Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, $0.01 par value

RNGR

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule ~~12b‑2~~12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule ~~12b‑2~~12b-2 of the Exchange Act). Yes ☐ No ☒

As of July ~~24, 2019,~~22, 2020, the registrant had ~~8,717,026~~8,479,668 shares of Class A Common Stock and 6,866,154 shares of Class B Common Stock outstanding.

RANGER ENERGY SERVICES, INC.

PART I – FINANCIAL INFORMATION

~~ITEM~~Item 1. Financial Statements

RANGER ENERGY SERVICES, INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share amounts)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

RANGER ENERGY SERVICES, INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except share and per share amounts)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

RANGER ENERGY SERVICES, INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except share amounts)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

RANGER ENERGY SERVICES, INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

RANGER ENERGY SERVICES, INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Organization and Business Operations

~~Organization~~Business

Ranger Energy Services, Inc. (“~~Ranger”~~Ranger, Inc.,” “Ranger,” or the “Company”) is a provider of onshore high specification (“high-spec”) well service rigs and complementary services in the United States. The Company also provides an extensive range of well site services to leading U.S. exploration and production (“E&P”) companies that are fundamental to establishing and maintaining the flow of oil and natural gas throughout the productive life of a well.

The Company offers services that consist of well completion support, workover, well maintenance, wireline, fluid management, other complementary services, as well as installation, commissioning and operating of modular equipment, which are conducted in 3 reportable segments, as follows:

•High Specification Rigs. Provider of high-spec well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well.

•Completion and Other Services. Provider of wireline completion services necessary to bring a well on production and other ancillary services often utilized in conjunction with the high-spec rig services to enhance the production of a well.

•Processing Solutions. Provider of proprietary, modular equipment for the processing of natural gas.

The Company’s operations take place in most of the active oil and natural gas basins in the United States, including the Permian Basin, Denver-Julesburg Basin, Bakken Shale, Eagle Ford Shale, Haynesville Shale, Gulf Coast, South Central Oklahoma Oil Province and Sooner Trend Anadarko Basin Canadian and Kingfisher Counties plays.

Ranger, Inc. was incorporated as a Delaware corporation in February 2017. Ranger, Inc. is a holding company, the sole material assets of which consist of membership interests in RNGR Energy Services, LLC, a Delaware limited liability company (“Ranger LLC”). Ranger LLC owns all of the outstanding equity interests in Ranger Energy Services, LLC (“Ranger Services”) and Torrent Energy Services, LLC (“Torrent Services”), the subsidiaries through which it operates its assets. Ranger LLC is the sole managing member of Ranger Services and Torrent Services, and is responsible for all operational, management and administrative decisions relating to Ranger Services and Torrent Services’ business and consolidates the financial results of Ranger Services and Torrent Services and their subsidiaries.

~~Reorganization~~Recent Events

~~On August 10, 2017, Ranger Services, entered into~~The outbreak of the novel coronavirus (“COVID-19”) has spread across the globe and has been declared a Master Reorganization Agreement with, among others, Ranger LLC, Ranger Energy Holdings LLC, Ranger Energy Holdings II, LLC, Torrent Energy Holdings, LLC and Torrent Energy Holdings II, LLC. In connection with the Master Reorganization Agreement, an aggregate of $3.0 million to be paidpublic health emergency by the ~~Company~~World Health Organization and a National Emergency by the President of the United States. The COVID-19 pandemic has resulted, and is likely to ~~CSL Energy Holdings I, LLC, a Delaware limited liability company~~continue to result, in significant economic disruption and ~~CSL Energy Holdings II, LLC, a Delaware limited liability company, on or prior~~has, and is likely to continue to, adversely affect the ~~18-month anniversary~~operations of the Company’s ~~initial public offering (the “Offering”)~~business, as the significantly reduced global and national economic activity has resulted in atreduced demand for oil and natural gas. Federal, state and local governments mobilized to implement containment mechanisms to minimize impacts to their populations and economies. Various containment measures, which includes the ~~Company’s option, cash, shares~~quarantining of ~~Class A Common Stock (with such shares to be valued based on the greater of the price of the Class A Common Stock~~cities, regions and countries, while aiding in the ~~Offering~~prevention of further outbreak, have resulted in a severe drop in general economic activity and a 30-day weighted average price) or a combination thereof (included within Other current liabilities on the accompanying consolidated balance sheet as of December 31, 2018). During the three and six months ended June 30, 2019, the Company settled the $3.0 million liability. See Note 9 — Equity for further details of the Company’s equity position.

~~The Company is one of the largest providers of high specification (“high‑spec”) well service rigs and associated services~~resulting decrease in the United States, with a focus on technically demanding unconventional horizontal well completion and production operations. We believe that our fleet of 141 well service rigs is among the newest and most advanced in the industry and, based on our historical rig utilization and feedback from our customers, we believe that we are an operator of choice for U.S. onshore exploration and production (“E&P”) companies that require completion and production services at increasing lateral lengths. Our high‑specification well service rigs facilitate operations throughout the lifecycle of a well, including (i) completion services, such as milling out composite plugs after the hydraulic fracturing process and the installation of downhole production equipment; (ii) workover, including retrieval and replacement of existing production tubing; (iii) well maintenance, including replacement of downhole artificial lift components; and (iv) decommissioning, such as plugging and abandonment operations. The Company also provides Completion and Other Services, which provides services necessary to bring and maintain a well on production and primarily includes (i) wireline perforating and pumpdown services and (ii) snubbing services often utilized in conjunction with our high-spec rigs to convey equipment in and out of a well during completion and workover activities. The Company provides rental equipment, including well control packages, hydraulic catwalks and other equipment that are often deployed with our well service rigs.energy demand. In addition, the ~~Company owns~~global economy has experienced a significant disruption to global supply chains. The extent of the COVID-19 outbreak on the Company’s operational and ~~operates a fleet~~financial performance will continue to depend on certain developments, including the duration and spread of ~~proprietary, modular natural gas processing equipment that processes rich natural gas streams~~the outbreak and its continued impact on customer activity and third-party providers. The direct impact to the Company’s operations began to take effect at the ~~wellhead or central gathering points. The Company has operations in most~~close of the ~~active~~first quarter ended March 31, 2020, and continued through the issuance of these condensed consolidated financial statements. The full extent to which the COVID-19 outbreak may affect the Company’s financial conditions, results of operations or liquidity subsequent to the issuance of these condensed consolidated financial statements is uncertain. At the time of this filing, cases of COVID-19 in the U.S. were increasing rapidly, particularly in Texas, where we conduct significant operations.

The severe drop in economic activity, travel restrictions and other restrictions due to COVID-19 have had a significant negative impact on the demand for oil and gas. In addition to the impact of the COVID-19 outbreak, in March 2020, OPEC, Russia and certain other oil producing states, commonly referred to as “OPEC Plus,” failed to agree on a plan to cut production of oil and natural gas. Subsequently, Saudi Arabia announced plans to increase production to record levels and reduce the prices at which they sell oil and, in turn, Russia responded with threats to also increase production. Collectively, these events created an unprecedented global oil and natural gas ~~basins~~supply and demand imbalance, reduced global oil and natural gas storage capacity, caused oil prices to decline significantly and resulted in continued volatility in oil, natural gas and NGLs prices into the second

quarter of 2020. On April 12, 2020, OPEC Plus agreed to cut oil production by 9.7 million barrels per day in May and June 2020; however, on July 15, 2020, OPEC Plus agreed to increase production by 1.6 million barrels per day starting in August 2020. With the combined effects of the increased production levels earlier in 2020, the recent increase in production and the reduction in demand caused by COVID-19, the global oil and natural gas supply and demand imbalance persists and continues to have a significant adverse effect on the oil and gas industry.

Due to the significantly reduced demand for oil and natural gas as a result of the COVID-19 pandemic and the current oversupply of oil and natural gas in the ~~United States,~~market, available storage and capacity for the Company’s customers’ production may be limited or completely unavailable in the future, which may further negatively impact the price of oil.

The Company cannot predict whether, or when, the global supply and demand imbalance will be resolved or whether, or when, oil and natural gas production and economic activities will return to normalized levels. In the absence of additional reductions to global production, oil, natural gas and NGLs prices could remain at current levels, or decline further, for an extended period of time.

Factors deriving from the COVID-19 response, as well as the oil oversupply, that have or may negatively impact sales, liquidity and gross margins in the future include, but are not limited to: limitations on the ability of the Company’s customers to conduct business, which would result in a decrease in demand for services and lower utilization of the Company’s assets; limitations on the ability of suppliers to provide materials or equipment, limitations on the ability of the Company’s employees to perform their work due to illness caused by the pandemic or local, state or federal orders requiring employees to remain at home; reduction of capital expenditures and discretionary spend; and limitations on the ability of customers to pay us on a timely basis. If prolonged, such factors may also negatively affect the carrying values of the Company’s property and equipment and intangible assets. At the close of the first quarter, the Company initiated cost reductions throughout the organization, including a reduction in the ~~Permian Basin,~~workforce and salary reductions. Additionally, various other operational, travel and organizational expense reductions will continue to manage costs to preserve liquidity through the ~~Denver‑Julesburg Basin,~~downturn. We believe these actions will provide sufficient liquidity to finance our operations for twelve months post issuance of these consolidated financial statements. We will continue to actively monitor the ~~Bakken Shale,~~situation and may take further actions that alter business operations as may be required by federal, state or local authorities, or that we determine are in the ~~Eagle Ford Shale,~~best interests of the ~~Haynesville Shale,~~Company’s employees, customers and stakeholders.

On March 12, 2020, the ~~Gulf Coast~~Company received a non-binding offer from CSL Capital Management, L.P. (“CSL”) and Bayou Holdings, proposing to acquire all of the ~~South Central Oklahoma Oil Province~~outstanding shares of common stock of the Company not owned by CSL, Bayou Holdings and ~~Sooner Trend Anadarko Basin Canadian~~T. Rowe Price Associates, Inc. in a cash merger transaction for $6.00 per share (the “Take Private Proposal”). On May 11, 2020, CSL announced their decision to not pursue the possible acquisition of shares outstanding of Ranger at this time and ~~Kingfisher counties plays.~~abandoned the Take Private Proposal.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The consolidated balance sheet as of December 31, ~~2018~~2019 has been derived from audited financial statements and the unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) for interim financial information and the Securities and Exchange Commission’s (the “SEC”) instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain notes and other information have been condensed or omitted. The unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the results of operations for the interim periods. These interim financial statements should be read in conjunction with the consolidated financial statements and related notes for the years ended December 31, ~~2018~~2019 and ~~2017,~~2018, included in the Annual Report filed on Form 10-K for the ~~years~~year ended December 31, ~~2018 and 2017~~2019 (the “Annual Report”). Interim results for the periods presented may not be indicative of results that will be realized for future periods.

The Company has made certain reclassifications to our prior period operating revenue, cost of sales and general and administrative amounts due to the change in reportable segments whereby our High Specification Rig and Completion and Other Services segments were bifurcated from our legacy Well Services segment as a result of our fourth quarter 2018 operating segment changes. None of these reclassifications have an impact on our condensed consolidated operations results, cash flows or financial position.

~~The Company has made certain reclassifications to our prior period Additional Paid-In Capital and Accumulated Deficit amounts.~~ ~~None of these reclassifications have an impact on our condensed consolidated operations results, cash flows or financial position.~~

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in Note 2 — Summary of Significant Accounting Policies of the Annual Report. There have been no changes in such policies or the application of such policies during the six months ended June 30, ~~2019, except as discussed in Note 7 — Leases and below.~~2020.

The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Management uses historical and other pertinent information to determine these estimates. Actual results could differ from such estimates. Areas where critical accounting estimates are made by management include:

•Depreciation and amortization of property ~~plant~~ and equipment and intangible assets;

•Impairment of property ~~plant~~ and equipment ~~goodwill~~ and intangible assets;

~~Allowance for doubtful accounts;~~•Revenue recognition;

~~Fair value of assets acquired~~•Income taxes; and ~~liabilities assumed in an acquisition; and~~

~~Equity‑based~~•Equity-based compensation.

Emerging Growth Company ~~status~~Status and Smaller Reporting Company Status

The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The Company will remain an emerging growth company until the earlier of (1) the last day of its fiscal year (a) following the fifth anniversary of the completion of ~~the Offering,~~its initial public offering (“IPO”), (b) in which its total annual gross revenue is at least $1.07 billion, or (c) in which the Company is deemed to be a large accelerated filer, which means the market value of the Company’s common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of its most recently completed second fiscal quarter, or (2) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. The Company has irrevocably opted out of the extended transition period and, as a result, the Company will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

The Company is also a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act. Smaller reporting company means an issuer that is not an investment company, an asset-back issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that has (i) market value of common stock held by non-affiliates of less than $250 million; or (ii) annual revenues of less than $100 million and either no common stock held by non-affiliates or a market value of common stock held by non-affiliates of less than $700 million. Smaller reporting company status is determined on an annual basis.

New Accounting Pronouncements

Recently ~~Adopted~~Issued Accounting Standards

In ~~February~~June 2016, the Financial Accounting Standards Board (“FASB”) issued ~~Accounting Standards Update (“ASU”) 2016‑02,~~ ~~Leases~~ASU 2016-13, Financial Instruments - Credit Losses, ~~amending~~which replaces the incurred loss impairment methodology to reflect expected credit losses. The amendment requires the measurement of all expected credit losses for financial assets held at the reporting date to be performed based on historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2022, with early adoption permitted. The Company is evaluating the effect of this accounting ~~for leases. Under~~standard on its consolidated financial statements.

In March 2020, the ~~new provisions, all lessees will report a right‑of‑use asset and a liability for~~FASB issued ASU 2020-04, Reference Rate Reform - Facilitation of the ~~obligation to make payments for all leases with the exception~~Effects of those leases with a term of 12 months or less. All other leases will fall into one of two categories: (i) a financing lease or (ii) an operating lease. Lessor accounting remains substantially unchanged with the exception that no leases entered into after the effective date will be classified as leveraged leases.

~~Effective January 1, 2019, the Company has adopted ASU 2016-02 and elected the following practical~~Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for accounting ~~policy elections for recognition, measurement~~contracts, hedging relationships and ~~presentation:~~

The Company did not apply the practical expedient to utilize hind-sight in applying the standard. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease, discounted at our annual incremental borrowing rate (“IBR”). ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments are excluded from the ROU asset and lease liabilities and are recognized in the period in which the obligation for those payments are incurred. For certain leases, where variable lease payments are incurred and relate primarily to common area maintenance, in substance fixed payments are included in the ROU asset and lease liability. For those leases that do not provide an implicit rate, we use our IBR based on the information available at the lease commencement date in determining the present value of lease payments. ROU assets also include any lease payments made and exclude lease incentives. Lease terms do not include options to extend or terminate the lease, as management does not consider them reasonably certain to exercise.applied through December 31, 2022. The Company has ~~a related party lease, which is included within the ROU asset and liability. Please see Note 14 — Related Party Transactions~~not made any contract modifications as of the ~~Annual Report for further discussion~~date of ~~the Company’s related parties.~~

~~As of January 1, 2019, the Company recognized an operating lease right-of-use asset and corresponding liability of $8.3 million on our condensed consolidated Balance Sheet. See~~ ~~Note 7 — Leases, for further details of the Company’s operating and financing leases.~~

~~Recently Issued Accounting Standards~~this report to transition to a different reference rate, however it will consider this guidance as future modifications are made.

