| Reporting Segments |
Reporting Segments
As of June 30, 2018, our revenues, income before income taxes and identifiable assets are primarily attributable to four reportable segments. The Company principally provides energy services in connection with on-shore drilling of oil and natural gas wells for small to large domestic independent oil and natural gas producers and electric infrastructure services to government-funded utilities, private utilities, public investor-owned utilities and co-operative utilities.
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.
As of June 30, 2018, the Company’s four reportable segments include pressure pumping services ("Pressure Pumping"), infrastructure services ("Infrastructure"), natural sand proppant services ("Sand") and contract land and directional drilling services ("Drilling").
The pressure pumping services segment provides hydraulic fracturing services primarily in the Utica Shale of Eastern Ohio, Marcellus Shale in Pennsylvania, Permian Basin in Texas and the mid-continent region in Oklahoma. 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 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 contract land and directional drilling services segment provides vertical, horizontal and directional drilling services primarily in the Permian Basin in West Texas.
The Company also provides coil tubing services, pressure control services, flowback services, cementing 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 meet the quantitative thresholds of a reporting segment and do not meet the aggregation criteria set forth in ASC 280 Segment Reporting. Therefore, results for these operating segments are included in the column labeled "All Other" in the tables below. 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.
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):
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Three months ended June 30, 2018 |
Pressure Pumping |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
Revenue from external customers |
$ |
100,333 |
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$ |
360,250 |
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$ |
37,439 |
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$ |
17,126 |
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$ |
18,446 |
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$ |
— |
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$ |
533,594 |
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Intersegment revenues |
1,073 |
|
— |
|
15,406 |
|
84 |
|
1,721 |
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(18,284 |
) |
— |
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Total revenue |
101,406 |
|
360,250 |
|
52,845 |
|
17,210 |
|
20,167 |
|
(18,284 |
) |
533,594 |
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Cost of revenue, exclusive of depreciation, depletion, amortization and accretion |
61,593 |
|
210,189 |
|
35,117 |
|
15,280 |
|
17,649 |
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— |
|
339,828 |
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Intersegment cost of revenues |
16,174 |
|
754 |
|
1,019 |
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(40 |
) |
129 |
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(18,036 |
) |
— |
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Total cost of revenue |
77,767 |
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210,943 |
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36,136 |
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15,240 |
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17,778 |
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(18,036 |
) |
339,828 |
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Selling, general and administrative |
20,822 |
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39,786 |
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1,787 |
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1,591 |
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1,141 |
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— |
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65,127 |
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Depreciation, depletion, amortization and accretion |
13,829 |
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4,094 |
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3,881 |
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5,349 |
|
3,642 |
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— |
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30,795 |
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Impairment of long-lived assets |
— |
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— |
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— |
|
187 |
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— |
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— |
|
187 |
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Operating income (loss) |
(11,012 |
) |
105,427 |
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11,041 |
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(5,157 |
) |
(2,394 |
) |
(248 |
) |
97,657 |
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Interest expense, net |
341 |
|
106 |
|
76 |
|
265 |
|
171 |
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— |
|
959 |
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Other expense |
80 |
|
330 |
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36 |
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32 |
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8 |
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— |
|
486 |
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Income (loss) before income taxes |
$ |
(11,433 |
) |
$ |
104,991 |
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$ |
10,929 |
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$ |
(5,454 |
) |
$ |
(2,573 |
) |
$ |
(248 |
) |
$ |
96,212 |
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Three months ended June 30, 2017 |
Pressure Pumping |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
Revenue from external customers |
$ |
49,924 |
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$ |
1,709 |
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$ |
24,000 |
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$ |
12,472 |
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$ |
10,157 |
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$ |
— |
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$ |
98,262 |
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Intersegment revenues |
272 |
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— |
|
762 |
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— |
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85 |
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(1,119 |
) |
— |
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Total revenue |
50,196 |
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1,709 |
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24,762 |
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12,472 |
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10,242 |
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(1,119 |
) |
98,262 |
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Cost of revenue, exclusive of depreciation, depletion, amortization and accretion |
35,826 |
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1,626 |
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19,974 |
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12,033 |
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7,881 |
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— |
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77,340 |
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Intersegment cost of revenues |
847 |
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— |
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267 |
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— |
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5 |
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(1,119 |
) |
— |
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Total cost of revenue |
36,673 |
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1,626 |
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20,241 |
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12,033 |
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7,886 |
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(1,119 |
) |
77,340 |
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Selling, general and administrative |
2,403 |
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307 |
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2,416 |
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1,435 |
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1,139 |
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— |
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7,700 |
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Depreciation, depletion, amortization and accretion |
9,626 |
|
340 |
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2,206 |
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4,974 |
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2,747 |
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— |
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19,893 |
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Operating income (loss) |
1,494 |
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(564 |
) |
(101 |
) |
(5,970 |
) |
(1,530 |
) |
— |
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(6,671 |
) |
Interest expense, net |
303 |
|
4 |
|
353 |
|
440 |
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12 |
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— |
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1,112 |
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Bargain purchase gain |
— |
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— |
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(4,012 |
) |
— |
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— |
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— |
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(4,012 |
) |
Other expense |
4 |
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— |
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140 |
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60 |
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(1 |
) |
— |
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203 |
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Income (loss) before income taxes |
$ |
1,187 |
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$ |
(568 |
) |
$ |
3,418 |
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$ |
(6,470 |
) |
$ |
(1,541 |
) |
$ |
— |
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$ |
(3,974 |
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Six months ended June 30, 2018 |
Pressure Pumping |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
Revenue from external customers |
$ |
196,912 |
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$ |
685,709 |
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$ |
73,942 |
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$ |
32,354 |
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$ |
38,926 |
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$ |
— |
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$ |
1,027,843 |
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Intersegment revenues |
5,632 |
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— |
