10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 001-37988

Keane Group, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	38-4016639
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1800 Post Oak Boulevard, Suite 450, Houston, TX	77056
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (713) 960-0381

2121 Sage Road, Suite 370, Houston, TX, 77056

(Former address of principal executive office)

Title of Each Class	Name of Each Exchange On Which Registered
Common Stock, $0.01, par value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

_______________

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x     No  ¨

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (do not check if a smaller reporting company)	Smaller reporting company	¨
Emerging Growth Company	¨

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

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

As of October 30, 2018, the registrant had 105,669,227 shares of common stock outstanding.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	4
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	6
	Condensed Consolidated Statements of Changes in Stockholders' Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to the Unaudited Condensed Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	38
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	56
Item 4.	Controls and Procedures	57
PART II.	OTHER INFORMATION	57
Item 1.	Legal Proceedings	57
Item 1A.	Risk Factors	57
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 3.	Defaults Upon Senior Securities	58
Item 4.	Mine Safety Disclosures	58
Item 5.	Other Information	59
Item 6.	Exhibits	60
	Signatures	61

PART I

Item 1. Condensed Consolidated Financial Statements (Unaudited)

4

KEANE GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Amounts in thousands)

	September 30, 2018		December 31, 2017
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	82,848	$	96,120
Trade and other accounts receivable, net	246,345		238,018
Inventories, net	28,772		33,437
Prepaid and other current assets	9,982		8,519
Total current assets	367,947		376,094
Property and equipment, net	550,273		468,000
Goodwill	132,524		134,967
Intangible assets	53,253		57,280
Other noncurrent assets	10,332		6,775
Total assets	$	1,114,329	$	1,043,116
Liabilities and Stockholders’ Equity
Liabilities
Current liabilities:
Accounts payable	$	125,524	$	92,348
Accrued expenses	113,877		135,175
Customer contract liabilities	1,280		5,000
Current maturities of capital lease obligations	4,173		3,097
Current maturities of long-term debt	2,116		1,339
Stock-based compensation - current	4,281		4,281
Other current liabilities	217		914
Total current liabilities	251,468		242,154
Capital lease obligations, less current maturities	6,522		4,796
Long-term debt, net of unamortized deferred financing costs and unamortized debt discount, less current maturities	338,915		273,715
Stock-based compensation - noncurrent	—		4,281
Other noncurrent liabilities	4,849		5,078
Total noncurrent liabilities	350,286		287,870
Total liabilities	601,754		530,024
Stockholders’ equity
Common stock, par value $0.01 per share (authorized 500,000 shares, issued 107,221 shares)	1,072		1,118
Paid-in capital in excess of par value	485,754		541,074
Retained earnings (deficit)	24,558		(27,372		)
Accumulated other comprehensive income (loss)	1,191		(1,728		)
Total stockholders’ equity	512,575		513,092
Total liabilities and stockholders’ equity	$	1,114,329	$	1,043,116

See accompanying notes to unaudited condensed consolidated financial statements.

5

KEANE GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Amounts in thousands, except for per unit amounts)

(Unaudited)

	Three Months Ended September30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Revenue	$	558,908		$	477,302		$	1,650,457		$	1,040,591
Operating costs and expenses:
Cost of services(1)	436,799			391,089			1,287,892			893,465
Depreciation and amortization	68,287			46,204			187,742			109,316
Selling, general and administrative expenses	27,783			28,592			85,792			68,915
(Gain) loss on disposal of assets	1,113			302			5,169			(137		)
Total operating costs and expenses	533,982			466,187			1,566,595			1,071,559
Operating income (loss)	24,926			11,115			83,862			(30,968		)
Other income (expense):
Other income	14,454			942			1,481			4,647
Interest expense(2)	(5,978		)	(7,195		)	(27,285		)	(51,905		)
Total other income (expense)	8,476			(6,253		)	(25,804		)	(47,258		)
Income (loss) before income taxes	33,402			4,862			58,058			(78,226		)
Income tax expense	(2,623		)	(797		)	(4,855		)	(1,862		)
Net income (loss)	30,779			4,065			53,203			(80,088		)
Net loss attributable to predecessor	—			—			—			(7,918		)
Net income (loss) attributable to Keane Group, Inc.	30,779			4,065			53,203			(72,170		)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	28			64			(37		)	108
Hedging activities	1,119			(178		)	3,429			(167		)
Total comprehensive income (loss)	$	31,926		$	3,951		$	56,595		$	(80,147	)
Net income (loss) per share(3):
Basic net income (loss) per share	$	0.28		$	0.04		$	0.48		$	(0.77	)
Diluted net income (loss) per share	0.28			0.04			0.48			(0.77		)
Weighted-average shares outstanding: basic(3)	108,825			111,509			110,706			104,496
Weighted-average shares outstanding: diluted(3)	108,990			111,755			110,871			104,496

⁽¹⁾   Cost of services during the three and nine months ended September 30, 2018 excludes depreciation of $65.4 million and $177.9 million, respectively. Cost of services during the three and nine months ended September 30, 2017 excludes depreciation of $43.8 million and $103.3 million, respectively. Depreciation related to cost of services is presented within depreciation and amortization disclosed separately.

⁽²⁾   Interest expense during the nine months ended September 30, 2018 includes $7.6 million in write-offs of deferred financing costs incurred in connection with the extinguishment of the Company’s 2017 Term Loan Facility (as defined within). Interest expense during the nine months ended September 30, 2017 includes $15.8 million of prepayment penalties and $15.3 million in write-offs of deferred financing costs, incurred in connection with the refinancing by the Company (as defined herein) of its then-existing revolving credit and security agreement, entered into on March 16, 2016, between certain of the Company’s subsidiaries and certain financial institutions (the “2016 ABL Facility”) and the Company’s early debt extinguishment of its then-existing credit agreement, entered into on March 16, 2016, between certain of the Company’s subsidiaries and certain financial institutions (the “2016 Term Loan Facility”) and Senior Secured Notes (as defined herein).

⁽³⁾ The earnings per share amounts for 2017 have been computed to give effect to the Organizational Transactions (as defined herein) as if they had occurred on January 1, 2017, including the limited liability company agreement of Keane Investor (as defined herein) to, among other things, exchange all of the Existing Owners’ (as defined herein) membership interests for the newly-created ownership interests.

See accompanying notes to unaudited condensed consolidated financial statements.

6

KEANE GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Amounts in thousands)

(Unaudited)

	Common stock			Paid-in capital in excess of par value			Retained earnings (deficit)			Accumulated other comprehensive income (loss)			Total
Balance as of December 31, 2017	$	1,118		$	541,074		$	(27,372	)	$	(1,728	)	$	513,092
Stock-based compensation(1)	5			16,197			—			—			16,202
Shares repurchased and retired related to share-based compensation	(1		)	(3,414		)	—			—			(3,415		)
Shares repurchased and retired related to stock repurchase program	(50		)	(68,103		)	(1,273		)	—			(69,426		)
Other comprehensive income	—			—			—			2,919			2,919
Net income	—			—			53,203			—			53,203
Balance as of September 30, 2018	$	1,072		$	485,754		$	24,558		$	1,191		$	512,575

⁽¹⁾   Stock-based compensation during the nine months ended September 30, 2018 includes stock-based compensation expense recognized during the period of $11.9 million and the vested deferred stock awards of $4.3 million. Refer to Note (11) Stock-Based Compensation for further discussion of the Company’s stock-based compensation.

See accompanying notes to unaudited condensed consolidated financial statements.

7

KEANE GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2018			2017
Cash flows from operating activities:
Net income (loss)	$	53,203		$	(80,088	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization	187,742			109,316
Amortization of deferred financing fees	2,329			4,621
Loss on debt extinguishment, including prepayment premiums	7,550			31,084
(Gain) loss on disposal of assets	5,169			(137		)
Loss on contingent consideration liability	13,254			—
Realized (gain) loss on derivative	(473		)	173
Stock-based compensation	11,924			7,334
Gain on insurance proceeds recognized in other income	(14,892		)	—
Other non-cash (expense)	—			(322		)
Unrealized gain (loss) on derivative	3,429			(167		)
Changes in operating assets and liabilities
Increase in trade and other accounts receivable, net	(8,432		)	(94,237		)
Decrease (increase) in inventories	4,171			(21,417		)
Decrease (increase) in prepaid and other current assets	(1,463		)	8,410
Decrease (increase) in other assets	(3,129		)	258
Increase in accounts payable	15,345			25,920
Increase (decrease) in accrued expenses	(19,980		)	5,537
Decrease in customer contract liabilities	(3,720		)	—
Increase (decrease) in other liabilities	(923		)	8,329
Net cash provided by operating activities	251,104			4,614
Cash flows from investing activities
Acquisition of business	(35,003		)	(124,374		)
Purchase of property and equipment	(211,962		)	(84,348		)
Advances of deposit on equipment	(3,801		)	(3,667		)
Implementation of software	(708		)	(660		)
Proceeds from sale of assets	2,512			10,530
Payments for leasehold improvements	(1,574		)	(157		)
Equity method investment	(1,163		)	—
Proceeds from insurance recoveries	18,222			—
Net cash used in investing activities	(233,477		)	(202,676		)
Cash flows from financing activities:
Proceeds from the term loan facility, net of debt discount	348,250			285,000
Payments on the secured notes and term loan facility	(284,077		)	(289,190		)
Payment of debt issuance costs	(7,331		)	(12,739		)
Prepayment premiums on early debt extinguishment	—			(15,817		)
Payments on capital leases	(2,874		)	(2,059		)
Proceeds from issuance of common stock	—			255,494
Shares repurchased and retired related to share repurchase program	(69,426		)	—
Shares repurchased and retired related to share-based compensation	(3,415		)	—
Payments on contingent consideration liability	(11,962		)	—
Net cash provided by (used in) financing activities	(30,835		)	220,689
Non-cash effect of foreign translation adjustments	(64		)	182

8

KEANE GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)

Net increase (decrease) in cash and cash equivalents	(13,272		)	22,809
Cash and cash equivalents, beginning	96,120			48,920
Cash and cash equivalents, ending	$	82,848		$	71,729
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest expense, net	$	18,454		$	18,697
CVR Settlement	19,918			—
Income taxes	5,226			—
Non-cash investing and financing activities:
Non-cash purchases of property and equipment	$	23,552		$	17,151
Non-cash issuance of acquisition shares	—			130,290
Non-cash reduction in capital lease obligations	121			20
Non-cash additions to capital lease obligations	5,784			1,689

See accompanying notes to unaudited condensed consolidated financial statements.

