What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-02-26 compared with 2020-02-28 · 237 added, 194 removed, 558 unchanged (44% of the section changed)

10 unchanged sentences

Note 2—Summary of Significant Accounting Policies

Note 3—Acquisition

Note 3—Property and Equipment

Note 5—Goodwill and Intangible Assets

Note 4—Intangible Assets

Note 5—Accrued Expenses

7 unchanged sentences

Note 14—Segment Reporting

Note 16—Selected Quarterly Financial Data (Unaudited)

Report of Independent Registered Public Accounting Firm

5 unchanged sentences

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases during the year ended December 31, 2019, due to the adoption of Accounting Standards Codification Topic 842, Leases .

Basis for Opinion

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Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits and the report of the other auditors provide a reasonable basis for our opinion.

We believe that our audits provide a reasonable basis for our opinion.

/s/ BDO USA, LLP

5 unchanged sentences

(in millions, except share and per share amounts)

Current assets

Cash and cash equivalents $ 2.8 $ 6.9

1 unchanged sentence

Contract assets 1.1 1.2

Inventory 2.3 3.8

Prepaid expenses 3.6 5.3

2 unchanged sentences

Intangible assets, net 8.5 9.3

Operating lease right-of-use assets

Operating leases, right-of-use assets 5.8 6.5

Other assets 1.2 0.1

Total assets $ 240.6 $ 293.5

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable $ 10.5 $ 13.8

4 unchanged sentences

Total current liabilities 33.0 55.1

Operating lease right-of-use obligations

Operating leases, right-of-use obligations 5.2 4.5

Finance lease obligations 1.3 3.6

6 unchanged sentences

50,000,000 shares authorized;

no shares issued or outstanding as of December 31, 2019 and December 31, 2018

no shares issued or outstanding as of December 31, 2020 and 2019

Class A Common Stock, $ 0.01 par value, 100,000,000 shares authorized;

9,093,743 shares issued and 8,541,915 shares outstanding as of December 31, 2020;

8,448,527 shares issued and outstanding as of December 31, 2018

8,839,788 shares issued and 8,725,851 shares outstanding as of 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 December 31, 2019 and December 31, 2018

Class A Common Stock held in treasury, at cost (113,937 shares)

6,866,154 shares issued and outstanding as of December 31, 2020 and 2019

Class A Common Stock held in treasury at cost;

551,828 treasury shares and 113,937 treasury shares as of December 31, 2020 and 2019, respectively

( 3.8 ) ( 0.7 )

Accumulated deficit ( 18.4 ) ( 8.1 )

Additional paid-in capital 123.9 121.8

Total controlling interest stockholders' equity

Non-controlling interest

Total controlling stockholders' equity 101.9 113.2

Noncontrolling interest 82.9 89.8

Total stockholders' equity 184.8 203.0

17 unchanged sentences

Depreciation and amortization 35.0 34.8

Impairment of goodwill

Gain on debt retirement ( 2.1 ) —

Total operating expenses 202.9 324.5

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Net income (loss) attributable to Ranger Energy Services, Inc.

$ ( 10.3 ) $ 1.8

Earnings (loss) per common share

Basic $ ( 1.21 ) $ 0.21

Diluted $ ( 1.21 ) $ 0.21

Weighted average common shares outstanding

Basic 8,532,923 8,634,013

Diluted 8,532,923 8,634,013

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

2 unchanged sentences

(in millions, except shares)

Year Ended December 31,

Years Ended December 31,

2020 2019 2020 2019

Quantity Amount

Shares, Class A Common Stock

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(in millions)

Year ended December 31,

Years Ended December 31,

Cash Flows from Operating Activities

2 unchanged sentences

Depreciation and amortization 35.0 34.8

Impairment of goodwill

Equity based compensation 3.7 3.3

Gain on debt retirement ( 2.1 ) —

Other costs, net 2.6 0.9

Changes in operating assets and liabilities, net of the acquisition

Changes in operating assets and liabilities

Accounts receivable 15.6 5.2

Contract assets 0.1 1.9

Inventory 0.4 1.1

Prepaid expenses 1.7 ( 0.2 )

Other assets ( 1.1 ) 0.8

Accounts payable ( 3.3 ) ( 1.1 )

Accrued expenses ( 9.1 ) 0.5

Operating lease, right-of-use obligations ( 0.6 ) —

Other long-term liabilities 1.1 0.3

3 unchanged sentences

Proceeds from disposal of property and equipment 1.8 0.8

Acquisition costs, net of cash received

Net cash used in investing activities ( 5.4 ) ( 23.4 )

2 unchanged sentences

Principal payments on Credit Facility ( 47.1 ) ( 35.2 )

Borrowings on Encina Master Financing Agreement, net of deferred financing costs

Principal payments on Encina Master Financing Agreement ( 10.0 ) ( 9.8 )

3 unchanged sentences

Shares withheld on equity transactions ( 0.3 ) ( 0.4 )

Net cash (used in) provided by financing activities

Net cash used in financing activities ( 24.2 ) ( 24.2 )

Increase (decrease) in Cash and Cash equivalents ( 4.1 ) 4.3

1 unchanged sentence

Cash and Cash Equivalents, End of Year $ 2.8 $ 6.9

Supplemental Cash Flows Information

Supplemental Cash Flow Information

Interest paid $ 2.9 $ 4.5

2 unchanged sentences

Additions to fixed assets through financing leases $ ( 1.0 ) $ 2.4

Initial operating lease right of use assets additions

Early termination of financing leases $ 1.3 $ —

Initial operating leases, right-of-use asset additions $ — $ ( 8.3 )

Issuance of Class A Common Stock to related party $ — $ 3.0

6 unchanged sentences

We provide 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.

exploration and production (“E&P”) companies that are fundamental to establishing and enhancing the flow of oil and natural gas throughout the productive life of a well.

