| Summary of Financial Information for Reportable Segments |
Summarized financial information for our reportable segments is as follows:
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Stimulation Services |
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Proppant Production |
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Manufacturing |
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Other |
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Eliminations |
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Total |
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Three Months Ended March 31, 2024: |
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Revenue |
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External customers — services |
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$ |
505.4 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
505.4 |
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External customers — product sales (1) |
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— |
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53.3 |
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9.6 |
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13.2 |
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— |
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76.1 |
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Intercompany (2) |
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11.9 |
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24.4 |
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33.9 |
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28.5 |
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(98.7 |
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— |
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Total Revenue |
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$ |
517.3 |
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$ |
77.7 |
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$ |
43.5 |
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$ |
41.7 |
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$ |
(98.7 |
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$ |
581.5 |
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Adjusted EBITDA (3) (4) |
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$ |
125.0 |
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$ |
28.4 |
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$ |
4.4 |
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$ |
3.6 |
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$ |
(1.7 |
) |
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$ |
159.7 |
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Depreciation, depletion and amortization |
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92.9 |
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18.0 |
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1.1 |
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0.8 |
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— |
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112.8 |
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Investment in property, plant & equipment |
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52.7 |
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6.4 |
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0.6 |
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0.2 |
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— |
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59.9 |
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As of March 31, 2024: |
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Cash and cash equivalents |
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$ |
5.8 |
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$ |
14.0 |
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$ |
3.3 |
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$ |
5.2 |
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$ |
— |
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$ |
28.3 |
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Total current assets |
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504.9 |
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172.8 |
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170.8 |
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71.3 |
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(255.2 |
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664.6 |
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Property, plant, and equipment, net |
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805.7 |
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847.5 |
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19.4 |
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17.2 |
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— |
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1,689.8 |
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Total assets (5) |
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2,465.4 |
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1,143.2 |
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253.2 |
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187.8 |
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(1,042.6 |
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3,007.0 |
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Current portion of long-term debt |
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56.8 |
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75.3 |
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1.0 |
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3.3 |
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— |
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136.4 |
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Long-term debt |
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594.7 |
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314.8 |
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2.7 |
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— |
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— |
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912.2 |
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Total liabilities |
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1,380.0 |
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214.2 |
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207.5 |
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51.9 |
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(180.2 |
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1,673.4 |
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Three Months Ended March 31, 2023: |
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Revenue |
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External customers — services |
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$ |
786.7 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
786.7 |
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External customers — product sales (1) |
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— |
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55.8 |
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3.4 |
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11.6 |
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— |
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70.8 |
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Intercompany |
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3.5 |
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26.4 |
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63.7 |
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37.6 |
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(131.2 |
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— |
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Total Revenue |
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$ |
790.2 |
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$ |
82.2 |
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$ |
67.1 |
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$ |
49.2 |
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$ |
(131.2 |
) |
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$ |
857.5 |
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Adjusted EBITDA (3) |
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$ |
205.7 |
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$ |
41.3 |
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$ |
8.0 |
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$ |
(7.9 |
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$ |
— |
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$ |
247.1 |
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Depreciation, depletion and amortization |
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96.1 |
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12.4 |
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1.0 |
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0.8 |
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— |
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110.3 |
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Investment in property, plant & equipment |
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74.9 |
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7.7 |
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0.4 |
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0.2 |
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— |
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83.2 |
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As of December 31, 2023: |
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Cash and cash equivalents |
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$ |
1.3 |
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$ |
17.7 |
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$ |
0.4 |
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$ |
5.9 |
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$ |
— |
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$ |
25.3 |
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Total current assets |
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445.8 |
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181.2 |
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164.7 |
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70.6 |
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(224.2 |
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638.1 |
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Property, plant, and equipment, net |
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881.6 |
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859.8 |
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19.8 |
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17.8 |
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— |
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1,779.0 |
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Total assets (5) |
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2,483.9 |
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1,160.1 |
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243.9 |
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188.7 |
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(1,005.9 |
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3,070.7 |
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Current portion of long-term debt |
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46.2 |
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71.6 |
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1.0 |
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7.6 |
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— |
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126.4 |
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Long-term debt |
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611.1 |
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328.2 |
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2.7 |
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0.1 |
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— |
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942.1 |
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Total liabilities |
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1,404.5 |
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225.7 |
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201.5 |
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55.5 |
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(145.1 |
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1,742.1 |
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(1)
Our proppant production segment recognized noncash revenue associated with acquired contract liabilities of $13.6 million and $8.1 million in the three months ended March 31, 2024 and 2023, respectively. Refer to Item 8 "Financial Statements and Supplementary Data" in our Annual Report for information about our acquired contract liabilities.
(2)
In our other business activities, Flotek recorded $8.7 million of revenue related to contract shortfalls because the stimulation services segment did not purchase the minimum contractual commitment of chemistry products from Flotek.
(3)We evaluate the performance of our segments based on Adjusted EBITDA. We define Adjusted EBITDA as our net income (loss) before (i) interest expense, net, (ii) income taxes, (iii) depreciation, depletion and amortization, (iv) (loss) gain on disposal of assets, net, (v) stock-based compensation, and (vi) other charges, such as reorganization costs and other costs related to our initial public offering, certain credit losses, gain (loss) on extinguishment of debt, gain (loss) on investments, acquisition and integration expenses, litigation expenses and accruals for legal contingencies, acquisition earnout adjustments, severance charges and impairments of long-lived assets.
(4)
Adjusted EBITDA for the stimulated services segment included an intercompany supply commitment charge of $8.7 million because this segment did not purchase the minimum contractual commitment of chemistry products from Flotek.
(5)
Total assets for the stimulation services segment includes our investment in BPC, which was $24.9 million and $23.4 million as of March 31, 2024 and December 31, 2023, respectively. The gains and losses associated with this investment are not included in our segment profit measure of adjusted EBITDA.
The following table reconciles Adjusted EBITDA for our reportable segments to net income:
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Three Months Ended March 31, |
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2024 |
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2023 |
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Adjusted EBITDA of reportable segments |
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$ |
159.7 |
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$ |
247.1 |
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Interest expense, net |
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(37.6 |
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(34.9 |
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Depreciation, depletion and amortization |
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(112.8 |
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(110.3 |
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Income tax expense |
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(0.3 |
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(6.7 |
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Gain (loss) on disposal of assets, net |
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1.4 |
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(1.5 |
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Gain (loss) on extinguishment of debt |
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(0.8 |
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4.1 |
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Acquisition earnout adjustment |
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— |
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3.0 |
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Stock-based compensation |
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(2.1 |
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(2.9 |
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Stock-based compensation related to deemed contributions |
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— |
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(10.2 |
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Provision for credit losses, net of recoveries |
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— |
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(0.1 |
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Severance charges |
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(0.7 |
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— |
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Acquisition and integration costs |
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(0.2 |
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(12.3 |
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Litigation expenses and accruals for legal contingencies |
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(4.8 |
) |
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(5.8 |
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Unrealized gain (loss) on investments, net |
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1.2 |
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(9.7 |
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Net income |
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$ |
3.0 |
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$ |
59.8 |
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