9

KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(1)    Basis of Presentation and Nature of Operations

Keane Group, Inc. (the “Company”, “KGI” or “Keane”) was formed on October 13, 2016 as a Delaware corporation to be a holding corporation for Keane Group Holdings, LLC and its subsidiaries (collectively referred to as “Keane Group”), for the purpose of facilitating the initial public offering (the “IPO”) of shares of common stock of the Company. On January 25, 2017, the Company completed the IPO of 30,774,000 shares of its common stock at the public offering price of $19.00 per share, which included 15,700,000 shares offered by the Company and 15,074,000 shares offered by the selling stockholder. Upon completion of the IPO and the reorganization, the Company had 103,128,019 shares of common stock outstanding.

In connection with the IPO, the Company completed a series of organizational transactions (the “Organizational Transactions”), including the following:

• Certain entities affiliated with Cerberus Capital Management, L.P., certain members of the Keane family, Trican Well Service Ltd. (“Trican”) and certain members of the Company’s management team (collectively, the “Existing Owners”) contributed all of their direct and indirect equity interests in Keane Group to Keane Investor Holdings LLC (“Keane Investor”);

• Keane Investor contributed all of its equity interests in Keane Group to the Company in exchange for common stock of the Company; and

• The Company’s independent directors received grants of restricted stock of the Company in substitution for their interests in Keane Group.

The Organizational Transactions represented a transaction between entities under common control and were accounted for similarly to pooling of interests in a business combination. The common stock of the Company issued to Keane Investor in exchange for its equity interests in Keane Group was recognized by the Company at the carrying value of the equity interests in Keane Group. In addition, the Company became the successor and Keane Group the predecessor for the purposes of financial reporting. The financial statements for the periods prior to the IPO and Organizational Transactions have been adjusted to combine and consolidate the previously separate entities for presentation purposes.

Earnings per share and weighted-average shares outstanding for the three and nine months ended September 30, 2017 have been presented giving pro forma effect to the Organizational Transactions as if they had occurred on January 1, 2016.

The accompanying unaudited condensed consolidated financial statements were prepared using United States Generally Accepted Accounting Principles (“GAAP”) and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with the Company’s 2017 Annual Report on Form 10-K filed on March 1, 2018.

The Company’s accounting policies are in accordance with GAAP. The preparation of financial statements in conformity with these accounting principles requires the Company to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and (2) the reported amounts of revenue and expenses during the reporting period. Ultimate results could differ from the Company’s estimates.

Management believes the unaudited condensed consolidated financial statements included herein contain all adjustments necessary to present fairly the Company’s financial position as of September 30, 2018 and the results of its operations and cash flows for the three and nine months ended September 30, 2018 and 2017. Such adjustments are of a normal recurring nature.

The unaudited condensed consolidated financial statements include the accounts of Keane and Keane Group.

All intercompany transactions and balances have been eliminated.

The unaudited condensed consolidated financial statements for the period from January 1, 2017 to July 2, 2017 reflect only the historical results of the Company prior to the completion of the Company’s acquisition of RockPile (as defined herein).

Secondary Offering

On January 17, 2018, the Company’s Registration Statement on Form S-1 (File No. 333-222500) was declared effective by the Securities and Exchange Commission (the “SEC”) for an offering on behalf of Keane Investor (the “selling stockholder”), pursuant

10

KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

to which 15,320,015 shares were sold by the selling stockholder (including 1,998,262 shares sold pursuant to the exercise of the underwriters’ over-allotment option) at a price to the public of $18.25 per share. The Company did not sell any common stock in, and did not receive any of the proceeds from, the offering. From the completion of the secondary offering, the vesting of certain of the Company’s RSUs (as defined herein) on January 2018 and the Company’s stock repurchase (as discussed herein), Keane Investor controls 53.1% of the Company’s outstanding common stock as of September 30, 2018.

(2)    Summary of Significant Accounting Policies

(a) Business Combinations and Asset Acquisitions

Business combinations are accounted for using the acquisition method of accounting in accordance with the Accounting Standards Codification (“ASC”) 805, “Business Combinations”, as amended by Accounting Standards Update (“ASU”) 2017-01, “Business Combinations (Topic 805), Clarifying the Definition of a Business.” The purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values. Fair value of the acquired assets and liabilities is measured in accordance with the guidance of ASC 850, “Fair Value Measurements”, using discounted cash flows and other applicable valuation techniques. Any acquisition related costs incurred by the Company are expensed as incurred. Any excess purchase price over the fair value of the net identifiable assets acquired is recorded as goodwill if the definition of a business is met. Fair value of the acquired assets and liabilities is measured in accordance with the guidance of ASC 850 using discounted cash flows and other applicable valuation techniques. Operating results of an acquired business are included in our results of operations from the date of acquisition.

Asset acquisitions, as defined in ASU 2017-01, are measured based on their cost to the Company, including transaction costs. An asset acquisition’s cost or the consideration transferred by the Company is assumed to be equal to the fair value of the net assets acquired. If the consideration transferred is cash, measurement is based on the amount of cash the Company paid to the seller as well as transaction costs incurred. Consideration given in the form of nonmonetary assets, liabilities incurred or equity interests issued is measured based on either the cost to the Company or the fair value of the assets or net assets acquired, whichever is more clearly evident. The cost of an asset acquisition is allocated to the assets acquired based on their estimated relative fair values. Goodwill is not recognized in an asset acquisition.

Refer to Note (3)Acquisitions for discussion of the acquisitions completed in 2018 and 2017.

(b) Revenue Recognition

The Company adopted ASU 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers, effective January 1, 2018, using the modified retrospective method. Changes were made to the relevant business processes and the related control activities, including information systems, in order to monitor and maintain appropriate controls over financial reporting. There were no significant changes to the Company’s internal control over financial reporting due to the Company’s adoption of ASU 2014-09.

Revenue from the Company’s Completion Services and Other Services segments are earned as services are rendered, which is generally on a per stage or fixed monthly rate for the Company’s Completions Services segment and on a per job basis for the Other Services segment. All revenue is recognized when a contract with a customer exists, the performance obligations under the contract have been satisfied over time, the amount to which the Company has the right to invoice has been determined and collectability of amounts subject to invoice is probable. Contract fulfillment costs, such as mobilization costs and shipping and handling costs, are expensed as incurred and are recorded in cost of services in the unaudited condensed consolidated statements of operations and comprehensive income (loss). To the extent fulfillment costs are considered separate performance obligations that are billable to the customer, the amounts billed are recorded as revenue in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The Company does not incur contract acquisition and origination costs. Taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from revenues in the unaudited condensed consolidated statements of operations and comprehensive income (loss) and net cash provided by operating activities in the unaudited condensed consolidated statements of cash flows.

The Company has elected the practical expedient to recognize revenue based upon the transactional value it has the right to invoice upon completion of each performance obligation per the contract terms, as the Company believes its right to consideration corresponds directly with the value transferred to the customer, and this expedient does not lend itself to the application of significant judgment. The Company has also elected the practical expedient to expense immediately mobilization costs, as the amortization period would always be less than one year. As a result of electing these practical expedients, there was no material impact on the Company’s current revenue recognition processes and no retrospective adjustments were necessary.

11

KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

The Company’s obligations for refunds as well as the warranties and related obligations stated in its contracts with its customers are standard to the industry and are related to the correction of any defectiveness in the execution of its performance obligations.

Revenue from the Company’s Completion Services and Other Services segments are recognized as follows:

Completion Services

The Company provides hydraulic fracturing and wireline services pursuant to contractual arrangements, such as term contracts and pricing agreements. Revenue is recognized upon the completion of each performance obligation. The Company’s performance obligations under its Completion Services segment represent each stage frac’d or each stage perforated. Once a stage has been completed, a field ticket is created that includes charges for the service performed and the chemicals and proppant consumed during the course of the service. The field ticket may also include charges for the mobilization of the equipment to the location, any additional equipment used on the job and other miscellaneous items. The field ticket represents the amounts to which the Company has the right to invoice and to recognize as revenue.

Other Services

The Company provides cementing services pursuant to contractual arrangements, such as term contracts or on a spot market basis. Revenue is recognized upon the completion of each performance obligation, which for cementing services, represents the portion of the well cemented: surface casing, intermediate casing or production liner. The performance obligations are satisfied over time. Jobs for these services are typically short term in nature, with most jobs completed in a day. Once the well has been cemented, a field ticket is created that includes charges for the services performed and the consumables used during the course of service. The field ticket represents the amounts to which the Company has the right to invoice and to recognize as revenue.

