Annual report pursuant to Section 13 and 15(d)

Reporting Segments and Geographic Areas

v3.19.1
Reporting Segments and Geographic Areas
 12 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]  
Reporting Segments and Geographic Areas
Reporting Segments and Geographic Areas
Reporting Segments

As of December 31, 2018, our revenues, income before income taxes and identifiable assets are primarily attributable to three reportable segments. The Company principally provides electric infrastructure services to government-funded utilities, private utilities, public investor-owned utilities and co-operative utilities and services in connection with on-shore drilling of oil and natural gas wells for small to large domestic independent oil and natural gas producers.

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.

In 2017, the Company had four reportable segments, including pressure pumping services, infrastructure services, natural sand proppant services and contract land and directional drilling services. Based on its assessment of FASB ASC 280, Segment Reporting, guidance at December 31, 2018, the Company changed its reportable segment presentation in 2018, as it determined based upon both a quantitative and qualitative basis that the contract land and directional drilling services segment, which previously included Bison Drilling, Bison Trucking, Panther Drilling, Mako Acquisitions and White Wing Tubular, is not of continuing significance for accounting reporting purposes. The Company now includes the results of the entities previously included in the contract land and directional drilling services segment in its reconciling column titled "All Other" in the tables below for the years ended December 31, 2018 and 2017. As of December 31, 2018, the Company’s three reportable segments include infrastructure services ("Infrastructure"), pressure pumping services ("Pressure Pumping") and natural sand proppant services ("Sand"). The results for the year ended December 31, 2017 have been retroactively adjusted to reflect his change in reportable segments.

In 2016, the Company had five reportable segments, including pressure pumping services, well services, natural sand proppant services, contract land and directional drilling services and other energy services. The results for the years ended December 31, 2016 continue to be reported under these five segments, and therefore, are not directly comparable to the results for the years ended December 31, 2018 and 2017.

The infrastructure services segment provides electric utility infrastructure services to government-funded utilities, private utilities, public investor-owned utilities and co-operative utilities in Puerto Rico and the northeast, southwest and midwest portions of the United States. The pressure pumping services segment provides hydraulic fracturing services primarily in the Utica Shale of Eastern Ohio, Marcellus Shale in Pennsylvania, Eagle Ford and Permian Basins in Texas and the mid-continent region. The sand segment mines, processes and sells sand for use in hydraulic fracturing. The sand segment primarily services the Utica Shale, Permian Basin, SCOOP, STACK and Montney Shale in British Columbia and Alberta, Canada.

The Company also provides contract land and directional drilling services, coil tubing services, flowback services, cementing services, acidizing services, equipment rental services, crude oil hauling services and remote accommodation services. The businesses that provide these services are distinct operating segments, which the CODM reviews independently when making key operating and resource utilization decisions. None of these operating segments met the quantitative thresholds of a reporting segment and did not meet the aggregation criteria set forth in ASC 280 Segment Reporting for the year ended December 31, 2018. Therefore, results for these operating segments are included in the column labeled "All Other" in the tables below for the years ended December 31, 2018 and 2017. Additionally, assets for corporate activities, which primarily include cash and cash equivalents, inter-segment accounts receivable, prepaid insurance and certain property and equipment, are included in the All Other column. Although Mammoth LLC, which holds these corporate assets, meets one of the quantitative thresholds of a reporting segment, it does not engage in business activities from which it may earn revenues and its results are not regularly reviewed by the Company's CODM when making key operating and resource utilization decisions. Therefore, the Company does not include it as a reportable segment.

Prior to 2017, information used by the CODM in measuring segment profits or losses did not include intersegment revenues and costs as they were deemed immaterial for decision-making purposes. In 2017, the Company's CODM changed the way segment profits and losses are measured to include intersegment revenues and expenses. The historical results by segment below for the year ended December 31, 2016 have been revised to reflect this change in measurement method.

Sales from one segment to another are generally priced at estimated equivalent commercial selling prices. Total revenue and total cost of revenue amounts included in the Eliminations column in the following tables include inter-segment transactions conducted between segments. Receivables due for sales from one segment to another and for corporate allocations to each segment are included in the Eliminations column for total assets in the following tables. All transactions conducted between segments are eliminated in consolidation. Transactions conducted by companies within the same reporting segment are eliminated within each reporting segment. The following tables set forth certain financial information with respect to the Company’s reportable segments (in thousands):
Year Ended December 31, 2018
Infrastructure
Pressure Pumping
Sand
All Other
Eliminations
Total
Revenue from external customers
$
1,082,371

$
362,491

$
100,816

$
144,406

$
—

$
1,690,084

Intersegment revenues
—

7,001

67,459

5,516

(79,976
)
—

Total revenue
1,082,371

369,492

168,275

149,922

(79,976
)
1,690,084

Cost of revenue, exclusive of depreciation, depletion, amortization and accretion
608,017

223,296

126,714

135,777

—

1,093,804

Intersegment cost of revenues
2,583

70,365

6,103

898

(79,949
)
—

Total cost of revenue
610,600

293,661

132,817

136,675

(79,949
)
1,093,804

Selling, general and administrative(a)
27,126

29,761

6,218

9,992

—

73,097

Depreciation, depletion, amortization and accretion
20,516

51,487

13,519

34,355

—

119,877

Impairment of long-lived assets
308

143

—

8,404

—

8,855

Operating income (loss)
423,821

(5,560
)
15,721

(39,504
)
(27
)
394,451

Interest expense
423

1,171

234

1,359

—

3,187

Other expense
573

434

525

504

—

2,036

Income (loss) before income taxes
$
422,825

$
(7,165
)
$
14,962

$
(41,367
)
$
(27
)
$
389,228

Total expenditures for property, plant and equipment
$
100,701

$
33,774

$
17,935

$
39,533

$
—

$
191,943

As of December 31, 2018:
 
