Mammoth Energy Services, Inc. Announces

Second Quarter 2019 Operational and Financial Results

•	Second Quarter net loss of $11 million, or $0.24 per diluted share

•	Second Quarter Adjusted EBITDA of $9 million

•	Suspended dividend due to oilfield service market conditions

•	2019 capital budget decreased 49% from $80 million to $41 million

OKLAHOMA CITY, OKLAHOMA, August 1, 2019 - Mammoth Energy Services, Inc. ("Mammoth" or the "Company") (NASDAQ: TUSK) today reported financial and operational results for the quarter ended June 30, 2019.

Financial Highlights for the Second Quarter of 2019:

Total revenue was $181.8 million for the three months ended June 30, 2019, down from $262.1 million for the three months ended March 31, 2019 and down from $533.6 million for the three months ended June 30, 2018.

Net loss for the three months ended June 30, 2019 was $10.9 million, or $0.24 per fully diluted share, as compared to net income of $28.3 million, or $0.63 per fully diluted share, for the three months ended March 31, 2019 and net income of $42.7 million, or $0.95 per fully diluted share, for the three months ended June 30, 2018.

Adjusted EBITDA (as defined and reconciled below) was $8.6 million for the three months ended June 30, 2019, down from $82.8 million for the three months ended March 31, 2019 and down from $148.6 million for the three months ended June 30, 2018.

Arty Straehla, Mammoth's Chief Executive Officer, stated, “The second quarter of 2019 was a challenging environment as further capital restraint by our oilfield customers continued to apply downward pressure on pricing and resulted in several completions being delayed or canceled with short notice. In addition, we worked through the challenges of demobilizing our equipment from Puerto Rico. As a result of current market conditions, we have begun to right size our operations and we expect this process to be completed in the coming months. Demand for infrastructure services remains high with the competencies and experience of our crews allowing for unique bidding opportunities in both the US and overseas. While our work in Puerto Rico has ended, we have continued to receive payments from PREPA, with $42 million received in the second quarter of 2019. For the remainder of 2019, we are taking a disciplined approach to our spending and we have reduced our 2019 capital expenditure budget from $80 million to $41 million. As a result of oilfield market conditions, our board of directors has suspended the quarterly cash dividend.”

Infrastructure Services

Mammoth's infrastructure services segment contributed revenues of $41.8 million for the three months ended June 30, 2019, a decrease from $108.7 million for the three months ended March 31, 2019 and a decline from $360.3 million for the three months ended June 30, 2018.

During the second quarter of 2019, Mammoth demobilized approximately 1,000 pieces of equipment from Puerto Rico back to the Lower 48.

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Pressure Pumping Services

Mammoth's pressure pumping division contributed revenues (inclusive of inter-segment revenues) of $84.6 million for the three months ended June 30, 2019, a decrease from $92.1 million for the three months ended March 31, 2019 and a decrease from $101.4 million for the three months ended June 30, 2018.

Mammoth's pressure pumping division completed a total of 1,717 stages for the three months ended June 30, 2019, as compared to 1,889 stages for the three months ended March 31, 2019 and 1,815 stages for the three months ended June 30, 2018. An average of 2.7 of our 6 fleets were active for the three months ended June 30, 2019, compared to average utilization of 4.4 fleets during the three months ended March 31, 2019 and an average utilization of 4.3 fleets during the three months ended June 30, 2018.

  

Natural Sand Proppant Services

Mammoth's natural sand proppant division contributed revenues (inclusive of inter-segment revenues) of $40.4 million for the three months ended June 30, 2019, an increase from $37.9 million for the three months ended March 31, 2019 and a decrease from $52.8 million for the three months ended June 30, 2018.

The Company sold 812,611 tons of sand during the three months ended June 30, 2019, a 22% increase from the 665,806 tons sold during the three months ended March 31, 2019 and a 4% increase from the 777,850 tons sold during the three months ended June 30, 2018. The Company's average sales price for the sand sold during the second quarter of 2019 was $30.09 per ton, a 7% decrease from the $32.20 per ton average sales price during the first quarter of 2019 and a 30% decrease from the $43.09 per ton average sales price during the second quarter of 2018.