Disaggregation of Revenue

Revenue activities during the three and nine months ended September 30, 2018 and 2017 were as follows:

	(Thousands of Dollars)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Revenue by segment:
Completion Services	$	548,418	$	468,479	$	1,625,798	$	1,031,768
Other Services	10,490		8,823		24,659		8,823
Total revenue	$	558,908	$	477,302	$	1,650,457	$	1,040,591
Revenue by geography:
East	$	192,977	$	155,698	$	622,496	$	396,983
North	71,263		100,939		199,242		166,892
South	294,668		220,665		828,719		476,716
Total revenue	$	558,908	$	477,302	$	1,650,457	$	1,040,591

Contract Balances

In line with industry practice, the Company bills its customers for its services in arrears, typically when the stage or well is completed or at month-end. The majority of the Company’s jobs are completed in less than 30 days. Furthermore, it is currently not standard practice for the Company to execute contracts with prepayment features. As such, the Company’s contract liabilities are immaterial to its condensed consolidated balance sheets. Payment terms after invoicing are typically 30 days or less.

(c) Property and Equipment

Property and equipment, inclusive of equipment under capital lease, are generally stated at cost.

12

KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from 6 months to 40 years. Management bases the estimate of the useful lives and salvage values of property and equipment on expected utilization, technological change and effectiveness of maintenance programs. When components of an item of property and equipment are identifiable and have different useful lives, they are accounted for separately as major components of property and equipment. Equipment held under capital leases are generally amortized on a straight-line basis over the shorter of the estimated useful life of the underlying asset and the term of the lease.

Gains and losses on disposal of property and equipment are determined by comparing the proceeds from disposal with the carrying amount of property and equipment and are recognized net within operating costs and expenses in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

Major classifications of property and equipment and their respective useful lives are as follows:

Land	Indefinite life
Building and leasehold improvements	3 months – 40 years
Machinery and equipment	13 months – 10 years
Office furniture, fixtures and equipment	3 years – 5 years

Leasehold improvements are assigned a useful life equal to the term of the related lease.

In the first quarter of 2018, the Company reassessed the estimated useful lives of select machinery and equipment. The Company concluded that due to an increase in service intensity driven by a shift to more 24-hour work, higher stage volumes, larger stages and more proppant usage per stage, the estimated useful lives of these select machinery and equipment should be reduced by approximately 50%.

In accordance with ASC 250, “Accounting Changes and Error Corrections,” the change in the estimated useful lives of the Company’s property and equipment was accounted for as a change in accounting estimate, on a prospective basis, effective January 1, 2018. This change resulted in an increase in depreciation expense and decrease in net income during the nine months ended September 30, 2018 of $13.1 million in the unaudited condensed consolidated statement of operations and comprehensive income (loss).

As a result of a system upgrade to its fixed asset accounting module, in the third quarter of 2018, the Company changed its depreciation method from mid-month straight-line depreciation to days straight-line depreciation. The impact of this change in depreciation method to the Company’s unaudited condensed consolidated statement of operations and comprehensive income (loss) was immaterial.

Depreciation methods, useful lives and residual values are reviewed annually.

(d) Derivative Instruments and Hedging Activities

The Company is exposed to certain risks relating to its ongoing business operations. The Company utilizes interest rate derivatives to manage interest rate risk associated with its floating-rate borrowings. The Company recognizes all derivative instruments as either assets or liabilities on the condensed consolidated balance sheets at their respective fair values. For derivatives designated in hedging relationships, changes in the fair value are either offset through earnings against the change in fair value of the hedged item attributable to the risk being hedged or recognized in accumulated other comprehensive income (loss) until the hedged item affects earnings.

The Company only enters into derivative contracts that it intends to designate as hedges for the variability of cash flows to be received or paid related to a recognized asset or liability (i.e. cash flow hedge). For all hedging relationships, the Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged and how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively. The Company also formally assesses, both at the inception of the hedging relationship and on an ongoing basis, whether the derivatives that are used in hedging relationships are highly effective in offsetting changes in cash flows of hedged transactions. For derivative instruments that are designated and qualify as part of a cash flow hedging relationship, the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

The Company discontinues hedge accounting prospectively, when it determines that the derivative is no longer highly effective in offsetting cash flows attributable to the hedged risk, the derivative expires or is sold, terminated, or exercised, the originally forecasted transaction is no longer probable of occurring, or if management decides to remove the designation of the cash flow hedge. The net derivative instrument gain or loss related to a discontinued cash flow hedge shall continue to be reported in accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the originally hedged transaction affects earnings, unless it is probable that the forecasted transaction will not occur by the end of the originally specified time period. When it is probable that the originally forecasted transaction will not occur by the end of the originally specified time period, the Company recognizes immediately, in earnings, any gains and losses related to the hedging relationship that were recognized in accumulated other comprehensive income (loss). In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the Company continues to carry the derivative at its fair value on the condensed consolidated balance sheet and recognizes any subsequent changes in the derivative’s fair value in earnings.

(e) Stock-based compensation

The Company recognizes compensation expense for restricted stock awards, restricted stock units to be settled in common stock (“RSUs”) and non-qualified stock options (“stock options”) based on the fair value of the awards at the date of grant. The fair value of restricted stock awards and RSUs is determined based on the number of shares or RSUs granted and the closing price of the Company’s common stock on the date of grant. The fair value of stock options is determined by applying the Black-Scholes model to the grant date market value of the underlying common shares of the Company. The Company has elected to recognize forfeiture credits for these awards as they are incurred, as this method better reflects actual stock-based compensation expense.

Compensation expense from time-based restricted stock awards, RSUs and stock options is amortized on a straight-line basis over the requisite service period, which is generally the vesting period.

Deferred compensation expense associated with liability-based awards, such as deferred stock awards that are expected to settle with the issuance of a variable number of shares based on a fixed monetary amount at inception, is recognized at the fixed monetary amount at inception and is amortized on a straight-line basis over the requisite service period, which is generally the vesting period. Upon settlement, the holders receive an amount of common stock equal to the fixed monetary amount at inception, based on the closing price of the Company’s stock on the date of settlement.

Tax deductions on the stock-based compensation awards are not realized until the awards are vested or exercised. The Company recognizes deferred tax assets for stock-based compensation awards that will result in future deductions on its income tax returns, based on the amount of stock-based compensation recognized at the statutory tax rate in the jurisdiction in which the Company will receive a tax deduction. If the tax deduction for a stock-based award is greater than the cumulative GAAP compensation expense for that award upon realization of a tax deduction, an excess tax benefit will be recognized and recorded as a favorable impact on the effective tax rate. If the tax deduction for an award is less than the cumulative GAAP compensation expense for that award upon realization of the tax deduction, a tax shortfall will be recognized and recorded as an unfavorable impact on the effective tax rate. Any excess tax benefits or shortfalls will be recorded discretely in the period in which they occur. The cash flows resulting from any excess tax benefit will be classified as financing cash flows in the unaudited condensed consolidated statements of cash flows.

The Company provides its employees with the election to settle the income tax obligations arising from the vesting of their restricted or deferred stock-based compensation awards by the Company withholding shares equal to such income tax obligations. Shares acquired from employees in connection with the settlement of the employees’ income tax obligations are accounted for as treasury shares that are subsequently retired.

Restricted stock awards and RSUs are not considered issued and outstanding for purposes of earnings per share calculations until vested.

For additional information, see Note (11) Stock-Based Compensation.

(f) Taxes

Upon consummation of the Organizational Transactions and the IPO, the Company became subject to U.S. federal income taxes. A provision for U.S. federal income tax has been provided in the unaudited condensed consolidated financial statements for the nine months ended September 30, 2018 and 2017.

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

In addition, the Company has a Canadian subsidiary, which is treated as a corporation for Canadian federal and provincial tax purposes. For Canadian tax purposes, the Company is subject to foreign income tax.

The Company is responsible for certain state income and franchise taxes, which include Colorado, Montana, New Mexico, North Dakota, Oklahoma, Pennsylvania, Texas and West Virginia.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and tax carryforwards, if applicable. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date.

See Note (16) Income Taxes for a detailed discussion of the Company’s taxes and activities thereof during the nine months ended September 30, 2018 and 2017.

(g) Equity-method investments

Investments in non-controlled entities over which the Company has the ability to exercise significant influence over the non-controlled entities’ operating and financial policies are accounted for under the equity-method. Under the equity-method, the investment in the non-controlled entity is initially recognized at cost and subsequently adjusted to reflect the Company’s share of the entity’s income (losses), any dividends received by the Company and any other-than-temporary impairments.Investments accounted for under the equity-method are presented within other noncurrent assets in the condensed consolidated balance sheets.

As of September 30, 2018 and December 31, 2017, the Company recognized $1.2 million and $0.6 million, respectively, for its only equity-method investment.

(3)Acquisitions

(a) RockPile

On July 3, 2017 (the “RockPile Acquisition Date”), the Company acquired 100% of the outstanding equity interests of RockPile Energy Services, LLC and its subsidiaries (“RockPile”) from RockPile Energy Holdings, LLC (the “Principal Seller”). RockPile was a multi-basin provider of integrated well completion services in the United States, whose primary service offerings included hydraulic fracturing, wireline perforation and workover rigs. Through this acquisition, the Company deepened its existing presence in the Permian Basin and Bakken Formation and further solidified its position as one of the largest pure-play providers of integrated well completion services in the United States. This acquisition also enabled the Company to expand certain service offerings and capabilities within its Other Services segment.

The acquisition of RockPile was completed for cash consideration of $116.6 million, subject to post-closing adjustments, 8,684,210 shares of the Company’s common stock (the “Acquisition Shares”) and contingent value rights, as described below. The fair value of the Acquisition Shares, which was recorded in stockholders’ equity in the condensed consolidated balance sheets, was calculated using the closing price of the Company’s common stock on July 3, 2017, of $16.29, discounted by 7.9% to reflect the lack of marketability resulting from the 180-day lock-up period during which resale of the Acquisition Shares was restricted.