With the exception of the ~~standard~~standards above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to the Company’s condensed consolidated financial statements.

Note 3 — ~~Acquisitions~~

~~MVCI Acquisition~~

On January 31, 2018, the Company closed on the acquisition of MVCI Energy Services (“MVCI Acquisition”) for a total consideration of $4.0 million in cash. The MVCI Acquisition assets were primarily engaged in well testing services for its customers. The MVCI Acquisition is being accounted for as a business combination. The Company evaluated its purchase allocation and has reported $4.0 million on its consolidated balance sheets as property, plant and equipment. The pro forma results of operations for the MVCI Acquisition is not presented because the pro forma effects, individually and in the aggregate, are not material to the Company’s consolidated results of operations.

~~Note 4 —~~ Property ~~Plant~~ and Equipment, Net

Property ~~plant~~ and equipment, net include the following (in millions):

Estimated Useful Life (years) June 30, 2019 December 31, 2018
Machinery and equipment 5 - 30 $ 42.3
$ 42.0
Vehicles 3 - 5 18.8
17.9
Mechanical refrigeration units 30 21.8
20.9
Natural gas liquid storage tanks 15 5.9
5.9
High specification rigs 5 - 20 178.4
175.7
Other property, plant and equipment 3 - 30 16.1
12.7
Property, plant and equipment 283.3
275.1
Less: accumulated depreciation (68.7 ) (52.5 )
Construction in progress 13.1
7.2
Property, plant and equipment, net $ 227.7
$ 229.8


	Estimated Useful Life (years)	June 30, 2020		December 31, 2019
High specification rigs	20	$	128.2	$	127.2
High specification rigs machinery and equipment	5 - 10	40.7		38.3
Completion and other services machinery and equipment	5 - 10	56.5		55.8
Processing solutions machinery and equipment	3 - 30	45.9		40.8
Vehicles	3 - 15	23.0		25.9
Other property and equipment	5 - 25	10.6		10.1
Property and equipment		304.9		298.1
Less: accumulated depreciation		(100.3)		(85.5)
Construction in progress		2.0		6.3
Property and equipment, net		$	206.6	$	218.9

Depreciation expense was ~~$8.2~~$9.3 million and ~~$6.8~~$8.2 million for the three months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$16.5~~$18.0 million and ~~$12.7~~$16.5 million for the six months ended June 30, 2020 and 2019, ~~and 2018,~~ respectively.

~~Note 5 — Goodwill and Intangible Assets~~

During the ~~year~~three and six months ended ~~December 31, 2018,~~June 30, 2020, the Company noted a sustained ~~decrease~~decline in ~~the~~ stock price due to the reduced demand and oversupply of oil and natural gas, which was an indication that the fair value of ~~goodwill~~the Company’s long-lived assets could have fallen below ~~its~~their carrying ~~amount.~~values. As a result, ~~the Company~~an impairment analysis was performed ~~a quantitative~~and it was determined that no impairment ~~test~~existed. Please see “Note 1 — Organization and ~~determined the goodwill was impaired. The Company estimated the implied fair value~~Business Operations—Recent Events” for additional information regarding reduced demand and oversupply of oil and “Part I, Item 8. Financial Statements and Supplementary Data — Note 2 — Summary of Significant Accounting Policies — Significant Accounting Policies — Long-Lived Asset Impairment” of the ~~goodwill using a variety~~Annual Report for the policy of valuation methods, including the income and market approaches. During the year ended December 31, 2018, the Company recognized an impairment loss of $9.0 million associated with the remaining balance of our goodwill. The estimate of fair value required the use of significant unobservable inputs, representative of a Level 3 fair value measurement.testing long-lived assets for impairment.

Note 4 — Intangible Assets

Definite lived intangible assets are comprised of the following (in millions):

Amortization expense was $0.2 million and $0.2 million for the three months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively and ~~$0.3~~$0.4 million and ~~$0.4~~$0.3 million for the six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. Amortization expense for the future periods is expected to be as follows (in millions):


For the twelve months ending June 30,	Amount
2021	$	0.7
2022	0.7
2023	0.7
2024	0.7
2025	0.8
Thereafter	5.3
Total	$	8.9

For the twelve months ending June 30, Amount
2020 $ 0.7
2021 0.7
2022 0.7
2023 0.7
2024 0.8
Thereafter 6.1
$ 9.7

Note 65 — Accrued Expenses

Accrued expenses include the following (in millions):


	June 30, 2020		December 31, 2019
Accrued payables	$	1.9	$	8.3
Accrued compensation	4.3		6.3
Accrued taxes	1.6		1.8
Accrued insurance	0.2		2.0
Accrued expenses	$	8.0	$	18.4

June 30, 2019 December 31, 2018
Accrued payables $ 7.1
$ 5.6
Accrued compensation 10.2
6.2
Accrued taxes 2.0
2.9
Accrued insurance 0.5
3.8
Accrued expenses $ 19.8
$ 18.5

The Company has operating leases, primarily for real estate and equipment, with terms that vary from ~~less than~~ 12 months ~~included in Short-term leases costs in the table below,~~ to ~~eight~~seven years, included in ~~Operating~~operating lease costs in the table below. The operating leases are included in ~~Operating lease~~operating leases, right-of-use assets, ~~Other~~other current liabilities and ~~Operating lease~~operating leases, right-of-use obligations in ~~our~~the Condensed Consolidated Balance ~~Sheet.~~Sheets.

Lease costs associated with yard and field offices are included in cost of services and executive offices are included in General and administrative costs in the Condensed Consolidated Statements of Operations. Lease costs and other information related to operating leases for the three and six months ended June 30, 2020 and 2019, isare as follows (in millions):

Aggregate future minimum lease payments under operating leases are as follows (in millions):

For the twelve months ending June 30, Total
2020 $ 2.7
2021 1.4
2022 0.8
2023 0.7
2024 0.7
Thereafter 2.6
Total future minimum lease payments 8.9
Less: amount representing interest (2.2 )
Present value of future minimum lease payments 6.7
Less: current portion of operating lease obligations (2.1 )
Long-term portion of operating lease obligations $ 4.6

~~Aggregate future minimum rental payments as of December 31, 2018, were as follows (in millions):~~

The Company leases certain assets, primarily automobiles, under finance leases ~~which~~with terms that are generally three to ~~five~~four years. The assets and liabilities under finance leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the assets. The assets are amortized over the shorter of the estimated useful lives or over the lease term. The finance leases are included in Property and equipment, net, Finance lease obligations, current portion and Finance lease obligations in ~~our~~the Condensed Consolidated Balance ~~Sheet.~~Sheets.

Lease costs and other information related to finance leases for the three and six months ended June 30, 2020 and 2019, isare as follows (in millions):

Aggregate future minimum lease payments under finance leases are as follows (in millions):


For the twelve months ending June 30,	Total
2021	$	4.3
2022	1.6
2023	0.6
2024	0.1
Total future minimum lease payments	6.6
Less: amount representing interest	(0.3)
Present value of future minimum lease payments	6.3
Less: current portion of finance lease obligations	(4.0)
Long-term portion of finance lease obligations	$	2.3

For the twelve months ending June 30, Total
2020 $ 5.1
2021 3.7
2022 1.4
2023 0.2
Thereafter —
Total future minimum lease payments 10.4
Less: amount representing interest (0.8 )
Present value of future minimum lease payments 9.6
Less: current portion of finance lease obligations (4.8 )
Long-term portion of finance lease obligations $ 4.8

~~Aggregate future minimum rental payments as of December 31, 2018, were as follows (in millions):~~

For the year ending December 31, Total
2019 $ 5.0
2020 4.6
2021 2.1
2022 0.2
2023 0.1
Thereafter —
Total future minimum lease payments 12.0
Less: amount representing interest (1.0 )
Present value of future minimum lease payments 11.0
Less: current portion of capital lease obligations (4.4 )
Total capital lease obligations, less current portion $ 6.6

The aggregate carrying amounts, net of issuance costs, of the Company’s debt consists of the following (in millions):

In connection with the ~~Company’s initial public offering (the “Offering”)~~IPO and the ESCO ~~Acquisition,~~Leasing, LLC (“ESCO”) acquisition, both of which occurred on August 16, 2017, the Company issued $7.0 million of ~~seller’s notes~~Seller’s Notes as partial consideration for the ESCO ~~Acquisition.~~acquisition. These notes ~~include~~included a note for $1.2 million, which was paid in August 2018 and a note for $5.8 million, ~~due in February 2019.~~which was settled during the six months ended June 30, 2020. Both of these notes ~~bear~~bore interest at 5.0%, payable quarterly until their respective maturity dates.

During the year ended December 31, 2018, the Company provided notice to ESCO ~~Leasing, LLC~~ that the Company sought to be indemnified for breach of contract. The Company exercised its right to stop payments of the remaining principal balance of $5.8 million on the Seller’s Notes and any unpaid interest, pending resolution of certain indemnification claims. Interest on the outstanding principal balance was accrued through the maturity date of the Note Payable. During the six months ended June 30, 2020, the Company paid $3.8 million to settle the note and any unpaid interest, in full, and recognized a gain on the retirement of debt of $2.1 million, which is included in the Condensed Consolidated Statement of Operations within General and administrative expenses. Please see Note 12 — Commitments and Contingencies for further details.

On August 16, 2017, ~~in connection with the Offering,~~ Ranger Energy Services, LLC, (“Ranger, LLC”) entered into a $50.0 million senior unsecured revolving credit facility (the “Credit Facility”) by and among certain of Ranger’s subsidiaries, as borrowers, each of the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent (the “Administrative Agent”). The Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the value of the Company’s eligible accounts receivable less certain reserves.

~~The Credit Facility permits extensions of credit up to the lesser of $50.0 million and a borrowing base that~~ Such calculation is ~~determined by calculating the amount equal to the sum of (i) 85% of the Eligible Accounts (as defined~~submitted, in the ~~Credit Facility), less the amount, if any,~~form of the Dilution Reserve (as defined in the Credit Facility), minus (ii) the aggregate amount of Reserves (as defined in the Credit Facility), if any, established by the Administrative Agent from time to time pursuant to the Credit Facility. The borrowing base is calculated on a monthly basis pursuant to a borrowing base certificate, ~~delivered by the Company~~ to the Administrative ~~Agent.~~

~~Borrowings~~Agent within ten business days of the preceding month end. The Credit Facility includes cash dominion provisions that permits the Administrative Agent to sweep cash daily from the Company’s bank accounts into an account of the Administrative Agent to repay the Company’s obligations under the Credit Facility. Such dominion is triggered when excess availability is less than the greater of $6.25 million and 12.5% of the lesser of (x) the maximum revolver amount and (y) the borrowing base as of such date of determination. When the Company is subject to dominion, for 30 consecutive days it is required to either (a) maintain excess availability in excess of the greater of $6.25 million and 12.5% of the lesser of (x) the maximum revolver amount and (y) the borrowing base as of such date of determination and no event of default has occurred and is continuing or (b) have no revolver drawings and available cash of at least $20.0 million for dominion to revert back to the Company. During the three months ended March 31, 2020, the Company borrowed against the Credit Facility causing dominion to revert to the Administrative Agent, however after the 30 consecutive day period, as defined above, dominion reverted back to the Company in April 2020. The borrowings under the Credit Facility, ~~bear interest, at~~and related issuance costs, were included in long-term debt, net in the ~~Company’s election, at either~~Condensed Consolidated Balance Sheets as of June 30, 2020, as the (a) one-, two-, three- or six-month LIBOR or (b) the greatest of (i) the federal funds rate plus ½%, (ii) the one-month LIBOR plus 1% and (iii) the Administrative Agent’s prime rate (the “Base Rate”), in each case plus an applicable margin, and interest shall be payable monthly in arrears. Company was not subject to dominion. The Credit Facility is scheduled to mature on August 16, 2022.

The applicable margin for the LIBOR loans ranges from ~~1.50%~~1.5% to ~~2.00%~~2.0% and the applicable margin for Base Rate loans ranges from ~~0.50%~~0.5% to ~~1.00%~~1.0%, in each case, depending on ~~the Company’s~~Ranger LLC’s average excess availability under the Credit Facility. The applicable margin for the LIBOR ~~loans~~loan was 1.75% and the applicable margin for Base Rate loans ~~were~~was 0.75% as of June 30, ~~2019. During~~2020. The weighted average interest rate for the continuance of a bankruptcy event of default, automatically and during the continuance of any other default, upon the Administrative Agent’s or the required lenders’ election, all outstanding amountsborrowings under the Credit Facility ~~bears interest at 2.00% plus~~was 3.1% for the ~~otherwise applicable interest rate. The~~six months ended June 30, 2020.

Under the Credit Facility, ~~is scheduled to mature~~the total loan capacity was $15.8 million, which was based on ~~August 16, 2022 and has~~ a ~~weighted average interest rate of 4.7%~~borrowing base certificate in effect as of June 30, ~~2019.~~

In addition, the Credit Facility restricts the Company’s ability to make distributions on, or redeem or repurchase, its equity interests, except for certain distributions, including distributions of cash so long as, both at the time of the distribution and after giving effect to the distribution, no default exists under the Credit Facility and either (a) excess availability at all times during the preceding 90 consecutive days, on a pro forma basis and after giving effect to such distribution, is not less than the greater of (1) 22.5% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (2) $10.0 million or (b) if the fixed charge coverage ratio is at least 1.0x on a pro forma basis, excess availability at all times during the preceding 90 consecutive days, on a pro forma basis and after giving effect to such distribution, is not less than the greater of (1) 17.5% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (2) $7.0 million. If the foregoing threshold under clause (b) is met, the Company may not make such distributions (but may make certain other distributions, including under clause (a) above) prior to the earlier of the date that is (a) 12 months from closing or (b) the date that the Company’s fixed charge coverage ratio is at least 1.0x for two consecutive quarters. The Credit Facility generally permits the Company to make distributions required under the Tax Receivable Agreement (‘‘TRA’’), but a ‘‘Change of Control’’ under the TRA constitutes an event of default under the Credit Facility, and the Credit Facility does not permit the Company to make payments under the TRA upon acceleration of its obligations thereunder unless no event of default exists or would result therefrom and the Company has been in compliance with the fixed charge coverage ratio for the most recent 12-month period on a pro forma basis. The Credit Facility also requires the Company to maintain a fixed charge coverage ratio of at least 1.0x if the Company’s liquidity is less than $10.0 million until the Company’s liquidity is at least $10.0 million for 30 consecutive days.2020. The Company ~~is not to be subject to a fixed charge coverage ratio if it has no drawings under the Credit Facility and has at least $20.0 million~~had outstanding borrowings of ~~qualified cash.~~

~~The Credit Facility contains events of default customary for facilities of this nature, including, but not limited, to:~~

Upon the occurrence and during the continuation of an event of default, subject to the terms and conditions of the Credit Facility, the lenders are able to declare any outstanding principal of the Credit Facility debt, together with accrued and unpaid interest, to be immediately due and payable and exercise other remedies.

