CJ 2017 Annual Report

measures of performance, including operating income (loss) and net income (loss), to evaluate performance, but only with respect to the Company as a whole and not on a reportable segment basis. As required under Item 10(e) of Regulation S-K of the Securities Exchange Act of 1934, as amended, included below is a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, from net income (loss), which is the nearest comparable U.S. GAAP financial measure (in thousands) on a consolidated basis for the years ended December 31, 2017, 2016 and 2015, and on a reportable segment basis for the years ended December 31, 2017, 2016 and 2015. Successor Predecessor Years Ended December 31, 2017 2016 2015 Net income (loss) $ 22,457 $ (944,289) $ (872,542) Interest expense, net 1,527 157,465 82,086 Income tax benefit (39,760) (129,010) (299,093) Depreciation and amortization 140,650 217,440 276,353 Other (income) expense, net (3) (9,504) (8,773) (Gain) loss on disposal of assets (31,463) 3,075 (544) Impairment expense — 436,395 791,807 Acquisition-related costs 4,606 10,534 42,662 Severance, facility closures and other 5,954 34,179 16,881 Restructuring costs 11,236 30,401 — Reorganization costs — 55,330 — Inventory write-down — 35,350 31,109 Share-based compensation expense acceleration 15,658 7,792 — Immaterial accounts payable accrual correction — — (13,190) Adjusted EBITDA $ 130,862 $ (94,842) $ 46,756 Year Ended December 31, 2017 (Successor) Completion Services Well Support Services Corporate / Elimination Total Net income (loss) $ 161,124 $ (19,390) $ (119,277) $ 22,457 Interest expense, net 634 87 806 1,527 Income tax benefit (28,950) — (10,810) (39,760) Depreciation and amortization 88,053 48,832 3,765 140,650 Other (income) expense, net 4,205 (2,281) (1,927) (3) Gain on disposal of assets (7,753) (23,706) (4) (31,463) Acquisition-related costs 4,474 — 132 4,606 Severance, facility closures and other — 5,441 513 5,954 Restructuring costs 101 250 10,885 11,236 Share-based compensation expense acceleration — — 15,658 15,658 Adjusted EBITDA $ 221,888 $ 9,233 $ (100,259) $ 130,862 C&J ENERGY SERVICES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 115