Subject to the terms and conditions of the Contingent Value Rights Agreement (the “CVR Agreement”) by and among the Company, the Principal Seller and Permitted Holders (as defined in the CVR Agreement and, together with the Principal Seller, the “RockPile Holders”), the Company agreed to pay contingent consideration (the “Aggregate CVR Payment Amount”), which would equal the product of the Acquisition Shares held by RockPile on April 10, 2018 and the CVR Payment Amount, provided that the CVR Payment Amount did not exceed $2.30. The “CVR Payment Amount” was the difference between (a) $19.00 and (b) the arithmetic average of the dollar volume weighted average price of the Company’s common stock on each trading day for twenty (20) trading days randomly selected by the Company during the thirty (30) trading day period immediately preceding the last business day prior to April 3, 2018 (the “Twenty-Day VWAP”). The Aggregate CVR Payment Amount was agreed to be reduced on a dollar for dollar basis if the sum of the following exceeds $165.0 million:

• (i) the aggregate gross proceeds received in connection with the resale of any Acquisition Shares, plus

• (ii) the product of the number of Acquisition Shares held by the RockPile Holders on April 10, 2018 and the Twenty-Day VWAP, plus

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

• (iii) the Aggregate CVR Payment Amount.

In early April 2018, in accordance with the terms and conditions of the CVR Agreement, the Company calculated and paid the final Aggregate CVR Payment Amount, due to the RockPile Holders, of $19.9 million and recognized a loss of $13.2 million during the nine months ended September 30, 2018 in other income (expense), net in the unaudited condensed consolidated statement of operations and comprehensive income (loss).

The Company accounted for the acquisition of RockPile using the acquisition method of accounting. Assets acquired, liabilities assumed and equity issued in connection with the acquisition were recorded based on their fair values. The purchase accounting is subject to the twelve-month measurement adjustment period to reflect any new information that may be obtained in the future about facts and circumstances that existed as of the RockPile Acquisition Date that, if known, would have affected the measurement of the amounts recognized as of that date. The measurement period for the acquisition of RockPile ended on July 3, 2018.

The following tables summarize the fair value of the consideration transferred for the acquisition of RockPile and the preliminary allocation of the purchase price to the fair values of the assets acquired, liabilities assumed and equity consideration at the RockPile Acquisition Date:

	(Thousands of Dollars)
Total Purchase Consideration:	Preliminary Purchase Price Allocation			Adjustments			Purchase Price Allocation as of September 30, 2018
Cash consideration	$	123,293		$	(6,717	)	$	116,576
Equity consideration	130,290			—			130,290
Contingent consideration	11,962			—			11,962
Less: Cash acquired	(20,379		)	20,379			—
Total purchase consideration, less cash acquired	$	245,166		$	13,662		$	258,828
Trade and other accounts receivable	$	57,117		$	1,484		$	58,601
Inventories, net	2,853			138			2,991
Prepaid and other current assets	13,630			(717		)	12,913
Property and equipment, net	157,654			8,653			166,307
Intangible assets	20,967			(1,267		)	19,700
Notes receivable	250			(250		)	—
Other noncurrent assets	363			(57		)	306
Total identifiable assets acquired	252,834			7,984			260,818
Accounts payable	(38,999		)	16,180			(22,819		)
Accrued expenses	(22,161		)	(13,315		)	(35,476		)
Deferred revenue	(23,053		)	698			(22,355		)
Other non-current liabilities	(827		)	(2,412		)	(3,239		)
Total liabilities assumed	(85,040		)	1,151			(83,889		)
Goodwill	77,372			4,527			81,899
Total purchase price consideration	$	245,166		$	13,662		$	258,828

Goodwill is calculated as the excess of the consideration transferred over the fair value of the net assets acquired. The goodwill in this acquisition is primarily attributable to expected synergies and new customer relationships and was allocated to the Completions Services segment. All the goodwill recognized for the acquisition of RockPile is tax deductible with an amortization period of 15 years.

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(b) Asset Acquisition from Refinery Specialties, Incorporated

On July 24, 2018, the Company executed a purchase agreement with Refinery Specialties, Incorporated (“RSI”) to acquire approximately 90,000 hydraulic horsepower and related support equipment for approximately $35.4 million, inclusive of an $0.8 million for deposit reimbursement related to future equipment deliveries. This acquisition was partially funded by the insurance proceeds the Company received in connection with a fire that resulted in damage to a portion of one of the Company’s fleets (for further details see Note (6) Property and Equipment, net). The Company also assumed operating leases for light duty vehicles in connection with the RSI transaction, and RSI entered into a non-compete arrangement in turn with the Company. In September 2018, the Company and RSI reached an agreement to refund the Company $0.8 million of the purchase price due to repair costs required for certain acquired equipment. The resulting purchase price after the refund was $34.6 million and the Company incurred $0.4 million of transaction costs related to the acquisition, bringing total cash consideration related to the acquisition to $35.0 million.

The Company accounted for this acquisition as an asset acquisition pursuant to ASU 2017-01 and allocated the purchase price of the acquisition plus the transactions costs amongst the acquired hydraulic horsepower and related support equipment, as the fair value of the acquired hydraulic horsepower and related support equipment represented substantially all of the fair value of the gross assets acquired in the asset acquisition with RSI.

(4)Intangible Assets

The intangible assets balance in the Company’s condensed consolidated balance sheets represents the fair value, net of amortization, as applicable, related to the following:

	(Thousands of Dollars)
	September 30, 2018
	Weighted Average Remaining Amortization Period (Years)	Gross Carrying Amounts		Accumulated Amortization			Net Carrying Amount
Customer contracts	8.5	$	68,600	$	(27,356	)	$	41,244
Non-compete agreements	7.5	700		(350		)	350
Trade name	Indefinite life	10,200		—			10,200
Technology	2.1	2,087		(628		)	1,459
Total		$	81,587	$	(28,334	)	$	53,253

	(Thousands of Dollars)
	December 31, 2017
	Weighted Average Remaining Amortization Period (Years)	Gross Carrying Amounts		Accumulated Amortization			Net Carrying Amount
Customer contracts	9.1	$	68,600	$	(23,049	)	$	45,551
Non-compete agreements	8.1	750		(360		)	390
Trade name	Indefinite life	10,200		—			10,200
Technology	2.1	3,023		(1,884		)	1,139
Total		$	82,573	$	(25,293	)	$	57,280

Amortization expense related to the intangible assets for the three months ended September 30, 2018 and 2017 was $1.5 million and $2.0 million, respectively. Amortization expense related to the intangible assets for the nine months ended September 30, 2018 and 2017 was $4.7 million and $5.1 million, respectively.

Amortization for the intangible assets excluding trade name of $10.2 million with an indefinite useful life and in process software, over the next five years, is as follows:

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Year-end December 31,	(Thousands of Dollars)
2018	$	1,524
2019	5,399
2020	5,275
2021	4,994
2022	4,972

(5)    Inventories, net

Inventories, net, consisted of the following at September 30, 2018 and December 31, 2017:

	(Thousands of Dollars)
	September 30, 2018		December 31, 2017
Sand, including freight	$	10,620	$	11,551
Chemicals and consumables	7,109		7,940
Materials and supplies	11,043		13,946
Total inventory, net	$	28,772	$	33,437

Inventories are reported net of obsolescence reserves of $1.2 million and $0.3 million as of September 30, 2018 and December 31, 2017, respectively. The Company recognized $0.5 million and $0.1 million of obsolescence expense during the three months ended September 30, 2018 and 2017, respectively. The Company recognized $0.9 million and $0.2 million of obsolescence expense during the nine months ended September 30, 2018 and 2017, respectively.

(6)    Property and Equipment, net

Property and Equipment, net consisted of the following at September 30, 2018 and December 31, 2017:

	(Thousands of Dollars)
	September 30, 2018			December 31, 2017
Land	$	4,771		$	5,186
Building and leasehold improvements	32,386			30,322
Office furniture, fixtures and equipment	7,515			6,338
Machinery and equipment	1,010,140			773,516
	1,054,812			815,362
Less accumulated depreciation	(510,311		)	(372,617		)
Construction in progress	5,772			25,255
Total property and equipment, net	$	550,273		$	468,000

The machinery and equipment balance as of September 30, 2018 and December 31, 2017 included $10.1 million of hydraulic fracturing equipment under capital leases. The machinery and equipment balance as of September 30, 2018 and December 31, 2017 also included approximately $10.4 million and $5.1 million, respectively, of vehicles under capital leases. Accumulated depreciation for the hydraulic fracturing equipment under capital leases was $9.4 million and $8.3 million as of September 30, 2018 and December 31, 2017, respectively. Accumulated depreciation for the vehicles under capital leases was $2.9 million and $1.6 million as of September 30, 2018 and December 31, 2017, respectively.

All (gains) and losses are presented within (gain) loss on disposal of assets in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

The following summarizes the primary proceeds received and (gains) losses recognized on the disposal of certain assets for the three and nine months ended September 30, 2018 and 2017:

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Three and Nine Months Ended September 30, 2018

During the three months ended September 30, 2018, the Company

• recognized a loss of $4.1 million relating to early disposals of various hydraulic fracturing pump components, offset by $3.2 million salvage value on transmission cores from failed transmissions. These assets were within the Completion Services segment.