Blended second quarter production costs came in at approximately $12 per ton during the second quarter of 2019, unchanged from the first quarter of 2019 production costs and a 24% decrease from production costs of approximately $15.70 per ton during the second quarter of 2018.

Other Services

Mammoth's other services, including contract land and directional drilling, coil tubing, pressure control, flowback, cementing, acidizing, equipment rentals, crude oil hauling and remote accommodations, contributed revenues (inclusive of inter-segment revenues) of $28.4 million for the three months ended June 30, 2019, a decrease from $38.5 million for the three months ended March 31, 2019 and a decrease from $37.3 million for the three months ended June 30, 2018.

An average of 601 pieces of equipment were rented during the three months ended June 30, 2019, down 3% from the average 621 pieces of equipment rented during the three months ended March 31, 2019 and a 77% increase from an average of 339 pieces of equipment rented for the three months ended June 30, 2018. As a result of market conditions, the Company has temporarily shut down its cementing and acidizing operations as well as its flowback operations subsequent to June 30, 2019.

Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses were $9.5 million for the three months ended June 30, 2019, as compared to $17.3 million for the three months ended March 31, 2019 and $65.1 million for the three months ended June 30, 2018.

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Following is a breakout of SG&A expense (in thousands):

	Three Months Ended												Six Months Ended
	June 30,								March 31,				June 30,
	2019				2018				2019				2019				2018
Cash expenses:
Compensation and benefits	$	2,154			$	10,978			$	9,230			$	11,384			$	18,677
Professional services	2,934				2,981				3,789				6,723				5,568
Other(a)	3,381				3,935				3,244				6,626				5,542
Total cash SG&A expense	8,469				17,894				16,263				24,733				29,787
Non-cash expenses:
Bad debt provision(b)	262				28,263				4				266				53,790
Equity based compensation(c)	—				17,487				—				—				17,487
Stock based compensation	724				1,483				1,069				1,792				2,574
Total non-cash SG&A expense	986				47,233				1,073				2,058				73,851
Total SG&A expense	$	9,455			$	65,127			$	17,336			$	26,791			$	103,638

a.	Includes travel-related costs, IT expenses, rent, utilities and other general and administrative-related costs.

b.	$28.3 million and $53.6 million of the bad debt expense recognized during the three and six months ended June 30, 2018 was subsequently reversed during the third quarter of 2018.

c.	Represents compensation expense for non-employee awards, which were issued and are payable by certain affiliates of Wexford (the sponsor level).

SG&A expenses, as a percentage of total revenue, were 5% for the three months ended June 30, 2019 as compared to 7% for the three months ended March 31, 2019 and 12% for the three months ended June 30, 2018.

Liquidity

As of June 30, 2019, Mammoth had cash on hand totaling $7.2 million and outstanding borrowings under its revolving credit facility of $82.0 million. As of June 30, 2019, the Company had $93.5 million of available borrowing capacity under its revolving credit facility, after giving effect to $8.7 million of outstanding letters of credit, resulting in total liquidity of approximately $100.7 million. As of July 31, 2019, the Company had cash on hand totaling $11.6 million and outstanding borrowings under its revolving credit facility of $85.5 million.

Capital Expenditures

The following table summarizes Mammoth's capital expenditures by operating division for the periods indicated (in thousands):

	Three Months Ended												Six Months Ended
	June 30,								March 31,				June 30,
	2019				2018				2019				2019				2018
Infrastructure services(a)	$	2,177			$	40,778			$	3,254			$	5,431			$	56,556
Pressure pumping services(b)	4,013				8,233				7,329				11,342				16,099
Natural sand proppant services(c)	990				6,958				985				1,975				12,658
Other(d)	2,767				17,042				8,705				11,472				23,472
Total capital expenditures	$	9,947			$	73,011			$	20,273			$	30,220			$	108,785

a.	Capital expenditures primarily for truck, tooling and other equipment for the periods presented.

b.	Capital expenditures primarily for pressure pumping and water transfer equipment for the for the periods presented.

c.	Capital expenditures primarily for maintenance for the 2019 periods presented and plant upgrades for the 2018 periods presented.

d.	Capital expenditures primarily for equipment for the Company's rental business and upgrades to its rig fleet for the periods presented.