Our service offerings 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 three 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.

Provides 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 our high-spec rig services to maintain the production of a well.

Provides wireline completion services necessary to bring a well on production and other ancillary services often utilized in conjunction with our high-spec rig services to enhance the production of a well.

• Processing Solutions .

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

Provides proprietary, modular equipment for the processing of natural gas.

We operate 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.

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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.

Recent Events

The outbreak of the novel coronavirus (“COVID-19”) has spread across the globe and has been declared a public health emergency by the World Health Organization 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 is likely to 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 to minimize impacts to their populations and economies.

Various containment measures, which include the quarantining of cities, regions and countries, while aiding in the prevention of further outbreak, have resulted in a severe drop in general economic activity and a resulting decrease in energy demand.

In addition, the global economy has experienced a significant disruption to global supply chains.

The extent of the COVID-19 outbreak on the Company’s operational and financial performance will continue to 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 effect at the close of the first quarter ended March 31, 2020, and continued through the issuance of these 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 consolidated financial statements is uncertain.

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 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 through the year ended December 31, 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 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 workforce and salary reductions.

Additionally, various other operational, travel and organizational expense reductions will continue to manage costs to preserve liquidity through the 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 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 best interests of the Company’s employees, customers and stakeholders.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The accompanying audited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the U.S.

The accompanying audited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) and pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”).

1 unchanged sentence

All intercompany balances and transactions have been eliminated.

Investments in which the Company exercises control are consolidated and the noncontrolling interests of such investments, which are not attributable directly or indirectly to the Company, are presented as a separate component of net income and equity in the accompanying consolidated financial statements.

Investments in which the Company exercises control are consolidated and the noncontrolling interests of such investments, which are not attributable directly or indirectly to the Company, are presented as a separate component of net income or loss and equity in the accompanying consolidated financial statements.

The Company has ownership interests in Ranger LLC, which is consolidated within the Company’s consolidated financial statements but is not wholly owned by the Company.

1 unchanged sentence

Use of Estimates

The preparation of consolidated financial statements in conformity with 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

The preparation of 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 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.

2 unchanged sentences

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

Impairment of property and equipment, goodwill and intangible assets;

• Impairment of property and equipment and intangible assets;

• Revenue recognition;

14 unchanged sentences

Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable and current economic conditions.

The allowance for doubtful accounts was $1.6 million and $0.5 million for the years ended December 31, 2019 and 2018 , respectively.

The allowance for doubtful accounts was $ 1.6 million for both of the years ended December 31, 2020 and 2019.

Bad debt expense recorded for the years ended December 31, 2020 and 2019 was $ 0.1 million and $ 1.3 million, respectively.

Balance at Beginning of Year

Charged to Operations

Balance at End of Year

Balance at Beginning of Year Charged to Operations Written Off Balance at End of Year

Allowance for Doubtful Accounts Receivable

Inventories are carried at the lower of cost or net realizable value and primarily consist of supplies held for the Completion and Other Services segment.

2020 $ 1.6 $ 0.1 $ ( 0.1 ) $ 1.6

2019 $ 0.5 $ 1.3 $ ( 0.2 ) $ 1.6

Inventories are carried at the lower of cost or net realizable value and primary consists of supplies held for the Completion and Other Services segment.

Right-of-use (“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”).

4 unchanged sentences

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.

Effective January 1, 2019, the Company has adopted ASU 2016-02 and elected the following practical expedients and accounting policy elections for recognition, measurement and presentation:

The optional transition method, therefore, will not adjust comparative period financial information or make the new required lease disclosures for periods prior to the effective date;

the package of practical expedients to not reassess prior conclusions related to (i) contracts containing leases, (ii) lease classification and (iii) initial direct costs;

to make the accounting policy election for short-term leases, or leases with terms of 12 months or less, therefore the lease payments will be recorded as an expense on a straight line basis over the lease term;

to combine lease and non-lease components.

Lease terms do not include options to extend or terminate the lease, as management does not consider them reasonably certain to exercise at this time.

Leases with terms of 12 months or less are considered short-term leases and therefore payments are recorded as an expense on a straight line basis over the lease term.

Any lease and non-components are combined.

Operating Leases

The Company enters into operating leases, primarily for real estate and equipment, with terms that vary from less than 12 months to eight years .

The operating leases are included in Operating lease right-of-use assets, Other current liabilities and Operating lease right-of-use obligations in the Consolidated Balance Sheet.

The Company enters into operating leases, primarily for real estate, with terms that vary from less than 12 months to seven years , where certain of the leases contain escalation clauses.

The operating leases are included in Operating lease right-of-use assets, Other current liabilities and Operating lease right-of-use obligations in the Consolidated Balance Sheets.

Lease costs associated with our yards and field offices are included in Cost of Services and our executive offices are included in General and Administrative expenses in the Consolidated Statements of Operations.

