MAMMOTH ENERGY SERVICES, INC. (TUSK)
SIC breadcrumb: Mining > SIC Major Group 13 > SIC 1389 Oil & Gas Field Services, NEC
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1679268. Latest filing source: 0001628280-26-015693.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 44,292,000 | USD | 2025 | 2026-03-06 |
| Net income | 4,597,000 | USD | 2025 | 2026-03-06 |
| Assets | 334,894,000 | USD | 2025 | 2026-03-06 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001679268.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 230,625,000 | 691,496,000 | 1,690,084,000 | 625,012,000 | 313,076,000 | 228,962,000 | 362,086,000 | 309,492,000 | 45,599,000 | 44,292,000 |
| Net income | -92,453,000 | 58,964,000 | 235,965,000 | -79,044,000 | -107,607,000 | -101,430,000 | -619,000 | -3,163,000 | -207,326,000 | 4,597,000 |
| Operating income | -34,630,000 | 62,771,000 | 394,451,000 | -128,383,000 | -148,679,000 | -123,041,000 | -16,418,000 | -16,685,000 | -120,357,000 | -57,433,000 |
| Diluted EPS | -2.94 | 1.42 | 5.24 | -1.76 | -2.36 | -2.18 | -0.01 | -0.07 | -4.31 | 0.10 |
| Operating cash flow | 29,689,000 | 57,616,000 | 386,668,000 | -95,318,000 | 6,967,000 | -18,865,000 | 15,266,000 | 31,386,000 | 180,717,000 | -18,570,000 |
| Capital expenditures | 5,843,000 | 12,737,000 | 19,395,000 | 1,214,000 | 70,552,000 | |||||
| Assets | 502,362,000 | 867,243,000 | 1,073,091,000 | 952,385,000 | 824,562,000 | 720,892,000 | 724,678,000 | 698,479,000 | 384,031,000 | 334,894,000 |
| Liabilities | 79,581,000 | 359,447,000 | 319,039,000 | 283,644,000 | 261,235,000 | 257,670,000 | 262,062,000 | 238,379,000 | 131,213,000 | 76,606,000 |
| Stockholders' equity | 507,796,000 | 754,052,000 | 668,741,000 | 563,327,000 | 463,222,000 | 462,616,000 | 460,100,000 | 252,818,000 | 258,288,000 | |
| Cash and cash equivalents | 29,239,000 | 5,637,000 | 67,625,000 | 5,872,000 | 14,822,000 | 9,899,000 | 17,282,000 | 16,556,000 | 60,845,000 | 101,987,000 |
| Free cash flow | -24,708,000 | 2,529,000 | 11,991,000 | 179,503,000 | -89,122,000 |
Ratios
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | -40.09% | 8.53% | 13.96% | -12.65% | -34.37% | -44.30% | -0.17% | -1.02% | 10.38% | |
| Operating margin | -15.02% | 9.08% | 23.34% | -20.54% | -47.49% | -53.74% | -4.53% | -5.39% | -129.67% | |
| Return on equity | 11.61% | 31.29% | -11.82% | -19.10% | -21.90% | -0.13% | -0.69% | -82.01% | 1.78% | |
| Return on assets | -18.40% | 6.80% | 21.99% | -8.30% | -13.05% | -14.07% | -0.09% | -0.45% | -53.99% | 1.37% |
| Liabilities / equity | 0.71 | 0.42 | 0.42 | 0.46 | 0.56 | 0.57 | 0.52 | 0.52 | 0.30 | |
| Current ratio | 3.04 | 1.43 | 1.92 | 3.12 | 3.61 | 2.93 | 2.09 | 2.72 | 1.65 | 2.53 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001679268.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2020-Q4 | 2020-12-31 | 85,050,000 | derived Q4 = FY annual - nine-month YTD | ||
| 2021-Q1 | 2021-03-31 | 66,804,000 | reported discrete quarter | ||
| 2021-Q2 | 2021-06-30 | 47,440,000 | reported discrete quarter | ||
| 2021-Q3 | 2021-09-30 | 57,485,000 | reported discrete quarter | ||
| 2022-Q2 | 2022-06-30 | 0.04 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | 0.16 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 0.17 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 75,431,000 | -4,470,000 | -0.09 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | -1,088,000 | -0.02 | reported discrete quarter | |
| 2023-Q4 | 2023-12-31 | -5,956,000 | derived Q4 = FY annual - nine-month YTD | ||
| 2024-Q1 | 2024-03-31 | -11,811,000 | -0.25 | reported discrete quarter | |
| 2024-Q2 | 2024-06-30 | 51,529,000 | -155,993,000 | -3.25 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 40,015,000 | -24,042,000 | -0.50 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 53,200,000 | -15,480,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 62,465,000 | -537,000 | -0.01 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 16,409,000 | 8,848,000 | 0.18 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 14,801,000 | -12,615,000 | -0.26 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 8,901,000 | derived Q4 = FY annual - nine-month YTD | ||
| 2026-Q1 | 2026-03-31 | 22,030,000 | 5,187,000 | 0.11 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001628280-26-033686.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto presented in this Quarterly Report and the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K. This discussion contains 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 statements due to a number of factors, including those discussed in Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission, or the SEC, on March 6, 2026 and the section entitled “Cautionary Note Regarding Forward-Looking Statements” appearing elsewhere in this Quarterly Report.
Overview
We are an integrated, growth-oriented company focused on providing products and services to our customers primarily in the oil and natural gas and utility infrastructure industries. Our suite of services includes rental services, infrastructure services, natural sand proppant services, accommodation services and drilling services. Our rental services segment provides a wide range of equipment used in oilfield, construction and aviation activities. Our infrastructure services segment provides engineering, design and fiber optic services to the utility industry. Our natural sand proppant services segment mines, processes and sells natural sand proppant used for hydraulic fracturing. Our accommodation services provide housing, kitchen and dining, and recreational service facilities for workers located in remote areas away from readily available lodging. Our drilling services provides directional drilling to oilfield operators.
We are focused on driving returns through improved execution by prioritizing asset utilization, margin expansion, and capital efficiency across the portfolio. While macroeconomic uncertainty including tariffs and demand volatility continue to affect parts of the market, we remain proactive in repositioning Mammoth to perform through differing business cycles.
Business Developments
During 2025, we completed four strategic divestitures. On April 11, 2025, we sold a portion of our infrastructure services entities, including our distribution, transmission and substation operations, for aggregate proceeds of approximately $108.7 million, subject to customary post-closing adjustments. On June 16, 2025, we sold all of the equipment previously used in our hydraulic fracturing services for $15.0 million. On September 15, 2025, the Company completed the sale of assets related to its natural sand proppant operations at its Piranha Proppant LLC processing plant. On December 2, 2025, we completed the sale of our engineering services business, Aquawolf, for approximately $30.0 million, also subject to customary post-closing adjustments. The results of operations, financial position and cash flows for these businesses are reported as discontinued operations for all periods presented and discussed in this report. Unless otherwise indicated, the information presented in this Management’s Discussion and Analysis relates only to our continuing operations.
To reflect how management evaluates the business after these divestitures, prior period segment information in our results of operations below has been recast to conform with our segment composition as of March 31, 2026. See Note 3. Discontinued Operations of the notes to our unaudited condensed consolidated financial statements for more information.
Overview of Our Industries
Aircraft Industry
The operating environment for the lease of aircraft and aircraft assets is currently favorable. Factors such as population growth as well as global economic health and development are positively influencing both passenger and freight demand. In addition, factors and trends including Original Equipment Manufacturer supply chain challenges and backlogs, the financing needs of airlines and the availability of maintenance facilities as well as repair timelines may increase the demand for our aircraft and aircraft equipment.
Oil and Natural Gas Industry
The oil and natural gas industry has traditionally been volatile and is influenced by a combination of long-term, short-term and cyclical trends, including the domestic and international supply and demand for oil and natural gas, current and expected future prices for oil and natural gas and the perceived stability and sustainability of those prices, production depletion
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rates and the resultant levels of cash flows generated and allocated by exploration and production companies to their drilling, completion and related services and products budgets. The oil and natural gas industry is also impacted by general domestic and international economic conditions, political instability in oil producing countries, government regulations (both in the United States and elsewhere), levels of customer demand, the availability of pipeline capacity, storage capacity, shortages of equipment and materials and other conditions and factors that are beyond our control.