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Explanatory Note Regarding Financial Information

The financial information contained in this release should be read in conjunction with the financial information contained in Mammoth’s Annual Report to be filed on Form 10-K with the Securities and Exchange Commission ("SEC"), Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings.

The Company's Chief Executive Officer and Chief Financial Officer comprise the Company's Chief Operating Decision Maker function ("CODM"). Segment information is prepared on the same basis that the CODM manages the segments, evaluates the segment financial statements and makes key operating and resource utilization decisions. Segment evaluation is determined on a quantitative basis based on a function of operating income (loss) as well as a qualitative basis, such as nature of the product and service offerings and types of customers.

Conference Call Information

Mammoth will host a conference call on Friday, August 2, 2019 at 10:00 a.m. CDT (11:00 am EDT) to discuss its second quarter 2019 financial and operational results. The telephone number to access the conference call is 844-265-1561 in the U.S. and the international dial in is 216-562-0385. The conference ID for the call is 6178026. The conference call will also be webcast live on www.mammothenergy.com in the “Investors” section.

About Mammoth Energy Services, Inc.

Mammoth is an integrated, growth-oriented energy service company serving companies engaged in the exploration and development of North American onshore unconventional oil and natural gas reserves and government-funded utilities, private utilities, public investor-owned utilities and co-operative utilities through its energy infrastructure services. Mammoth’s suite of services and products include: pressure pumping services, infrastructure services, natural sand and proppant services and other energy services.

For additional information about Mammoth, please visit its website at www.mammothenergy.com, where Mammoth routinely posts announcements, updates, events, investor information and presentations and recent news releases.

Investor Contact:

Don Crist

Director of Investor Relations

dcrist@mammothenergy.com

405-608-6048

Media Contact:

Peter Mirijanian

peter@pmpadc.com

(202) 464-8803

Forward-Looking Statements and Cautionary Statements

This news release (and any oral statements made regarding the subjects of this release, including on the conference call announced herein) contains certain statements and information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “plan,” “estimate,” “project,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “potential,” “would,” “may,” “probable,” “likely” and similar expressions, and the negative thereof, are intended to identify forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding our business outlook and plans, future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, costs and other guidance regarding future developments. Forward-looking statements are not assurances of future performance. These forward-looking statements are based on management’s current expectations and beliefs, forecasts for our existing operations, experience and perception of historical trends, current conditions, anticipated future developments and their effect on us, and other factors believed to be appropriate. Although management believes that the expectations and assumptions reflected in these forward-looking statements are

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reasonable as and when made, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all). Moreover, our forward-looking statements are subject to significant risks and uncertainties, including those described in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings we make with the SEC, including those relating to our acquisitions and our contracts, many of which are beyond our control, which may cause actual results to differ materially from our historical experience and our present expectations or projections which are implied or expressed by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: the failure to receive or delays in receiving governmental authorizations, approvals and/or payments; the outcome of an ongoing government investigation relating to the contracts awarded to our subsidiary Cobra Acquisitions LLC by the Puerto Rico Electric Power Authority; our inability to replace the prior levels of work in our infrastructure segment; risks relating to economic conditions; the loss of or interruption in operations of one or more key suppliers or customers; the effects of government regulation, permitting and other legal requirements; operating risks; the adequacy of capital resources and liquidity; weather; natural disasters; litigation; competition in the oil and natural gas and infrastructure industries; and costs and availability of resources.

Investors are cautioned not to place undue reliance on any forward-looking statement which speaks only as of the date on which such statement is made. We undertake no obligation to correct, revise or update any forward-looking statement after the date such statement is made, whether as a result of new information, future events or otherwise, except as required by applicable law.

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MAMMOTH ENERGY SERVICES, INC.