Finance Leases

The Company enters into lease arrangements for certain vehicles, which are considered finance leases and generally have a term of three to five years .

The Company enters into lease arrangements for certain equipment, which are considered finance leases and generally have a term of three to five years .

The assets and liabilities under finance leases are recorded at the lower of 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 Consolidated Balance Sheet.

Property and Equipment

The finance leases are included in Property and equipment, net, Finance lease obligations, current portion and Finance lease obligations in our Consolidated Balance Sheets.

Property and Equipment, net

Property and equipment is stated at cost or estimated fair market value at the acquisition date less accumulated depreciation.

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If a long‑lived asset is tested for recoverability and the undiscounted estimated future cash flows expected to result from the use and eventual disposition of the asset is less than the carrying amount of the asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long‑lived asset exceeds its fair value.

During the first and second quarter of 2020, the Company noted a sustained decline in stock price due to the reduced demand and oversupply of oil and natural gas, which was an indication that the fair value of the Company’s long-lived assets could have fallen below their carrying values.

As a result, an impairment analysis was performed and it was determined that no impairment existed.

Intangible Assets

Identified intangible assets with determinable lives consist of customer relationships and trade names, as described in Note 5 — Goodwill and Intangible Assets .

Customer relationships and trade names are straight-line amortized over their estimated useful lives.

Identified intangible assets with determinable lives consist of customer relationships.

Customer relationships are straight-line amortized over their estimated useful lives.

Fair Value Measurements

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The Company elected the “right to invoice” practical expedient for recognizing revenue.

The Company invoices customers upon completion of the specified services and collection generally occurs within the payment terms agreed with customers.

The Company invoices 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 arrangements with customers.

All revenues transactions are presented on a net of sales tax in the consolidated statement of operations.

All revenue transactions are presented on a net of sales tax in the Consolidated Statement of Operations.

Contract Balances

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Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets.

Under GAAP, the valuation allowance is recorded to reduce the Company’s 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.

Under US GAAP, the valuation allowance is recorded to reduce the Company’s 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 ultimate realization of the deferred tax assets depends on the generation of sufficient taxable income.

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The amount of unrecognized tax benefit requires management to make significant assumptions about the expected outcomes of certain tax positions included in filed or yet to be filed tax returns.

At December 31, 2019 and 2018 , the Company did not have any uncertain tax positions.

As of December 31, 2020 and 2019, the Company did not have any uncertain tax positions.

The Company is subject to income taxes in the United States and in numerous state tax jurisdictions.

5 unchanged sentences

Equity-Based Compensation

The financial statements reflect various equity-based compensation awards granted by Ranger.

These awards include restricted stock and performance stock awards.

The Company recognizes compensation expense related to equity-based awards granted based on the estimated fair value of the awards on the date of grant.

The Consolidated Financial Statements reflect various equity-based compensation awards granted by Ranger.

These awards include restricted stock awards and performance stock units.

The Company recognizes compensation expense related to equity-based awards based on the estimated fair value of the awards on the date of grant.

The fair value of the equity-based awards on the grant date is generally recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards.

The fair value of the performance stock awards are estimated using an option pricing model that includes certain assumptions, such as volatility, dividend yield and the risk free interest rate.

The fair value of the restricted stock awards are estimated using the market price of the Company’s shares on the grant date.

The fair value of the performance stock units are estimated using an option pricing model that includes certain assumptions, such as volatility, dividend yield and the risk free interest rate.

Changes in these assumptions could change the fair value of our unit based awards and associated compensation expense in our Consolidated Statements of Operations.

Forfeitures of all equity-based compensation are recognized as they occur.

Emerging Growth Company and Smaller Reporting Company Status

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An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable 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.

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Recent Accounting Pronouncements

Recently adopted accounting standards

On January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases.

Under the new provisions, all lessees will report an ROU asset and corresponding liability for the obligation to make payments for all leases, with an exception for those leases with a term of 12 months or less.

All leases fall into one of two categories:

(i) a financing lease or (ii) an operating lease.

Additionally, it requires expanded disclosures regarding the nature, amount and timing of lease assets and obligations.

The Company adopted this accounting standard using the modified retrospective approach and 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

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses , which replaces the incurred loss impairment methodology to reflect expected credit losses.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses , 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.

1 unchanged sentence

The Company is evaluating the effect of this accounting standard on its consolidated financial statements.

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

Note 3 — Acquisition

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 was 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 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 and Equipment

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for accounting contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met.

The amendments apply only to contracts, hedging relationships and other transactions that reference the London Interbank Offering Rate (“LIBOR”) or another reference rate expected to be discontinued due to the reference rate reform.

ASU 2020-04 became effective as of March 12, 2020 and can be applied through December 31, 2022.

The Company has not made any contract modifications as of the date of 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 standards above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to the Company’s consolidated financial statements.

Note 3 — Property and Equipment, Net

Property and equipment include the following (in millions):

Useful Life December 31,

(Years) 2020 2019

High specification rigs 20 $ 127.2 $ 127.2

2 unchanged sentences

Process solutions machinery and equipment 3 - 30

Vehicles 3 - 15

Other property and equipment 5 - 25

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Depreciation expense was $ 34.2 million and $ 34.1 million for the years ended December 31, 2020 and 2019, respectively.