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29,918 |
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86 |
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4,136 |
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(39,772 |
) |
— |
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Total revenue |
202,544 |
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685,709 |
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103,860 |
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32,440 |
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43,062 |
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(39,772 |
) |
1,027,843 |
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Cost of revenue, exclusive of depreciation, depletion, amortization and accretion |
128,205 |
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404,265 |
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68,447 |
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29,755 |
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35,257 |
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— |
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665,929 |
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Intersegment cost of revenues |
31,576 |
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2,545 |
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5,305 |
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122 |
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234 |
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(39,782 |
) |
— |
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Total cost of revenue |
159,781 |
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406,810 |
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73,752 |
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29,877 |
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35,491 |
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(39,782 |
) |
665,929 |
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Selling, general and administrative |
23,485 |
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71,637 |
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3,431 |
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2,844 |
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2,241 |
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— |
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103,638 |
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Depreciation, depletion, amortization and accretion |
27,815 |
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6,501 |
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6,197 |
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9,704 |
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7,486 |
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— |
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57,703 |
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Impairment of long-lived assets |
— |
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— |
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— |
|
187 |
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— |
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— |
|
187 |
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Operating income (loss) |
(8,537 |
) |
200,761 |
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20,480 |
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(10,172 |
) |
(2,156 |
) |
10 |
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200,386 |
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Interest expense, net |
845 |
|
182 |
|
156 |
|
660 |
|
353 |
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— |
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2,196 |
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Other expense |
92 |
|
332 |
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23 |
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72 |
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(5 |
) |
— |
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514 |
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Income (loss) before income taxes |
$ |
(9,474 |
) |
$ |
200,247 |
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$ |
20,301 |
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$ |
(10,904 |
) |
$ |
(2,504 |
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$ |
10 |
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$ |
197,676 |
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Six months ended June 30, 2017 |
Pressure Pumping |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
Revenue from external customers |
$ |
90,377 |
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$ |
1,709 |
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$ |
38,912 |
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$ |
23,223 |
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$ |
19,007 |
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$ |
— |
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$ |
173,228 |
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Intersegment revenues |
459 |
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— |
|
1,447 |
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— |
|
85 |
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(1,991 |
) |
— |
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Total revenue |
90,836 |
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1,709 |
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40,359 |
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23,223 |
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19,092 |
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(1,991 |
) |
173,228 |
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Cost of revenue, exclusive of depreciation, depletion, amortization and accretion |
64,533 |
|
1,712 |
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32,582 |
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22,986 |
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14,025 |
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— |
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135,838 |
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Intersegment cost of revenues |
1,532 |
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— |
|
454 |
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— |
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5 |
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(1,991 |
) |
— |
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Total cost of revenue |
66,065 |
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1,712 |
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33,036 |
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22,986 |
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14,030 |
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(1,991 |
) |
135,838 |
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Selling, general and administrative |
4,180 |
|
355 |
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4,474 |
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2,728 |
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2,700 |
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— |
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14,437 |
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Depreciation, depletion, amortization and accretion |
18,784 |
|
340 |
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3,569 |
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9,942 |
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4,495 |
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— |
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37,130 |
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Operating income (loss) |
1,807 |
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(698 |
) |
(720 |
) |
(12,433 |
) |
(2,133 |
) |
— |
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(14,177 |
) |
Interest expense, net |
431 |
|
4 |
|
486 |
|
657 |
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(69 |
) |
— |
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1,509 |
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Bargain purchase gain |
— |
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— |
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(4,012 |
) |
— |
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— |
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— |
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(4,012 |
) |
Other expense |
7 |
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— |
|
154 |
|
224 |
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2 |
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— |
|
387 |
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Income (loss) before income taxes |
$ |
1,369 |
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$ |
(702 |
) |
$ |
2,652 |
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$ |
(13,314 |
) |
$ |
(2,066 |
) |
$ |
— |
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$ |
(12,061 |
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Pressure Pumping |
Infrastructure |
Sand |
Drilling |
All Other |
Eliminations |
Total |
As of June 30, 2018: |
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Total assets(a)
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$ |
277,895 |
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$ |
341,171 |
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$ |
199,421 |
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$ |
92,578 |
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$ |
150,579 |
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$ |
(32,521 |
) |
$ |
1,029,123 |
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Goodwill |
$ |
86,043 |
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$ |
891 |
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$ |
2,684 |
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$ |
— |
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$ |
11,893 |
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$ |
— |
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$ |
101,511 |
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As of December 31, 2017: |
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Total assets(a)
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$ |
297,140 |
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$ |
205,275 |
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$ |
190,859 |
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$ |
88,527 |
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$ |
243,767 |
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$ |
(158,325 |
) |
$ |
867,243 |
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Goodwill |
$ |
86,043 |
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$ |
891 |
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$ |
2,684 |
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$ |
— |
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$ |
10,193 |
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$ |
— |
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$ |
99,811 |
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a. |
Total assets included in the All Other column include Mammoth LLC corporate assets totaling $34.3 million and $148.8 million, respectively, as of June 30, 2018 and December 31, 2017, of which $16.9 million and $137.4 million are inter-segment accounts receivable which are eliminated in consolidation.
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