CONSOLIDATED BALANCE SHEETS

ASSETS		June 30,				December 31,
		2019				2018
CURRENT ASSETS		(in thousands)
Cash and cash equivalents		$	7,245			$	67,625
Accounts receivable, net		385,626				337,460
Receivables from related parties		37,400				11,164
Inventories		22,114				21,302
Prepaid expenses		10,196				11,317
Other current assets		699				688
Total current assets		463,280				449,556
Property, plant and equipment, net		408,408				436,699
Sand reserves		69,762				71,708
Operating lease right-of-use assets		52,184				—
Intangible assets, net - customer relationships		1,563				1,711
Intangible assets, net - trade names		5,625				6,045
Goodwill		101,245				101,245
Other non-current assets		6,843				6,127
Total assets		$	1,108,910			$	1,073,091
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable		$	72,671			$	68,843
Payables to related parties		1,020				370
Accrued expenses and other current liabilities		42,658				59,652
Current operating lease liability		17,338				—
Income taxes payable		30,780				104,958
Total current liabilities		164,467				233,823
Long-term debt		82,036				—
Deferred income tax liabilities		56,580				79,309
Long-term operating lease liability		34,807				—
Asset retirement obligation		3,534				3,164
Other liabilities		4,270				2,743
Total liabilities		345,694				319,039
COMMITMENTS AND CONTINGENCIES
EQUITY
Equity:
Common stock, $0.01 par value, 200,000,000 shares authorized, 45,004,795 and 44,876,649 issued and outstanding at June 30, 2019 and December 31, 2018		450				449
Additional paid in capital		533,151				530,919
Retained earnings		232,990				226,765
Accumulated other comprehensive loss		(3,375		)		(4,081		)
Total equity		763,216				754,052
Total liabilities and equity		$	1,108,910			$	1,073,091

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MAMMOTH ENERGY SERVICES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Three Months Ended												Six Months Ended
	June 30,								March 31,				June 30,
	2019				2018				2019				2019				2018
	(in thousands, except per share amounts)
REVENUE
Services revenue	$	115,760			$	455,545			$	193,101			$	308,861			$	864,204
Services revenue - related parties	36,837				40,611				44,073				80,910				89,699
Product revenue	18,362				27,708				12,309				30,671				52,748
Product revenue - related parties	10,861				9,730				12,655				23,516				21,192
Total revenue	181,820				533,594				262,138				443,958				1,027,843
COST AND EXPENSES
Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $25,597, $26,898, $25,682, $51,280 and $51,473, respectively, for the three months ended June 30, 2019, June 30, 2018 and March 31, 2019 and six months ended June 30, 2019 and 2018)	132,688				302,283				158,106				290,794				593,262
Services cost of revenue - related parties (exclusive of depreciation, depletion, amortization and accretion of $0, $0, $0, $0 and $0, respectively, for the three months ended June 30, 2019, June 30, 2018 and March 31, 2019 and six months ended June 30, 2019 and 2018)	2,650				2,428				713				3,363				4,220
Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $4,525, $3,879, $2,871, $7,395 and $6,193, respectively, for the three months ended June 30, 2019, June 30, 2018 and March 31, 2019 and six months ended June 30, 2019 and 2018)	32,677				35,117				30,251				62,928				68,447
Selling, general and administrative	8,796				64,595				16,902				25,698				102,677
Selling, general and administrative - related parties	659				532				434				1,093				961
Depreciation, depletion, amortization and accretion	30,145				30,795				28,576				58,721				57,703
Impairment of long-lived assets	—				187				—				—				187
Total cost and expenses	207,615				435,937				234,982				442,597				827,457
Operating (loss) income	(25,795		)		97,657				27,156				1,361				200,386
OTHER INCOME (EXPENSE)
Interest expense, net	(1,551		)		(959		)		(523		)		(2,074		)		(2,196		)
Other, net	4,019				(486		)		24,557				28,576				(514		)
Total other income (expense)	2,468				(1,445		)		24,034				26,502				(2,710		)
(Loss) income before income taxes	(23,327		)		96,212				51,190				27,863				197,676
(Benefit) provision for income taxes	(12,438		)		53,512				22,857				10,419				99,430
Net (loss) income	$	(10,889	)		$	42,700			$	28,333			$	17,444			$	98,246
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment, net of tax of $92, $86, ($90), $182 and $272, respectively, for the three months ended June 30, 2019, June 30, 2018 and March 31, 2019 and six months ended June 30, 2019 and 2018	350				(325		)		356				706				(786		)
Comprehensive (loss) income	$	(10,539	)		$	42,375			$	28,689			$	18,150			$	97,460
Net (loss) income per share (basic)	$	(0.24	)		$	0.95			$	0.63			$	0.39			$	2.20
Net (loss) income per share (diluted)	$	(0.24	)		$	0.95			$	0.63			$	0.39			$	2.18
Weighted average number of shares outstanding (basic)	45,003				44,737				44,929				44,966				44,700
Weighted average number of shares outstanding (diluted)	45,003				45,059				45,063				45,060				44,977
Dividends declared per share	$	0.125			—				$	0.125			$	0.25			—