 
 
 
 
 
Goodwill
$
3,828

$
86,043

$
2,684

$
8,690

$
—

$
101,245

Intangible assets, net
$
1,650

$
4,059

$
—

$
2,047

$
—

$
7,756

Total assets
$
366,457

$
254,278

$
177,870

$
122,442

$
152,044

$
1,073,091

a.
Included in Pressure Pumping selling, general and administrative expense is non-cash equity based compensation expense of $17.5 million.

Year Ended December 31, 2017
Infrastructure
Pressure Pumping
Sand
All Other
Eliminations
Total
Revenue from external customers
$
224,425

$
277,326

$
90,023

$
99,722

$
—

$
691,496

Intersegment revenue
—

2,026

27,014

2,527

(31,567
)
—

Total revenue
224,425

279,352

117,037

102,249

(31,567
)
691,496

Cost of revenue, exclusive of depreciation, depletion, amortization and accretion
120,117

183,089

91,049

88,314

—

482,569

Intersegment cost of revenues
1,443

28,147

1,731

211

(31,532
)
—

Total cost of revenue
121,560

211,236

92,780

88,525

(31,532
)
482,569

Selling, general and administrative
21,606

9,501

8,190

10,589

—

49,886

Depreciation and amortization
3,185

45,413

9,394

34,132

—

92,124

Impairment of long-lived assets
—

—

324

3,822

—

4,146

Operating income (loss)
78,074

13,202

6,349

(34,819
)
(35
)
62,771

Interest expense
241

1,622

679

1,768

—

4,310

Bargain purchase gain
—

—

(4,012
)
—

—

(4,012
)
Other expense
6

129

211

331

—

677

Income (loss) before income taxes
$
77,827

$
11,451

$
9,471

$
(36,918
)
$
(35
)
$
61,796

Total expenditures for property, plant and equipment
$
20,144

$
85,853

$
16,376

$
11,480

$
—

$
133,853

As of December 31, 2017:
 
 
 
 
 
 
Goodwill
$
891

$
86,043

$
2,684

$
10,193

$
—

$
99,811

Intangible assets, net
$
1,770

$
12,392

$
—

$
1,977

$
—

$
16,139

Total assets
$
205,275

$
297,140

$
190,859

$
255,641

$
(81,672
)
$
867,243

Year Ended December 31, 2016
Pressure Pumping
Well Services
Sand
Drilling
Other Energy Services
Eliminations
Total
Revenue from external customers
$
123,856

$
10,024

$
33,835

$
32,043

$
30,867

$
—

$
230,625

Intersegment revenues
569

79

4,267

—

—

(4,915
)
—

Total revenue
124,425

10,103

38,102

32,043

30,867

(4,915
)
230,625

Cost of revenue, exclusive of depreciation, depletion, amortization and accretion
82,552

13,540

31,895

31,848

13,186

—

173,021

Intersegment cost of revenues
4,336

26

561

(8
)
—

(4,915
)
—

Total cost of revenue
86,888

13,566

32,456

31,840

13,186

(4,915
)
173,021

Selling, general and administrative
4,327

2,336

3,337

5,625

2,423

—

18,048

Depreciation, depletion, amortization and accretion
37,013

5,128

6,483

21,512

2,179

—

72,315

Impairment of long-lived assets
139

1,385

—

347

—

—

1,871

Operating loss
(3,942
)
(12,312
)
(4,174
)
(27,281
)
13,079

—

(34,630
)
Interest expense
599

134

434

2,829

100

—

4,096

Other expense (income)
27

(566
)
96

248

37

—

(158
)
(Loss) income before income taxes
$
(4,568
)
$
(11,880
)
$
(4,704
)
$
(30,358
)
$
12,942

$
—

$
(38,568
)
Total expenditures for property, plant and equipment
7,673

405

528

2,709

425

—

11,740

As of December 31, 2016:
 
 
 
 
 
 
 
Goodwill
$
86,043

$
—

$
2,684

$
—

$
—

$
—

$
88,727

Intangible assets, net
$
21,435

$
132

$
—

$
—

$
—

$
—

$
21,567

Total assets
$
197,635

$
128,698

$
109,128

$
99,868

$
48,653

$
(81,620
)
$
502,362



Geographic Areas

The following table presents consolidated revenues by country based on sales destination of the products or services (in thousands):
 
 
Year Ended December 31,
 
 
2018
 
2017
 
2016
United States
 
$
654,506

 
$
471,745

 
$
196,573

Puerto Rico
 
1,022,558

 
203,087

 
—

Canada
 
13,020

 
16,664

 
34,052

Total
 
$
1,690,084

 
$
691,496

 
$
230,625



The following table presents long-lived assets, excluding deferred income tax assets, by country (in thousands):
 
 
Year Ended December 31,
 
 
2018
 
2017
 
2016
United States
 
$
571,555

 
$
515,904

 
$
389,575

Puerto Rico
 
32,604

 
6,923

 
—

Canada
 
19,376

 
23,254

 
23,848

Total
 
$
623,535

 
$
546,081

 
$
413,423