CJ 2017 Annual Report

C&J ENERGY SERVICES, INC. AND SUBSIDIARIES C ONSOLIDATED S TATEMENTS OF C ASH F LOWS (Amounts in thousands) Successor Predecessor Year Ended December 31, On January 1, Years Ended December 31, 2017 2017 2016 2015 Cash flows from operating activities: Net income (loss) $ 22,457 $ 298,582 $ (944,289) $ (872,542) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 140,650 — 217,440 276,353 Impairment expense — — 436,395 791,807 Inventory write-down — — 35,350 31,109 Contingent consideration adjustment — — (4,700) (11,147) Deferred income taxes (31,244) (4,613) (129,533) (273,144) Provision for doubtful accounts 4,444 — 1,735 8,071 Equity (earnings) loss from unconsolidated affiliate 83 — 5,663 (500) (Gain) loss on disposal of assets (31,463) — 3,075 (544) Share-based compensation expense 23,437 — 17,740 18,549 Amortization of deferred financing costs 608 — 48,310 10,926 Accretion of original issue discount — — 52,414 6,187 Reorganization items, net — (315,626) 30,611 — Changes in operating assets and liabilities: Accounts receivable (203,101) — 137,075 278,150 Inventories (26,072) — 4,244 21,123 Prepaid expenses and other current assets 16,013 — 24,447 (26,821) Accounts payable 41,801 — (75,016) (168,607) Payroll and related costs and accrued expenses 38,104 (1,436) 35,028 17,400 Liabilities subject to compromise — (33,000) — — Income taxes receivable (payable) 1,714 3,604 (108) Other 2,663 — (6,965) (3,257) Net cash provided by (used in) operating activities 94 (56,093) (107,372) 103,005 Cash flows from investing activities: Purchases of and deposits on property, plant and equipment (210,186) — (57,909) (166,321) Proceeds from disposal of property, plant and equipment and non-core service lines 68,250 — 32,809 4,468 Payments made for business acquisitions (133,750) — — (663,303) Other payments related to non-core service lines — (1,827) — Net cash used in investing activities (275,686) — (26,927) (825,156) Cash flows from financing activities: Proceeds from revolving debt and term loans — — 174,000 1,339,400 Payments on revolving debt and term loans — — (13,250) (539,950) Proceeds from DIP Facility — — 23,000 — Payments on DIP Facility — (25,000) — — Payments of capital lease obligations — — (2,388) (3,874) Financing costs (1,739) (2,248) (1,009) (55,450) Proceeds from issuance of common stock, net of offering costs 215,920 200,000 — 453 Registration costs associated with issuance of common stock — — — (1,465) Employee tax withholding on restricted stock vesting (3,842) — (497) (2,621) Excess tax benefit (expense) from share-based compensation — — (5,592) (2,367) Net cash provided by financing activities 210,339 172,752 174,264 734,126 Effect of exchange rate on cash (2,102) — (1,282) 3,908 Net increase (decrease) in cash and cash equivalents (67,355) 116,659 38,683 15,883 Cash and cash equivalents, beginning of year 181,242 64,583 25,900 10,017 Cash and cash equivalents, end of year $ 113,887 $ 181,242 $ 64,583 $ 25,900 See accompanying notes to consolidated financial statements 73