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MAMMOTH ENERGY SERVICES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended
	June 30,
	2019				2018
	(in thousands)
Cash flows from operating activities:
Net income	$	17,444			$	98,246
Adjustments to reconcile net income to cash provided by operating activities:
Equity based compensation	—				17,487
Stock based compensation	2,233				2,916
Depreciation, depletion, accretion and amortization	58,721				57,703
Amortization of coil tubing strings	1,003				1,120
Amortization of debt origination costs	163				199
Bad debt expense	266				53,790
Loss (gain) on disposal of property and equipment	176				(128		)
Impairment of long-lived assets	—				187
Deferred income taxes	(22,911		)		(27,906		)
Other	(199		)		—
Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net	(48,530		)		(122,908		)
Receivables from related parties	(26,236		)		3,114
Inventories	(1,815		)		4,156
Prepaid expenses and other assets	1,115				(1,195		)
Accounts payable	7,366				34,186
Payables to related parties	650				538
Accrued expenses and other liabilities	(17,129		)		10,193
Income taxes payable	(74,172		)		94,753
Net cash (used in) provided by operating activities	(101,855		)		226,451
Cash flows from investing activities:
Purchases of property and equipment	(30,085		)		(105,349		)
Purchases of property and equipment from related parties	(135		)		(3,436		)
Business acquisitions	—				(13,356		)
Contributions to equity investee	(680		)		—
Proceeds from disposal of property and equipment	2,465				898
Net cash used in investing activities	(28,435		)		(121,243		)
Cash flows from financing activities:
Borrowings from lines of credit	108,000				52,000
Repayments of lines of credit	(25,964		)		(151,900		)
Dividends paid	(11,219		)		—
Principal payments on financing leases and equipment financing notes	(992		)		(145		)
Net cash provided by (used in) financing activities	69,825				(100,045		)
Effect of foreign exchange rate on cash	85				(98		)
Net change in cash and cash equivalents	(60,380		)		5,065
Cash and cash equivalents at beginning of period	67,625				5,637
Cash and cash equivalents at end of period	$	7,245			$	10,702
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,830			$	2,543
Cash paid for income taxes	$	116,442			$	32,584
Supplemental disclosure of non-cash transactions:
Purchases of property and equipment included in accounts payable	$	2,339			$	20,897

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MAMMOTH ENERGY SERVICES, INC.

SEGMENT INCOME STATEMENTS

(in thousands)

Three months ended June 30, 2019	Infrastructure			Pressure Pumping			Sand			All Other			Eliminations			Total
Revenue from external customers	$	41,821		$	82,973		$	29,223		$	27,803		$	—		$	181,820
Intersegment revenues	—			1,668			11,170			584			(13,422		)	—
Total revenue	41,821			84,641			40,393			28,387			(13,422		)	181,820
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion	44,864			59,835			32,676			30,640			—			168,015
Intersegment cost of revenues	—			11,797			1,141			562			(13,500		)	—
Total cost of revenue	44,864			71,632			33,817			31,202			(13,500		)	168,015
Selling, general and administrative	3,035			2,664			1,380			2,376			—			9,455
Depreciation, depletion, amortization and accretion	7,818			10,174			4,528			7,625			—			30,145
Operating (loss) income	(13,896		)	171			668			(12,816		)	78			(25,795		)
Interest expense, net	386			452			72			641			—			1,551
Other (income) expense, net	(4,045		)	9			(32		)	49			—			(4,019		)
(Loss) income before income taxes	$	(10,237	)	$	(290	)	$	628		$	(13,506	)	$	78		$	(23,327	)