During the nine months ended September 30, 2018, the Company

• divested its idle field operations facility in Mathis, Texas, acquired as part of the Acquired Trican Operations, for net proceeds of $1.2 million and a net loss of $2.7 million, within the Corporate segment.

• recognized a loss of $9.3 million relating to early disposals of hydraulic fracturing pump component, offset by $6.8 million salvage value on transmission cores from failed transmissions. These assets were within the Completion Services segment.

Three and Nine Months Ended September 30, 2017

During the three months ended September 30, 2017, the Company divested the following assets:

• Idle facility in Searcy, Arkansas, acquired as part of the Acquired Trican Operations, divested for net proceeds of $0.5 million and a net loss of $0.6 million, within the Corporate segment,

• Air compressor units, divested for net proceeds of $0.9 million and a net gain of $0.9 million, within the Other Services segment,

• six workover rigs acquired in the acquisition of RockPile, within the Other Services segment, divested for net proceeds of $6.8 million with no (gain) or loss, and

• Hydraulic fracturing operating equipment, divested for a net loss of $0.6 million, within the Completions segment.

During the nine months ended September 30, 2017, the Company also divested its idle facility in Woodward, Oklahoma, acquired as part of the Acquired Trican Operations, for net proceeds of $2.4 million and a net gain of $0.5 million, within the Completions Services segment.

Casualty Loss

On July 1, 2018, one of the Company’s hydraulic frac fleets operating in the Permian Basin was involved in an accidental fire, which resulted in damage to a portion of the equipment in that fleet. The Company received $18.1 million of insurance proceeds for replacement cost of the damaged equipment, which offset the $3.2 million impairment loss recognized on the damaged equipment. The resulting gain of $14.9 million was recognized in other income (expense), net in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(7)    Long-Term Debt

Long-term debt as of September 30, 2018 and December 31, 2017 consisted of the following:

	(Thousands of Dollars)
	September 30, 2018			December 31, 2017
2018 Term Loan Facility	$	349,125		$	—
2017 Term Loan Facility	—			283,202
Capital leases	10,706			7,918
Less: Unamortized debt discount and debt issuance costs	(8,105		)	(8,173		)
Total debt, net of unamortized debt discount and debt issuance costs	351,726			282,947
Less: Current portion	(6,289		)	(4,436		)
Long-term debt, net of unamortized debt discount and debt issuance costs, including capital leases	$	345,437		$	278,511

Credit Facilities

On May 25, 2018, Keane Group Holdings, LLC, a subsidiary of the Company, and the 2018 Term Loan Guarantors (as defined below) entered into a term loan facility (the “2018 Term Loan Facility”) with each lender from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent. The proceeds of the 2018 Term Loan Facility were used to repay the Company’s pre-existing term loan facility (the “2017 Term Loan Facility”), along with related fees and expenses, with the excess proceeds allocated to fund general corporate purposes. The 2018 Term Loan Facility was executed with a debt discount of $1.8 million, which will be amortized using the effective interest method and netted against the carrying amount of the 2018 Term Loan Facility. The Company did not incur any prepayment premiums to repay the 2017 Term Loan Facility.

Subject to certain exceptions as set forth in the definitive documentation for the 2018 Term Loan Facility, the amounts outstanding under the 2018 Term Loan Facility are guaranteed by the Company, Keane Frac, LP, KS Drilling, LLC, KGH Intermediate Holdco I, LLC, KGH Intermediate Holdco II, LLC, and Keane Frac GP, LLC, and each subsidiary of the Company that will be required to execute and deliver a facility guaranty in the future pursuant to the terms of the 2018 Term Loan Facility (collectively, the “2018 Term Loan Guarantors”).

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Below is a summary of the Company’s credit facilities outstanding as of September 30, 2018:

	(Thousands of Dollars)
	2017 ABL Facility(1)		2018 Term Loan Facility(1)
Original facility size	$	300,000	$	350,000
Outstanding balance	—		350,000
Letters of credit issued	2,500		—
Available borrowing base commitment	207,887		n/a
Interest Rate(2)	LIBOR or base rate plus applicable margin		LIBOR or base rate plus applicable margin
Maturity Date	December 22, 2022		May 25, 2025

⁽¹⁾ For detailed discussion on the Company’s credit facilities, see “Liquidity and Capital Resources” under Part I. “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

⁽²⁾ London Interbank Offer Rate (“LIBOR”) is subject to a 1.00% floor.

Maturities of the 2018 Term Loan Facility for the next five years are presented below:

Year-end December 31,	(Thousands of Dollars)
2018	$	875
2019	3,500
2020	3,500
2021	3,500
2022	3,500
	$	14,875

Deferred Charges and Other Costs

Deferred charges include deferred financing costs and debt discounts or debt premiums. Deferred charges are capitalized and amortized using the effective interest method and netted against the carrying amount of the related borrowing. The amortization is recorded in interest expense on the unaudited condensed consolidated statements of operations and comprehensive income (loss). Amortization expense related to the capitalized deferred charges for the three months ended September 30, 2018 and 2017 was $1.0 million and $0.6 million, respectively. Amortization expense related to the capitalized deferred charges for the nine months ended September 30, 2018 and 2017 was $2.3 million and $4.6 million, respectively.

Deferred charges associated with the 2018 Term Loan Facility that were capitalized upon recognition of the 2018 Term Loan Facility were $9.0 million. Unamortized deferred charges associated with the 2018 Term Loan Facility were $8.1 million and nil as of as of September 30, 2018 and December 31, 2017, respectively, and are recorded in long-term debt, net of unamortized deferred charges and unamortized debt discount, less current maturities on the condensed consolidated balance sheets. Deferred charges associated with the 2017 Term Loan Facility that were expensed upon repayment of the 2017 Term Loan Facility were $7.6 million. Unamortized deferred charges associated with the 2016 ABL Facility and the Company’s $300 million asset-based revolving credit facility obtained on February 17, 2017 and as amended on December 22, 2017 (the “2017 ABL Facility”) were $4.2 million and $5.0 million as of September 30, 2018 and December 31, 2017, respectively, and are recorded in other noncurrent assets on the condensed consolidated balance sheets.

Interest expense during the nine months ended September 30, 2017 included $15.8 million of prepayment penalties and $15.3 million in write-offs of deferred charges, incurred in connection with the Company’s refinancing of its 2016 ABL Facility and the Company’s early debt extinguishment of its 2016 Term Loan Facility and secured notes due 2019 (the “Senior Secured Notes”) in 2017.

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Capital Leases

The Company leases certain machinery, equipment and vehicles under capital leases that expire between 2018 and 2022. Total remaining principal balance outstanding on the Company’s capital leases as of September 30, 2018 and December 31, 2017 was $10.7 million and $7.9 million, respectively. Total interest expense incurred on these capital leases was $0.1 million during the three months ended September 30, 2018 and 2017 and $0.3 million and $0.2 million and for the nine months ended September 30, 2018 and 2017, respectively.

Depreciation of assets held under capital leases is included within depreciation expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). See Note (6) Property and Equipment, netfor further details.

Future annual capital lease commitments, including the interest component and exclusive of deferred financing costs, as of September 30, 2018 for the next five years are listed below:

Year-end December 31,	(Thousands of Dollars)
2018	$	1,314
2019	5,191
2020	2,356
2021	2,134
2022	678
Subtotal	11,673
Less amount representing interest	(964)
	$	10,709

(8)     Significant Risks and Uncertainties

The Company operates in two reportable segments: Completion Services and Other Services, with significant concentration in the Completion Services segment.

During the three months ended September 30, 2018 and 2017, sales to Completion Services customers represented 99% and 98% of the Company’s consolidated revenue, respectively. During the three months ended September 30, 2018 and 2017, sales to Completion Services customers represented 100% and 98% of the Company’s consolidated gross profit, respectively.

During the nine months ended September 30, 2018 and 2017, sales to Completion Services customers represented 99% of the Company’s consolidated revenue. During the nine months ended September 30, 2018 and 2017, sales to Completion Services customers represented 100% of the Company’s consolidated gross profit.

Oil and natural gas prices are significant drivers behind the pace and location of the Company’s customer activity. The Company actively monitors trends in oil and natural gas prices and focuses on maintaining flexibility. While commodity prices have improved, the Company expects volatility and uncertainty to remain in place throughout 2018, driven by economic activity, geopolitical factors and regional dynamics throughout the U.S, including pipeline availability within the Permian Basin.     

The industry is subject to strains in sand supply, driven by weather-induced rail congestion, combined with mine-related issues due to rail-related output constraints, flooding impacts, delays on local mine start-ups and continued growth in demand. While the industry faced significant strain in sand supply throughout the first quarter of 2018 and into the beginning of the second quarter of 2018, these transitory issues were largely resolved by the second quarter of 2018.

For the three months ended September 30, 2018, revenue from the Company’s top three customers individually represented 16%, 11% and 10% of the Company’s consolidated revenue, respectively. For the three months ended September 30, 2017, revenue from the Company’s top customer represented 11% of the Company’s consolidated revenue, respectively.

For the nine months ended September 30, 2018, revenue from the Company’s top four customers individually represented 16%, 12%, 11% and 10% of the Company’s consolidated revenue, respectively. For the nine months ended September 30, 2017, revenue from the Company’s top customer individually represented 10% of the Company’s consolidated revenue.

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Revenue is earned from each of these customers within the Completion Services segment.

For the three and nine months ended September 30, 2018 and 2017, two suppliers represented approximately 5% to 15% of the Company’s overall purchases. The costs for each of these suppliers were incurred within the Completion Services segment.

(9) Derivatives

The Company uses interest-rate-related derivative instruments to manage its variability of cash flows associated with changes in interest rates on its variable-rate debt.