~~As of June 30, 2019, the Company has borrowed $26.3 million under the Credit Facility. The Company has a borrowing capacity of approximately $40.3~~$5.0 million under the Credit Facility, ~~with approximately $14.0~~leaving a residual $10.8 million available for borrowings as of June 30, ~~2019.~~2020. The Company made a cash payment of $5.0 million on the Credit Facility in July 2020, such that there were 0 borrowings under the Credit Facility as of July 22, 2020. The Company was in compliance with the Credit Facility covenants as of June 30, ~~2019.~~

2020. The Company capitalized fees of $0.7 million associated with the Credit Facility, which are included in the ~~unaudited interim condensed consolidated balance sheets~~Condensed Consolidated Balance Sheets as a discount to the Credit ~~Facility, and~~Facility. Such fees will be amortized through ~~maturity.~~maturity and are included in Interest Expense, net on the Condensed Consolidated Statement of Operations. Unamortized debt issuance costs as of June 30, ~~2019 approximated $0.5~~2020 was $0.4 million.

Encina Master Financing and Security Agreement (“Financing Agreement”)

On June 22, 2018, the Company entered into a ~~Master~~ Financing ~~and Security~~ Agreement with Encina Equipment Finance SPV, LLC (the “Lender”). The amount available to be provided by the Lender to the Company under the Financing Agreement was contemplated to be not less than $35.0 million, and not to exceed $40.0 million. The first financing was required to be in an amount up to $22.0 million, ~~or $21.3 million, net of expenses,~~ which was used by the Company to acquire certain capital equipment. Subsequent to the first financing, the Company borrowed an additional ~~$18.0 million, or~~ $17.8 million, net of expenses and in two tranches, under the Financing Agreement. WeThe Company utilized the additional net proceeds to acquire certain capital equipment. The Financing Agreement is secured by a lien on certain ~~high specification~~high-spec rig assets. AtAs of June 30, ~~2019,~~2020, the aggregate principal balance outstanding ~~was $32.7 million~~ under the Financing Agreement ~~with a weighted average interest rate~~was $22.7 million. The total borrowings under the Financing Agreement were borrowed in three tranches, where the amounts outstanding are payable ratably over 48 months from the time of ~~10.5%.~~each borrowing. The three tranches mature in July 2022, November 2022 and January 2023.

Borrowings under the Financing Agreement bear interest at a rate per annum equal to the sum of 8.0% plus ~~the London Interbank Offered Rate (“LIBOR”),~~LIBOR, which was ~~2.4%~~1.5% as of June 30, ~~2019. The~~2020. Under the terms of the Financing Agreement, in no event will LIBOR fall below 1.5% and it requires ~~that~~ the Company to maintain a leverage ~~ratios~~ratio of ~~2.50~~2.5 to ~~1.00 as of June 30, 2019 and for periods thereafter.~~1.0. The Company was in compliance with the covenants under the Financing Agreement as of June 30, ~~2019.~~2020.

The Company capitalized fees of $0.9 million associated with the Financing Agreement, which are included onin the ~~unaudited interim condensed consolidated balance sheets~~Condensed Consolidated Balance Sheets as a discount to the long term ~~debt, and~~debt. Such fees will be amortized through ~~maturity.~~maturity and are included in Interest Expense, net in the Condensed Consolidated Statements of Operations. Unamortized debt issuance costs as of June 30, ~~2019 approximated $0.7~~2020 was $0.5 million.

Debt Obligations and Scheduled Maturities

As of June 30, ~~2019,~~2020, aggregate future principal ~~repayments~~payments of total debt ~~for the next five years~~ are as follows (in millions):


For the twelve months ending June 30,	Total
2021	$	10.0
2022	15.0
2023	2.7
Total	$	27.7

For the twelve months ending June 30, Total
2020 $ 15.8
2021 10.0
2022 36.3
2023 2.7
Total $ 64.8

Equity-Based Compensation

~~Time-Based Units~~In 2017, the Company adopted the Ranger Energy Services, Inc. 2017 Long Term Incentive Plan (the “2017 Plan”). The Company has granted shares of restricted stock (“restricted shares”) and performance-based restricted stock units (“performance stock units”) under the 2017 Plan.

Restricted Stock Awards

During the three and six months ended June 30, 2020, the Company granted 465,304 restricted shares with an aggregate value of $2.0 million. During the six months ended June 30, 2019, ~~and 2018 there were~~the Company granted 495,750 ~~and 498,302~~ restricted shares ~~granted, respectively. The~~with an aggregate value of ~~awards granted during six months ended June 30, 2019 and 2018 was~~ $3.9 ~~million and $4.1 million, respectively.~~million. As of June 30, ~~2019,~~2020, there was an aggregate ~~$5.6~~$4.5 million of unrecognized expense related to restricted shares issued which is expected to be recognized over a weighted average period of ~~2.2~~2.0 years.

Performance Stock Units

The performance criteria applicable to performance stock units that have been granted by the Company are based on relative total shareholder return, which measures the Company’s total shareholder return as compared to the total shareholder return of a designated peer group, and absolute total shareholder return. Generally, the performance stock units are subject to a three-year performance period.

During the three and six months ended June 30, 2020, the Company granted 121,262 target shares of market based performance stock units at a relative and absolute grant date fair value of approximately $6.33 per share and $3.62 per share, respectively, which are expected to vest on April 3, 2023. During the six months ended June 30, 2019, the Company granted 105,920 target shares of market based performance ~~restricted~~ stock units at a relative and absolute grant date fair value of approximately $11.96 per share and $9.50 per share, respectively, which are expected to ~~certain employees. The market based performance restricted stock units cliff~~ vest on March 21, 2022. As defined in the LTIP, the performance criteria applicable to the performance awards is measured at a relative and absolute shareholder return, which measures the Company’s total shareholder return as compared to the total shareholder return of the defined peer group.

As of June 30, ~~2019,~~2020, there was ~~approximately $1.0~~an aggregate $1.3 million of unrecognized compensation cost related to ~~shares of market based~~ performance ~~restricted~~ stock units which is expected to be recognized over a weighted average period of ~~2.5~~1.9 years.

During the ~~three and~~ six months ended June 30, ~~2018,~~2020, the Company ~~granted 79,430 target~~repurchased 344,827 shares of market based performance restricted stock units at a relative and absolute grant date fair value of approximately $8.59 per share and $4.38 per share, respectively, to certain employees. The market based performance restricted stock units cliff vest on December 31, 2020. As defined in the LTIP, the performance criteria applicable to the performance awards is measured at a relative and absolute shareholder return, which measures the Company’s total shareholder return as compared to the total shareholder return of the defined peer group. As of June 30, 2019, there was $0.3 million of unrecognized compensation cost related to shares of market based performance restricted stock units which is expected to be recognized over a weighted average period of 1.5 years.

~~Share Issuance to Related Party~~

In connection with the Master Reorganization Agreement, an aggregate of $3.0 million (included within other current liabilities on the accompanying consolidated balance sheet as of December 31, 2018) was settled by the Company and CSL Energy Holdings I, LLC and CSL Energy Holdings II, LLC during the three and six months ended June 30, 2019. At the Company’s discretion the liability was settled with the issuance of 206,897 Class A Common ~~Stock. Refer to~~Stock for an aggregate $2.4 million in a privately negotiated transaction with ESCO. Please see Note 112 — ~~Organization~~Commitments and ~~Business Operations~~Contingencies for further details.

~~Share Repurchase Program~~

In June 2019, the Board of Directors approved a share repurchase program, authorizing the Company to purchase up to 10% of the outstanding Class A Common Stock held by non-affiliates, not to exceed 580,000 shares or $5.0 million in aggregate value. Share repurchases may take place from time to time on the open market or through privately negotiated transactions. The duration of the share repurchase program iswas 12 months and ~~may be~~could have been accelerated, suspended or discontinued at any time without notice. During the ~~three~~six months ended June 30, ~~2019,~~2020, the Company ~~did not repurchase any~~repurchased 93,063 shares of the Company’s Class A Common ~~Stock.~~Stock for an aggregate $0.7 million. Refer to “Part II, Item 2. Unregistered Sales of Securities” for further information.

Note 109 — Risk Concentrations

Customer Concentrations

For the three months ended June 30, 2020, two customers, EOG Resources and Concho Resources, Inc., accounted for 23% and 18%, respectively, of the Company’s consolidated revenues. For the six months ended June 30, 2020, the same two customers each accounted for 19% of the Company’s consolidated revenues. As of June 30, 2020, approximately 18% of the accounts receivable balance was due from these customers.

For the three months ended June 30, 2019, two customers, EOG Resources and Concho Resources, Inc., accounted for 17% and 15%, respectively, of the Company’s ~~total revenue.~~consolidated revenues. For the six months ended June 30, 2019, two customers, EOG Resources and Concho Resources, Inc., accounted for 17% and 14%, respectively, of the Company’s ~~total~~consolidated revenues. AtAs of June 30, 2019, approximately 19% of the accounts receivable balance was due from these customers.

For the three months ended June 30, 2018, one customer, EOG Resources, accounted for approximately 23% of the Company’s total revenues. For the six months ended June 30, 2018, one customer, EOG Resources, accounted for approximately 22%, of the Company’s total revenues. At June 30, 2018, approximately 18% of the accounts receivable balance was due from this customer.

Note 1110 — Income Taxes

The Company is a corporation and is subject to U.S. federal income tax. The effective U.S. federal income tax rate applicable to the Company for the six months ended June 30, 2020 and 2019 was 0.0% and ~~2018 was~~ 11.3% ~~and 7.3%~~, respectively. The Company is subject to the Texas Margin Tax that requires tax payments at a maximum statutory effective rate of 0.75% on the taxable margin of each taxable entity that does business in Texas.

As a result of the ~~Offering~~IPO and subsequent reorganization, the Company recorded a deferred tax asset; however, a full valuation allowance has been recorded to reduce the Company’s net deferred tax assets to an amount that is more likely than not to be realized and is based upon the uncertainty of the realization of certain federal and state deferred tax assets related to net operating loss carryforwards and other tax attributes. The Company currently believes that it is reasonably possible to achieve a three-year cumulative level of profitability within the next 12 months, and as early as the third quarter of 2019, which would enhance the ability to conclude that is it more likely than not that the deferred tax assets would be realized and support a release of a portion or substantially all of the valuation allowance. A release of the valuation allowance would result in the recognition of an increase in deferred tax assets and an income tax benefit in the period in which the release occurs, although the exact timing and amount of the release is subject to change based on numerous factors, including projections of future taxable income, which continues to be assessed based on available information each reporting period.

Total income tax expense for the three and six months ended June 30, 2020 and 2019 differed from amounts computed by applying the U.S. federal statutory tax rates to pre-tax income or loss primarily due to ~~the release of~~changes in the valuation allowance related to ~~current period~~ pre-tax book income or loss and the impact of permanent differences between book and taxable income or loss attributable to ~~non-controlling~~noncontrolling interest. The effective tax rate includes a rate benefit attributable to the fact that Ranger LLC operates as a limited liability company treated as a partnership for federal and state income tax purposes and as such, is not subject to federal and state income taxes, except for the State of Texas for which Ranger LLC files with the Company. Accordingly, the portion of earnings attributable to ~~non-controlling~~noncontrolling interest is subject to tax when reported as a component of the ~~non-controlling~~noncontrolling interest’s taxable income.

The Company is subject to the following material taxing jurisdictions: the United States and Texas. As of June 30, ~~2019,~~2020, the Company has no current tax years under audit. The Company remains subject to examination for federal income taxes and state income taxes for tax years 2018, 2017 and 2016.

The Company has evaluated all tax positions for which the statute of limitations remains open and believes that the material positions taken would more likely than not be sustained upon examination. Therefore, as of June 30, ~~2019,~~2020, the Company had not established any reserves for, nor recorded any unrecognized benefits related to, uncertain tax positions.

The Coronavirus, Aid, Relief and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws. For the three and six months ended June 30, 2020, there were no material tax impacts to the condensed consolidated financial statements as it relates to COVID-19 measures, although, the Company has deferred payroll tax payments through December 31, 2020. The Company will continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others.

Note 1211 — Earnings (Loss) per Share

Earnings (loss) per share is based on the amount of net income ~~or loss~~(loss) allocated to the shareholders and the weighted average number of shares outstanding during the period for each class of Common Stock. The numerator and denominator used to compute earnings (loss) per share were as follows (in millions, except share and per share data):

During the three and six months ended June 30, ~~2019 and 2018,~~2020, the Company excluded 0.9 million of equity-based awards and 6.9 million shares of Common Stock issuable upon conversion of the Company’s Class B Common Stock in calculating diluted loss per share, as the effect was anti-dilutive. ~~During the three and six months ended June 30, 2018, the Company excluded 0.5 million equity-based compensation awards in calculating diluted loss per share, as the effect was anti-dilutive.~~

Note 1312 — Commitments and Contingencies

From time to time, the Company is involved in various legal matters arising in the normal course of business. The Company does not believe that the ultimate resolution of these currently pending matters will have a material adverse effect on its condensed consolidated financial position or results of operations.

During the year ended December 31, 2018, the Company provided notice to ESCO ~~Leasing, LLC~~ that the Company sought to be indemnified for breach of contract. The Company exercised ~~the~~its right to stop payments of the remaining principal balance of $5.8 million on the Seller's Notes and any unpaid interest, pending resolution of certain indemnification claims. During the six months ended June 30, 2020, the Company paid an aggregate of $6.2 million to ESCO, of which $3.8 million was paid to settle the Seller’s Note, and any unpaid interest, and $2.4 million was paid to repurchase shares of the Company’s Class A Common Stock. Please see “Note 7 — Debt” and “Note 8 — Equity” for further details of the debt and equity settlements.

Note 1413 — Segment Reporting

Historically, the Company reported two segments, with corporate general and administrative expense categorized as other. During the fourth quarter of 2018, the Company bifurcated the legacy Well Services segment into High Specification Rigs and Completion and Other Services due to the modifications made to its internal reporting and responsibilities of those reporting to the Chief Operating Decision Maker (“CODM”). As a result, the financial information being provided to the CODM has been updated to align with our new internal organization, which resulted in a new reportable segment discussed further below.

The Company’s operations are all located in the United States and organized into ~~three~~3 reportable segments: High Specification Rigs, Completion and Other Services and Processing Solutions. ~~Our~~The reportable segments comprise the structure used by ~~our CODM~~the Chief Operating Decision Maker (“CODM”) to make key operating decisions and assess performance during the years presented in the accompanying condensed consolidated financial statements. ~~Our~~The CODM evaluates the segments’ operating performance based on multiple measures including Operating income, ~~(loss),~~ Adjusted EBITDA, rig hours and rig utilization. The tables below present the operating income ~~(loss)~~ measurement, as the Company believes this is most consistent with the principals used in measuring the condensed consolidated financial statements.

We have made certain reclassifications to our prior period operating revenue, cost of sales and general and administrative amounts due to the change in reportable segments whereby our High Specification Rig and Completion and Other Services segments were bifurcated from our legacy Well Services segment as a result of our fourth quarter 2018 operating segment changes. None of these reclassifications have an impact on our condensed consolidated operations results, cash flows or financial position.