Three months ended June 30, 2018	Infrastructure			Pressure Pumping			Sand			All Other			Eliminations			Total
Revenue from external customers	$	360,250		$	100,333		$	37,439		$	35,572		$	—		$	533,594
Intersegment revenues	—			1,073			15,406			1,776			(18,255		)	—
Total revenue	360,250			101,406			52,845			37,348			(18,255		)	533,594
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion	210,189			61,593			35,117			32,929			—			339,828
Intersegment cost of revenues	754			16,174			1,019			60			(18,007		)	—
Total cost of revenue	210,943			77,767			36,136			32,989			(18,007		)	339,828
Selling, general and administrative	39,786			20,822			1,787			2,732			—			65,127
Depreciation, depletion, amortization and accretion	4,094			13,829			3,881			8,991			—			30,795
Impairment of long-lived assets	—			—			—			187			—			187
Operating income (loss)	105,427			(11,012		)	11,041			(7,551		)	(248		)	97,657
Interest expense, net	106			341			76			436			—			959
Other expense, net	330			80			36			40			—			486
Income (loss) before income taxes	$	104,991		$	(11,433	)	$	10,929		$	(8,027	)	$	(248	)	$	96,212

Three months ended March 31, 2019	Infrastructure			Pressure Pumping			Sand			All Other			Eliminations			Total
Revenue from external customers	$	108,721		$	90,595		$	24,964		$	37,858		$	—		$	262,138
Intersegment revenues	—			1,544			12,897			658			(15,099		)	—
Total revenue	108,721			92,139			37,861			38,516			(15,099		)	262,138
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion	58,965			64,211			30,252			35,642			—			189,070
Intersegment cost of revenues	—			13,537			1,047			497			(15,081		)	—
Total cost of revenue	58,965			77,748			31,299			36,139			(15,081		)	189,070
Selling, general and administrative	9,517			3,213			1,519			3,087			—			17,336
Depreciation, depletion, amortization and accretion	7,719			9,893			2,873			8,091			—			28,576
Operating income (loss)	32,520			1,285			2,170			(8,801		)	(18		)	27,156
Interest expense, net	39			198			30			256			—			523
Other expense, net	(24,824		)	(1		)	—			268			—			(24,557		)
Income (loss) before income taxes	$	57,305		$	1,088		$	2,140		$	(9,325	)	$	(18	)	$	51,190

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MAMMOTH ENERGY SERVICES, INC.

SEGMENT INCOME STATEMENTS

(in thousands)

Six months ended June 30, 2019	Infrastructure			Pressure Pumping			Sand			All Other			Eliminations			Total
Revenue from external customers	$	150,542		$	173,568		$	54,187		$	65,661		$	—		$	443,958
Intersegment revenues	—			3,212			24,067			1,243			(28,522		)	—
Total revenue	150,542			176,780			78,254			66,904			(28,522		)	443,958
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion	103,828			124,047			62,928			66,282			—			357,085
Intersegment cost of revenues	—			25,334			2,188			1,060			(28,582		)	—
Total cost of revenue	103,828			149,381			65,116			67,342			(28,582		)	357,085
Selling, general and administrative	12,553			5,876			2,899			5,463			—			26,791
Depreciation, depletion, amortization and accretion	15,537			20,068			7,401			15,715			—			58,721
Operating income (loss)	18,624			1,455			2,838			(21,616		)	60			1,361
Interest expense, net	425			649			102			898			—			2,074
Other (income) expense, net	(28,869		)	8			(32		)	317			—			(28,576		)
Income (loss) before income taxes	$	47,068		$	798		$	2,768		$	(22,831	)	$	60		$	27,863