Note 5 — Goodwill and Intangible Assets

During the year ended December 31, 2018 , the Company noted a sustained decrease in the stock price, which was an indication that the fair value of goodwill could have fallen below its carrying amount.

As a result, the Company performed a quantitative impairment test and determined the goodwill was impaired.

The Company estimated the implied fair value of the goodwill using a variety of valuation methods, including the income and market approaches.

During the year ended December 31, 2018 , the Company recognized a loss of $9.0 million associated with the remaining balance of goodwill.

The estimate of fair value required the use of significant unobservable inputs, representative of a Level 3 fair value measurement.

Note 4 — Intangible Assets

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

Useful Life December 31,

(Years) 2020 2019

Customer relationships 10 - 18

$ 11.4 $ 11.4

accumulated amortization ( 2.9 ) ( 2.1 )

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Amortization expense for the future periods is expected to be as follows (in millions):

For the years ending December 31,

For the years ending December 31, Amount

Thereafter 4.9

Note 5 — Accrued Expenses

Accrued expenses include the following (in millions):

Accrued expenses are comprised of the following (in millions):

Accrued payables $ 2.7 $ 8.3

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Operating Leases

Lease costs and other information related to operating leases for the year ended December 31, 2019 is as follows (in millions):

December 31, 2019

Lease costs and other information related to operating leases are as follows (in millions):

Years Ended December 31,

Short-term lease costs $ 1.9 $ 5.4

1 unchanged sentence

Operating cash outflows from operating leases $ 2.6 $ 2.9

Weighted average remaining lease term

Weighted average remaining lease term 6.1 years 5.8 years

Weighted average discount rate 8.5 % 9.3 %

Aggregate future minimum lease payments under operating leases for the year ended December 31, 2019 is as follows (in millions):

For the years ending December 31,

As of December 31, 2020, aggregate future minimum lease payments under operating leases was (in millions):

For the years ending December 31, Total

Thereafter 1.7

Total future minimum lease payments 7.8

2 unchanged sentences

current portion of operating lease obligations ( 0.7 )

Long-term portion of operating lease obligations

Aggregate future minimum rental payments as of December 31, 2018, were $2.9 million , $2.3 million , $0.9 million , $0.7 million , $0.7 million and $3.0 million for the years ending December 31, 2019, 2020, 2021, 2022, 2023 and thereafter, respectively.

Long-term portion of finance lease obligations $ 5.2

Finance Leases

Lease costs and other information related to finance leases for the year ended December 31, 2019 is as follows (in millions):

December 31, 2019

Lease costs and other information related to finance leases are as follows (in millions):

Years Ended December 31,

Amortization of finance leases $ 4.7 $ 5.2

1 unchanged sentence

Financing cash outflows from finance leases $ 4.7 $ 4.8

Weighted average remaining lease term

Weighted average remaining lease term 1.2 years 1.4 years

Weighted average discount rate 3.9 % 4.3 %

Aggregate future minimum lease payments under finance leases for the year ended December 31, 2019 and 2018 are as follows (in millions):

As of December 31, 2020, aggregate future minimum lease payments under finance leases was (in millions):

For the years ending December 31, 2020

4 unchanged sentences

Long-term portion of finance lease obligations $ 1.3

On February 22, 2021, the Company entered into an agreement to sell and leaseback certain of our vehicles for cash consideration of $ 3.5 million.

Note 7 — Debt

3 unchanged sentences

Encina Master Financing Agreement 17.3 27.1

Total Debt 24.5 42.4

Current portion of long-term debt ( 10.0 ) ( 15.8 )

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The notes 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 that the Company is sought to be indemnified for breach of contract.

During the year ended December 31, 2018, the Company provided notice to ESCO 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 year ended December 31, 2020, the Company settled the indemnification claims, 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.

Please see ‘Note 12 — Commitments and Contingencies’ for further details.

Credit Facility

On August 16, 2017 , 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 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 is scheduled to mature on August 16, 2022 .

On August 16, 2017, Ranger, LLC entered into a $ 50.0 million senior 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 Company’s eligible accounts receivable serves as collateral for the borrowings under the Credit Facility.

The applicable margin for LIBOR loans ranges from 1.5 % to 2.0 % and the applicable margin for Base Rate loans ranges from 0.5 % to 1.0 %, in each case, depending on Ranger, LLC’s average excess availability under the Credit Facility.

The applicable margin for the LIBOR loan was 1.8% and the Credit Facility’s interest rate was 3.5% as of December 31, 2019 .

As of December 31, 2019 , under the Credit facility, the Company borrowed $10.0 million , has a borrowing capacity of $30.5 million , with a residual $20.5 million available for borrowing.

The Company is in compliance with the Credit Facility covenants as of December 31, 2019 .

The Company capitalized fees of $0.7 million associated with the Credit Facility, which are included on the consolidated balance sheets as a discount to the Credit Facility.

The applicable margin for the LIBOR loan was 2.2 % and the Base Rate loan interest rate was 4.3 % as of December 31, 2020.

The weighted average interest rate for the borrowings under the Credit Facility was 3.2 % for the year ended December 31, 2020.

Under the Credit Facility, the total loan capacity was $ 20.7 million, which was based on a borrowing base certificate in effect as of December 31, 2020.