On May 25, 2018, the Company entered into the 2018 Term Loan Facility, which has an initial aggregate principal amount of $350 million, and repaid its pre-existing 2017 Term Loan Facility. The 2018 Term Loan Facility has a variable interest rate based on LIBOR, subject to a 1.0% floor. As a result of this transaction, the Company desired to hedge additional notional amounts to continue to hedge approximately 50% of its expected LIBOR exposure and to extend the terms of its swaps to align with the 2018 Term Loan Facility.

On June 22, 2018, the Company unwound its existing interest rate swaps and received $3.2 million in proceeds. The Company used the $3.2 million of proceeds to execute a new off-market interest rate swap. Under the terms of the new interest rate swap, the Company receives 1-month LIBOR, subject to a 1% floor, and makes payments based on a fixed rate of 2.625%. The new interest rate swap is effective through March 31, 2025 and has a notional amount of $175.0 million. The new interest rate swap was designated in a new cash flow hedge relationship.

The Company discontinued hedge accounting on the pre-existing interest rate swaps upon termination. At the time hedge accounting was discontinued, the exiting interest rate swaps had $3.5 million of deferred gains in accumulated other comprehensive income. This amount was not reclassified from accumulated other comprehensive income into earnings, as it remained probable that the originally forecasted transaction will occur.

The following table presents the fair value of the Company’s derivative instruments on a gross and net basis as of the periods shown below:

	(Thousands of Dollars)
	Derivatives Designated  As Hedging Instruments			Derivatives Not Designated  As Hedging Instruments		Gross Amounts of Recognized Assets and Liabilities			Gross Amounts Offset in the Balance Sheet(1)		Net Amounts Presented in the Balance Sheet(2)
As of September 30, 2018:
Other noncurrent asset	$	3,888		$	—	$	3,888		$	—	$	3,888
Other noncurrent liability	(24		)	—		(24		)	—		(24		)
As of December 31, 2017:
Other noncurrent asset	$	324		$	—	$	324		$	—	$	324
Other noncurrent liability	(254		)	—		(254		)	—		(254		)

⁽¹⁾  With all of the Company’s financial trading counterparties, agreements are in place that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements.

⁽²⁾  There are no amounts subject to an enforceable master netting arrangement that are not netted in these amounts. There are no amounts of related financial collateral received or pledged.

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

The following table presents gains and losses for the Company’s interest rate derivatives designated as cash flow hedges (in thousands of dollars):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2018		2017			2018		2017			Location
Amount of gain (loss) recognized in other comprehensive income on derivative	$	1,119	$	(178	)	$	3,429	$	(167	)	OCI
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) (“AOCI”) into earnings	163		—			473		(73		)	Interest Expense
Amount of loss reclassified from AOCI into earnings as a result of originally forecasted transaction becoming probable of not occurring	—		—			—		(100		)	Interest Expense

The gain recognized in other comprehensive income for the derivative instrument is presented within hedging activities in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

There were no gains or losses recognized in earnings as a result of excluding amounts from the assessment of hedge effectiveness. Based on recorded values at September 30, 2018, $1.1 million of net gains will be reclassified from accumulated other comprehensive income into earnings within the next 12 months.

The following table presents gains and losses for the Company’s interest rate derivatives not designated in a hedge relationship under ASC 815, “Derivative Financial Instruments,” (in thousands of dollars):

		Three months ended September 30,					Nine Months Ended September 30,
Description	Location	2018		2017			2018		2017
Loss on interest contracts	Interest expense	$	—	$	(29	)	$	—	$	(367	)

See Note (10)Fair Value Measurements and Financial Information for further information related to the Company’s derivative instruments.

(10) Fair Value Measurements and Financial Information

The Company discloses the required fair values of financial instruments in its assets and liabilities under the hierarchy guidelines, in accordance with GAAP. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, derivative instruments, long-term debt, capital lease obligations and contingent liabilities. As of September 30, 2018 and December 31, 2017, the carrying values of the Company’s financial instruments, included in its condensed consolidated balance sheets, approximated or equaled their fair values.

Recurring Fair Value Measurement

At September 30, 2018 and December 31, 2017, the financial instruments measured by the Company at fair value on a recurring basis were its interest rate derivatives.

The fair market value of the derivative financial instruments reflected on the condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 were determined using industry-standard models that consider various assumptions, including current market and contractual rates for the underlying instruments, time value, implied volatilities, nonperformance risk as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument and can be supported by observable data.

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

The following tables present the placement in the fair value hierarchy of assets and liabilities that were measured at fair value on a recurring basis at September 30, 2018 and December 31, 2017 (in thousands of dollars):

				Fair value measurements at reporting date using
	September 30, 2018			Level 1		Level 2			Level 3
Assets:
Interest rate derivatives	$	3,888		$	—	$	3,888		$	—
Liabilities:
Interest rate derivatives	(24		)	—		(24		)	—

				Fair value measurements at reporting date using
	December 31, 2017			Level 1		Level 2			Level 3
Assets:
Interest rate derivatives	$	70		$	—	$	70		$	—
Liabilities:
Aggregate CVR Payment	(6,665		)	—		(6,665		)	—

Non-Recurring Fair Value Measurement

The fair values of indefinite-lived assets and long-lived assets are determined with internal cash flow models based on significant unobservable inputs. The Company measures the fair value of its property, plant and equipment using the discounted cash flow method, the fair value of its customer contracts using the multi-period excess earning method and income based “with and without” method, the fair value of its trade names and acquired technology using the “income-based relief-from-royalty” method and the fair value of its non-compete agreement using the “lost income” approach. Assets acquired as a result of the acquisition of RockPile were recorded at their fair values on the date of acquisition. See Note (3)Acquisitionsfor further details.

Given the unobservable nature of the inputs used in the Company’s internal cash flow models, the cash flow models are deemed to use Level 3 inputs.

During the nine months ended September 30, 2018 and 2017, the Company determined there were no events that would indicate the carrying amount of its indefinite-lived assets and long-lived assets may not be recoverable, and as such, no impairment charge was recognized.

Credit Risk

The Company’s financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents, derivative contracts and trade receivables.

The Company’s cash balances on deposit with financial institutions totaled $82.8 million and $96.1 million as of September 30, 2018 and December 31, 2017, respectively, which exceeded Federal Deposit Insurance Corporation insured limits. The Company regularly monitors these institutions’ financial condition.

The credit risk from the derivative contract derives from the potential failure of the counterparty to perform under the terms of the derivative contracts. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with high-quality counterparties, whose Standard & Poor’s credit rating is higher than BBB. The derivative instruments entered into by the Company do not contain credit-risk-related contingent features.

The majority of the Company’s trade receivables have payment terms of 30 days or less. As of September 30, 2018, trade receivables from the Company’s top two customers individually represented 20% of total accounts receivable. As of December 31, 2017, trade receivables from the Company’s top customer represented 17% of total accounts receivable. The Company mitigates the associated credit risk by performing credit evaluations and monitoring the payment patterns of its customers. The Company has not had to write-off any bad debts for its customers during the nine months ended September 30, 2018 or in 2017 and has a process in place to collect all receivables within 30 to 60 days of aging.

25

KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(11) Stock-Based Compensation

As of September 30, 2018, the Company has four types of stock-based compensation under the Equity and Incentive Award Plan: (i) deferred stock awards for three executive officers, (ii) restricted stock awards issued to independent directors, (iii) restricted stock units and (iv) non-qualified stock options. RSUs and non-qualified stock options are issued to executive officers and other key management personnel. The Company has reserved 7,734,601 shares of its common stock for awards that may be issued under the Equity and Incentive Award Plan.

The following table summarizes stock-based compensation costs for the three and nine months ended September 30, 2018 and 2017 (in thousands of dollars):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Deferred stock awards	$	1,070	$	1,070	$	3,211	$	3,211
Restricted stock awards	185		94		366		245
Restricted stock units	2,864		1,643		6,620		3,217
Non-qualified stock options	690		322		1,727		661
Equity-based compensation cost	$	4,809	$	3,129	$	11,924	$	7,334

(a) Deferred stock awards

Upon consummation of the IPO, the executive officers of the Company identified in the table below became eligible for retention payments, the first on January 1, 2018 and the second on January 1, 2019, in the bonus amounts set forth in the table below. On March 16, 2017, the compensation committee of the board of directors of the Company (the “Board of Directors”) approved, and each executive officer agreed, that in lieu of the executive officer’s cash retention payments, the executive officer was granted a deferred stock award under the Equity and Incentive Award Plan. Each executive officer’s deferred stock award provides that, subject to the executive officer remaining employed through the applicable vesting date and complying with the restrictive covenants imposed on him under his employment agreement with the Company, the executive officer will be entitled to receive payment of a stock bonus equal to the variable number of shares of the Company’s common stock having a fair market value on the payment date equal to the bonus amount set forth in the table below:

	Bonus Amounts
	First		Second
James C. Stewart	$	1,975,706	$	1,975,706
Gregory L. Powell	1,646,422		1,646,422
M. Paul DeBonis Jr.	658,569		658,569

The Company accounted for these deferred stock awards as liability-classified awards and recorded them at fair value based on the fixed monetary value on the date of grant. The Company recognized $8.6 million as a deferred compensation expense liability and contra-equity during the first quarter of 2017.

The first stock bonuses vested on January 1, 2018 and were settled for 177,872 shares, net of withholdings, based on the February 15, 2018 close price of $14.98. The second stock bonus will vest on January 1, 2019 and will be settled on February 15, 2019. For the three months ended September 30, 2018 and 2017, the Company recognized $1.1 million of non-cash stock compensation expense. For the nine months ended September 30, 2018 and 2017, the Company recognized $3.2 million of non-cash stock compensation expense into earnings, which is presented within selling, general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). As of September 30, 2018, total unamortized compensation cost related to unvested deferred stock awards was $1.1 million, which the Company expects to recognize over the remaining weighted-average period of 0.25 years.