Demand for most of our oil and natural gas products and services depends substantially on the level of expenditures by companies in the oil and natural gas industry. The levels of capital expenditures of our customers are driven by many factors, including the prices of oil and natural gas. The conflict in the Middle East, including attacks on regional energy infrastructure, has resulted in higher oil prices and the potential for multi-year LNG constraints. These factors have resulted in improved demand for our services, which we expect to continue through the remainder of 2026. Positive trends that may contribute to increased activity will come from LNG export capacity coming online and general electricity and power demand enhancements. We will be strategically positioned to capitalize on this anticipated demand if and when it ramps up.
Infrastructure Industry
The infrastructure industry involves the construction and maintenance of fiber networks. Demand for our services is driven by artificial intelligence (“AI”) and data center projects.
Certain barriers to entry exist in the markets in which we operate, including adequate financial resources, technical expertise, high safety ratings and a proven track record of operational success. We compete based upon our industry experience, technical expertise, financial and operational resources, geographic presence, industry reputation, safety record and customer service. While we believe our customers consider a number of factors when selecting a service provider, they generally award most of their work through a bid process. Consequently, price is often a principal factor in determining which service provider is selected.
We believe that AI and high-performance computing will drive the upgrade and overbuild of fiber networks in order to increase data capacity. Funding for projects in the infrastructure space remains strong with added opportunities since the Infrastructure Investment and Jobs Act ("IIJA") was signed into law on November 15, 2021. Federal and state agencies continue to implement multi‑year funding programs established under the IIJA, including substantial investments through Broadband Equity, Access and Deployment ("BEAD") program. These programs continue to support planned investment in broadband, utility, transportation, and clean‑energy projects. Although these programs were enacted several years ago, the implementation and distribution of funds remain ongoing and are expected to continue well into the latter half of the decade. Market participants across telecommunications, power, and energy‑transition sectors have announced substantial capital plans aligned with these programs, supported by federal incentives and growing private‑sector investment in areas such as fiber deployment, grid modernization, electrification, and data‑center‑related power demand.
Settlement Agreement with PREPA
Cobra and PREPA previously entered into two agreements to aid in the restoration and reconstruction of Puerto Rico’s power grid in response to damage caused by Hurricane Maria in 2017. Our work under each of the contracts with PREPA ended on March 31, 2019. PREPA is currently subject to bankruptcy proceedings, which were filed in July 2017 and are currently pending in the United States District Court for the District of Puerto Rico (the “Title III Court”). Cobra pursued litigation in the Title III Court and other dispute resolution efforts seeking recovery of the amounts owed to Cobra by PREPA for restoration services in Puerto Rico, which proceedings are discussed in more detail in the Company’s prior reports filed with the SEC. On July 22, 2024, Cobra entered into the Settlement Agreement with PREPA. Pursuant to the terms of the Settlement Agreement, PREPA paid Cobra approximately $168.4 million in 2024 and, as of March 31, 2026, PREPA owes Cobra $20.0 million, which is payable to Cobra within seven days following the effective date of PREPA’s plan of adjustment in its bankruptcy proceedings. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, previously filed with the SEC for more information regarding the Settlement Agreement.
First Quarter 2026 Financial Overview
•Revenue for the first quarter of 2026 increased by $10.4 million, or 90%, to $22.0 million from $11.6 million for the first quarter of 2025. The increase in total revenue is primarily attributable to an increase in rental and aviation sales, accommodation and drilling services revenue.
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•Net income for the first quarter of 2026 was $5.2 million, or $0.11 per diluted share, as compared to net loss of $0.5 million, or $(0.01) per diluted share, for the first quarter of 2025.
•Adjusted EBITDA for the first quarter of 2026 was $1.9 million as compared to ($2.3) million for the first quarter of 2025. See “Non-GAAP Financial Measures” for a reconciliation of net income (loss) from continuing operations to Adjusted EBITDA.
Future Results
We expect to generate positive adjusted EBITDA from continuing operations for the full year 2026.
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Results of Operations
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
Three Months Ended
March 31, 2026
March 31, 2025
(in thousands)
Revenue:
Rental services and aviation sales
$
12,967
$
1,927
Infrastructure services
269
712
Natural sand proppant services
3,864
6,739
Accommodation services
3,541
2,081
Drilling services
1,421
182
Other services
48
—
Eliminations
(80)
(10)
Total revenue
22,030
11,631
Cost of revenue:
Rental services and aviation sales (exclusive of depreciation and amortization of $2,611 and $167 for the three months ended March 31, 2026 and 2025, respectively)
8,060
1,418
Infrastructure services (exclusive of depreciation and amortization of $56 and $53 for the three months ended March 31, 2026 and 2025, respectively)
511
874
Natural sand proppant services (exclusive of depreciation, depletion and accretion of $429 and $877 for the three months ended March 31, 2026 and 2025, respectively)
4,455
5,476
Accommodation services (exclusive of depreciation and accretion of $288 and $259 for the three months ended March 31, 2026 and 2025, respectively)
2,138
1,432
Drilling services (exclusive of depreciation of $17 and $29 for the three months ended March 31, 2026 and 2025, respectively)
1,192
396
Other services (exclusive of depreciation of $69 and $698 for the three months ended March 31, 2026 and 2025, respectively)
231
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[Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains 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 statements due to a number of factors, including those discussed in Item 1A. “Risk Factors” and the section entitled “Forward-Looking Statements” appearing elsewhere in this annual report.
Overview
We are an integrated, growth-oriented services company focused on providing products and services to our customers primarily in the oil and natural gas, aviation and utility infrastructure industries. Our primary business objective is to drive returns through improved execution by prioritizing asset utilization, margin expansion, and capital efficiency across the portfolio. Our suite of services includes rental services, infrastructure services, natural sand proppant services, accommodation services and drilling services. Our rental services segment provides a wide range of equipment used in oilfield, construction and aviation activities. Our infrastructure services division provides engineering, design, construction, upgrade, maintenance and repair services to the fiber industry. Our natural sand proppant services division mines, processes and sells natural sand proppant used for hydraulic fracturing. Our drilling services provides directional drilling to oilfield operators. We believe that the services we offer play a critical role in increasing the ultimate recovery and present value of production streams from unconventional resources as well as in constructing and improving fiber networks. Our complementary suite of services provides us with the opportunity to cross-sell our services and expand our customer base and geographic positioning.
We continue to focus on growing our rental business. We believe our portfolio of aviation assets provides an attractive form of aviation asset financing for operators that allows capital deployment and fleet flexibility while eliminating residual value risk for the operators.
Our revenues, operating (loss) income and identifiable assets are attributable to five reportable segments: rental services; infrastructure services; natural sand proppant services; accommodation services; and drilling services. Following changes to our reportable segments resulting from divestitures completed in 2025, prior‑year segment information for the year ended December 31, 2024 has been recast to align with the current period segment presentation. Since the dates presented below, we have conducted our operations through the following entities:
Rental Services Segment
•Mammoth Equipment Leasing LLC—November 2016
•Stingray Energy Services LLC, or Stingray Energy Services—June 2017
•Dire Wolf Energy Services LLC—January 2018
•Cobra Aviation Services LLC—January 2018
•Predator Aviation LLC—April 2019
•Leopard Aviation LLC—April 2019
Infrastructure Services Segment
•Falcon Fiber Solutions LLC—May 2021
Natural Sand Proppant Services Segment
•Muskie Proppant LLC—September 2011
•Piranha Proppant LLC—May 2017
•Sturgeon Acquisitions LLC—June 2017
•Taylor Frac, LLC—June 2017
•Taylor Real Estate Investments, LLC—June 2017
•South River Road, LLC—June 2017
Accommodation Services Segment
•Great White Sand Tiger Lodging Ltd.—October 2007
Drilling Services Segment
•Panther Drilling Systems LLC—December 2012
Other
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•Bison Drilling and Field Services, LLC—November 2010
•Bison Trucking—August 2013
•Mammoth Energy Services Inc.—June 2016
•Mammoth Energy Partners, LLC—October 2016
•Cobra Acquisitions LLC, or Cobra—January 2017
•Mako Acquisitions LLC—March 2017
•Tiger Shark Logistics LLC—October 2017
•Black Mamba Energy LLC—March 2018
•Stingray Cementing and Acidizing LLC, formerly RTS Energy Services LLC—June 2018
•Orca Energy Services LLC—December 2024
2025 Financial Overview and Highlights
•Net loss from continuing operations of $63.8 million, or $1.32 per diluted share, for the year ended December 31, 2025 as compared to net loss from continuing operations of $183.1 million, or $3.81 per diluted share, for the year ended December 31, 2024. Net loss for the year ended December 31, 2024 includes a non-cash, pre-tax charge of approximately $170.7 million, of which $89.2 million was charged to credit loss expense and $81.5 million was charged to interest on delinquent accounts receivable in relation to the Settlement Agreement with PREPA.