Six months ended June 30, 2018	Infrastructure			Pressure Pumping			Sand			All Other			Eliminations			Total
Revenue from external customers	$	685,709		$	196,912		$	73,942		$	71,280		$	—		$	1,027,843
Intersegment revenues	—			5,632			29,918			4,193			(39,743		)	—
Total revenue	685,709			202,544			103,860			75,473			(39,743		)	1,027,843
Cost of revenue, exclusive of depreciation, depletion, amortization and accretion	404,265			128,205			68,447			65,012			—			665,929
Intersegment cost of revenues	2,545			31,576			5,305			327			(39,753		)	—
Total cost of revenue	406,810			159,781			73,752			65,339			(39,753		)	665,929
Selling, general and administrative	71,637			23,485			3,431			5,085			—			103,638
Depreciation, depletion, amortization and accretion	6,501			27,815			6,197			17,190			—			57,703
Impairment of long-lived assets	—			—			—			187			—			187
Operating income (loss)	200,761			(8,537		)	20,480			(12,328		)	10			200,386
Interest expense, net	182			845			156			1,013			—			2,196
Other expense (income), net	332			92			23			67			—			514
Income (loss) before income taxes	$	200,247		$	(9,474	)	$	20,301		$	(13,408	)	$	10		$	197,676

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MAMMOTH ENERGY SERVICES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA

Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. Mammoth defines Adjusted EBITDA as net income (loss) before depreciation, depletion, amortization and accretion expense, impairment of long-lived assets, acquisition related costs, public offering costs, equity based compensation, stock based compensation, interest expense, net, other (income) expense, net (which is comprised of the (gain) or loss on disposal of long-lived assets) and provision (benefit) for income taxes, further adjusted to add back interest on trade accounts receivable. The Company excludes the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within the energy service industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) or cash flows from operating activities as determined in accordance with GAAP or as an indicator of Mammoth's operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Mammoth's computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDA is a widely followed measure of operating performance and may also be used by investors to measure its ability to meet debt service requirements.

The following tables provide a reconciliation of Adjusted EBITDA to the GAAP financial measure of net income (loss) on a consolidated basis and for each of the Company's segments (in thousands):

Consolidated

	Three Months Ended												Six Months Ended
	June 30,								March 31,				June 30,
Reconciliation of Adjusted EBITDA to net income (loss):	2019				2018				2019				2019				2018
Net (loss) income	$	(10,889	)		$	42,700			$	28,333			$	17,444			$	98,246
Depreciation, depletion, accretion and amortization expense	30,145				30,795				28,576				58,721				57,703
Impairment of long-lived assets	—				187				—				—				187
Acquisition related costs	45				77				—				45				31
Public offering costs	—				731				—				—				731
Equity based compensation	—				17,487				—				—				17,487
Stock based compensation	944				1,660				1,289				2,233				2,916
Interest expense, net	1,551				959				523				2,074				2,196
Other (income) expense, net	(4,019		)		486				(24,557		)		(28,576		)		514
Interest on trade accounts receivable	3,234				—				25,735				28,969				—
(Benefit) provision for income taxes	(12,438		)		53,512				22,857				10,419				99,430
Adjusted EBITDA	$	8,573			$	148,594			$	82,756			$	91,329			$	279,441

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MAMMOTH ENERGY SERVICES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Infrastructure Services

	Three Months Ended												Six Months Ended
	June 30,								March 31,				June 30,
Reconciliation of Adjusted EBITDA to net income:	2019				2018				2019				2019				2018
Net income	$	6,210			$	52,359			$	35,665			$	41,875			$	99,658
Depreciation and amortization expense	7,818				4,094				7,719				15,537				6,501
Acquisition related costs	12				4				—				12				(4		)
Public offering costs	—				360				—				—				360
Stock based compensation	9				606				462				471				1,063
Interest expense	386				106				39				425				182
Other (income) expense, net	(4,045		)		330				(24,824		)		(28,869		)		332
Interest on trade accounts receivable	3,234				—				25,735				28,969				—
(Benefit) provision for income taxes	(16,447		)		52,632				21,639				5,193				100,589
Adjusted EBITDA	$	(2,823	)		$	110,491			$	66,435			$	63,613			$	208,681