(b) Restricted stock awards

For the three months ended September 30, 2018 and 2017, the Company recognized $0.2 million and $0.1 million, respectively, of non-cash stock compensation expense. For the nine months ended September 30, 2018 and 2017, the Company

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

recognized $0.4 million and $0.2 million, respectively, of non-cash stock compensation expense into earnings, which is presented within selling, general and administrative expense in the unaudited condensed consolidated and statements of operations and comprehensive income (loss). As of September 30, 2018, total unamortized compensation cost related to unvested restricted stock awards was $0.9 million, which the Company expects to recognize over the remaining weighted-average period of 1.01 years.

Rollforward of restricted stock awards as of September 30, 2018 is as follows:

	Number of Restricted Stock Awards		Weighted average grant date fair value
Total non-vested at December 31, 2017	95,335		$	20.51
Shares issued	42,936		14.17
Shares vested	(6,315	)	14.49
Shares forfeited	—		—
Non-vested balance at September 30, 2018	131,956		$	18.73

(c) Restricted stock units

Restricted stock units are stock awards that vest over a one- to three-year service period. The compensation expense associated with these RSUs will be amortized into earnings on a straight-line basis over the vesting period. For the three months ended September 30, 2018 and 2017, the Company recognized $2.9 million and $1.6 million of non-cash stock compensation expense, respectively. For the nine months ended September 30, 2018 and 2017, the Company recognized $6.6 million and $3.2 million, respectively, of non-cash stock compensation expense into earnings, which is presented within selling, general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). As of September 30, 2018, total unamortized compensation cost related to unvested restricted stock units was $24.1 million, which the Company expects to recognize over the remaining weighted-average period of 2.11 years.

Rollforward of restricted stock units as of September 30, 2018 is as follows:

	Number of Restricted Stock Units		Weighted average grant date fair value
Total non-vested at December 31, 2017	1,099,620		$	14.62
Units issued	1,501,095		14.99
Units vested	(355,035	)	14.59
Actual units forfeited	(203,149	)	15.07
Non-vested balance at September 30, 2018	2,042,531		$	14.86

(d) Non-qualified stock options

For the three months ended September 30, 2018 and 2017, the company recognized $0.7 million and $0.3 million, respectively, of non-cash compensation expense into earnings. For the nine months ended September 30, 2018 and 2017, the Company recognized $1.7 million and $0.7 million, respectively, of non-cash compensation expense into earnings, which is presented within selling, general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). As of September 30, 2018, total unamortized compensation cost related to unvested stock options was $5.4 million, which the Company expects to recognize over the remaining weighted-average period of 2.10 years.

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Rollforward of stock options as of September 30, 2018 is as follows:

	Number of Stock Options		Weighted average grant date fair value
Total outstanding at December 31, 2017	589,977		$	6.16
Options granted	647,768		7.28
Options exercised	—		—
Actual options forfeited	(18,728	)	6.68
Options expired	—		—
Total outstanding at June 30, 2018	1,219,017		$	6.75

There were 196,657 stock options vested and exercisable at September 30, 2018.

Assumptions used in calculating the fair value of the stock options granted during the year are summarized below:

	2018 Options Granted			2017 Options Granted
Valuation assumptions:
Expected dividend yield	0		%	0		%
Expected equity volatility	46.3		%	51.5		%
Expected term (years)	6			6
Risk-free interest rate	2.7		%	1.6		%
Weighted average:
Exercise price per stock option	$	15.31		$	19.00
Market price per share	$	15.31		$	14.49
Fair value per stock option	$	7.28		$	6.16

(12) Stockholders’ Equity

(a) Vesting of Stock Awards

During the three and nine months ended September 30, 2018, 14,701 shares and 436,130 shares were issued, respectively, net of share settlements for payment of payroll taxes, upon the vesting of certain RSUs and deferred stock awards. Shares withheld during the period were immediately retired by the Company.

(b) Secondary Offering

On January 17, 2018, the Company’s Registration Statement on Form S-1 (File No. 333-222500) was declared effective by the SEC for an offering on behalf of Keane Investor, pursuant to which 15,320,015 shares were sold by the selling stockholder (including 1,998,262 shares sold pursuant to the exercise of the underwriters’ over-allotment option) at a price to the public of $18.25 per share. The Company did not sell any common stock in, and did not receive any of the proceeds from, the offering. Upon completion of the offering, the vesting of certain of the Company’s RSUs (as defined herein) on January 2018 and the Company’s stock repurchase, Keane Investor controlled 53.1% of the Company’s outstanding common stock as of September 30, 2018.

(c) Stock Repurchase

During the three and nine months ended September 30, 2018, the Company completed $29.3 million and $69.4 million of total share repurchases of its common stock at an average price of $12.18 and $13.78 per share, representing a total of 2,406,342 and 5,040,434 common shares of the Company, respectively. As of September 30, 2018, the Company had $70.6 million remaining for future share repurchases under its existing stock repurchase program. Of the total amount of shares repurchased, 1,248,440 shares were repurchased from White Deer Energy (as defined herein). For further details of this related-party transaction with White Deer Energy, see Note (18)Related Party Transactions.

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(13) Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) in the equity section of the condensed consolidated balance sheets includes the following:

	(Thousands of Dollars)
	Foreign currency items			Interest rate contract		AOCI
December 31, 2017	$	(2,507	)	$	779	$	(1,728	)
Other comprehensive income (loss), before tax	(37		)	2,956		2,919
Income tax expense(1)	—			—		—
September 30, 2018	$	(2,544	)	$	3,735	$	1,191

⁽¹⁾  The deferred tax liability created by other comprehensive income was netted against the Company’s deferred tax asset, which was offset by a valuation allowance.

The following table summarizes reclassifications out of accumulated other comprehensive income (loss) during the three and nine months ended September 30, 2018 and 2017 and (in thousands of dollars):

										Affected line item in the unaudited condensed consolidated statements of operations and comprehensive income (loss)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Interest rate derivatives, hedging	$	163	$	—	$	473	$	(173	)	Interest expense
Foreign currency items	—		—		—		—			Other income
Total reclassifications	$	163	$	—	$	473	$	(173	)

(14) Earnings per Share

Basic income or (loss) per share is based on the weighted average number of common shares outstanding during the period. Diluted income or (loss) per share includes additional common shares that would have been outstanding if potential common shares with a dilutive effect, such as stock awards from the Company’s Equity and Incentive Award Plan, had been issued. Anti-dilutive securities represent potentially dilutive securities which are excluded from the computation of diluted income or (loss) per share as their impact would be anti-dilutive.

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

A reconciliation of the numerators and denominators used for the basic and diluted net income (loss) per share computations is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Numerator:
Net income (loss)	$	30,779	$	4,065	$	53,203	$	(80,088	)
Denominator:
Basic weighted-average common shares outstanding(1)	108,825		111,509		110,706		104,496
Dilutive effect of restricted stock awards granted to Board of Directors	53		73		52		66
Dilutive effect of deferred stock award granted to named executive officers	—		—		—		—
Dilutive effect of RSUs granted under stock incentive plans	112		173		113		104
Diluted weighted-average common shares outstanding(2)	108,990		111,755		110,871		104,666

⁽¹⁾   The basic weighted-average common shares outstanding have been computed to give effect to the Organizational Transactions, including the limited liability company agreement of Keane Investor to, among other things, exchange all of the Company’s Existing Owners’ membership interests for the newly-created ownership interests.

⁽²⁾  As a result of the net loss incurred by the Company for the nine months ended September 30, 2017, the calculation of diluted net loss per share on the unaudited condensed consolidated statements of operations and comprehensive income (loss) gives no consideration to the potentially anti-dilutive securities shown in the above reconciliation, and as such is the same as basic net loss per share.

(15) Operating Leases

The Company has certain operating leases related to its real estate, rail cars and light duty vehicles. Certain leases include escalation clauses for adjusting rental payments to reflect changes in price indices. There are no significant restrictions imposed on the Company by the leasing agreements with regard to asset dispositions or borrowing ability. Some lease arrangements include renewal and purchase options or escalation clauses. In addition, certain lease contracts include rent holidays, rent concessions and leasehold improvement incentives. Leasehold improvements made at the inception of a lease or during the lease term are amortized over the remaining period of 3 months to 4.5 years.

Rental expense associated with the Company’s operating leases was $3.4 million and $3.6 million for the three months ended September 30, 2018 and 2017, respectively. Rental expense associated with the Company’s operating leases was $9.8 million and $8.5 million for the nine months ended September 30, 2018 and 2017, respectively.

Sublease proceeds were nil and $0.1 million for the three months ended September 30, 2018 and 2017, respectively. Sublease proceeds were nil and $0.3 million for the nine months ended September 30, 2018 and 2017, respectively. All sublease proceeds related to the subleased properties of the Company’s Canadian operations. These sublease proceeds were recorded as a reduction of the Company’s Canadian operations’ exit costs liability.

Additionally, the Company has sale-leasebacks that expire in 2020. Future minimum lease payments include $2.4 million related to the sale-leasebacks.