The Company had outstanding borrowings of $ 7.5 million under the Credit Facility, leaving a residual $ 13.2 million available for borrowing as of December 31, 2020.

The Company was in compliance with the Credit Facility covenants as of December 31, 2020.

There were capitalized fees of $ 0.7 million associated with the Credit Facility, which are included on the Consolidated Balance Sheets as a discount to the long term debt.

Such fees will be amortized through maturity and are included in Interest Expense, net on the Consolidated Statements of Operations.

Unamortized debt issuance costs as of December 31, 2020 was $ 0.3 million.

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.

Such calculation is submitted, in the form of a borrowing base certificate, to the Administrative Agent within ten business days of each preceding month end.

The Credit Facility includes cash dominion provisions that permit 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 first quarter of 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 the second quarter of 2020.

The borrowings under the Credit Facility, and related issuance costs, were included in Long-term debt, net in the Consolidated Balance Sheets as of December 31, 2020, as the Company was not subject to dominion and the scheduled maturity date is August 16, 2022.

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

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Subsequent to the first financing, the Company borrowed an additional $ 17.8 million, net of expenses and in two tranches, under the Financing Agreement.

We utilized proceeds to acquire certain capital equipment.

The Company utilized the additional net proceeds to acquire certain capital equipment.

The Financing Agreement is secured by a lien on certain high specification rig assets.

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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”), which was 1.8% as of December 31, 2019 .

The Financing Agreement requires that the Company maintain leverage ratios of 2.50 to 1.00 .

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”), subject to a floor of 1.5 %.

As of December 31, 2020, LIBOR was 1.5 %.

Under the terms of the Financing Agreement, the Company is required to maintain a leverage ratio of 2.50 to 1.00.

The Company was in compliance with the covenants under the Financing Agreement as of December 31, 2020.

The Company capitalized fees of $0.9 million associated with the Financing Agreement, which are included on the Consolidated Balance Sheets as a discount to the long term debt.

The Company capitalized fees of $ 0.9 million associated with the Financing Agreement, which are included on the Consolidated Balance Sheets as a discount to the Long-term Debt, net.

Such fees will be amortized through maturity and are included in Interest Expense, net on the Consolidated Statements of Operations.

Unamortized debt issuance costs as of December 31, 2019 approximated $0.6 million .

Debt Obligations and Scheduled Maturities

Unamortized debt issuance costs as of December 31, 2020 was $ 0.4 million.

Scheduled Debt Maturities

As of December 31, 2020, aggregate principal repayments of total debt for the next five years are as follows (in millions):

For the years ending December 31,

For the years ending December 31, Total

Note 8 — Equity

Equity Based Compensation

The Company has a Long-Term Incentive Plan (“LTIP”) for executives, employees, consultants and non-employee directors, under which awards can be granted in the form of stock options, stock appreciation rights, restricted stock, restricted stock awards (“RSAs”), performance awards, dividend equivalents, other stock-based awards, cash awards and substitute awards.

Subject to adjustment in accordance with the terms of the LTIP, 2,850,000 shares of Class A Common Stock have been reserved

for issuance pursuant to awards under the LTIP.

The Company has a Long-Term Incentive Plan (“LTIP”) for executives, employees, consultants and non-employee directors, under which awards can be granted in the form of stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units, performance awards, dividend equivalents, other stock-based awards, cash awards and substitute awards.

Subject to adjustment in accordance with the terms of the LTIP, 2,850,000 shares of Class A Common Stock have been reserved for issuance pursuant to awards under the LTIP.

Class A Common Stock withheld to satisfy exercise prices or tax withholding obligations will be available for delivery pursuant to other awards.

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The Company has granted RSAs, which generally vest in three equal annual installments beginning on the first anniversary date of the grant.

The aggregate value of awards granted during the year ended December 31, 2019 and 2018 was $4.5 million and $4.6 million , respectively.

As of December 31, 2019 and 2018 , there was unrecognized expense related to unvested RSA’s of $4.3 million and $2.9 million , respectively.

The aggregate fair value of RSAs granted during the years ended December 31, 2020 and 2019 was $ 2.5 million and $ 4.5 million, respectively.

As of December 31, 2020, there was an aggregate of $ 3.3 million of unrecognized expense related to RSAs issued, which are expected to be recognized over a weighted average period of 1.5 years.

The following table summarizes the unvested activity for RSAs during the years ended December 31, 2020 and 2019:

Weighted Average Grant Date Fair Value

Weighted Average Remaining Vesting Period

Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Vesting Period

Unvested at January 1, 2019 481,710

Unvested at December 31, 2018

Unvested at December 31, 2019

Performance Stock Units

The Company has granted performance awards to certain key employees, in the form of Performance Stock Units (“PSUs”), which are earned based on the achievement of certain market factors and performance targets at the discretion of the compensation committee of the board of directors.

The PSUs are subject to a three-year measurement period during which the number of Class A Common Stock to be issued remains uncertain until the end of the measurement period and will generally cliff vest based on the level of achievement with respect to the applicable performance criteria.

Granted 590,091 $ 7.59 2.1 years

Forfeited ( 80,767 )

Vested ( 229,446 )

Unvested at December 31, 2019 761,588 $ 7.84 1.8 years

Granted 649,039 $ 3.84 1.8 years

Forfeited ( 59,790 )

Vested ( 340,110 )

Unvested at December 31, 2020 1,010,727 $ 5.30 1.5 years

Performance Stock Units (“PSUs”)

The Company has granted performance awards to certain key employees, in the form of PSUs, which are earned based on the achievement of certain market factors and performance targets at the discretion of the board of directors.