Pressure Pumping Services

	Three Months Ended												Six Months Ended
	June 30,								March 31,				June 30,
Reconciliation of Adjusted EBITDA to net income (loss):	2019				2018				2019				2019				2018
Net income (loss)	$	(290	)		$	(11,433	)		$	1,088			$	798			$	(9,474	)
Depreciation and amortization expense	10,174				13,829				9,893				20,068				27,815
Acquisition related costs	18				33				—				18				33
Public offering costs	—				202				—				—				202
Equity based compensation	—				17,487				—				—				17,487
Stock based compensation	489				453				410				899				871
Interest expense	452				341				198				649				845
Other expense (income), net	9				80				(1		)		8				92
Adjusted EBITDA	$	10,852			$	20,992			$	11,588			$	22,440			$	37,871

Natural Sand Proppant Services

	Three Months Ended												Six Months Ended
	June 30,								March 31,				June 30,
Reconciliation of Adjusted EBITDA to net income (loss):	2019				2018				2019				2019				2018
Net income	$	628			$	10,929			$	2,140			$	2,768			$	20,301
Depreciation, depletion, accretion and amortization expense	4,528				3,881				2,873				7,401				6,197
Acquisition related costs	8				—				—				8				(38		)
Public offering costs	—				95				—				—				95
Stock based compensation	236				205				203				439				391
Interest expense	72				76				30				102				156
Other (income) expense, net	(32		)		36				—				(32		)		23
Adjusted EBITDA	$	5,440			$	15,222			$	5,246			$	10,686			$	27,125

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MAMMOTH ENERGY SERVICES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Other Services^(a) 

	Three Months Ended												Six Months Ended
	June 30,								March 31,				June 30,
Reconciliation of Adjusted EBITDA to net income (loss):	2019				2018				2019				2019				2018
Net (loss) income	$	(17,515	)		$	(8,907	)		$	(10,542	)		$	(28,057	)		$	(12,250	)
Depreciation and amortization expense	7,625				8,991				8,091				15,715				17,190
Impairment of long-lived assets	—				187				—				—				187
Acquisition related costs	7				40				—				7				40
Public offering costs	—				74				—				—				74
Stock based compensation	210				396				214				424				592
Interest expense, net	641				436				256				898				1,013
Other expense, net	49				40				268				317				67
Provision (benefit) for income taxes	4,009				880				1,217				5,226				(1,158		)
Adjusted EBITDA	$	(4,974	)		$	2,137			$	(496	)		$	(5,470	)		$	5,755

a.	Includes results for Mammoth's contract land and directional drilling, coil tubing, pressure control, flowback, cementing, acidizing, equipment rentals, crude oil hauling and remote accommodations services and corporate related activities. The Company's corporate related activities do not generate revenue.

After Tax Return on Invested Capital

After tax return on invested capital is a supplemental non-GAAP measure that is used by management to evaluate the Company's performance. Mammoth defines after tax return on invested capital as net income divided by total capital employed, which is the average of ending debt and equity for the last two years. Management believes after tax return on invested capital is a useful measure of how effectively the Company uses capital to generate profits and it provides additional insight for analysts and investors in evaluating the Company's financial and operating performance. After tax return on invested capital should not be considered in isolation or as a substitute for financial measures reported in accordance with GAAP. The following table provides the calculation of after tax return on invested capital using the GAAP financial measures of net income, total debt and total equity.

	Twelve Months Ended
	June 30,
	2019				2018				2017
	(in thousands)
Net income	$	155,163			$	163,360
Capital Employed
Total debt	$	82,036			$	—			$	65,000
Total equity	763,216				625,669				440,410
Total capital employed	$	845,252			$	625,669			$	505,410
Average capital employed(a)	$	735,461			$	565,540
Trailing twelve month after tax return on invested capital(b)	21		%		29		%

a.	Average capital employed is the average of total capital employed as of end of the period and end of the prior period.

b.	After tax return on invested capital is the ratio of net income for the period to average capital employed.

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