The following is a description of each operating segment:

High Specification Rigs. The Company’s High Specification Rigs facilitate operations throughout the lifecycle of a well, including (i) completion, (ii) workover, (iii) well maintenance and (iv) decommissioning. The Company provides these advanced well services to ~~exploration & production (“~~E~~&P”)~~&P companies, particularly to those operating in unconventional oil and natural gas reservoirs and requiring technically and operationally advanced services. ~~Our high specification~~The Company’s high-spec rigs are designed to support growing U.S. horizontal well demands. In addition to the core well service rig operations, the Company offers a suite of complementary services.

Completion and Other Services. ~~Our~~ The Completion and Other Services segment provides wireline completion services necessary to bring ~~and maintain~~ a well on production and ~~consists primarily~~other ancillary services often utilized in conjunction with the high-spec rig services to enhance the production of ~~our wireline and snubbing lines of business along with other, non-rig well services, such as fluid management and well services-related equipment rentals.~~a well.

Processing Solutions. The Company provides a range of proprietary, modular equipment for the processing of rich natural gas streams at the wellhead or central gathering points in basins where drilling and completion activity has outpaced the development of permanent processing infrastructure.

Other. The Company incurs costs, indicated as Other, that are not allocable to any of the operating segments or lines of business and ~~includes mostly~~include corporate general and administrative expenses as well as depreciation of office furniture and fixtures and other corporate assets.

Segment information as of June 30, ~~2019~~2020 and December 31, ~~2018~~2019 and for the three and six months ended June 30, ~~2019~~2020 and ~~2018~~2019 is as follows (in millions):


	High Specification Rigs		Completion and Other Services		Processing Solutions		Other		Total
	Three Months Ended June 30, 2020
Revenues	$	11.4	$	17.7	$	1.6	$	—	$	30.7
Cost of services	10.1		13.3		0.4		—		23.8
Depreciation and amortization	5.2		2.6		1.3		0.4		9.5
Operating income (loss)	(3.9)		1.8		(0.1)		(5.9)		(8.1)
Interest expense, net	—		—		—		0.8		0.8
Net income (loss)	(3.9)		1.8		(0.1)		(6.7)		(8.9)
Capital expenditures	$	(0.3)	$	0.5	$	0.2	$	0.3	$	0.7
	Six Months Ended June 30, 2020
Revenues	$	46.3	$	61.0	$	4.4	$	—	$	111.7
Cost of services	40.0		45.0		1.9		—		86.9
Depreciation and amortization	10.5		5.3		1.9		0.7		18.4
Operating income (loss)	(4.2)		10.7		0.6		(11.2)		(4.1)
Interest expense, net	—		—		—		1.9		1.9
Net income (loss)	(4.2)		10.7		0.6		(13.2)		(6.1)
Capital expenditures	$	4.3	$	1.7	$	0.4	$	0.3	$	6.7
	As of June 30, 2020
Property and equipment, net	$	125.7	$	36.6	$	38.9	$	5.4	$	206.6
Total assets	$	155.9	$	45.4	$	40.1	$	6.7	$	248.1

Three Months Ended June 30, 2018
High Specification Rigs Completion and Other Services Processing Solutions Other Total
Revenues $ 39.6
$ 29.5
$ 4.0
$ —
$ 73.1
Cost of services 33.6
21.8
1.9
—
57.3
Depreciation and amortization 4.6
1.8
0.4
0.2
7.0
Impairment of goodwill —
—
—
—
—
Operating income (loss) 1.4
5.9
1.7
(8.0 ) 1.0
Interest expense, net —
—
—
(0.5 ) (0.5 )
Net income (loss) 1.4
5.9
1.7
(10.2 ) (1.2 )
Capital expenditures $ 16.7
$ 3.7
$ 0.9
$ 0.5
$ 21.8
Six Months Ended June 30, 2018
Revenues $ 75.9
$ 52.9
$ 6.9
$ —
$ 135.7
Cost of services 65.1
40.2
3.3
—
108.6
Depreciation and amortization 8.6
3.5
0.6
0.4
13.1
Impairment of goodwill 9.0
—
—
—
9.0
Operating income (loss) (6.8 ) 9.2
3.0
(15.2 ) (9.8 )
Interest expense, net —
—
—
(0.9 ) (0.9 )
Net income (loss) (6.8 ) 9.2
3.0
(16.9 ) (11.5 )
Capital expenditures $ 25.0
$ 5.5
$ 3.1
$ 0.5
$ 34.1
As of December 31, 2018
Property, plant and equipment, net $ 159.2
$ 35.0
$ 34.3
$ 1.3
$ 229.8
Total assets $ 214.1
$ 47.0
$ 40.1
$ 1.3
$ 302.5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the historical financial statements and related notes included in Part I, Item 1. Financial Statements of this Quarterly Report on Form 10-Q (the “Quarterly Report”). This discussion contains ~~“forward‑looking~~“forward-looking statements” reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these ~~forward‑looking~~forward-looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, market prices for oil and natural gas, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this report. Please read Cautionary Note Regarding ~~Forward‑Looking~~Forward-Looking Statements. Also, please read the risk factors and other cautionary statements described under Part II, Item 1A.-“Risk Factors” included elsewhere in this Quarterly Report and in our Annual Report filed on Form 10-K for the ~~years~~year ended December 31, ~~2018 and 2017.~~2019. We assume no obligation to update any of these ~~forward‑looking~~forward-looking statements.

Overview

~~The Company is one~~Our service offerings consist of ~~the largest providers of high specification (“high‑spec”) well service rigs and associated services in the United States, with a focus on technically demanding unconventional horizontal~~ well completion support, workover, well maintenance, wireline, fluid management, other complementary services, as well as installation, commissioning and ~~production operations. We believe that our fleet~~operating of ~~141 well service rigs is among the newest and most advanced~~modular equipment, which are conducted in the industry and, based on our historical rig utilization and feedback from our customers, we believe that we are an operator of choice for U.S. onshore exploration and production (“E&P”) companies that require completion and production services at increasing lateral lengths. The Company has operations in most of the active oil and natural gas basins in the United States, including the Permian Basin, the Denver‑Julesburg Basin, the Bakken Shale, the Eagle Ford Shale, the Haynesville Shale, the Gulf Coast and the South Central Oklahoma Oil Province and Sooner Trend Anadarko Basin Canadian and Kingfisher counties plays.three reportable segments, as follows:

~~We conduct our operations through three segments:~~ •High Specification Rigs ~~Completion and Other Services and Processing Solutions, as described below.~~

~~Our High Specification Rig Services segment provides~~. Provider of high-spec well service rigs and complementary equipment and services ~~in the United States, with a focus on technically demanding unconventional horizontal well completion, workover and maintenance operations. These services are fundamental~~ to ~~establishing and maintaining the flow of oil and natural gas throughout the productive life of a well. Our high‑specification well service rigs~~ facilitate operations throughout the lifecycle of a well, including (i) completion services, such as milling out composite plugs after the hydraulic fracturing process and the installation of downhole production equipment; (ii) workover, including retrieval and replacement of existing production tubing; (iii) well maintenance, including replacement of downhole artificial lift components; and (iv) decommissioning, such as plugging and abandonment operations.well.

~~The Company also provides~~ •Completion and Other Services ~~which provides~~. Provider of wireline completion services necessary to bring ~~and maintain~~ a well on production and ~~primarily includes (i) wireline perforating and pumpdown services and (ii) snubbing~~other ancillary services often utilized in conjunction with our high-spec ~~rigs~~rig services to ~~convey equipment in and out~~enhance the production of a ~~well during completion~~well.

•Processing Solutions. Provider of proprietary, modular equipment for the processing of natural gas.

For additional financial information about our segments, please see “Item 1. Financial Information — Note 13 — Segment Reporting.”

Recent Events and ~~workover activities.~~ Outlook

The ~~Company provides rental equipment, including well control packages, hydraulic catwalks~~outbreak of the novel coronavirus (“COVID-19”) has spread across the globe and ~~other equipment that are often deployed with our well service rigs.~~

~~Our Processing Solutions segment engages~~has been declared a public health emergency by the World Health Organization (“WHO”) and a National Emergency by the President of the United States. The COVID-19 pandemic has resulted, and is likely to continue to result, in significant economic disruption and has, and will likely continue to, adversely affect the operations of the Company’s business, as the significantly reduced global and national economic activity has resulted in reduced demand for oil and natural gas. Federal, state and local governments mobilized to implement containment mechanisms and minimize impacts to their populations and economies. Various containment measures, which included the quarantining of cities, regions and countries, while aiding in the ~~rental, installation, commissioning, start‑up, operation~~prevention of further outbreak, have resulted in a severe decline in general economic activity and ~~maintenance of Mechanical Refrigeration Units (“MRU”), Natural Gas Liquid (“NGL”) stabilizer units, NGL storage units and related equipment.~~a resulting decrease in energy demand. In addition, the ~~Company owns~~global economy has experienced a significant disruption to global supply chains. The risks associated with the COVID-19 pandemic have impacted our workforce and ~~operates a fleet~~the way we meet our business objectives. The extent of ~~proprietary, modular natural gas processing equipment that processes rich natural gas streams~~the COVID-19 outbreak on the Company’s operational and financial performance will significantly depend on certain developments, including the duration and spread of the outbreak and its continued impact on customer activity and third-party providers. The direct impact to the Company’s operations began to take affect at the ~~wellhead or central gathering points.~~

~~For further information regarding~~close of the first quarter ended March 31, 2020 and continued through the close of the second quarter ended June 30, 2020; however the full extent to which the COVID-19 outbreak may affect the Company’s financial conditions, results of operations ~~for each segment, please see “Management’s Discussion and Analysis~~or liquidity subsequent to the issuance of ~~Financial Condition and Results of Operations—Results of Operations” in Item 2 and Part I, Note 13 — Commitments and Contingencies~~these financial statements is uncertain. At the time of this ~~Quarterly Report.~~filing, cases of COVID-19 in the U.S. were increasing rapidly, particularly in Texas, where we conduct significant operations.

COVID-19 and numerous public and political responses thereto have contributed to equity market volatility and potentially the risk of a global recession. We expect this global equity market volatility experienced in the first and second quarters of 2020 to continue at least until the outbreak of COVID-19 stabilizes, if not longer. The response to the COVID-19 outbreak (such as stay-at-home orders, closures of restaurants and banning of group gatherings) and slowing of the global economy has contributed to increased unemployment rates.

an unprecedented global oil and natural gas supply and demand imbalance, reduced global oil and natural gas storage capacity, caused oil and natural gas prices to decline significantly and resulted in continued volatility in oil, natural gas and NGLs prices into the second quarter of 2020. On April 12, 2020, OPEC Plus agreed to cut oil production by 9.7 million barrels per day in May and June 2020; however, on July 15, 2020 OPEC Plus agreed to increase production by 1.6 million barrels per day starting in August 2020. With the combined effects of the increased production levels earlier in 2020, the recent increase in production and the reduction in demand caused by COVID-19, the global oil and natural gas supply and demand imbalance persists and continues to have a significant adverse effect on the oil and gas industry.

Due to the significantly reduced demand for oil and natural gas as a result of the COVID-19 pandemic and the current oversupply of oil and natural gas in the market, available storage and capacity for our customers’ production may be limited or completely unavailable in the future, which may further negatively impact the price of oil.

We cannot predict whether or when the global supply and demand imbalance will be resolved or whether or when oil and natural gas production and economic activities will return to normalized levels. In the absence of additional reductions to global production, oil, natural gas and NGLs prices could remain at current levels, or decline further, for an extended period of time.

Factors deriving from the COVID-19 response, as well as the oil oversupply, that have or may negatively impact sales, liquidity and gross margins in the future include, but are not limited to: limitations on the ability of our suppliers to provide materials or equipment, limitations on the ability of our employees to perform their work due to illness caused by the pandemic or local, state or federal orders requiring employees to remain at home; reduction of capital expenditures and discretionary spend; limitations on the ability of our customers to conduct business; and limitations on the ability of our customers to pay us on a timely basis. If prolonged, such factors may also negatively affect the carrying values of our property and equipment and intangible assets. As of the date of this report, the Company has initiated cost reductions throughout the organization, including a reduction in workforce of approximately 60% and salary reductions across the Company’s organizational structure, which has reduced payroll expense by greater than 70% since the beginning of 2020. Additionally, we have made various other operational, travel and organizational expense reductions and will continue to manage costs to preserve liquidity through this downturn. We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state or local authorities, or that we determine are in the best interests of our employees, customers and stakeholders. Currently, we expect to have sufficient liquidity to operate our business and remain in compliance with the financial covenants under our Credit Facility agreement.

The U.S. government has implemented a number of programs in the wake of the impacts of COVID-19, including the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the largest relief package in U.S. history, and the Main Street Lending Program established by the Federal Reserve. Although we qualified for limited aid under the CARES Act related to the deferment of certain employer taxes, the Company is currently evaluating whether it can meet the conditions of and benefit from the Main Street Lending Program.

On March 12, 2020, the Company received a non-binding offer from CSL Capital Management, L.P. and Bayou Holdings, proposing to acquire all of the outstanding shares of common stock of the Company not owned by CSL, Bayou Holdings and T. Rowe Price Associates, Inc. in a cash merger transaction for $6.00 per share (the “Take Private Proposal”). On May 11, 2020, CSL announced their decision to not pursue the possible acquisition of shares outstanding of Ranger at this time and abandon the Take Private Proposal.

How We Generate Revenues

We currently generate revenues through the provision of a variety of oilfield services. These services are performed under a variety of contract structures, including a long term ~~take‑or‑pay~~take-or-pay contract and various master service agreements, as supplemented by statements of work, pricing agreements and specific quotes. A portion of our master services agreements include provisions that establish pricing arrangements for a period of up to one year in length. However, the majority of those agreements provide for pricing adjustments based on market conditions. The majority of our services are priced based on prevailing market conditions and changing input costs at the time the services are provided, giving consideration to the specific requirements of the customer.

In determining the appropriate amount of revenue to be recognized as we fulfill the obligations under its contracts with customers, the following steps must be performed at contract inception: (i) identification of the promised goods or services in the

contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligation and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

We satisfy our performance obligation over time as the services are performed. The Company believes the output method is a reasonable measure of progress for the satisfaction of our performance obligations, which are satisfied over time, as it provides a faithful depiction of (i) our performance towards complete satisfaction of the performance obligation under the contract and (ii) the value transferred to the customer of the services performed under the contract. We invoice our customers upon completion of the specified services and collection generally occurs within the payment terms agreed with customers. Accordingly, there is no financing component to our arrangement with customers. Please see Note 2 — Summary of Significant Accounting Policies of the Annual Report.

Costs of Conducting Our Business

The principal expenses involved in conducting our business are personnel, repairs and maintenance costs as well as other direct material costs, general and administrative, depreciation and amortization and interest expense. We manage the level of our expenses, except depreciation and amortization and interest expense, based on several factors, including industry conditions and expected demand for our services. In addition, a significant portion of the costs we incur in our business is variable based on the quantities of specific services provided and the requirements of such services.

Direct cost of services and general and administrative expenses include the following major cost categories: (i) personnel ~~costs~~costs; and (ii) equipment costs (including repair and maintenance).

Personnel costs associated with our operational employees represent a significant cost of our business. A substantial portion of our labor costs is attributable to our crews and is partly variable based on the requirements of specific customers and operations. A key component of personnel costs ~~relates~~relate to the ongoing training of our employees, which improves safety rates and reduces attrition. We also incur costs to employ personnel to support our services and perform maintenance on our assets. Costs for these employees are not directly tied to our level of business activity.