The PSUs are subject to a three year measurement period during which the number of Class A Common Stock to be issued in settlement of the PSUs remains uncertain until the end of the measurement period and will generally cliff vest based on the level of achievement with respect to the applicable performance criteria.

Subsequent to such measurement period, the vesting of PSUs is subject to certification by the board of directors.

As defined in the respective PSU agreements, the performance criteria applicable to these awards is relative and absolute total shareholder return (“TSR”).

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Achievement with respect to the absolute TSR criteria is based on a measurement of the Company’s stock price growth during the measurement period.

The PSUs that were granted during the years ended December 31, 2019 and 2018 will cliff vest, subject to the achievement of applicable performance criteria, on March 21, 2022 and December 31, 2021 , respectively.

The PSUs that were granted during the years ended December 31, 2020 and 2019 will cliff vest, subject to the achievement of applicable performance criteria and certification by the board of directors, on April 23, 2023 and March 21, 2022, respectively.

As of December 31, 2020, there was an aggregate of $ 0.9 million of unrecognized compensation cost related to PSUs.

The following table summarizes the unvested activity for PSUs during the years ended December 31, 2020 and 2019:

Weighted Average

Vesting Period

Weighted Average

Relative Absolute

Shares Weighted Average

Fair Value Weighted Average

Vesting Period Shares Weighted Average

Fair Value Weighted Average

Vesting Period

Unvested as of January 1, 2019 35,482 35,482

Unvested as of December 31, 2018

Granted 52,960 $ 11.96 52,960 $ 9.50

Unvested as of December 31, 2019 88,442 88,442

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 year ended December 31, 2019 .

At the Company’s discretion the liability was settled with the issuance of 206,897 Class A Common Stock.

Share Repurchase Program

Granted 60,631 $ 6.33 2.3 years 60,631 $ 3.62 2.3 years

Unvested as of December 31, 2020 149,073 1.4 years 149,073 1.4 years

Purchases of Equity Securities

During the year ended December 31, 2020, the Company repurchased 344,828 shares of the Company’s Class A Common Stock for an aggregate $ 2.4 million in a privately negotiated transaction with ESCO.

See ‘Note 12 — Commitments and Contingencies’ for further details.

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 is 12 months and may be accelerated, suspended or discontinued at any time without notice.

As of December 31, 2019 , the Company has repurchased $0.7 million of Class A Common Stock under the program.

The following table summarizes the activity of treasury stock for the years ended December 31, 2019 :

The duration of the share repurchase program was 12 months and therefore ended in June 2020.

During the years ended December 31, 2020 and 2019, the Company repurchased 93,063 shares and 113,937 shares, respectively, of Class A Common Stock for an aggregate $ 0.7 million for both periods, in the open market.

The following table summarizes the activity of treasury stock for the years ended December 31, 2020 and 2019:

Treasury Stock

Quantity Amount

Balance at January 1, 2019 — $ —

Repurchase of Class A Common Stock ( 113,937 ) ( 0.7 )

Balance at December 31, 2019 ( 113,937 ) ( 0.7 )

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Balance at December 31, 2020 ( 551,828 ) $ ( 3.8 )

Share Issuance to Related Party

In connection with the Offering, the Company entered into a master reorganization agreement in 2017, under which the parties thereto effected a series of restructuring transactions.

Under the master reorganization agreement, an aggregate of $ 3.0 million liability was settled by the Company and CSL Energy Holdings I, LLC during the year ended December 31, 2019.

At the Company’s discretion the liability was settled with the issuance of 206,898 Class A Common Stock.

Note 9 — Risk Concentrations

Customer Concentrations

For the year ended December 31, 2019 , two customers, EOG Resources and Concho Resources, accounted for approximately 17% and 14% , respectively, of the Company’s consolidated revenues.

As of December 31, 2019 , approximately 12% and 8% of the consolidated accounts receivable balance was due from these customers.

For the year ended December 31, 2018 , one customer, EOG Resources, accounted for approximately 20% of the Company’s consolidated revenues.

As of December 31, 2018 , approximately 12% of the consolidated accounts receivable balance was due from this customer.

For the year ended December 31, 2020, two customers, EOG Resources (“EOG”) and Concho Resources, Inc.

(“Concho”), accounted for approximately 21 % and 17 %, respectively, of the Company’s consolidated revenues.

As of December 31, 2020, approximately 11 % and 10 %, respectively, of the consolidated accounts receivable balance was due from these customers.

For the year ended December 31, 2019, two customers, EOG and Concho, accounted for approximately 17 % and 14 %, respectively, of the Company’s consolidated revenues.

As of December 31, 2019, approximately 12 % and 8 % respectively, of the consolidated accounts receivable balance was due from these customers.

Note 10 — Income Taxes

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federal income tax rate applicable to the Company for the years ended December 31, 2020 and 2019 was 21 %.

Total income tax expense for the year ended December 31, 2019 differed from amounts computed by applying the U.S.

Total income tax expense for the year ended December 31, 2020 and 2019 differed from amounts computed by applying the U.S.

federal statutory tax rate of 21 % primarily due to non-deductible expenses, other state taxes, in addition to the adjustment for non-controlling interest that is not subject to federal tax.