•Adjusted EBITDA from continuing operations of ($17.4) million for the year ended December 31, 2025 as compared to ($171.2) million for the year ended December 31, 2024. See “Non-GAAP Financial Measures” below for a reconciliation of net loss from continuing operations to Adjusted EBITDA from continuing operations. Adjusted EBITDA from continuing operations for the year ended December 31, 2024 includes a non-cash, pre-tax charge of approximately $170.7 million, of which $89.2 million was charged to credit loss expense and $81.5 million was charged to interest on delinquent accounts receivable in relation to the Settlement Agreement with PREPA.
Overview of Our Industries
Aircraft Industry
The operating environment for the lease of aircraft and aircraft assets is currently favorable. Factors such as population growth as well as improved global economic health and development are positively influencing both passenger and freight demand. In addition, factors and trends including OEM supply chain challenges and backlogs, the financing needs of airlines and the availability of maintenance facilities as well as repair timelines may increase the demand for our aircraft and aircraft assets.
Oil and Natural Gas Industry
The oil and natural gas industry has traditionally been volatile and is influenced by a combination of long-term, short-term and cyclical trends, including the domestic and international supply and demand for oil and natural gas, current and expected future prices for oil and natural gas and the perceived stability and sustainability of those prices, production depletion rates and the resultant levels of cash flows generated and allocated by exploration and production companies to their drilling, completion and related services and products budgets. The oil and natural gas industry is also impacted by general domestic and international economic conditions, political instability in oil producing countries, government regulations (both in the United States and elsewhere), levels of customer demand, the availability of pipeline capacity, storage capacity, shortages of equipment and materials and other conditions and factors that are beyond our control.
Demand for most of our oil and natural gas products and services depends substantially on the level of expenditures by companies in the oil and natural gas industry. The levels of capital expenditures of our customers are driven by many factors, including the prices of oil and natural gas. Throughout 2025 and 2024, we experienced challenges in our oil and gas businesses as a result of a generally declining rig count combined with elevated oil and natural gas production in the U.S. We expect 2026 activity to remain steady during the first half of the year with potential for upside in the back half of the year. Positive trends that may contribute to increased activity will come from LNG export capacity coming online and general electricity and power demand enhancements. We will be strategically positioned to capitalize on this anticipated demand if and when it ramps up.
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Natural Sand Proppant Industry
Increased demand from oil and gas companies in 2022 resulted in higher demand and pricing for our sand compared to 2021, which continued throughout the first quarter of 2023. Demand for our natural sand proppant was adversely impacted in the second quarter of 2023 by the wildfires in Canada, which hindered our ability to transport sand. As discussed above, pricing for crude oil and natural gas declined from levels seen in 2022, which slowed down completion activities and adversely impacted demand for our sand proppant services in the second half of 2023. Activity remained suppressed throughout 2024 and 2025. As discussed above, we expect 2026 activity to be relatively steady, with the potential for moderate upside compared to 2025 driven by increases in natural gas demand to support power demand and LNG exports.
Our proppant sand reserves consist of Northern White silica sand, giving us access to a range of high-quality sand grades meeting or exceeding all API specifications, including a mix between concentrations of coarse grades (20/40 and 30/50 mesh size) and finer grades (40/70 and 100 mesh size). Our sample boring data and our historical production data have indicated that our reserves contain deposits of approximately 60% 40 mesh size or finer substrate. The coarseness and conductivity of Northern White frac sand significantly enhances recovery of oil and liquids-rich gas by allowing hydrocarbons to flow more freely than is sometimes possible with native sand. The low acid-solubility increases the integrity of Northern White frac sand relative to other proppants with higher acid-solubility, especially in shales where hydrogen sulfide and other acidic chemicals are co-mingled with the targeted hydrocarbons. In addition, its crush resistant properties enable Northern White frac sand to be used in deeper drilling applications than the frac sand produced from many native mineral deposits.
We believe that the coarseness, conductivity, sphericity, acid-solubility, and crush-resistant properties of our Northern White sand reserves and our facilities’ connectivity to rail and other transportation infrastructure afford us a cost advantage over many of our competitors and make us one of a select group of sand producers capable of delivering high volumes of frac sand that is optimal for oil and natural gas production to all major unconventional resource basins currently producing throughout North America.
Infrastructure Industry
The infrastructure industry involves the construction and maintenance of fiber networks. Demand for our services is driven by artificial intelligence (“AI”) and data center projects.
Certain barriers to entry exist in the markets in which we operate, including adequate financial resources, technical expertise, high safety ratings and a proven track record of operational success. We compete based upon our industry experience, technical expertise, financial and operational resources, geographic presence, industry reputation, safety record and customer service. While we believe our customers consider a number of factors when selecting a service provider, they generally award most of their work through a bid process. Consequently, price is often a principal factor in determining which service provider is selected.
We believe that AI and high-performance computing will drive the upgrade and overbuild of fiber networks in order to increase data capacity. Funding for projects in the infrastructure space remains strong with added opportunities since the Infrastructure Investment and Jobs Act ("IIJA") was signed into law on November 15, 2021. Federal and state agencies continue to implement multi‑year funding programs established under the IIJA, including substantial investments through Broadband Equity, Access and Deployment ("BEAD") program. These programs continue to support planned investment in broadband, utility, transportation, and clean‑energy projects. Although these programs were enacted several years ago, the implementation and distribution of funds remain ongoing and are expected to continue well into the latter half of the decade. Market participants across telecommunications, power, and energy‑transition sectors have announced substantial capital plans aligned with these programs, supported by federal incentives and growing private‑sector investment in areas such as fiber deployment, grid modernization, electrification, and data‑center‑related power demand.
Settlement Agreement with PREPA
Since we commenced operations in this line of business, a substantial portion of our infrastructure revenue has been generated from storm restoration work, primarily from the Puerto Rico Electric Power Authority, or PREPA, due to damage caused by Hurricane Maria. On October 19, 2017, Cobra Acquisitions LLC, or Cobra, and PREPA entered into an emergency master services agreement for repairs to PREPA’s electrical grid. The one-year contract, as amended, provided for payments of up to $945 million. On May 26, 2018, Cobra and PREPA entered into a second one-year, $900 million master services agreement to provide additional repair services and begin the initial phase of reconstruction of the electrical power system in Puerto Rico. Our work under each of the contracts with PREPA ended on March 31, 2019. PREPA is currently subject to
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bankruptcy proceedings, which were filed in July 2017 and are currently pending in the United States District Court for the District of Puerto Rico (the “Title III Court”). As a result, PREPA’s ability to meet its payment obligations under the above-referenced agreements was largely dependent upon funding from the Federal Emergency Management Agency (“FEMA”) or other sources. Since September 30, 2019, Cobra has been pursuing litigation in the Title III Court and other dispute resolution efforts seeking recovery of the amounts owed to Cobra by PREPA for restoration services in Puerto Rico, which proceedings are discussed in more detail in the Company’s prior reports filed with the SEC. PREPA was holding approximately $18.4 million in funds (the “Withheld FEMA Funds”) received from FEMA and considered payable to Cobra but had been withheld due to garnishments asserted by three Puerto Rican municipalities (the “Specified Municipalities”) for certain municipal tax claims discussed in Mammoth’s filings with the SEC (the “Specified Municipal Tax Claims”) and for which Cobra disputed any valid garnishment.
On July 22, 2024, Cobra entered into a release and settlement agreement with PREPA and the FOMB, in its capacity as Title III representative for PREPA, to settle all outstanding matters between Cobra and PREPA (the “Settlement Agreement”). Under the terms of the Settlement Agreement, Cobra was allowed an administrative expense claim against PREPA of $170.0 million, plus the $18.4 million in the Withheld FEMA Funds. Cobra’s allowed claim will be paid through three installments: (i) $150.0 million on the later of (A) ten business days following approval of the Settlement Agreement by the Title III Court and (B) August 31, 2024; (ii) $20.0 million within seven days following the effective date of PREPA’s plan of adjustment; and (iii) $18.4 million (subject to providing one or more indemnity letters of credit) in the Withheld FEMA Funds within either (A) ten business days after the deadline for appealing the entry of the settlement order by the Title III Court under the applicable bankruptcy rules of procedure if no such appeal is filed, or (B) if the provisions of the settlement order allowing PREPA to release the Withheld FEMA Funds to Cobra without retaining any liability to the Specified Municipalities are appealed by the Specified Municipalities, within ten business days of the filing of the notice of such appeal.