During the six months ended June 30, 2020, the Company significantly reduced the workforce due to the impacts of the COVID-19 and geopolitical events that have recently taken place. Additionally, we implemented salary reductions across our organizational structure. The combined impact of the workforce reduction and salary reductions has resulted in payroll expense decreasing by greater than 70% since the beginning of 2020. We ~~incur significant equipment~~will continue to actively manage costs ~~in connection with the operation of our business, including repair~~ and ~~maintenance costs.~~take further actions as necessary. See “—Recent Events and Outlook” above.

How We Evaluate Our Operations

Management uses a variety of metrics to analyze our operating results and ~~profitability. These metrics~~profitability, which include ~~among others,~~ operating revenues, operating income (loss) and ~~Adjusted EBITDA.~~

adjusted EBITDA, among others. Within our High Specification Rig segment, management uses additional metrics to analyze our activity levels and ~~profitability. These metrics include, among others,~~profitability, including, rig hours and rig utilization.

Revenues

We analyze our revenues by comparing actual revenues to our internal projections for a given period and to prior periods to assess our performance. We believe that revenues are a meaningful indicator of the demand and pricing for our services.

Operating Income (Loss)

We analyze our operating income (loss), which we define as revenues less cost of services, general and administrative expenses, depreciation and amortization, impairment and other operating expenses, to measure our financial performance. We believe operating income (loss) is a meaningful metric because it provides insight on profitability and true operating performance based on the historical cost basis of our assets. We also compare operating income (loss) to our internal projections for a given period and to prior periods.

Adjusted EBITDA

We view Adjusted EBITDA, which is a ~~non‑GAAP~~non-GAAP financial measure, as an important indicator of performance. We define Adjusted EBITDA as net income (loss) before net interest expense, ~~net,~~ income tax provision or benefit, depreciation and amortization, ~~equity‑based~~equity-based compensation, ~~acquisition‑related~~acquisition-related and severance costs, ~~impairment of goodwill,~~ gain or loss on ~~sale~~disposal of assets and other non-cash and certain items that we do not view as indicative of our ongoing performance. See “Results of Operations—Note Regarding ~~Non‑GAAP~~Non-GAAP Financial Measure” for more information and reconciliations of net income (loss) to Adjusted EBITDA, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Rig Hours

Within our High Specification Rig segment, we analyze rig hours as an important indicator of our activity levels and profitability. Rig hours represent the aggregate number of hours that our well service rigs actively worked during the periods presented. We typically bill customers for our well services on an hourly basis during the period that a well service rig is actively working, making rig hours a useful metric for evaluating our profitability.

Rig Utilization

Within our High Specification Rig segment, we analyze rig utilization as a further important indicator of our activity levels and profitability. We measure rig utilization by reference to average monthly hours per rig, which is calculated by dividing (a) the approximate, aggregate operating well service rig hours for the periods presented by (b) the aggregate number of ~~high specification~~high-spec rigs in our fleet during such period, as aggregated on a monthly basis utilizing a mid-month convention whereby a ~~high specification~~high-spec rig added to our fleet during a month, meaning that we have taken delivery of such ~~high specification~~high-spec rig and it is ready for service, assumed to be in our fleet for one half of such month. We believe that rig utilization as measured by average monthly hours per ~~high specification~~high-spec rig is a meaningful indicator of the operational efficiency of our core revenue-producing assets, market demand for our well services and our ability to profitably capitalize on such demand. Our evaluation of our rig utilization as measured by average monthly hours per rig may not be comparable to that of our competitors.

The primary factors that have historically impacted, and will likely continue to impact, our actual aggregate well service rig hours for any specified period are: (i) customer demand, which is influenced by factors such as commodity prices, the complexity of well completion operations and technological advances in our industry, and (ii) our ability to meet such demand, which is influenced by changes in our fleet size and resulting rig availability, as well as weather, employee availability and related factors. The primary factors that have historically impacted, and will likely continue to impact, the aggregate number of ~~high specification~~high-spec rigs in our fleet during any specified period are the extent and timing of changes in the size of our well service rig

fleet to meet short-term and expected long-term demand, and our ability to successfully maintain a fleet capable of ensuring sufficient, but not excessive, rig availability to meet such demand.

For the three months ended June 30, 2019 and 2018, our rig utilization as measured by average monthly hours per rig was approximately 147 hours and 187 hours, respectively. Actual aggregate operating well service rig hours decreased from approximately 76,200 in the three months ended June 30, 2018 to approximately 62,200 in the three months ended June 30, 2019. The decrease in rig hours was partially offset by an increase in our average revenue per rig hour to $530 from $513 for the three months ended June 30, 2019 and 2018, respectively.

For the six months ended June 30, 2019 and 2018, our rig utilization, as measured by average monthly hours per rig, was approximately 145 hours and 186 hours, respectively. Actual aggregate operating well service rig hours decreased from approximately 149,800 in the six months ended June 30, 2018, to approximately 122,300 in the six months ended June 30, 2019. The decrease in rig hours was partially offset by an increase in our average revenue per rig hour to $526 from $500 for the six months ended June 30, 2019 and 2018, respectively.

~~Factors Impacting the Comparability of Results of Operations~~

~~Tax Receivable Agreement~~

In connection with the Offering, we entered into a TRA with certain of the Ranger Unit holders and their permitted transferees (each such person, a “TRA Holder” and, together, the “TRA Holders”). The TRA generally provides for the payment by us to each TRA Holder of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that we actually realize (computed using the estimated impact of state and local taxes) or are deemed to realize in certain circumstances in periods following the Offering as a result of (i) certain increases in tax basis that occur as a result of our acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s Ranger Units in connection with the Offering or pursuant to the exercise of the Redemption Right or the Call Right (each as defined in the Amended and Restated Limited Liability Company Agreement of Ranger LLC) and (ii) imputed interest deemed to be paid by us as a result of, and additional tax basis arising from, any payments we make under the TRA. We will retain the benefit of the remaining 15% of these cash savings.

~~Income Taxes~~

Ranger Inc. is a Subchapter C corporation under the Internal Revenue Code of 1986, as amended (the “Code”), and, as a result, is subject to U.S. federal, state and local income taxes. We account for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled pursuant to the provisions of ASC 740, ~~Income Taxes~~. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized. We currently believe that it is

reasonably possible for us to achieve a three-year cumulative level of profitability within the next 12 months, and as early as the third quarter of 2019, which would enhance our ability to conclude that is it more likely than not that the deferred tax assets would be realized and support a release of a portion or substantially all of the valuation allowance. A release of the valuation allowance would result in the recognition of an increase in deferred tax assets and an income tax benefit in the period in which the release occurs, although the exact timing and amount of the release is subject to change based on numerous factors, including our projections of future taxable income, which we continue to asses based on available information each reporting period.

Results of Operations

Three Months Ended June 30, 2020 compared to Three Months Ended June 30, 2019 ~~compared to~~ ~~Three Months Ended June 30, 2018~~

The following table presents the operating results for the three months ended June 30, ~~2019~~2020 as compared to the three months ended June 30, ~~2018.~~2019.


	Three Months Ended June 30,						Change
	2020		2019		$		%
Revenues
High specification rigs	$	11.4	$	33.1	$	(21.7)	(66)	%
Completion and other services	17.7		46.3		(28.6)		(62)	%
Processing solutions	1.6		4.9		(3.3)		(67)	%
Total revenues	30.7		84.3		(53.6)		(64)	%

Operating expenses
Cost of services (exclusive of depreciation and amortization):
High specification rigs	10.1		28.7		(18.6)		(65)	%
Completion and other services	13.3		35.0		(21.7)		(62)	%
Processing solutions	0.4		1.9		(1.5)		(79)	%
Total cost of services	23.8		65.6		(41.8)		(64)	%
General and administrative	5.5		6.3		(0.8)		(13)	%
Depreciation and amortization	9.5		8.4		1.1		13	%
Total operating expenses	38.8		80.3		(41.5)		(52)	%

Operating income (loss)	(8.1)		4.0		(12.1)		(303)	%

Other expenses
Interest expense, net	0.8		1.9		(1.1)		(58)	%
Total other expenses	0.8		1.9		(1.1)		(58)	%

Income (loss) before income tax expense	(8.9)		2.1		(11.0)		(524)	%
Tax expense	—		0.3		(0.3)		(100)	%
Net income (loss)	$	(8.9)	$	1.8	$	(10.7)	(594)	%

Three Months Ended
June 30, Change
2019 2018 $ %
Revenues
High Specification Rigs $ 33.1
$ 39.6
$ (6.5 ) (16 )%
Completion and Other Services 46.3
29.5
16.8
57 %
Processing Solutions 4.9
4.0
0.9
23 %
Total revenues 84.3
73.1
11.2
15 %
Operating expenses
Cost of services (exclusive of depreciation and amortization shown separately):
High Specification Rigs 28.7
33.6
(4.9 ) (15 )%
Completion and Other Services 35.0
21.8
13.2
61 %
Processing Solutions 1.9
1.9
—
— %
Total cost of services 65.6
57.3
8.3
14 %
General and administrative 6.3
7.8
(1.5 ) (19 )%
Depreciation and amortization 8.4
7.0
1.4
20 %
Total operating expenses 80.3
72.1
8.2
11 %
Operating income 4.0
1.0
3.0
300 %
Other expenses
Interest expense, net 1.9
0.5
1.4
280 %
Total other expenses 1.9
0.5
1.4
280 %
Income before income tax expense 2.1
0.5
1.6
320 %
Tax expense (benefit) 0.3
1.7
(1.4 ) 82 %
Net income (loss) $ 1.8
$ (1.2 ) $ 3.0
250 %

Revenues. Revenues for the three months ended June 30, ~~2019 increased $11.2~~2020 decreased $53.6 million, or ~~15%~~64%, to ~~$84.3~~$30.7 million from ~~$73.1~~$84.3 million for the three months ended June 30, ~~2018.~~2019. The decrease in revenues, across all reporting segments, is due to the deterioration of crude oil pricing and significantly reduced demand for our services during the three months ended June 30, 2020, as described in “—Recent Events and Outlook” above. The change in revenues by segment was as follows:

High Specification Rigs. High Specification Rig revenues for the three months ended June 30, ~~2019~~2020 decreased ~~$6.5~~$21.7 million, or ~~16%~~66%, to ~~$33.1~~$11.4 million from ~~$39.6~~$33.1 million for the three months ended June 30, ~~2018.~~2019. The decrease in rig services revenue included ~~an 18%~~a 60% decrease in total rig hours to ~~62,200 from 76,200~~24,600 for the three months ended June 30, ~~2019 compared to~~2020 from 62,200 for the three months ended June 30, ~~2018.~~2019. The ~~reduction in total~~decreased rig hours ~~was partially offset by~~attributed to a ~~3% increase~~60% decrease in rig utilization. The average ~~dayrates~~revenue per rig hour decreased 13% to ~~$530~~$463 from ~~$513~~$530 for the ~~six~~three months ended June 30, ~~2019 and 2018, respectively.~~2019.

Completion and Other Services. Completion and Other Services revenues for the three months ended June 30, ~~2019 increased$16.8~~2020 decreased $28.6 million, or ~~57%~~62%, to ~~$46.3~~$17.7 million from ~~$29.5~~$46.3 million for the three months ended June 30, ~~2018.~~2019. The ~~increase is~~decrease was primarily attributable to our wireline business, which accounted for approximately ~~$13.6~~$18.9 million, or ~~81%~~66%, of the segment revenue ~~increase, related~~decrease. The decrease in wireline services revenue included a 50% decrease in active wireline units to ~~the expansion of the Company’s activities. The wireline unit count increased 86% from seven~~five units as of June 30, ~~2018 compared to 13~~2020 from ten units as of June 30, 2019. All other service lines also had comparable revenue reductions.

Processing Solutions. Processing Solutions revenues for the three months ended June 30, ~~2019 increased $0.9~~2020 decreased $3.3 million, or ~~23%~~67%, to ~~$4.9~~$1.6 million from ~~$4.0~~$4.9 million for the three months ended June 30, ~~2018.~~2019. The ~~increase~~decrease was primarily attributable to ~~an increase~~a decrease in ~~MRU revenue due~~Mechanical Refrigeration Unit (“MRU”) utilization to ~~a 16% increase in MRU units from 25 units~~12% as of June 30, ~~2018 compared to 29 units~~2020, from 78% as of June

30, 2019, which accounted for approximately $1.4 million, or 88%, of the revenue decline. The MRU utilization decrease was due to

certain of our customer contracts that terminated, as scheduled, without renewal. The revenue decrease within the segment is also due to a decline in mobilization and ~~an increase in~~maintenance revenue related to our ~~rental rates. Additionally, there were increased revenues associated with our compressors, tanks and generator rentals.~~MRUs.

Cost of services (excluding depreciation and amortization shown separately). Cost of services for the three months ended June 30, ~~2019 increased $8.3~~2020 decreased $41.8 million, or ~~14%~~64%, to ~~$65.6~~$23.8 million from ~~$57.3~~$65.6 million for the three months ended June 30, ~~2018.~~2019. As a percentage of revenue, cost of services was 78% for both the three months ended June 30, ~~2019~~2020 and ~~2018.~~2019. The decline in cost of services, across all segments, corresponds with the decreased demand for our services, as described above. The declines are primarily attributable to a reduction in employee cost related to our reduction in workforce. The change in cost of services by segment was as follows:

High Specification Rigs. High Specification Rig cost of services for the three months ended June 30, ~~2019~~2020 decreased ~~$4.9~~$18.6 million, or ~~15%~~65% to ~~$28.7~~$10.1 million from ~~$33.6~~$28.7 million for the three months ended June 30, ~~2018.~~2019. The decrease was primarily attributable to a ~~reduction~~decrease in variable expenses, notably employee costs and repair and maintenance ~~costs, due to a decrease in rig hours.~~costs.

Completion and Other Services. Completion and Other Services cost of services for the three months ended June 30, ~~2019 increased $13.2~~2020 decreased $21.7 million, or ~~61%~~62%, to ~~$35.0~~$13.3 million from ~~$21.8~~$35.0 million for the three months ended June 30, ~~2018.~~2019. The ~~increase~~decrease was primarily attributable to ~~an increase~~the decrease in ~~expenses due to the expansion of the completion activities, primarily our~~ wireline business, which ~~includes increases~~accounted for approximately $13.5 million, or 62%, of the segment cost of sales decrease. The decrease was primarily attributable to a decrease in variable expenses related to employee costs and ~~cost of services.~~direct material costs across all service lines.

Processing Solutions. Processing Solutions cost of services for the three months ended June 30, ~~2019 remained constant at~~2020 decreased $1.5 million, or 79%, to $0.4 million from $1.9 million ~~for both the three months ended June 30, 2019 and 2018.~~

~~General & Administrative.~~ ~~General and administrative expenses~~ for the three months ended June 30, ~~2019~~2019. The decrease was primarily attributable to a decrease in employee costs and costs associated with ancillary equipment rentals, corresponding with a decrease in revenue.