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 first half of 2020, 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.

Year Ended December 31,

Years Ended December 31,

Current provision (benefit)

Federal $ — $ —

State ( 0.2 ) 0.4

Total current provision (benefit) ( 0.2 ) 0.4

Deferred provision (benefit)

Federal 0.2 1.4

Total deferred expense (benefit) 0.2 1.8

Income tax expense (benefit) $ — $ 2.2

A reconciliation of the expected income tax expense on income (loss) before income taxes using the statutory federal income tax rate of 21% for 2019 to income tax expense follows (in millions):

A reconciliation of the expected income tax expense on income (loss) before income taxes using the statutory federal income tax rate of 21 % for 2020 and 2019 to income tax expense follows (in millions):

Income (loss) before income taxes $ ( 18.5 ) $ 6.6

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Nontaxable (loss) income allocated to non-controlling interest 1.7 ( 0.6 )

Valuation allowance 2.1 —

Non-deductible expenses and other 0.2 0.5

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Valuation allowance ( 5.3 ) ( 3.5 )

Net non-current deferred income tax asset

Net deferred income tax asset $ 11.1 $ 12.9

Deferred income tax liabilities

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Property and equipment ( 0.5 ) ( 0.5 )

Total non-current deferred income tax liability

Deferred income tax liability ( 11.6 ) ( 13.4 )

Net deferred income tax liability $ ( 0.5 ) $ ( 0.5 )

As of December 31, 2020, the Company has net operating loss carryforwards of approximately $ 71.5 million, consisting of $ 9.8 million of section 382 limited losses expiring beginning in 2034, an estimated $ 20.6 million of non-section 382 limited losses expiring beginning in 2037 and $ 41.1 million of non-section 382 limited losses which carryforward indefinitely.

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.

As of December 31, 2020, the Company had deferred payroll tax payments of $ 1.9 million, however there were no other material tax impacts to the consolidated financial statements as it related to COVID-19 measures.

Note 11 — Earnings (Loss) per Share

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The following table presents the Company’s calculation of basic and diluted earnings or loss per share for the years ended December 31, 2020 and 2019 (in millions, except share and per share data):

Year Ended December 31,

Years Ended December 31,

Income (loss) (numerator):

Net income (loss) attributable to Ranger Energy Services, Inc.

$ ( 10.3 ) $ 1.8

Net income (loss) attributable to Class A Common Stock $ ( 10.3 ) $ 1.8

Net income (loss) attributable to Ranger Energy Services, Inc.

$ ( 10.3 ) $ 1.8

Net income (loss) attributable to Class A Common Stock $ ( 10.3 ) $ 1.8

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Diluted earnings (loss) per share $ ( 1.21 ) $ 0.21

During the year ended December 31, 2019 , the Company excluded 6.9 million shares of Common Stock issuable upon conversion of the Company’s Class B Common Stock and 1.2 million equity-based awards in calculating diluted earnings per share, as the effect was anti-dilutive.

For the year ended December 31, 2018 , the Company excluded 6.9 million shares of Common Stock issuable upon conversion of the Company’s Class B Common Stock, 0.5 million equity-based awards and 0.2 million Common Stock issuable upon payment of CSL liability, in calculating diluted loss per share, as the effect was anti-dilutive.

During the years ended December 31, 2020 and 2019, the Company excluded 6.9 million shares of Class A Common Stock issuable upon conversion of the Company’s Class B Common Stock for both periods and 1.3 million and 1.2 million, respectively, equity-based awards in calculating diluted earnings or loss per share, as the effect was anti-dilutive.

Note 12 — Commitments and Contingencies

Legal Matters

During the year ended December 31, 2018 , the Company provided notice to ESCO Leasing, LLC that the Company is seeking 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.

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 matters will have a material adverse effect on its 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 is seeking to be indemnified for breach of contract.

During the year ended December 31, 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.

See “Note 7 — Debt” and “Note 8 — Equity” for further details of the debt and equity settlements.

Note 13 — Related Party Transactions

Stockholders’ Agreement

In connection with the Offering, Ranger entered into a stockholders’ agreement (the “Stockholders’ Agreement”) with the Existing Owners and the Bridge Loan Lenders (defined below).

In connection with the Offering, Ranger entered into a stockholders’ agreement (the “Stockholders’ Agreement”) with the Legacy Owners and the Bridge Loan Lenders (defined below).

Among other things, the Stockholders’ Agreement provides CSL and Bayou Wells Holdings Company, LLC (“Bayou Holdings”) with the right to designate nominees to Ranger’s board of directors (each, as applicable, a “CSL Director” or “Bayou Director”) as follows:

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“Cash Election Value” means, with respect to the shares of Class A Common Stock to be delivered to the redeeming Ranger Unit Holder by us pursuant to our Call Right, the amount that would be received if the number of shares of Class A Common Stock to which the redeeming Ranger Unit Holder would otherwise be entitled were sold at a per share price equal to the trailing 10 -day volume weighted average price of a share of Class A Common Stock on such redemption, net of actual or deemed offering expenses.

The Company incurred $ 0.7 million and $ 0.9 million in expenses to CSL and other board members for the years ended December 31, 2020 and 2019, respectively, primarily related to office rent, where such lease terminated during the fourth quarter of 2020.

