519,069 
Pressure
Pumping
All Other Total
Year ended December 31, 2018
Net income (loss)
$ 253,196  $ (79,334) $ 173,862 
Depreciation and amortization
83,404  4,734  88,138 
Interest expense
—  6,889  6,889 
Income tax expense
—  51,255  51,255 
Loss on disposal of assets
59,962  (742) 59,220 
Stock‑based compensation
—  5,482  5,482 
Other expense
—  663  663 
Other general and administrative expense (1)
203  205 
Deferred IPO bonus
1,832  977  2,809 
Adjusted EBITDA
$ 398,396  $ (9,873) $ 388,523 
(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.
Major Customers
          The Company had revenue from the following significant customers that accounted for the following percentages of the Company’s total revenue:
Year Ended December 31,
2020 2019 2018
Customer A
42.5  % 25.5  % 24.1  %
Customer B
20.3  % 20.9  % 16.5  %
Customer C
9.3  % 13.2  % 12.2  %
Customer D
8.6  % 9.2  % 8.9  %
Customer E
5.8  % 8.2  % 7.1  %
           The above significant customers’ revenue that relates to pressure pumping is below:
Year Ended December 31,
2020 2019 2018
Customer A 99.8  % 99.7  % 97.4  %
Customer B 97.6  % 95.4  % 98.3  %
Customer C 99.9  % 99.9  % 100.0  %
Customer D 99.7  % 100.0  % 100.0  %
Customer E 85.7  % 100.0  % 100.0  %