General & Administrative. General and administrative expenses decreased ~~$1.5~~$0.8 million, or 13%, to ~~$6.3~~$5.5 million ~~from $7.8 million compared to~~for the three months ended June 30, ~~2018.~~2020 compared to $6.3 million for the three months ended June 30, 2019. The decrease ~~was~~is attributable to ~~employee-related~~lower employee costs, which is related to our reduction in workforce, and lower professional ~~fees.~~fees during the three months ended June 30, 2020.

Depreciation and Amortization. Depreciation and amortization for the three months ended June 30, ~~2019~~2020 increased ~~$1.4~~$1.1 million, or ~~20%~~13%, to ~~$8.4~~$9.5 million from ~~$7.0~~$8.4 million for the three months ended June 30, ~~2018.~~2019. The increase is attributable to depreciation expense for fixed assets ~~added~~placed into service during the ~~year ended December 31, 2018.~~trailing 12 months, partially offset by asset retirements.

Interest Expense, net. Interest expense, net for the three months ended June 30, ~~2019 increased $1.4~~2020 decreased $1.1 million, or ~~280%~~58%, to ~~$1.9~~$0.8 million from ~~$0.5~~$1.9 million for the three months ended June 30, ~~2018.~~2019. The ~~increase~~decrease to net interest expense ~~net~~ was attributable to the ~~borrowings~~reduction of the principal balance on our Encina Master Financing Agreement ~~which was entered into~~and Credit Facility, coupled with a decrease in ~~June 2018, and increased borrowings under our Credit Facility.~~London Interbank Offering Rate (“LIBOR”).

Six Months Ended June 30, ~~2019~~2020 compared to Six Months Ended June 30, ~~2018~~2019

~~The following table presents the operating results for the~~ ~~six months ended June 30, 2019~~ ~~as compared to the~~ ~~six months ended June 30,~~ ~~2018.~~


	Six Months Ended June 30,						Change
	2020		2019		$		%
Revenues
High specification rigs	$	46.3	$	64.8	$	(18.5)	(29)	%
Completion and other services	61.0		97.9		(36.9)		(38)	%
Processing solutions	4.4		9.9		(5.5)		(56)	%
Total revenues	111.7		172.6		(60.9)		(35)	%

Operating expenses
Cost of services (exclusive of depreciation and amortization):
High specification rigs	40.0		56.1		(16.1)		(29)	%
Completion and other services	45.0		72.9		(27.9)		(38)	%
Processing solutions	1.9		4.1		(2.2)		(54)	%
Total cost of services	86.9		133.1		(46.2)		(35)	%
General and administrative	10.5		13.5		(3.0)		(22)	%
Depreciation and amortization	18.4		16.8		1.6		10	%
Total operating expenses	115.8		163.4		(47.6)		(29)	%

Operating income (loss)	(4.1)		9.2		(13.3)		(145)	%

Other expenses
Interest expense, net	1.9		3.2		(1.3)		(41)	%
Total other expenses	1.9		3.2		(1.3)		(41)	%

Income (loss) before income tax expense	(6.0)		6.0		(12.0)		(200)	%
Tax expense	0.1		0.6		(0.5)		(83)	%
Net income (loss)	$	(6.1)	$	5.4	$	(11.5)	(213)	%

�� Six Months Ended
June 30, Change
2019 2018 $ %
Revenues
High Specification Rigs $ 64.8
$ 75.9
$ (11.1 ) (15 )%
Completion and Other Services 97.9
52.9
45.0
85 %
Processing Solutions 9.9
6.9
3.0
43 %
Total revenues 172.6
135.7
36.9
27 %
Operating expenses
Cost of services (exclusive of depreciation and amortization shown separately):
High Specification Rigs 56.1
65.1
(9.0 ) (14 )%
Completion and Other Services 72.9
40.2
32.7
81 %
Processing Solutions 4.1
3.3
0.8
24 %
Total cost of services 133.1
108.6
24.5
23 %
General and administrative 13.5
14.8
(1.3 ) (9 )%
Depreciation and amortization 16.8
13.1
3.7
28 %
Impairment of goodwill —
9.0
(9.0 ) (100 )%
Total operating expenses 163.4
145.5
17.9
12 %
Operating income 9.2
(9.8 ) 19.0
(194 )%
Other expenses
Interest expense, net 3.2
0.9
2.3
(256 )%
Total other expenses 3.2
0.9
2.3
(256 )%
Income before income tax expense 6.0
(10.7 ) 16.7
156 %
Tax expense (benefit) 0.6
0.8
(0.2 ) (25 )%
Net income (loss) $ 5.4
$ (11.5 ) $ 16.9
147 %

Revenues. Revenues for the six months ended June 30, ~~2019 increased $36.9~~2020 decreased $60.9 million, or ~~27%~~35%, to ~~$172.6~~$111.7 million from ~~$135.7~~$172.6 million for the six months ended June 30, ~~2018.~~2019. The ~~increase~~decrease in revenues, across all reporting segments, is due to the deterioration of crude oil pricing and significantly reduced demand for our services during the six months ended June 30, 2020, as described in “—Recent Events and Outlook” above. The change in revenues by segment was as follows:

High Specification Rigs. High Specification ~~Rigs~~Rig revenues for the six months ended June 30, ~~2019~~2020 decreased ~~$11.1~~$18.5 million, or ~~15%~~29%, to ~~$64.8~~$46.3 million from ~~$75.9~~$64.8 million for the six months ended June 30, ~~2018.~~2019. The decrease in rig services revenue included ~~an 18% reduction~~a 29% decrease in total rig hours to ~~122,300 hours~~87,000 for the six months ended June 30, ~~2019~~2020 from ~~149,800~~122,300 for the six months ended June 30, ~~2018.~~2019. The ~~reduction in total~~decreased rig hours ~~was partially offset by~~drove a ~~5% increase~~28% decrease in rig utilization. Our average ~~dayrates~~revenue per rig hour increased 1% to ~~$526~~$531 from ~~$500~~$526 for the six months ended June 30, ~~2019 and 2018, respectively.~~2019.

Completion and Other Services. Completion and Other Services revenues for the six months ended June 30, ~~2019 increased $45.0~~2020 decreased $36.9 million, or ~~85%~~38%, to ~~$97.9~~$61.0 million from ~~$52.9~~$97.9 million for the six months ended June 30, ~~2018.~~2019. The ~~increase~~decrease is primarily attributable to our wireline business, which accounted for approximately ~~$39.5~~$23.3 million, or ~~88%~~63%, of the revenue ~~increase, attributable~~decrease. The decrease in wireline revenue included a 50% decrease in active wireline units to ~~the expansion of the Company’s activities. The wireline unit count increased 86% from seven~~five units as of June 30, ~~2018 compared to 13.0~~2020 from ten units as of June 30, 2019. All other service lines also had revenue reductions.

Processing Solutions. Processing Solutions revenues for the six months ended June 30, ~~2019 increased $3.0~~2020 decreased $5.5 million, or ~~43%~~56%, to ~~$9.9~~$4.4 million from ~~$6.9~~$9.9 million for the six months ended June 30, ~~2018.~~2019. The ~~increase~~decrease was primarily attributable to ~~an increase~~a decrease in MRU ~~revenue due~~utilization to ~~a 16% increase in MRU units from 25 units~~12% as of June 30, ~~2018 compared to 29 units~~2020, from 78% as of June 30, 2019, ~~and an increase in~~which accounted for approximately$2.7 million, or 61%, of the revenue decline. The MRU utilization decrease was due to certain of our ~~rental rates. Additionally, there were increased revenues associated with our compressors, tanks and generator rentals.~~customer contracts that terminated, as scheduled, without renewal.

Cost of services (excluding depreciation and amortization shown separately). Cost of services for the six months ended June 30, ~~2019 increased $24.5~~2020 decreased $46.2 million, or ~~23%~~35%, to ~~$133.1~~$86.9 million from ~~$108.6~~$133.1 million for the six months ended June 30, ~~2018.~~2019. As a percentage of revenue, cost of services was ~~77% and 80%~~approximately 78% for both the six months ended June 30, ~~2019~~2020 and ~~2018, respectively.~~2019. The ~~increase~~decline in cost of services, across all segments, corresponds with the decreased demand for our services, as described

above. The declines are primarily attributable to a reduction in employee cost. The change in cost of services by segment was as follows:

High Specification Rigs. High Specification ~~Rigs~~Rig cost of services for the six months ended June 30, ~~2019~~2020 decreased ~~$9.0~~$16.1 million, or ~~14%~~29%, to ~~$56.1~~$40.0 million from ~~$65.1~~$56.1 million for the six months ended June 30, ~~2018.~~2019. The decrease was primarily attributable to a ~~reduction~~decrease in variable expenses, notably employee costs and repair and maintenance costs, ~~due to~~corresponding with a decrease in total rig hours.

Completion and Other Services. Completion and Other Services cost of services for the six months ended June 30, ~~2019 increased $32.7~~2020 decreased $27.9 million, or ~~81%~~38%, to ~~$72.9~~$45.0 million from ~~$40.2~~$72.9 million for the six months ended June 30, ~~2018.~~2019. The ~~increase~~decrease was primarily attributable to ~~an increase~~the decrease in ~~expenses due to the expansion of the completion activities, primarily our~~ wireline business, which ~~includes increases~~accounted for $16.1 million, or 58%, of the segment cost of services decrease. The decrease was primarily attributable to a decrease in variable expenses related to employee costs and ~~cost of services.~~direct material costs across all service lines.

Processing Solutions. Processing Solutions cost of services for the six months ended June 30, ~~2019 increased $0.8~~2020 decreased $2.2 million, or ~~24%~~54%, to ~~$4.1~~$1.9 million from ~~$3.3~~$4.1 million for the six months ended June 30, ~~2018.~~2019. The ~~increase~~decrease was primarily attributable to ~~increases~~a decrease in ~~new~~labor costs and costs associated with ancillary equipment rentals, ~~and the mobilization costs incurred~~corresponding with a decrease in ~~connection with such rental corresponding to additional revenues.~~revenue.

General & Administrative. General and administrative expenses for the six months ended June 30, ~~2019~~2020 decreased ~~$1.3~~$3.0 million, or 9%22%, to ~~$13.5~~$10.5 million from ~~$14.8~~$13.5 million for the six months ended June 30, ~~2018.~~2019. The decrease ~~was~~is attributable to ~~employee-related~~the gain on debt retirement of $2.1 million related to the settlement of the ESCO Seller’s Notes during the six months ended June 30, 2020, as well as lower employee costs, which is related to our reduction in workforce, and lower professional fees.

Depreciation and Amortization. Depreciation and amortization for the six months ended June 30, ~~2019~~2020 increased ~~$3.7~~$1.6 million, or ~~28%~~10%, to ~~$16.8~~$18.4 million from ~~$13.1~~$16.8 million for the six months ended June 30, ~~2018.~~2019. The increase is attributable to depreciation expense for fixed assets ~~added~~placed into service during the ~~year ended December 31, 2018.~~trailing 12 months, partially offset by asset retirements.

~~Impairment of goodwill.~~ Impairment of goodwill for the six months ended June 30, 2018 was $9.0 million compared to no impairment for the six months ended June 30, 2019. During the six months ended June 30, 2018 we identified that there was a sustained decrease in the Company’s stock price, which we identified as a triggering event that precipitated the need to perform a goodwill impairment test. The results of the quantitative impairment test yielded a fair value of the High Specification Rig reporting unit that was below the carrying value of the reporting unit as of March 31, 2018 by an amount in excess of the carrying value of goodwill. Therefore an impairment charge of $9.0 million was recorded. Please see Note 5 — Goodwill and Intangible Assets to the unaudited interim condensed consolidated financial statements.

Interest Expense, net. Interest expense, net for the six months ended June 30, ~~2019~~2020 decreased ~~$2.3~~$1.3 million, or ~~256%~~41%, to ~~$3.2~~$1.9 million from ~~$0.9~~$3.2 million for the six months ended June 30, ~~2018.~~2019. The ~~increase~~decrease to net interest expense ~~net~~ was attributable to the ~~borrowings~~reduction of the principal balance on our Encina Master Financing Agreement ~~which was entered into~~and Credit Facility, coupled with a decrease in ~~June 2018, and increased borrowings under our Credit Facility.~~LIBOR.

Note Regarding ~~Non‑GAAP~~Non-GAAP Financial Measure

Adjusted EBITDA is not a financial measure determined in accordance with GAAP. We define Adjusted EBITDA as net income (loss) before interest expense, net, income tax provision (benefit), depreciation and amortization, ~~equity‑based~~equity-based compensation, ~~IPO~~acquisition-related, severance and ~~acquisition‑related and severance~~reorganization costs, impairment of goodwill, gain or loss on ~~sale~~disposal of assets and certain other items that we do not view as indicative of our ongoing performance.

We believe Adjusted EBITDA is a useful performance measure because it allows for an effective evaluation of our operating performance when compared to our peers, without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net loss determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an indication that our results will be unaffected by the items excluded from Adjusted EBITDA. Our computations of Adjusted EBITDA may not be identical to other similarly titled measures of other companies. The following table presents reconciliations of net income (loss) to Adjusted EBITDA, our most directly comparable financial measure calculated and presented in accordance with GAAP.

Three Months Ended June 30, ~~2019~~2020 compared to Three Months Ended June 30, ~~2018~~2019


	Three Months Ended June 30, 2020
	High Specification Rigs		Completion and Other Services		Processing Solutions		Other		Total
	(in millions)
Net income (loss)	$	(3.9)	$	1.8	$	(0.1)	$	(6.7)	$	(8.9)
Interest expense	—		—		—		0.8		0.8
Tax expense	—		—		—		—		—
Depreciation and amortization	5.2		2.6		1.3		0.4		9.5
Equity based compensation	—		—		—		0.9		0.9
Severance and reorganization costs	0.4		0.2		—		0.4		1.0
(Gain) loss on disposal of property and equipment	—		—		—		(0.1)		(0.1)
Adjusted EBITDA	$	1.7	$	4.6	$	1.2	$	(4.3)	$	3.2


	Three Months Ended
	June 30, 2019														Three Months Ended June 30, 2019
	High Specification Rigs			Completion and Other Services		Processing Solutions		Other			Total				High Specification Rigs		Completion and Other Services			Processing Solutions		Other		Total
	(in millions)														(in millions)
Net income (loss)	$	(0.4	)	$	8.4	$	2.5	$	(8.7	)	$	1.8		Net income (loss)	$	(0.4)	$	8.4		$	2.5	$	(8.7)	$	1.8
Interest expense	—			—		—		1.7			1.7			Interest expense	—		—			—		1.7		1.7
Tax expense (benefit)	—			—		—		0.3			0.3
Tax expense														Tax expense	—		—			—		0.3		0.3
Depreciation and amortization	4.8			2.9		0.5		0.2			8.4			Depreciation and amortization	4.8		2.9			0.5		0.2		8.4
Equity based compensation	—			—		—		0.9			0.9			Equity based compensation	—		—			—		0.9		0.9
IPO, Acquisition, and severance costs	—			—		—		—			—
(Gain) loss on property, plant and equipment	—			—		—		(0.1		)	(0.1		)
Severance and reorganization costs														Severance and reorganization costs	—		—			—		—		—
(Gain) loss on disposal of property and equipment														(Gain) loss on disposal of property and equipment	—		—			—		(0.1)		(0.1)
Adjusted EBITDA	$	4.4		$	11.3	$	3.0	$	(5.7	)	$	13.0		Adjusted EBITDA	$	4.4	$	11.3	��	$	3.0	$	(5.7)	$	13.0

Three Months Ended
June 30, 2018
High Specification Rigs Completion and Other Services Processing Solutions Other Total
(in millions)
Net income (loss) $ 1.4
$ 5.9
$ 1.7
$ (10.2 ) $ (1.2 )
Interest expense —
—
—
0.5
0.5
Tax expense (benefit) —
—
—
1.7
1.7
Depreciation and amortization 4.6
1.8
0.4
0.2
7.0
Equity based compensation —
—
—
0.8
0.8
IPO, Acquisition, and severance costs 0.3
—
—
0.3
0.6
(Gain) loss on property, plant and equipment 0.2
—
—
—
0.2
Adjusted EBITDA $ 6.5
$ 7.7
$ 2.1
$ (6.7 ) $ 9.6

Adjusted EBITDA for the three months ended June 30, ~~2019 increased $3.4~~2020 decreased $9.8 million to ~~$13.0~~$3.2 million from ~~$9.6~~$13.0 million for the three months ended June 30, ~~2018.~~2019. The change by segment was as follows:

High Specification Rigs. High Specification Rigs Adjusted EBITDA for the three months ended June 30, ~~2019~~2020 decreased ~~$2.1~~$2.7 million to ~~$4.4~~$1.7 million from ~~$6.5~~$4.4 million for the three months ended June 30, ~~2018, primarily~~2019, due to decreased revenues of ~~$6.5~~$21.7 million, partially offset by a corresponding decrease in cost of services of ~~$4.9~~$18.6 million.