As of December 31, 2020 amounts due to or from CSL and other board members was negligible.

In connection with the IPO, the Company entered into a master reorganization agreement in 2017, under which the parties thereto effected a series of restructuring transactions.

Under the master reorganization agreement, an aggregate of $ 3.0 million liability was settled by the Company and CSL Energy Holdings I, LLC during the year ended December 31, 2019.

At the Company’s discretion the liability was settled with the issuance of 206,898 Class A Common Stock.

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The TRA generally provides for the payment by the Company of 85 % of the net cash savings, if any, in U.S.

federal, state and local income tax and franchise tax that the Company actually realizes (computed using simplifying assumptions to address the impact of state and local taxes) or is deemed to realize in certain circumstances in periods after the Offering as a result of (i) certain increases in tax basis that occur as a result of the Company’s 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 the Company as a result of, and

additional tax basis arising from, any payments the Company makes under the TRA.

federal, state and local income tax and franchise tax that the Company actually realizes (computed

using simplifying assumptions to address the impact of state and local taxes) or is deemed to realize in certain circumstances in periods after the Offering as a result of (i) certain increases in tax basis that occur as a result of the Company’s acquisition (or deemed acquisition for U.S.

The Company will retain the benefit of the remaining 15 % of these cash savings.

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The CODM evaluates the segments’ operating performance based on multiple measures including 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.

The tables below present the operating income (loss) measurement, as the Company believes this is most consistent with the principals used in measuring the financial statements.

The following is a description of the segments:

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Completion and Other Services.

The Completion and Other Services segment provides wireline completion services necessary to bring a well on production and other ancillary services consisting primarily of the Company’s wireline and snubbing lines of business along with other, non-rig well services to maintain the production of a well.

Processing Solutions .

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Year Ended December 31, 2020

High Specification Rigs

Completion and Other Services

Processing Solutions

High Specification Rigs Completion and Other Services Processing Solutions Other Total

Revenues $ 82.5 $ 98.5 $ 6.8 $ — $ 187.8

Cost of services 71.5 73.7 2.7 — 147.9

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Depreciation and amortization 20.2 10.2 3.2 1.4 35.0

Impairment of goodwill

Gain on debt retirement — — — ( 2.1 ) ( 2.1 )

Operating income (loss) ( 9.2 ) 14.6 0.9 ( 21.4 ) ( 15.1 )

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Property and equipment, net $ 115.8 $ 30.8 $ 37.7 $ 5.1 $ 189.4

Total assets $ 154.3 $ 41.1 $ 38.4 $ 6.8 $ 240.6

Year Ended December 31, 2019

High Specification Rigs

Completion and Other Services

Processing Solutions

High Specification Rigs Completion and Other Services Processing Solutions Other Total

Revenues $ 132.1 $ 184.3 $ 20.5 $ — $ 336.9

Cost of services 114.8 139.0 9.2 — 263.0

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Depreciation and amortization 20.1 11.4 2.2 1.1 34.8

Impairment of goodwill

Gain on debt retirement — — — — —

Operating income (loss) ( 2.8 ) 33.9 9.1 ( 27.8 ) 12.4

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Property and equipment, net $ 132.2 $ 40.8 $ 40.5 $ 5.4 $ 218.9

Note 16 — Selected Quarterly Financial Data (Unaudited)

The following table summarizes the unaudited quarterly statements of the Company for 2019 and 2018 (in millions, except per share data):

Three months ended

September 30,

Total revenues

Operating income

Net income (loss)

Net income (loss) attributable to Ranger Energy Services, Inc.

Basic earnings (loss) per share

Diluted earnings (loss) per share

Total revenues

Operating income (loss)

Net income (loss)

Net income (loss) attributable to Ranger Energy Services, Inc.

Basic net income (loss) per share

Diluted net income (loss) per share

Immaterial Correction

During the preparation of the consolidated financial statements for the year ended December 31, 2019, we identified that the diluted weighted average number of shares and diluted earnings per share amounts for the quarterly periods ended March 31, June 30 and September 30, 2019 and related footnote disclosures were misstated in the interim financial statements filed on Form 10-Q due to a misapplication of the if-converted method of calculating diluted earnings per share.

Other than as noted below, this error had no impact on the interim financial statements for the quarters ended March 31, June 30 and September 30, 2019.

For the period ended March 31, 2019, diluted weighted average shares should have been 15,614,429 instead of 9,730,710 , and diluted earnings per share should have been $0.19 instead of $0.21 .

For the three months ended June 30, 2019, diluted weighted average shares should have been 15,412,431 instead of 9,491,683 , and diluted earnings per share should have been $0.10 instead of $0.11 .

For the six months ended June 30, 2019, diluted weighted average shares should have been 15,361,162 instead of 9,458,976 , and diluted earnings per share should have been $0.29 instead of $0.32 .

For the nine months ended September 30, 2019, diluted weighted average shares should have been 15,457,282 instead of 9,459,785 , and diluted earnings per share should have been $0.25 instead of $0.26 .

Management evaluated the error on previously issued financial statements and concluded the impact was immaterial.

These amounts and related footnote disclosures will be revised when the March 31, June 30 and September 30, 2020, financial information is filed.

Total assets $ 186.1 $ 57.4 $ 42.6 $ 7.4 $ 293.5

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data