The Settlement Agreement was approved by the Company’s Board of Directors on July 22, 2024, and was also approved by the PREPA Board and by the FOMB. On September 18, 2024, the Settlement Agreement was approved by the Title III Court overruling all objections thereto and an order was entered the same day (the “Settlement Order”). On October 1, 2024, Cobra received the first installment payment of $150.0 million from the Commonwealth of Puerto Rico in connection with the Settlement Agreement with PREPA. Also on October 1, 2024, certain Puerto Rico municipalities and Foreman Electric Services Inc. that had objected to approval of the Settlement Order each filed timely notices of appeal of the Settlement Order to the United States Court of Appeals for the First Circuit. None of the foregoing parties have sought a stay of the Settlement Order pending such appeals. Although the ultimate outcome of these appeals cannot be predicted with certainty, Cobra believes that the appeals are without merit.
On October 18, 2024, Cobra received a payment from PREPA totaling $18.4 million under the terms of the Settlement Agreement. In connection with the receipt of the $18.4 million from PREPA, Cobra instructed Fifth Third Bank, National Association (“Fifth Third Bank”) to issue a letter of credit to PREPA under the Reimbursement Agreement in the amount of $18.4 million and transferred a total of $19.3 million to a restricted cash account maintained by Fifth Third Bank as collateral for the letter of credit.
As a result of the Settlement Agreement, the Company recorded a non-cash, pre-tax charge of approximately $170.7 million in the second quarter of 2024 to reduce its accounts receivable balance from PREPA of $359.1 million, representing the amount owed to Cobra by PREPA in relation to these agreements as of June 30, 2024, including the accrued but unpaid interest, prior to the Settlement Agreement, to the amount expected to be received from the Settlement Agreement. Of the $170.7 million, $89.2 million was charged to credit loss expense, which is included in “selling, general and administrative” on the consolidated statements of comprehensive income (loss), and $81.5 million was charged to interest on delinquent accounts receivable, which is included in “other (expense) income, net” on the consolidated statements of comprehensive income (loss). As of December 31, 2025, $20.0 million remained outstanding from PREPA. See Note 2. “Summary of Significant Accounting Policies—Accounts Receivable” and Note 18. “Commitments and Contingencies—Litigation” to our consolidated financial statements included elsewhere in this annual report for more information.
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Results of Operations
The following discussion focuses on a comparison of the results of operations between the years ended December 31, 2025 and 2024.
Years Ended
December 31, 2025
December 31, 2024
Revenue:
(in thousands)
Rental services
$
11,098
$
7,105
Infrastructure services
4,086
1,476
Natural sand proppant services
16,552
19,057
Accommodation services
8,954
10,851
Drilling services
3,675
3,558
Other services
—
3,950
Eliminations
(73)
(398)
Total revenue
44,292
45,599
Cost of revenue:
Rental services (exclusive of depreciation and amortization of $3,738 and $1,155, respectively, for 2025 and 2024)
6,701
4,955
Infrastructure services (exclusive of depreciation and amortization of $221 and $170, respectively, for 2025 and 2024)
5,893
2,280
Natural sand proppant services (exclusive of depreciation, depletion and accretion of $4,106 and $5,228, respectively, for 2025 and 2024)
18,117
17,791
Accommodation services (exclusive of depreciation and amortization of $1,072 and $1,134, respectively, for 2025 and 2024)
5,951
6,397
Drilling services (exclusive of depreciation and amortization of $91 and $145, respectively, for 2025 and 2024)
3,765
4,373
Other services (exclusive of depreciation and amortization of $1,064 and $3,883, respectively, for 2025 and 2024)
2,209
7,137
Eliminations
(73)
(398)
Total cost of revenue
42,563
42,535
Selling, general and administrative expenses
19,572
114,468
Depreciation, depletion, amortization and accretion
10,292
11,715
Gains on disposal of assets, net
(2,371)
(2,762)
Impairment of long-lived assets
31,669
—
Operating loss
(57,433)
(120,357)
Interest income (expense and financing charges), net, inclusive of related parties
1,670
(9,497)
Other expense, net
(3,906)
(64,564)
Loss before income taxes
(59,669)
(194,418)
(Benefit) provision for income taxes
4,087
(11,306)
Net loss from continuing operations
$
(63,756)
$
(183,112)
Net income (loss) from discontinued operations, net of income taxes
$
68,353
$
(24,214)
Net income (loss)
$
4,597
$
(207,326)
Revenue. Revenue for 2025 decreased $1.3 million, or 3%, to $44.3 million from $45.6 million for 2024. The decline in total revenue is primarily attributable to decreases in revenue for other services, natural sand proppant services, and accommodation services, which was partially offset by an increase in revenue for rental services, infrastructure services, and
51
drilling services. Revenue derived from related parties was $1.6 million for 2025 compared to $1.5 million for 2024. Revenue by division was as follows:
Rental Services. Rental services division revenue increased $4.0 million, or 56%, to $11.1 million for 2025 from $7.1 million for 2024. The increase in our rental services revenue was primarily driven by a $2.5 million increase in aviation rental revenue, combined with a 29% increase in equipment rental revenue.
Infrastructure Services. Infrastructure services division revenue increased $2.6 million or 173%, to $4.1 million for 2025 from $1.5 million for 2024 primarily due to an increase in fiber optic revenue related to increased activity.
Natural Sand Proppant Services. Natural sand proppant services division revenue decreased $2.5 million, or 13%, to $16.6 million for 2025, from $19.1 million for 2024. The decrease in our natural sand proppant services revenue was primarily attributable to a 12% decrease in average price per ton of sand sold from $23.15 in 2024 to $20.43 in 2025 primarily driven by lower completions activity by our customers, which was offset by a 12% increase in sand volumes sold.
Accommodation Services. Accommodation services revenue decreased $1.9 million, or 17%, to $9.0 million for 2025 from $10.9 million for 2024, primarily due to a decline in utilization. On average, 186 rooms were utilized in 2025 as compared to 216 in 2024 for our accommodation services.
Drilling Services. Drilling services revenue marginally increased $0.1 million or 3% to $3.7 million for 2025 from $3.6 million for 2024, primarily due to a favorable shift in job mix toward higher value horizontal drilling activity, which offset decreased directional drilling activity.
Other Services. Other services revenue declined $3.9 million in 2025. This decrease was primarily related to our water transfer services, which were shut down during the third quarter of 2024, and our crude oil hauling services, which were idled at the beginning of 2025.
Cost of Revenue (exclusive of depreciation, depletion, amortization and accretion expense). Cost of revenue, exclusive of depreciation, depletion, amortization and accretion expense, marginally increased from $42.5 million, or 93% of total revenue, for 2024 to $42.6 million, or 96% of total revenue, for 2025. Cost of revenue by operating division was as follows:
Rental Services. Rental services division cost of revenue, exclusive of depreciation and amortization expense, increased $1.7 million, or 34%, from $5.0 million for 2024 to $6.7 million for 2025 primarily due to an increase in average equipment utilization. As a percentage of revenue, our rental services division cost of revenue, exclusive of depreciation and amortization expense of $3.7 million in 2025 and $1.2 million in 2024, was 60% and 70%, for 2025 and 2024, respectively. The decrease as a percentage of revenue is primarily due to higher equipment utilization as well as higher margins associated with aviation rentals as compared to equipment rentals, resulting in improved absorption of fixed operating costs.
Infrastructure Services. Infrastructure services division cost of revenue, exclusive of depreciation and amortization expense, increased $3.6 million from $2.3 million for 2024 to $5.9 million for 2025. As a percentage of revenue, cost of revenue, exclusive of depreciation and amortization expense of $0.2 million in 2025 and 2024, was 144% and 153% for 2025 and 2024, respectively. The decrease as a percentage of revenue is primarily due to an increase in contract labor costs as a percentage of revenue.
Natural Sand Proppant Services. Natural sand proppant services division cost of revenue, exclusive of depreciation, depletion and accretion expense, increased $0.3 million, or 2%, from $17.8 million for 2024 to $18.1 million for 2025. As a percentage of revenue, cost of revenue, exclusive of depreciation, depletion and accretion expense of $4.1 million in 2025 and $5.2 million in 2024, was 109% and 93%, for 2025 and 2024, respectively. The increase in cost as a percentage of revenue is primarily due to a 12% decrease in average sales price and a 12% increase in tons of sand sold.