Completion and Other Services. Completion and Other Services Adjusted EBITDA ~~increased $3.6~~decreased $6.7 million to ~~$11.3~~$4.6 million from ~~$7.7~~$11.3 million for the three months ended June 30, ~~2018,~~2019, due to ~~an increase~~a decrease in revenues of ~~$16.8~~$28.6 million, partially offset by a corresponding ~~increase~~decrease in cost of services of ~~$13.2~~$21.7 million.

Processing Solutions. Processing Solutions Adjusted EBITDA for the three months ended June 30, ~~2019 increased $0.9~~2020 decreased $1.8 million to ~~$3.0~~$1.2 million from ~~$2.1~~$3.0 million for the three months ended June 30, ~~2018,~~2019, due to ~~an increase~~a decrease in revenue of ~~$0.9~~$3.3 million, partially offset by a corresponding decrease in cost of services of $1.5 million.

Other. Other Adjusted EBITDA for the three months ended June 30, ~~2019~~2020 increased ~~$1.0~~$1.4 million to a loss of ~~$5.7~~$4.3 million from a loss of ~~$6.7~~$5.7 million for the three months ended June 30, ~~2018.~~2019. The balances included in Other reflect other general and administrative costs not directly attributable to High Specification Rigs, Completion and Other Services or Processing Solutions. The decrease is ~~primarily~~ due to a reduction in the Company’s general and administrative costs.

For further information regarding the results of operations for each segment, please see “Item 1. Financial Information —Note 13 — Segment Reporting.”

Six Months Ended June 30, ~~2019~~2020 compared to Six Months Ended June 30, ~~2018~~2019


	Six Months Ended June 30, 2020
	High Specification Rigs		Completion and Other Services		Processing Solutions		Other		Total
	(in millions)
Net income (loss)	$	(4.2)	$	10.7	$	0.6	$	(13.2)	$	(6.1)
Interest expense	—		—		—		1.9		1.9
Tax expense	—		—		—		0.1		0.1
Depreciation and amortization	10.5		5.3		1.9		0.7		18.4
Equity based compensation	—		—		—		1.7		1.7
Severance and reorganization costs	0.4		0.2		—		0.4		1.0
Gain on retirement of debt	—		—		—		(2.1)		(2.1)
(Gain) loss on disposal of property and equipment	—		—		—		(0.3)		(0.3)
Adjusted EBITDA	$	6.7	$	16.2	$	2.5	$	(10.8)	$	14.6

Six Months Ended
June 30, 2018
High Specification Rigs Completion and Other Services Processing Solutions Other Total
(in millions)
Net income (loss) $ (6.8 ) $ 9.2
$ 3.0
$ (16.9 ) $ (11.5 )
Interest expense, net —
—
—
0.9
0.9
Tax expense —
—
—
0.8
0.8
Depreciation and amortization 8.6
3.5
0.6
0.4
13.1
Equity based compensation —
—
—
1.0
1.0
IPO, Acquisition, and severance costs 0.3
—
—
0.3
0.6
Impairment of goodwill 9.0
—
—
—
9.0
(Gain) loss on property, plant and equipment 0.9
—
—
—
0.9
Adjusted EBITDA $ 12.0
$ 12.7
$ 3.6
$ (13.5 ) $ 14.8

Adjusted EBITDA for the six months ended June 30, ~~2019 increased $12.4~~2020 decreased $12.6 million to ~~$27.2~~$14.6 million from ~~$14.8~~$27.2 million for the six months ended June 30, ~~2018.~~2019. The change by segment was as follows:

High Specification Rigs. High Specification Rigs Adjusted EBITDA for the six months ended June 30, ~~2019~~2020 decreased ~~$3.3~~$2.0 million to ~~$8.7~~$6.7 million from ~~$12.0~~$8.7 million for the six months ended June 30, ~~2018, primarily~~2019, due to decreased revenues of ~~$11.1~~$18.5 million, partially offset by a corresponding decrease in cost of services of ~~$9.0~~$16.1 million.

Completion and Other Services. Completion and Other Services Adjusted EBITDA ~~increased $12.3~~for the six months ended June 30, 2020 decreased $8.8 million to ~~$25.0~~$16.2 million from ~~$12.7~~$25.0 million for the six months ended June 30, ~~2018,~~2019, due to ~~an increase in~~decreased revenues of ~~$45.0~~$36.9 million, partially offset by a corresponding ~~increase~~decrease in cost of services of ~~$32.7~~$27.9 million.

Processing Solutions. Processing Solutions Adjusted EBITDA for the six months ended June 30, ~~2019 increased $2.2~~2020 decreased $3.3 million to ~~$5.8~~$2.5 million from ~~$3.6~~$5.8 million for the six months ended June 30, ~~2018,~~2019, due to ~~an increase in revenue~~decreased revenues of ~~$3.0~~$5.5 million, partially offset by a corresponding ~~increase~~decrease in cost of services of ~~$0.8~~$2.2 million.

Other. Other Adjusted EBITDA for the six months ended June 30, ~~2019~~2020 increased ~~$1.2~~$1.5 million to a loss of ~~$12.3~~$10.8 million from a loss of ~~$13.5~~$12.3 million for the six months ended June 30, ~~2018.~~2019. The balances included in Other reflect other general and administrative costs not directly attributable to High Specification Rigs, Completion and Other Services or Processing Solutions. The decrease is ~~primarily~~ due to a reduction in the Company’s general and administrative costs.

For further information regarding the results of operations for each segment, please see “Item 1. Financial Information —Note 13 — Segment Reporting.”

Liquidity and Capital Resources

We require capital to fund ongoing operations, including maintenance expenditures on our existing fleet and equipment, organic growth initiatives, investments and acquisitions. Our primary sources of liquidity are cash generated from operations and borrowings under our Credit Facility. The borrowing base under our Credit Facility ~~and Financing Agreement and cash generated~~is calculated monthly on a percentage of our eligible accounts receivable less certain reserves. During the three months ended June 30, 2020, our borrowing base was reduced from ~~operations.~~$31.5 million to $15.8 million as a result of decreased accounts receivable during the period. We strive to maintain financial flexibility and proactively monitor potential capital sources to meet our investment and target liquidity requirements and to permit us to manage the cyclicality associated with our business.

As of June 30, ~~2019,~~2020, we had cash on hand of ~~approximately $1.7~~$6.0 million, operating cash flows of ~~$14.2~~$24.2 million and availability under our Credit Facility of ~~$14.0~~$10.8 million. As of July 22, 2020, our cash on hand and available borrowings under our Credit Facility approximated $11.1 million. We expect to have sufficient funds to meet the Company’s liquidity requirements and to stay within our covenants of our debt agreements for at least the next 12 months. See additional information under “— Our Debt Obligations.”

The following table presents our cash flows for the periods indicated:

Six Months Ended
June 30, 2019 Change
2019 2018 $ %
(in millions)
Cash Flows from Operating Activities $ 14.2
$ 12.1
$ 2.1
17 %
Cash Flows from Investing Activities (15.5 ) (34.5 ) 19.0
(55 )%
Cash Flows from Financing Activities 0.4
27.6
(27.2 ) (99 )%
Net change in cash $ (0.9 ) $ 5.2
$ (6.1 ) (117 )%


	Six Months Ended June 30,						Change
	2020		2019		$		%
	(in millions)
Net cash provided by operating activities	$	24.2	$	14.2	$	10.0	70	%
Net cash used in investing activities	(5.5)		(15.5)		10.0		65	%
Net cash (used in) provided by financing activities	(19.6)		0.4		(20.0)		(5,000)	%
Net change in cash	$	(0.9)	$	(0.9)	$	—	—	%

Operating Activities

Net cash provided by operating activities increased ~~$2.1~~$10.0 million to cash provided of $24.2 million for the six months ended June 30, 2020 compared to cash provided of $14.2 million for the six months ended June 30, ~~2019 compared to $12.1 million of cash generated for the six months ended June 30, 2018.~~2019. The change in cash flows provided by operating activities is primarily attributable to ~~an increase in gross margin for the six months ended June 30, 2019 compared~~cash collections related to ~~the six months ended June 30, 2018.~~accounts receivable, partially offset by cash payments related to our accounts payable and accrued expenses. The ~~use of~~Company increased cash from working capital by $20.5 million, or 178%, to cash ~~for the six months ended June 30, 2019 increased to $11.5 million as compared to $0.5~~generated from working capital of $9.0 million during the six months ended June 30, ~~2018.~~2020, compared to the use of working capital cash of $11.5 million during the six months ended June 30, 2019. This increase was partially offset by a decline in the operating margin during the six months ended June 30, 2019.

Investing Activities

Net cash used in investing activities decreased ~~$19.0~~$10.0 million to a use of cash of $5.5 million for the six months ended June 30, 2020 compared to a use of cash of $15.5 million for the six months ended June 30, 2019. The change in cash flows used in investing activities is attributable to a significant reduction in capital expenditures during the current year, in response to

the economic events that have taken place in the industry, coupled with an increased level of fixed assets acquired during the six months ended June 30, 2019, ~~compared~~relative to ~~$34.5~~the corresponding period of the current year.

Financing Activities

Net cash flows used in financing activities increased $20.0 million to a use of cash of $19.6 million for the six months ended June 30, ~~2018. The decrease in cash flows used in investing activities is primarily attributable~~2020 compared to the fixed assets acquired during the year ended December 31, 2018, which includes the MVCI Acquisition that took place during the six months ended June 30, 2018. The decreases in the use of cash was partially offset by a reduction in cash proceeds from the sale of property and equipment.

~~Financing Activities~~

~~Net~~ cash provided ~~by financing activities decreased $27.2 million to~~of $0.4 million for the six months ended June 30, ~~2019 compared~~2019. The change in cash flows from financing activities is primarily attributable to ~~$27.6 million for~~repayments on the principal balance of our Credit Facility and Encina Master Financing Agreement, settlement of the ESCO Note Payable and repurchases of our Class A Common Stock during the six months ended June 30, 2018. The decrease in cash flows provided by financing activities is attributable to decreased borrowings under our line of credit, increased payments on the Credit Facility and the Financing Agreement, partially offset by decreased payments of financing lease obligations.2020.

Supplemental Disclosures

We added fixed assets of ~~$2.3~~$0.1 million that were non-cash additions inand added $1.0 million of fixed assets through financing leases during the six months ended June 30, ~~2019 and purchased $0.8 million in finance leased assets.~~2020. In addition, aswe early terminated certain of ~~January 1, 2019, we added ROU assets~~our vehicle financing leases, thereby reducing our current and liabilities of $8.3 million related to the adoption of ASC 842. See Note 2 — Summary of Significant Accounting Policies and Note 7 — Leases to the unaudited interim condensed consolidated financial statements for more information for details of the adoption of ASC 842. Also, we settled a $3.0 million liabilitylong-term obligations by ~~issuing Class A Common Stock to a related party.~~$0.7 million.

Our working capital, which we define as total current assets less total current liabilities, ~~totaled $15.2 million and $2.2~~was a deficit of $1.4 million as of June 30, ~~2019 and~~2020 compared to a surplus of $3.6 million as of December 31, ~~2018, respectively.~~ 2019. The reduction in the Company’s profitability, due to the current macroeconomic environment, is the primary reason for this decrease in working capital. In April 2020, we eliminated all planned growth capital expenditures for the remainder of 2020. While our maintenance capital expenditures have historically been low due to the quality of our asset base, we expect minimal capital expenditures for the remainder of 2020.

In ~~connection with the Offering and the ESCO Acquisition~~August 2017, we issued $7.0 million of ~~seller’s notes~~Seller’s Notes as partial consideration for the acquisition of ESCO ~~Acquisition.~~Leasing, LLC (“ESCO”). These notes included a note for $1.2 million, which was paid in August 2018 and a note for $5.8 million, ~~due on February 16, 2019.~~which was settled during the six months ended June 30, 2020. Both ~~of these~~ notes ~~bear~~bore interest at 5.0% payable quarterly until their respective maturity dates.

During the year ended December 31, 2018, we provided notice to ESCO ~~Leasing, LLC~~ that we are seeking to be indemnified for breach of ~~our~~ contract. We exercised our right to stop payments of the remaining principal balance of $5.8 million on the Seller's Notes and any unpaid interest, pending resolution of certain indemnification claims. Interest on the outstanding principal balance was accrued through the maturity date of the Note Payable. During the six months ended June 30, 2020, the Company paid $3.8 million to settle the note and any unpaid interest, and recognized a gain on the retirement of the note of $2.1 million.



