CJ 2017 Annual Report

Completion Services Well Support Services Other Services Corporate / Elimination Total Year Ended December 31, 2017 (Successor) Revenue from external customers $ 1,256,511 $ 382,228 $ — $ — $ 1,638,739 Inter-segment revenues 610 1,437 — (2,047) — Depreciation and amortization 88,053 48,832 — 3,765 140,650 Operating income (loss) 137,014 (21,584) — (131,209) (15,779) Net income (loss) 161,124 (19,390) — (119,277) 22,457 Adjusted EBITDA 221,888 9,233 — (100,259) 130,862 Capital expenditures 184,580 24,368 — 1,238 210,186 As of December 31, 2017 (Successor) Total assets $ 1,159,188 $ 289,642 $ — $ 160,027 $ 1,608,857 Goodwill 147,515 — — — 147,515 Year Ended December 31, 2016 (Predecessor) Revenue from external customers $ 599,787 $ 363,768 $ 7,587 $ — $ 971,142 Inter-segment revenues 947 210 29,115 (30,272) — Depreciation and amortization 141,742 73,600 2,307 (209) 217,440 Operating loss (306,614) (377,707) (51,778) (133,909) (870,008) Net loss (306,866) (373,695) (58,757) (204,971) (944,289) Adjusted EBITDA (41,624) 19,456 (5,777) (66,897) (94,842) Capital expenditures 17,118 14,799 8,451 17,541 57,909 As of December 31, 2016 (Predecessor) Total assets $ 752,225 $ 500,379 $ 50,191 $ 58,887 $ 1,361,682 Goodwill — — — — — Year Ended December 31, 2015 (Predecessor) Revenue from external customers $ 1,261,398 $ 459,265 $ 28,226 $ — $ 1,748,889 Inter-segment revenues 4,009 — 150,755 (154,764) — Depreciation and amortization 199,921 71,389 5,159 (116) 276,353 Operating loss (882,786) (31,253) (69,129) (115,154) (1,098,322) Net loss (883,494) (35,313) (68,584) 114,849 (872,542) Adjusted EBITDA 51,008 68,809 (1,327) (71,734) 46,756 Capital expenditures 97,283 37,540 30,444 1,054 166,321 As of December 31, 2015 (Predecessor) Total assets $ 1,094,054 $ 920,008 $ 124,328 $ 60,601 $ 2,198,991 Goodwill — 307,677 — — 307,677 Management evaluates reportable segment performance and allocates resources based on total earnings (loss) before net interest expense, income taxes, depreciation and amortization, other income (expense), net gain or loss on disposal of assets, acquisition-related costs, and non-routine items (“Adjusted EBITDA”), because Adjusted EBITDA is considered an important measure of each reportable segment’s performance. In addition, management believes that the disclosure of Adjusted EBITDA as a measure of each reportable segment’s operating performance allows investors to make a direct comparison to competitors, without regard to differences in capital and financing structure. Investors should be aware, however, that there are limitations inherent in using Adjusted EBITDA as a measure of overall profitability because it excludes significant expense items. An improving trend in Adjusted EBITDA may not be indicative of an improvement in the Company’s profitability. To compensate for the limitations in utilizing Adjusted EBITDA as an operating measure, management also uses U.S. GAAP C&J ENERGY SERVICES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 114