Accommodation Services. Accommodation services cost of revenue, exclusive of depreciation and accretion, decreased $0.4 million, or 6%, to $6.0 million for 2025 from $6.4 million in 2024. As a percentage of revenue, cost of revenue, exclusive of depreciation and accretion of $1.1 million for 2025 and 2024, was 67% and 59% for 2025 and
52
2024, respectively. The increase as a percentage of revenue is primarily due to a decline in utilization, resulting in a higher ratio of fixed costs to variable costs.
Drilling Services. Drilling services cost of revenue, exclusive of depreciation, decreased $0.6 million, or 14%, to $3.8 million for 2025 from $4.4 million for 2024. As a percentage of revenue, cost of revenue, exclusive of depreciation of $0.1 million for 2025 and 2024, was 103% and 122% for 2025 and 2024, respectively. The decrease as a percentage of revenue is primarily due to an improvement in pricing.
Other Services. Other services cost of revenue, exclusive of depreciation and amortization expense, was $2.2 million for 2025 and $7.1 million in 2024, respectively. In 2024, cost of revenue, exclusive of depreciation and amortization, was 182% of revenue, and depreciation and amortization expense was $3.9 million. In 2025, no revenue was generated and depreciation and amortization expense was $1.1 million; the cost decrease was primarily due to decreased utilization, resulting in a higher proportion of fixed operating costs.
Selling, General and Administrative Expenses. Selling, general and administrative expenses, or SG&A, represent the costs associated with managing and supporting our operations. SG&A expense decreased $94.9 million, or 83%, to $19.6 million for the year ended December 31, 2025, from $114.5 million for the year ended December 31, 2024 primarily due to a decrease in the provision for expected credit losses in connection with the Settlement Agreement with PREPA that was recognized in 2024.
Depreciation, Depletion, Amortization and Accretion. Depreciation, depletion, amortization and accretion decreased $1.4 million, or 12%, to $10.3 million for 2025 from $11.7 million in 2024. The decrease is primarily due to a decline in property and equipment depreciation expense as a result of lower capital expenditures and existing assets being fully depreciated.
Gains on Disposal of Assets, Net. Gains on the disposal of assets decreased $0.4 million, or 14%, to $2.4 million for 2025 from $2.8 million in 2024. Gains on the disposal of assets are primarily related to the sale of down-hole tools, trucks, and field equipment for the year ended December 31, 2025, and primarily related to the sale of dormitories, trucks and field equipment for the year ended December 31, 2024.
Impairment of long-lived assets. The Company’s management made the decision to market assets related to is natural sand proppant operations at its Piranha Proppant LLC and Muskie Proppant LLC processing plants. As a result, the Company recognized impairment expense on these assets totaling $31.7 million in 2025. There was no similar activity for the year ended December 31, 2024.
Operating Loss. We reported an operating loss of $57.4 million for 2025 compared to $120.4 million for 2024. The decreased operating loss was primarily due to an $89.2 million charge to selling, general and administrative expenses recognized during the year ended December 31, 2024 in relation to the Settlement Agreement with PREPA. The decreased loss was coupled with increased utilization in our rental services divisions and reduction in total cash selling, general and administrative expense.
Interest income (expense and financing charges), net. Interest income, net of interest expense and financing charges was $1.7 million for the year ended December 31, 2025 compared to interest expense and financing charges, net of $9.5 million for the year ended December 31, 2024. The increase is primarily due to a $5.5 million financing charge incurred during the year ended December 31, 2024, in relation to the Assignment Agreement with SPCP Group coupled with a decline in interest expense on long term debt. See “—Liquidity and Capital Resources—Cobra Assignment Agreement” for additional information.
Other (Expense) Income, net. We recognized other expense, net of $3.9 million during the year ended December 31, 2025 compared to other income, net of $64.6 million for the year ended December 31, 2024. During the year ended December 31, 2024, we recognized interest on delinquent accounts receivable totaling $20.8 million in relation to our outstanding receivable with PREPA. In July 2024, Cobra entered into the Settlement Agreement with PREPA resulting in a charge to interest on delinquent accounts receivable totaling $81.5 million during the year ended December 31, 2024 to reduce its accounts receivable balance to the amount expected to be collected in relation to interest charged to PREPA.
Income Taxes. During 2025, we recorded income tax benefit of $4.1 million on pre-tax loss of $59.7 million compared to income tax expense of $11.3 million on pre-tax income of $194.4 million for 2024. Our effective tax rate was (6.8)% for 2025 compared to 5.8% for 2024. The effective tax rates for the years ended December 31, 2025 and 2024 differed from the statutory rate of 21% primarily due to the mix of earnings between the United States and Puerto Rico, changes in the
53
valuation allowance and interest and penalties. See Note 12. “Income Taxes” to our consolidated financial statements included elsewhere in this annual report for additional detail regarding our change in tax expense.
Discontinued Operations. We recorded net income from discontinued operations, net of income taxes totaling $68.4 million during the year ended December 31, 2025 compared to a net loss from discontinued operations, net of income taxes of $24.2 million for the year ended December 31, 2024. See Note 3 of the notes to our consolidated financial statements for a breakout of the results of operations for our discontinued operations.
Non-GAAP Financial Measures
Adjusted EBITDA from Continuing Operations
Adjusted EBITDA from continuing operations is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDA from continuing operations as net loss from continuing operations before depreciation, depletion, amortization and accretion, gains on disposal of assets, net, impairment of goodwill, stock based compensation, interest expense and financing charges, net, other expense (income), net (which is comprised of interest on trade accounts receivable and certain legal expenses) and (benefit) provision for income taxes, further adjusted to add back interest on trade accounts receivable. We exclude the items listed above from net loss from continuing operations in arriving at Adjusted EBITDA from continuing operations because these amounts can vary substantially from company to company within our industries depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA from continuing operations should not be considered as an alternative to, or more meaningful than, net loss from continuing operations or cash flows from operating activities as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA from continuing operations 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 components of Adjusted EBITDA from continuing operations. Our computations of Adjusted EBITDA from continuing operations may not be comparable to other similarly titled measures of other companies. We believe that Adjusted EBITDA from continuing operations is a widely followed measure of operating performance and may also be used by investors to measure our ability to meet debt service requirements.
The following tables provide a reconciliation of Adjusted EBITDA from continuing operations to net loss from continuing operations, the most directly comparable GAAP financial measure for the specified periods (in thousands):
Consolidated
Years Ended December 31,
Reconciliation of net loss from continuing operations to Adjusted EBITDA from continuing operations:
2025
2024
Net loss from continuing operations
$
(63,756)
$
(183,112)
Depreciation, depletion, amortization and accretion
10,292
11,715
Gains on disposal of assets, net
(2,371)
(2,762)
Impairment of long-lived assets
31,669
—
Stock based compensation
412
875
Interest expense and financing charges, net
(1,670)
9,497
Other expense, net
3,906
64,564
(Benefit) provision for income taxes
4,087
(11,306)
Interest on trade accounts receivable
—
(60,686)
Adjusted EBITDA from continuing operations
$
(17,431)
$
(171,215)
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Adjusted Net Loss from Continuing Operations and Adjusted Loss per Share from Continuing Operations
Adjusted net loss from continuing operations and adjusted basic and diluted loss per share from continuing operations are supplemental non-GAAP financial measures that are used by management to evaluate our operating and financial performance. Management believes these measures provide meaningful information about the Company’s performance by excluding certain non-cash charges, such as impairment of long-lived assets, which may not be indicative of the Company’s ongoing operating results, from net loss from continuing operations. Adjusted net loss from continuing operations and adjusted loss per share from continuing operations should not be considered in isolation or as a substitute for net loss from continuing operations and loss per share from continuing operations prepared in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. The following tables provide a reconciliation of adjusted net loss from continuing operations and adjusted loss per share from continuing operations to the GAAP financial measures of net loss from continuing operations and loss per share from continuing operations for the periods specified.