Delaware			~~81‑5449572~~81-5449572
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)



	Page
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Interim Condensed Consolidated Balance Sheets		3
Unaudited Interim Condensed Consolidated Statements of Operations		4
Unaudited Interim Condensed Consolidated Statements of Stockholders’ Equity		5
Unaudited Interim Condensed Consolidated Statements of Cash Flows		6
Notes to Unaudited Interim Condensed Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosures About Market Risks		3233
Item 4. Controls and Procedures		33

PART II – OTHER INFORMATION
Item 1. Legal Proceedings		34
Item 1A. Risk Factors		34
Item 2. Unregistered Sales of Securities and Use of Proceeds		3436
Item 6. Exhibits		3538

SIGNATURES		3639


	June 30, 2019			December 31, 2018				June 30, 2020		December 31, 2019
Assets							Assets
Cash and cash equivalents	$	1.7		$	2.6		Cash and cash equivalents	$	6.0	$	6.9
Accounts receivable, net	54.0			45.4			Accounts receivable, net	16.0		41.5
Contract assets	6.0			3.1			Contract assets	1.1		1.2
Inventory	7.7			4.9			Inventory	2.0		3.8
Prepaid expenses	3.7			5.1			Prepaid expenses	1.8		5.3
Total current assets	73.1			61.1			Total current assets	26.9		58.7

Property and equipment, net	227.7			229.8			Property and equipment, net	206.6		218.9
Intangible assets, net	9.7			10.0			Intangible assets, net	8.9		9.3
Operating lease right-of-use assets	6.7			—
Operating leases, right-of-use assets							Operating leases, right-of-use assets	5.3		6.5
Other assets	0.7			1.6			Other assets	0.4		0.1
Total assets	$	317.9		$	302.5		Total assets	$	248.1	$	293.5

Liabilities and Stockholders' Equity							Liabilities and Stockholders' Equity
Accounts payable	$	15.0		$	17.2		Accounts payable	$	5.1	$	13.8
Accrued expenses	19.8			18.5			Accrued expenses	8.0		18.4
Finance lease obligations, current portion	4.8			4.4			Finance lease obligations, current portion	4.0		5.1
Long-term debt, current portion	15.8			15.8			Long-term debt, current portion	10.0		15.8
Other current liabilities	2.5			3.0			Other current liabilities	1.2		2.0
Total current liabilities	57.9			58.9			Total current liabilities	28.3		55.1

Operating lease right-of-use obligations	4.6			—
Operating leases, right-of-use obligations							Operating leases, right-of-use obligations	4.2		4.5
Finance lease obligations	4.8			6.6			Finance lease obligations	2.3		3.6
Long-term debt, net	47.8			44.7			Long-term debt, net	16.8		26.6
Other long-term liabilities	0.7			0.3			Other long-term liabilities	1.3		0.7
Total liabilities	115.8			110.5			Total liabilities	52.9		90.5

Commitments and contingencies (Note 13)
Commitments and contingencies (Note 12)							Commitments and contingencies (Note 12)

Stockholders' equity							Stockholders' equity
Preferred stock, $0.01 per share; 50,000,000 shares authorized; no shares issued or outstanding as of June 30, 2019 and December 31, 2018	—			—
Class A Common Stock, $0.01 par value, 100,000,000 shares authorized; 8,717,026 and 8,448,527 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively	0.1			0.1
Class B Common Stock, $0.01 par value, 100,000,000 shares authorized; 6,866,154 shares issued and outstanding as of June 30, 2019 and December 31, 2018	0.1			0.1
Preferred stock, $0.01 per share; 50,000,000 shares authorized; 0 shares issued or outstanding as of June 30, 2020 and December 31, 2019							Preferred stock, $0.01 per share; 50,000,000 shares authorized; 0 shares issued or outstanding as of June 30, 2020 and December 31, 2019	—		—
Class A Common Stock, $0.01 par value, 100,000,000 shares authorized; 9,031,495 shares issued and 8,479,668 shares outstanding as of June 30, 2020 and 8,839,788 shares issued and 8,725,851 shares outstanding as of December 31, 2019							Class A Common Stock, $0.01 par value, 100,000,000 shares authorized; 9,031,495 shares issued and 8,479,668 shares outstanding as of June 30, 2020 and 8,839,788 shares issued and 8,725,851 shares outstanding as of December 31, 2019	0.1		0.1
Class B Common Stock, $0.01 par value, 100,000,000 shares authorized; 6,866,154 shares issued and outstanding as of June 30, 2020 and December 31, 2019							Class B Common Stock, $0.01 par value, 100,000,000 shares authorized; 6,866,154 shares issued and outstanding as of June 30, 2020 and December 31, 2019	0.1		0.1
Less: Class A Common Stock held in treasury, at cost (551,827 shares as of June 30, 2020 and 113,937 as of December 31, 2019)							Less: Class A Common Stock held in treasury, at cost (551,827 shares as of June 30, 2020 and 113,937 as of December 31, 2019)	(3.8)		(0.7)
Accumulated deficit	(6.9		)	(9.9		)	Accumulated deficit	(11.5)		(8.1)
Additional paid-in capital	119.9			111.6			Additional paid-in capital	121.0		121.8
Total stockholders' equity	113.2			101.9
Non-controlling interest	88.9			90.1
Total controlling stockholders' equity							Total controlling stockholders' equity	105.9		113.2
Noncontrolling interest							Noncontrolling interest	89.3		89.8
Total stockholders' equity	202.1			192.0			Total stockholders' equity	195.2		203.0
Total liabilities and stockholders' equity	$	317.9		$	302.5		Total liabilities and stockholders' equity	$	248.1	$	293.5


								June 30, 2020		December 31, 2019
	June 30, 2019			December 31, 2018
ESCO Notes Payable due February 2019	$	5.8		$	5.8
Wells Fargo Credit Facility due August 2022	25.8			17.9
Encina Master Financing Agreement due June 2023	32.0			36.8
ESCO Notes Payable							ESCO Notes Payable	$	—	$	5.8
Credit Facility							Credit Facility	4.6		9.5
Encina Master Financing Agreement							Encina Master Financing Agreement	22.2		27.1
Total Debt	63.6			60.5			Total Debt	26.8		42.4
Current portion of long-term debt	(15.8		)	(15.8		)	Current portion of long-term debt	(10.0)		(15.8)
Long term-debt, net	$	47.8		$	44.7		Long term-debt, net	$	16.8	$	26.6


	Three Months Ended					Six Months Ended
	June 30,					June 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2019		2018			2019		2018				2020		2019		2020		2019
Income (loss) (numerator):											Income (loss) (numerator):
Basic:											Basic:
Net income (loss) attributable to Ranger Energy Services, Inc.	$	1.0	$	(0.7	)	$	3.0	$	(6.4	)	Net income (loss) attributable to Ranger Energy Services, Inc.	$	(4.9)	$	1.0	$	(3.4)	$	3.0
Less: Undistributed earnings allocable to Class B Common Stock	—		—			—		—
Net income (loss) attributable to Class A Common Stock	$	1.0	$	(0.7	)	$	3.0	$	(6.4	)	Net income (loss) attributable to Class A Common Stock	$	(4.9)	$	1.0	$	(3.4)	$	3.0

Diluted:											Diluted:
Net income (loss) attributable to Ranger Energy Services, Inc.	$	1.0	$	(0.7	)	$	3.0	$	(6.4	)	Net income (loss) attributable to Ranger Energy Services, Inc.	$	(4.9)	$	1.0	$	(3.4)	$	3.0
Less: Undistributed earnings allocable to Class B Common Stock	—		—			—		—
Effect of noncontrolling interest, net of tax											Effect of noncontrolling interest, net of tax	—		0.5		—		1.4
Net income (loss) attributable to Class A Common Stock	$	1.0	$	(0.7	)	$	3.0	$	(6.4	)	Net income (loss) attributable to Class A Common Stock	$	(4.9)	$	1.5	$	(3.4)	$	4.4

Weighted average shares (denominator):											Weighted average shares (denominator):
Weighted average number of shares - basic	8,514,495		8,414,557			8,481,788		8,413,871			Weighted average number of shares - basic	8,474,077		8,514,495		8,545,925		8,481,788
Effect of share-based awards											Effect of share-based awards	—		31,782		—		13,220
Effect of noncontrolling interest, net of tax											Effect of noncontrolling interest, net of tax	—		6,866,154		—		6,866,154
Weighted average number of shares - diluted	9,491,684		8,414,557			9,458,977		8,413,871			Weighted average number of shares - diluted	8,474,077		15,412,431		8,545,925		15,361,162

Basic income (loss) per share	$	0.12	$	(0.08	)	$	0.35	$	(0.76	)	Basic income (loss) per share	$	(0.58)	$	0.12	$	(0.40)	$	0.35
Diluted income (loss) per share	$	0.11	$	(0.08	)	$	0.32	$	(0.76	)	Diluted income (loss) per share	$	(0.58)	$	0.10	$	(0.40)	$	0.29



	Estimated Useful Life (years)	June 30, 2019			December 31, 2018
Machinery and equipment	5 - 30	$	42.3		$	42.0
Vehicles	3 - 5	18.8			17.9
Mechanical refrigeration units	30	21.8			20.9
Natural gas liquid storage tanks	15	5.9			5.9
High specification rigs	5 - 20	178.4			175.7
Other property, plant and equipment	3 - 30	16.1			12.7
Property, plant and equipment		283.3			275.1
Less: accumulated depreciation		(68.7		)	(52.5		)
Construction in progress		13.1			7.2
Property, plant and equipment, net		$	227.7		$	229.8


For the year ending December 31,	Total
2019	$	2.9
2020	2.3
For the twelve months ending June 30,			For the twelve months ending June 30,	Total
2021	0.9		2021	$	1.7
2022	0.7		2022	1.0
2023	0.7		2023	0.8
2024			2024	0.8
2025			2025	0.8
Thereafter	3.0		Thereafter	2.0
Total future minimum lease payments	$	10.5	Total future minimum lease payments	7.1
Less: amount representing interest			Less: amount representing interest	(1.7)
Present value of future minimum lease payments			Present value of future minimum lease payments	5.4
Less: current portion of operating lease obligations			Less: current portion of operating lease obligations	(1.2)
Long-term portion of operating lease obligations			Long-term portion of operating lease obligations	$	4.2



	Three Months Ended June 30, 2018
	High Specification Rigs			Completion and Other Services		Processing Solutions		Other			Total
Revenues	$	39.6		$	29.5	$	4.0	$	—		$	73.1
Cost of services	33.6			21.8		1.9		—			57.3
Depreciation and amortization	4.6			1.8		0.4		0.2			7.0
Impairment of goodwill	—			—		—		—			—
Operating income (loss)	1.4			5.9		1.7		(8.0		)	1.0
Interest expense, net	—			—		—		(0.5		)	(0.5		)
Net income (loss)	1.4			5.9		1.7		(10.2		)	(1.2		)
Capital expenditures	$	16.7		$	3.7	$	0.9	$	0.5		$	21.8
	Six Months Ended June 30, 2018
Revenues	$	75.9		$	52.9	$	6.9	$	—		$	135.7
Cost of services	65.1			40.2		3.3		—			108.6
Depreciation and amortization	8.6			3.5		0.6		0.4			13.1
Impairment of goodwill	9.0			—		—		—			9.0
Operating income (loss)	(6.8		)	9.2		3.0		(15.2		)	(9.8		)
Interest expense, net	—			—		—		(0.9		)	(0.9		)
Net income (loss)	(6.8		)	9.2		3.0		(16.9		)	(11.5		)
Capital expenditures	$	25.0		$	5.5	$	3.1	$	0.5		$	34.1
	As of December 31, 2018
Property, plant and equipment, net	$	159.2		$	35.0	$	34.3	$	1.3		$	229.8
Total assets	$	214.1		$	47.0	$	40.1	$	1.3		$	302.5



	Three Months Ended
	June 30, 2018
	High Specification Rigs		Completion and Other Services		Processing Solutions		Other			Total
	(in millions)
Net income (loss)	$	1.4	$	5.9	$	1.7	$	(10.2	)	$	(1.2	)
Interest expense	—		—		—		0.5			0.5
Tax expense (benefit)	—		—		—		1.7			1.7
Depreciation and amortization	4.6		1.8		0.4		0.2			7.0
Equity based compensation	—		—		—		0.8			0.8
IPO, Acquisition, and severance costs	0.3		—		—		0.3			0.6
(Gain) loss on property, plant and equipment	0.2		—		—		—			0.2
Adjusted EBITDA	$	6.5	$	7.7	$	2.1	$	(6.7	)	$	9.6


	Change $														Change $
	High Specification Rigs			Completion and Other Services		Processing Solutions		Other			Total				High Specification Rigs		Completion and Other Services		Processing Solutions		Other		Total
	(in millions)														(in millions)
Net income (loss)	$	(1.8	)	$	2.5	$	0.8	$	1.5		$	3.0		Net income (loss)	$	(3.5)	$	(6.6)	$	(2.6)	$	2.0	$	(10.7)
Interest expense	—			—		—		1.2			1.2			Interest expense	—		—		—		(0.9)		(0.9)
Tax expense (benefit)	—			—		—		(1.4		)	(1.4		)
Tax expense														Tax expense	—		—		—		(0.3)		(0.3)
Depreciation and amortization	0.2			1.1		0.1		—			1.4			Depreciation and amortization	0.4		(0.3)		0.8		0.2		1.1
Equity based compensation	—			—		—		0.1			0.1			Equity based compensation	—		—		—		—		—
IPO, Acquisition, and severance costs	(0.3		)	—		—		(0.3		)	(0.6		)
(Gain) loss on property, plant and equipment	(0.2		)	—		—		(0.1		)	(0.3		)
Severance and reorganization costs														Severance and reorganization costs	0.4		0.2		—		0.4		1.0
(Gain) loss on disposal of property and equipment														(Gain) loss on disposal of property and equipment	—		—		—		—		—
Adjusted EBITDA	$	(2.1	)	$	3.6	$	0.9	$	1.0		$	3.4		Adjusted EBITDA	$	(2.7)	$	(6.7)	$	(1.8)	$	1.4	$	(9.8)


	Six Months Ended
	June 30, 2019														Six Months Ended June 30, 2019
	High Specification Rigs			Completion and Other Services		Processing Solutions		Other			Total				High Specification Rigs		Completion and Other Services		Processing Solutions		Other		Total
	(in millions)														(in millions)
Net income (loss)	$	(0.9	)	$	19.3	$	4.8	$	(17.8	)	$	5.4		Net income (loss)	$	(0.9)	$	19.3	$	4.8	$	(17.8)	$	5.4
Interest expense, net	—			—		—		3.2			3.2
Interest expense														Interest expense	—		—		—		3.2		3.2
Tax expense	—			—		—		0.6			0.6			Tax expense	—		—		—		0.6		0.6
Depreciation and amortization	9.6			5.7		1.0		0.5			16.8			Depreciation and amortization	9.6		5.7		1.0		0.5		16.8
Equity based compensation	—			—		—		1.5			1.5			Equity based compensation	—		—		—		1.5		1.5
IPO, Acquisition, and severance costs	—			—		—		—			—
Impairment of goodwill	—			—		—		—			—
(Gain) loss on property, plant and equipment	—			—		—		(0.3		)	(0.3		)
Severance and reorganization costs														Severance and reorganization costs	—		—		—		—		—
Gain on retirement of debt														Gain on retirement of debt	—		—		—		—		—
(Gain) loss on disposal of property and equipment														(Gain) loss on disposal of property and equipment	—		—		—		(0.3)		(0.3)
Adjusted EBITDA	$	8.7		$	25.0	$	5.8	$	(12.3	)	$	27.2		Adjusted EBITDA	$	8.7	$	25.0	$	5.8	$	(12.3)	$	27.2



~~Period~~	~~Total number of shares repurchased~~	~~Average price paid per share~~	~~Total number of shares purchased as part of publicly announced plans or programs~~	~~Maximum number of shares that may yet be purchased under the plans or programs~~
~~June 28, 2019 through June 30, 2019~~	—	—	—	—


Ranger Energy Services, Inc.

~~Ranger Energy Services, Inc.~~


/s/ J. Brandon Blossman	July ~~26, 2019~~27, 2020
J. Brandon Blossman		Date
Chief Financial Officer
(Principal Financial Officer)


/s/ Mario H. Hernandez		July ~~26, 2019~~27, 2020
Mario H. Hernandez		Date
Chief Accounting Officer
(Principal Accounting Officer)