Ranger Energy Services : Non-GAAP Reconciliations - 4Q2020 - EBITDA and Adjusted EBITDA

RANGER ENERGY SERVICES, INC.

SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES

(UNAUDITED)

Adjusted EBITDA is not a financial measure determined in accordance with U.S. GAAP. We define Adjusted EBITDA as net income or loss before net interest expense, income tax provision or benefit, depreciation and amortization, equity‑based compensation, acquisition-related, severance and reorganization costs, gain or loss on disposal of assets, and certain other non-cash and certain 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 or loss in arriving at Adjusted EBITDA because these amounts can vary substantially within our industry depending upon accounting methods, 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 U.S. 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 or loss, our most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, to Adjusted EBITDA.

The following tables are a reconciliation of net income or loss to Adjusted EBITDA for the three months ended December 31, 2020 and September 30, 2020, in millions:

Three Months Ended December 31, 2020

High Specification

RigsCompletion and Other Services

Processing

Solutions (in millions)OtherTotalNet income (loss)

$

$

$

(4.9) 2.2

Interest expense, net Tax expense (benefit) Depreciation and amortization EBITDA

Equity based compensation Severance and reorganization costs

$

2.9

$

3.6

$

0.7

$

(4.0) $ 3.2

(Gain) loss on disposal of property and equipment Adjusted EBITDA

(2.6) $ - - 5.1 2.5 - - 0.4

1.7 - - 2.2 3.9 - -

0.1 - - 0.6 0.7 - -

(5.9) $ 0.7 -

(6.7) 0.7 -

0.3 8.2

0.9 0.9

-

-

(0.3) - - 0.1

Three Months Ended September 30, 2020

High Specification

RigsCompletion and Other Services

Processing

Solutions (in millions)OtherTotalNet income (loss)

$

$

$

(5.7) $ (5.7)

(0.1) (0.1)

(4.6) 3.4

(0.4) (0.4)

Interest expense, net Tax expense (benefit) Depreciation and amortization EBITDA

Equity based compensation Severance and reorganization costs

$

2.4

$

5.0

$

0.9

$

(3.9) $ 4.4

(Gain) loss on disposal of property and equipment Adjusted EBITDA

(2.4) $ - - 4.6 2.2 - - 0.2

2.2 - - 2.7 4.9 - - 0.1

0.2 - - 0.7 0.9 - - -

0.8 0.8

0.4 8.4

1.1 1.1

- 0.3