Years Ended December 31,
2025
2024
(in thousands, except per share amounts)
Net loss from continuing operations, as reported
$
(63,756)
$
(183,112)
Impairment of long-lived assets
31,669
—
Adjusted net loss from continuing operations
$
(32,087)
$
(183,112)
Basic and diluted earnings per share from continuing operations, as reported
$
(1.32)
$
(3.81)
Impairment of long-lived assets
0.66
—
Adjusted basic and diluted earnings per share from continuing operations
$
(0.66)
$
(3.81)
Liquidity and Capital Resources
We require capital to fund ongoing operations including maintenance expenditures on our existing fleet of equipment, organic growth initiatives, investments and acquisitions, and the litigation settlement obligations described in Note 18. “Commitments and Contingencies” to our consolidated financial statements included elsewhere in this annual report and under “Capital Requirements and Sources of Liquidity” below. Our primary sources of liquidity have been cash on hand, borrowings under our revolving credit facility and cash flows from operations, as well as the net proceeds received by Cobra under the assignment agreement with SPCP Group relating to the PREPA receivable. Our primary uses of capital have been for investing in property, plant and equipment used to provide our services and to acquire complementary businesses.
Liquidity
The following table summarizes our liquidity as of the dates indicated (in thousands):
December 31,
2025
2024
Cash and cash equivalents
$
101,987
$
60,845
Revolving credit facility borrowing base
50,000
25,162
Less letter of credit facilities (environmental remediation)
(2,573)
(4,228)
Less letter of credit facilities (insurance programs)
(2,400)
(3,300)
Net working capital (less cash and current portion of long-term debt)(a)
(6,940)
(6,124)
Total
$
140,074
$
72,355
(a) Net working capital (less cash, cash equivalents and restricted cash) is calculated by subtracting total current liabilities, cash and cash equivalents and restricted cash from total current assets.
As of March 3, 2026, we had unrestricted cash on hand of $89.6 million, marketable securities of $28.8 million, no outstanding borrowings under our revolving credit facility and a borrowing base of $50.0 million, leaving an aggregate of $38.2
55
million of available borrowing capacity under this facility, after giving effect to $5.0 million of outstanding letters of credit. As of March 3, 2026, we had total liquidity of $156.6 million consisting of cash on hand and available borrowing capacity under our revolving credit facility.
Cash Flows
The following table sets forth our cash flows for the years indicated (in thousands):
December 31,
2025
2024
Net cash (used in) provided by operating activities from continuing operations
$
(19,575)
$
194,721
Net cash provided by (used in) operating activities from discontinued operations
1,005
(14,004)
Net cash (used in) provided by investing activities from continuing operations
(82,504)
3,847
Net cash provided by (used in) investing activities from discontinued operations
137,050
(14,279)
Net cash used in financing activities from continuing operations
(433)
(98,231)
Net cash used in financing activities from discontinued operations
(3,854)
(13,882)
Effect of foreign exchange rate on cash
109
(144)
Net increase in cash, cash equivalents and restricted cash
$
31,798
$
58,028
Operating Activities for Continuing Operations
Net cash (used in) provided by operating activities from continuing operations was ($19.6) million and $194.7 million, for the years ended December 31, 2025 and 2024, respectively. The change in operating cash flows from 2024 to 2025 was primarily due to decreased receipts on accounts receivable, including the receipt of $232.4 million from PREPA in 2024, which was partially offset by a decrease in net loss from continuing operations.
Operating Activities from Discontinued Operations
Net cash provided by (used in) operating activities from discontinued operations was $1.0 million and ($14) million, for the years ended December 31, 2025 and 2024, respectively. The change in operating cash flows from 2024 to 2025 was primarily attributable to the receipt of outstanding receivables of the discontinued entities and pressure pumping equipment.
Investing Activities from Continuing Operations
Net cash (used in) provided by investing activities from continuing operations was ($82.5) million and $3.8 million, for the years ended December 31, 2025 and 2024, respectively. Cash used in investing activities is primarily comprised of purchases of property, plant and equipment, purchases of marketable securities and proceeds from the disposal of property, plant and equipment.
The following table summarizes our capital expenditures by operating division for the periods indicated (in thousands):
Years Ended December 31,
2025
2024
Rental services(a)
$
69,953
$
351
Infrastructure services(b)
128
299
Accommodation services(c)
343
161
Drilling services(c)
128
184
Other(d)
—
219
Total capital expenditures
$
70,552
$
1,214
a. Capital expenditures primarily for purchasing aircraft and equipment to be used by our equipment rental businesses for the year ended December 31, 2025 and maintenance for the year ended December 31, 2024.
b. Capital expenditures primarily for trailer purchases for fiber optic crews for the year ended December 31, 2025 and an utility directional drill for the year ended December 31, 2024.
c. Capital expenditures primarily for maintenance and equipment for the years ended December 31, 2025 and 2024.
d. Capital expenditures primarily for maintenance for the year ended December 31, 2024.
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Investing Activities from Discontinued Operations
Net cash provided by (used in) investing activities from discontinued operations was $137.1 million and $(14.3) million for the years ended December 31, 2025 and 2024, respectively. The change in net cash provided by investing activities from discontinued operations for the periods is primarily due to the sale of a portion of our infrastructure services entities and pressure pumping equipment.
Financing Activities from Continuing Operations
Net cash used in financing activities from continuing operations was $0.4 million and $98.2 million for the years ended December 31, 2025 and 2024, respectively. The decrease in net cash used in financing activities from continuing operations is primarily attributable to repayments on long-term debt - related parties of $50.9 million and payments on financing transactions of $46.8 million incurred during the year ended December 31, 2024. There was no similar activity for the year ended December 31, 2025.
Financing Activities from Discontinued Operations
Net cash used in financing activities from discontinued operations was $3.9 million and $13.9 million for the years ended December 31, 2025 and 2024, respectively. The decrease in net cash provided by investing activities from discontinued operations is primarily attributable to principal payments on financing leases and equipment financing notes and payments on sale leaseback arrangements.
Effect of Foreign Exchange Rate on Cash
The effect of foreign exchange rate on cash was $0.1 million for the year ended December 31, 2025, and ($0.1) million for the year ended December 31, 2024. The year-over-year effect was driven primarily by a favorable (unfavorable) shift in the weakness (strength) of the Canadian dollar relative to the U.S. dollar for the cash held in Canadian accounts.
Net Working Capital
Our net working capital totaled $107.1 million and $74.1 million, respectively, at December 31, 2025 and 2024. Our unrestricted cash balances totaled $102.0 million and $60.8 million, respectively, at December 31, 2025 and 2024.
Revolving Credit Facility and Term Credit Facility
On October 16, 2023, we entered into a revolving credit facility and a term credit facility (each as defined below), which refinanced in full our indebtedness outstanding under, and terminated, the amended and restated revolving credit facility, dated as of October 19, 2018, as amended (the “previous revolving credit facility”), with us and certain of our direct and indirect subsidiaries, as borrowers, the lenders party thereto from time to time, and PNC Bank, National Association, as a lender and as administrative agent for the lenders.
On October 16, 2023, we, as borrower, and certain of our direct and indirect subsidiaries, as guarantors, entered into a revolving credit agreement with the lenders party thereto and Fifth Third Bank, National Association, as a lender and as administrative agent for the lenders (“Fifth Third Bank”), as may be subsequently amended (the “revolving credit facility”). The revolving credit facility provides for revolving commitments in an aggregate amount of up to $75 million. Borrowings under the revolving credit facility are secured by our assets, inclusive of the subsidiary companies, and are subject to a borrowing base calculation prepared monthly which includes a requirement to maintain certain reserves as specified in the revolving credit facility. The revolving credit facility also contains various affirmative and restrictive covenants. Interest under the revolving credit facility equals the Tranche Rate (as defined in the revolving credit facility) plus (i) 1.75%, if the Average Excess Availability Percentage (as defined in the revolving credit facility) is greater than 66 2/3%, (ii) 2.00% if the Average Excess Availability Percentage is greater than 33 1/3% and less than or equal to 66 2/3%, and (iii) 2.25% if the Average Excess Availability Percentage is less than or equal to 33 1/3%.
As of December 31, 2025 and December 31, 2024, the financial covenant under the revolving credit facility was the fixed charge coverage ratio of 1.0 to 1.0 which applies only during the period from the date that excess availability under the revolving credit facility is less than the greater of (i) 10% of total availability under the revolving credit facility and (ii) $5 million until the date in which the excess availability is equal to the greater of (i) 10% of excess availability and (ii) $5 million
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for 30 consecutive days (such period, a “Financial Covenant Period”). A Financial Covenant Period was not in effect as of each of December 31, 2025 and the filing date of this report.
On October 16, 2024, the Company entered into (i) an amendment to the revolving credit agreement (the “Credit Agreement Amendment”) and (ii) a letter of credit reimbursement agreement (the “Reimbursement Agreement”), each with Fifth Third Bank. The Credit Agreement Amendment, among other things, permits the transactions contemplated by the Reimbursement Agreement, including the issuance of one or more letters of credit to satisfy Cobra’s obligations under the Settlement Agreement relating to one or more indemnity letters of credit. The aggregate amount of all such letters of credit shall not exceed $18.4 million. Under the terms of the Reimbursement Agreement, the Company agreed to hold cash funds totaling at least 105% of the stated amount of all letters of credit in an account maintained by Fifth Third Bank and to which Fifth Third Bank has a first priority security interest.
On October 18, 2024, Cobra received a payment from PREPA totaling $18.4 million under the terms of the Settlement Agreement. In connection with the receipt of the $18.4 million from PREPA, Cobra instructed Fifth Third Bank to issue a letter of credit to PREPA under the Reimbursement Agreement in the amount of $18.4 million and transferred a total of $19.3 million to a restricted cash account maintained by Fifth Third Bank as collateral for the letter of credit.
On April 11, 2025, we entered into a second amendment to our revolving credit agreement to, among other things, do the following:
i.receive consent from Fifth Third Bank to effectuate the sale of 5 Star Electric, LLC, Higher Power Electric, LLC and Python Equipment LLC;
ii.permit the Company to repurchase up to the lesser of $50 million or 10 million shares of its common stock on or before March 31, 2026, so long as the aggregate amount of the Company’s unrestricted cash is greater than $50 million after each such repurchase;
iii.expand the Company’s investment opportunities to include equity securities and private investments; and
iv.add certain investments and qualified cash to the borrowing base calculation.
On July 2, 2025, the Company entered into a letter agreement in relation to its revolving credit facility whereby the Revolving Loan Commitments are reduced from $75.0 million to $50.0 million.
On October 16, 2023, we, as borrower, and certain of our direct and indirect subsidiaries, as guarantors, also entered into a loan and security agreement with the lenders party thereto and Wexford Capital LP, an affiliate of the Company (the “term credit facility”). The term credit facility was approved by the audit committee of our board of directors, consisting entirely of independent directors, as a transaction with a related party.
The term credit facility provided for term commitments in an aggregate amount equal to $45 million. Borrowings under the term credit facility were secured by our assets, inclusive of the subsidiary companies. The term credit facility also contained various affirmative and restrictive covenants. Interest under the term credit facility equaled the SOFR Interest Rate (as defined in the term credit facility) plus 7.50%; provided that we may elect to pay all or a portion of the accrued interest due with respect to any Interest Period (as defined in the new term credit facility) ending on or before April 16, 2025, in kind by adding such accrued interest to the principal amount of the outstanding loans thereunder.
In particular, under the term credit facility, we were required, among other things, to mandatorily remit to Wexford up to 50% of all amounts that constitute PREPA Claim Proceeds, as such term is defined in the term credit facility, which were used to reduce outstanding borrowings under the term credit facility, as required under the terms thereof. Wexford waived this requirement in connection with the Assignment Agreement and the $9.6 million received by Cobra from PREPA in February 2024.
In connection with the receipt of the first installment amount under the Settlement Agreement on October 1, 2024, the Company paid, in full, all amounts owed under the term credit facility, including the accrued and unpaid interest, in the aggregate amount of $50.9 million, and terminated the facility on October 2, 2024. In connection with the payoff of the term credit facility, Wexford waived the 1% early termination penalty.
If an event of default occurs under the revolving credit facility and remains uncured, it could have a material adverse effect on the Company’s business, financial condition, liquidity and results of operations. The lenders, as applicable, (i) would not be required to lend any additional amounts to the Company, (ii) could elect to increase the interest rate by 200 basis points, (iii) could elect to declare all outstanding borrowings, together with accrued and unpaid interest and fees, to be due and payable, (iv) may have the ability to require the Company to apply all of its available cash to repay outstanding borrowings, and (v) may
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foreclose on substantially all of the Company’s assets. The revolving credit facility is currently scheduled to mature on October 16, 2028.
There were no financial covenants applicable under the revolving credit facility as of December 31, 2025 and December 31, 2024.
As of March 3, 2026, our borrowing base was $50.0 million and we had no outstanding borrowings under our revolving credit facility, leaving an aggregate of $38.2 million of available borrowing capacity, after giving effect to $5.0 million of outstanding letters of credit and the requirement to maintain the reserves specified in the revolving credit facility out of the available borrowing capacity.
Cobra Assignment Agreement
On December 1, 2023, Cobra, as seller, and Mammoth, as guarantor, entered into an assignment agreement (the “Assignment Agreement”) with SPCP Group, LLC (“SPCP Group”), as purchaser. Under the terms and conditions of the Assignment Agreement, Cobra transferred to SPCP Group, at the purchase rate of 88.0% and free and clear of any liens and claims, all of its rights, title and interest in the first $63.0 million (the “Transferred Amount”) of the total outstanding accounts receivable that remained unpaid by PREPA as of October 6, 2023 (the “PREPA Claim”), received or to be received by Cobra on or after October 6, 2023. Between October 6, 2023 and December 1, 2023, Cobra received payments from PREPA with respect to the PREPA Claim totaling $8.6 million (the “Interim Payment Amount”), resulting in the net Transferred Amount of $54.4 million.
In connection with the entry into the Assignment Agreement, Mammoth and Cobra obtained the required consents from lenders under the Company’s revolving credit facility with Fifth Third Bank and the Company’s term loan and security agreement with Wexford. Further, under the term loan and security agreement with Wexford, Mammoth was required, among other things, to mandatorily remit to Wexford up to 50% of all amounts that constitute PREPA Claim proceeds, including the proceeds received by Cobra under the Assignment Agreement, to reduce outstanding borrowings under such term loan and security agreement. In connection with the Assignment Agreement, Wexford waived this requirement.
The net proceeds received by Cobra in connection with the Assignment Agreement were $46.1 million. During the three months ended March 31, 2024, PREPA paid $64.0 million with respect to the outstanding PREPA receivable. Of the $64.0 million, $54.4 million was paid to SPCP Group, as Cobra’s assignee under the Assignment Agreement, which fully extinguished Cobra’s and Mammoth’s obligations to SPCP Group, and the Assignment Agreement was terminated.
Repurchase Program Authorization
On August 10, 2023, our board of directors approved a stock repurchase program pursuant to which we would be authorized to repurchase up to the lesser of $55 million or 10 million shares of its common stock, subject to the factors discussed below. Following the completion of the refinancing transactions discussed in this report, any stock repurchases under this program may be made opportunistically from time to time in open market or privately negotiated transactions in compliance with Rule 10b-18 under the Securities Act of 1934, as amended, including any 10b5-1 plan, and will be subject to market conditions, applicable legal and contractual restrictions, liquidity requirements and other factors. The repurchase program has no time limit, does not require us to repurchase any specific number of shares and may be suspended from time to time, modified or discontinued by our board of directors at any time. Any common stock repurchased as part of such stock repurchase program will be cancelled and retired. We have not repurchased any shares of our common stock under the stock repurchase program as of December 31, 2025 or to date. See also Item 1A. “Risk Factors--Our ability to repurchase stock may be limited and no assurance can be given that we will be able to effectuate our stock repurchase program in the future at indicated levels or at all.”
Capital Requirements and Sources of Liquidity
As we pursue our business and financial strategy, we regularly consider which capital resources are available to meet our future financial obligations and liquidity requirement. We believe that our cash on hand, including the cash payments received to date under the Settlement Agreement with PREPA, operating cash flow and available borrowings under our currently undrawn credit facility will be sufficient to meet our short-term and long-term funding requirements, including funding our current operations, planned capital expenditures, debt service obligations and known contingencies.
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During the year ended December 31, 2025, our capital expenditures totaled $70.6 million, including $70.0 million in our rental service segment primarily related to purchases of aircraft and equipment for our equipment rental business, $0.1 million in our infrastructure segment primarily related to trailer purchases for fiber optic crews and $0.5 million for our other divisions primarily related to equipment additions for our remote accommodations and drilling businesses.
During 2026, we currently estimate that our aggregate capital expenditures, excluding aviation equipment, will be approximately $11 million, depending upon industry conditions and our financial results. These capital expenditures include $4 million for equipment rentals in our rental services segment, $2 million for our infrastructure services segment, $3 million for our natural sand proppant services segment, $1 million for our accommodation services segment and $1 million for our drilling services segment. Additional growth in our infrastructure division is expected to be financed through leasing arrangements.
Also, as noted above in this report, in response to market conditions and reduced demand, we have (i) temporarily shut down certain of our oilfield service offerings, including crude oil hauling, cementing, acidizing and land drilling services, (ii) idled certain facilities, including our sand processing plant in Pierce County, Wisconsin and (iii) reduced our workforce across all of our operations. We continue to monitor market conditions to determine if and when we will recommence these services and operations and increase our workforce. Any such recommencement and expansion will further increase our liquidity requirements in advance of revenue generation.
In addition, while we regularly evaluate acquisition opportunities, we do not have a specific acquisition budget for 2026 since the timing and size of acquisitions cannot be accurately forecasted. We intend to continue to evaluate acquisition opportunities, including those in the renewable energy sector as well as transactions involving entities controlled by Wexford. Our acquisitions may be undertaken with cash, our common stock or a combination of cash, common stock and/or other consideration. In the event we make one or more acquisitions and the amount of capital required is greater than the amount we have available for acquisitions at that time, we could be required to reduce the expected level of capital expenditures and/or seek additional capital.
If we seek additional capital for any of the above or other reasons, we may do so through borrowings under the revolving credit facility, joint venture partnerships, sale-leaseback transactions, asset sales, including potential sales of accounts receivable or other financing transactions, offerings of debt or equity securities or other means. Although we expect that our sources of capital will be adequate to fund our short-term and long-term liquidity requirements, we cannot assure you that this additional capital will be available on acceptable terms or at all. If we are unable to obtain funds we need, our ability to conduct operations, make capital expenditures, satisfy debt services obligations, pay litigation settlement obligations, fund contingencies and/or complete acquisitions that may be favorable to us will be impaired, which would have a material adverse effect on our business, financial condition, results of operations and cash flows.
Contractual and Commercial Commitments
The following table summarizes our contractual obligations and commercial commitments as of December 31, 2025 (in thousands):
Total
Less than 1 year
1-3 Years
3-5 Years
More than 5 Years
Contractual obligations:
Commitment fees on revolving credit facility(a)
$
318
$
125
$
193
$
—
$
—
Operating lease obligations(b)
4,122
2,284
1,228
100
510
Financing lease obligations(c)
81
54
27
—
—
$
4,521
$
2,463
$
1,448
$
100
$
510
(a)Assumes no outstanding borrowings on the revolving credit facility.
(b)Operating lease obligations primarily relate to rail cars, real estate and other equipment.
(c)Financing lease obligations primarily relate to equipment for our infrastructure segment.
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Critical Accounting Policies and Estimates
The preparation of financial statements requires the use of judgments and estimates. Our critical accounting policies are described below to provide a better understanding of how we develop our assumptions and judgments about future events and related estimates and how they can impact our financial statements. A critical accounting estimate is one that requires our most difficult, subjective, or complex judgments and assessments and is fundamental to our results of operations. We identified our most critical accounting estimates to be:
–allowance for expected credit losses;
–valuations of long-lived assets, including goodwill and intangible assets; and
–litigation and contingencies.
We base our estimates on historical experience and on various other assumptions we believe to be reasonable according to the current facts and circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We believe the following are the critical accounting policies used in the preparation of our consolidated financial statements, as well as the significant estimates and judgments affecting the application of these policies. This discussion and analysis should be read in conjunction with our consolidated financial statements and related notes included in this report.
Allowance for Expected Credit Losses
We regularly review receivables and provide for estimated losses through an allowance for expected credit losses. In evaluating the level of established reserves, we make judgments regarding our customers’ ability to make required payments, economic events and other factors. As the financial condition of customers changes, circumstances develop, or additional information becomes available, adjustments to the allowance for expected credit losses may be required. This process involves judgment and estimation. Accordingly, our results of operations can be affected by adjustments to the allowance due to actual write-offs that differ from estimated amounts.
As of December 31, 2025 and 2024, our allowance for expected credit losses totaled $170.9 million and $171.3 million, respectively. During 2025 and 2024, we wrote-off accounts receivable totaling $0.4 million and $0.3 million, respectively.
PREPA Allowance for Expected Credit Losses
As of December 31, 2025, $20.0 million remained outstanding from PREPA. PREPA is currently subject to bankruptcy proceedings, which were filed in July 2017 and are currently pending in the United States District Court for the District of Puerto Rico (the “Title III Court”). As a result, PREPA’s ability to meet its payment obligations under the above-referenced agreements was largely dependent upon funding from the Federal Emergency Management Agency (“FEMA”) or other sources. Since September 30, 2019, Cobra has been pursuing litigation in the Title III Court and other dispute resolution efforts seeking recovery of the amounts owed to Cobra by PREPA for restoration services in Puerto Rico, which proceedings are discussed in more detail in the Company’s prior reports filed with the SEC. On July 22, 2024, Cobra entered into the Settlement Agreement with PREPA and the FOMB, in its capacity as Title III representative for PREPA, to settle all outstanding matters between Cobra and PREPA.
Under the terms of the Settlement Agreement, Cobra was allowed an administrative expense claim against PREPA of $170.0 million, plus the $18.4 million in the Withheld FEMA Funds, as defined herein. During October 2024, Cobra received the first installment payment of $150.0 million from the Commonwealth of Puerto Rico and the $18.4 million in the Withheld FEMA Funds. In October 2025, Fifth Third Bank released the $18.4 million letter of credit previously issued under the Reimbursement Agreement with PREPA. As of December 31, 2025, $20.0 million remained outstanding from PREPA. Under the terms of the Settlement Agreement, this amount is required to be paid to Cobra within seven days following the effective date of PREPA’s plan of adjustment.
As a result of the Settlement Agreement, the Company recorded a non-cash, pre-tax charge of approximately $170.7 million in the second quarter of 2024 to reduce its accounts receivable balance from PREPA of $359.1 million, representing the amount owed to Cobra by PREPA in relation to these agreements as of June 30, 2024, including the accrued but unpaid interest, prior to the Settlement Agreement, to the amount expected to be received from the Settlement Agreement. Of the $170.7 million, $89.2 million was charged to credit loss expense, which is included in “selling, general and
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administrative” in the accompanying consolidated statements of comprehensive loss, and $81.5 million was charged to interest on delinquent accounts receivable, which is included in “other (expense) income, net” in the accompanying consolidated statement of operations and comprehensive income (loss). Complete performance of the Settlement Agreement is not met until PREPA satisfies the remaining $20.0 million payment. Therefore, the Company recorded the $170.7 million as an allowance for expected credit losses.
See Note 2. “Summary of Significant Accounting Policies” to our consolidated financial statements included elsewhere in this annual report for additional detail regarding our allowance for expected credit losses.
Valuation of Long-Lived Assets
Long-lived assets such as property, plant and equipment, operating lease right-of-use assets, sand reserves and intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Possible indicators of impairment may include events or changes in circumstances affecting the manner in which the assets are being used, historical and estimated future profitability measures, and other adverse events or changes that could affect the value of the assets.
If a triggering event is identified, recoverability is assessed using undiscounted future net cash flows of assets grouped at the lowest level for which there are identifiable cash flows independent of the cash flows of other groups of assets. When alternative courses of action to recover the carrying amount of the asset group are under consideration, estimates of future undiscounted cash flows take into account possible outcomes and probabilities of their occurrence, which require us to apply judgment. If the carrying amount of the asset is not recoverable based on its estimated undiscounted cash flows expected to result from the use and eventual disposition, an impairment loss is recognized in an amount by which its carrying amount exceeds its estimated fair value. The assumptions used in the impairment evaluation of long-lived assets are inherently uncertain and require management’s judgment.
We recognized $31.7 million of impairment of long-lived assets for the year ended December 31, 2025. We did not recognize any impairment of long-lived assets for the year ended, December 31, 2024.
Litigation and Contingencies
As discussed in Note 18. “Commitments and Contingencies” to our consolidated financial statements included elsewhere in this annual report, we are involved in various litigation matters arising in the ordinary course of business. Accruals for litigation and contingencies are based on our assessment, including advice of legal counsel, of the expected outcome of litigation or other dispute resolution proceedings and/or the expected resolution of contingencies. For matters in which a liability is probable and reasonably estimable, we accrue an estimate for the resolution of the matter. For matters in which a liability is not probable and reasonably estimable, we do not accrue any amounts. Significant judgment is required in both the determination of probability of loss and the determination as to whether the amount is reasonably estimable. Accruals are based on information available at the time of the assessment due to the uncertain nature of such matters. As additional information becomes available, we reassess potential liabilities related to pending claims and litigation and may revise previous estimates, which could materially affect our results of operations in a given period.
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