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Minimum lease commitments remaining under operating leases for the next five years are $38.6 million as listed below:

Year-end December 31,	(Thousands of Dollars)
2018	$	4,206
2019	15,450
2020	9,451
2021	5,158
2022	4,320
Total	$	38,585

(16) Income Taxes

Keane Group Holdings, LLC was originally organized as a limited liability company and treated as a flow-through entity for federal and most state income tax purposes. As such, taxable income and any related tax credits were passed through to its members and included in their tax returns. As a result of the IPO and related Organizational Transactions, Keane Group, Inc. was formed as a corporation to hold all of the operational assets of Keane Group. Because Keane Group, Inc. is a taxable entity, the Company established a provision for deferred income taxes as of January 20, 2017. Accordingly, a provision for federal and state corporate income taxes has been made for the operations of Keane Group, Inc. from January 1, 2018 through September 30, 2018 in the unaudited condensed consolidated financial statements.

Deferred income taxes are provided to reflect the future tax consequences or benefits of differences between the tax basis of assets and liabilities and their reported amounts in the condensed consolidated balance sheets using enacted tax rates. Furthermore, as a result of the Company’s evaluation of both the positive and negative evidence, the Company determined it does not believe it is more likely than not that its deferred tax assets will be utilized in the foreseeable future and has recorded a valuation allowance. 

Included in the Company’s recording of its initial deferred taxes upon contribution to Keane Group, Inc. are deferred tax liabilities related to certain indefinite-lived intangible assets. The deferred tax liability related to these indefinite-lived intangible assets will only reverse at the time of ultimate sale or impairment. Due to the uncertain timing of this reversal, the temporary differences associated with indefinite-lived intangibles cannot be considered a source of future taxable income for purposes of determining a valuation allowance. As such, the deferred tax liability cannot be used to support an equal amount of the deferred tax asset. This is often referred to as a “naked credit.” The Company recognized a deferred tax liability of $1.9 million associated with this naked credit upon the IPO. This is presented within other noncurrent liabilities in the condensed consolidated balance sheets. This amount will increase as additional tax amortization is recognized, but will only decrease if the indefinite-lived intangibles are sold or impaired. Total deferred tax liability as of September 30, 2018 was $1.7 million, which was comprised of the naked credit and state tax deferred liabilities.

The Company’s effective tax rate on continuing operations for the nine months ended September 30, 2018 was 6.44%. The difference between the effective tax rate and the U.S. federal statutory rate is due to state taxes, change in valuation allowance and discrete tax effects related to secondary transaction costs and stock-based compensation benefits.

  Deferred taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities, given the provisions of enacted tax laws. Tax positions are evaluated for recognition using a more-likely-than-not threshold, and those tax positions requiring recognition are measured as the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. The Company’s policy is to record interest and penalties related to uncertain tax positions in income tax expense. At September 30, 2018, the Company did not have any accrued liabilities for uncertain tax positions and does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months.

As a result of market conditions and their corresponding impact on the Company’s business outlook, management determined that a valuation allowance was appropriate, as it is not more likely than not that the Company will not utilize its net deferred tax assets. The remaining tax impact not offset by a valuation allowance is related to tax amortization on the Company’s indefinite-lived intangible assets, state tax deferred liabilities, and secondary transaction costs and stock-based compensation benefits, which are treated discretely from the annualized effective tax rate for 2018.

On December 22, 2017, new tax reform legislation, commonly referred to as the Tax Cuts and Jobs Act was signed into law. The Company evaluated the provisions of the Tax Cuts and Jobs Act and determined only the reduced corporate tax rate from 35% to

31

KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

21% would have an impact on its consolidated financial statements as of December 31, 2017. Accordingly, the Company recorded a provision to income taxes for its assessment of the tax impact of the Tax Cuts and Jobs Act on ending deferred tax assets and liabilities and the corresponding valuation allowance. The effects of other provisions of the Tax Cuts and Job Act are not expected to have an adverse impact on the Company’s consolidated financial statements. Management will continue to analyze the impacts of the Tax Cuts and Jobs Act on the Company and refine its estimates during 2018.

(17) Commitments and Contingencies

As of September 30, 2018 and December 31, 2017, the Company had $3.8 million and $19.8 million of deposits on equipment, respectively. Outstanding purchase commitments on equipment were $22.9 million and $82.5 million, as of September 30, 2018 and December 31, 2017, respectively.

As of September 30, 2018 and December 31, 2017, the Company had committed $1.3 million and nil, respectively, to research and development with its equity-method investee, that is expected to generate economic benefits in 2019. As of September 30, 2018, future commitments associated with this research and development activity is anticipated to be approximately $3.1 million.

As of September 30, 2018 and December 31, 2017, the Company had issued letters of credit of $2.5 million and $2.0 million under the 2017 ABL Facility which secured performance obligations related to the Company’s capital lease with CIT Finance LLC and its general liability insurance.

In the normal course of operations, the Company enters into certain long-term raw material supply agreements for the supply of proppant to be used in hydraulic fracturing. As part of these agreements, the Company is subject to minimum tonnage purchase requirements and may pay penalties in the event of any shortfall.

Aggregate minimum commitments under long-term raw material supply contracts for the next five years as of September 30, 2018 are listed below:

	(Thousands of Dollars)
2018	$	7,324
2019	35,835
2020	32,475
2021	10,850
2022	—
	$	86,484

Litigation

From time to time, the Company is subject to legal and administrative proceedings, settlements, investigations, claims and actions, as is typical of the industry. These claims include, but are not limited to, contract claims, environmental claims, employment related claims, claims alleging injury or claims related to operational issues. The Company’s assessment of the likely outcome of litigation matters is based on its judgment of a number of factors, including experience with similar matters, past history, precedents, relevant financial information and other evidence and facts specific to the matter. In accordance with GAAP, the Company accrues for contingencies where the occurrence of a material loss is probable and can be reasonably estimated, based on the Company’s best estimate of the expected liability. The Company may increase or decrease its legal accruals in the future, on a matter-by-matter basis, to account for developments in such matters. Notwithstanding the uncertainty as to the final outcome and based upon the information currently available to it, the Company does not currently believe these matters in aggregate will have a material adverse effect on its financial position or results of operations.

The Company has been served with class and collective action claims alleging that the Company failed to pay a nationwide class of workers overtime in compliance with the Fair Labor Standards Act (“FLSA”) and state laws. On December 27, 2016, two former employees filed a complaint for a proposed collective action in United States District Court for the Southern District of Texas entitled Hickson and Villa v. Keane Group Holdings, LLC, et al., alleging certain field professionals were not properly classified under the FLSA and Pennsylvania law. In the first quarter of 2018, the parties agreed to settle the claims for $4.2 million. The Company has recognized a liability for the full settlement, which is recorded in accrued expenses on the condensed consolidated balance sheet as of September 30, 2018. The Company funded this settlement in the fourth quarter of 2018.

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

The Company is involved in a commercial dispute whereby a former customer has commenced an arbitration proceeding, captioned Halcon Operating Co., Inc. and Halcon Energy Properties, Inc. v. Keane Frac LP and Keane Frac GP, LLC, and on December 15, 2017, made a contested claim for contractual damages of approximately $4.3 million. The Company intends to vigorously dispute the merits of this claim and has asserted affirmative counterclaims for unpaid bills and other tort damages. Additionally, the Company has been served with a class or collective action claim alleging that the Company failed to pay a class of workers in Texas overtime in compliance with the FLSA and state laws. The Company intends to vigorously dispute the merits of these claims based on the Motor Carrier Act overtime exemption. The Company has recognized a liability of $2.8 million for these disputes which is recorded in accrued expenses on the condensed consolidated balance sheet as of September 30, 2018.

Environmental

The Company is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for protection of the environment. The Company cannot predict the future impact of such standards and requirements, which are subject to change and can have retroactive effectiveness. The Company continues to monitor the status of these laws and regulations. Currently, the Company has not been fined, cited or notified of any environmental violations that would have a material adverse effect upon its financial position, liquidity or capital resources. However, management does recognize that by the very nature of the Company’s business, material costs could be incurred in the near term to maintain compliance. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible regulation or liabilities, the unknown timing and extent of the corrective actions which may be required, the determination of the Company’s liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification.

Regulatory Audits

In 2017, the Company was notified by the Texas Comptroller of Public Accounts that it will conduct a routine audit of Keane Frac TX, LLC’s direct payment sales tax for the period from January 2014 through May 2017. The audit commenced in March 2018. The Company is currently unable to estimate the range of loss, if any, that may result from this matter.

(18)Related Party Transactions

Cerberus Operations and Advisory Company, an affiliate of the Company’s principal equity holder, provides certain consulting services to the Company. The Company paid $0.1 million and $0.3 million during the three and nine months ended September 30, 2018 and $0.1 million during the three and nine months ended September 30, 2017.

In connection with the Company’s reorganization, the Company engaged in transactions with affiliates. See Note (1)Basis of Presentation and Nature of Operationsand Note (12) Stockholders’ Equity for a description of these transactions.

In connection with the Company’s research and development initiatives, the Company has engaged in transactions with its equity-method investee. See Note (17) Commitments and Contingencies for a description of these commitments. As of September 30, 2018, the Company has purchased $1.2 million of shares in its equity-method investee.

In connection with the Company’s acquisition of RockPile, the Company agreed to pay contingent consideration, which was settled in early April 2018. See Note (3)Acquisitions for further detail.

On January 17, 2018, the Company’s Registration Statement on Form S-1 (File No. 333-222500) was declared effective by the SEC for an offering on behalf of Keane Investor, pursuant to which 15,320,015 shares were sold by the selling stockholder (including 1,998,262 shares sold pursuant to the exercise of the underwriters’ over-allotment option) at a price to the public of $18.25 per share. The Company did not sell any common stock in, and did not receive any of the proceeds from, the offering. Upon completion of the offering, Keane Investor controlled 50.9% of the Company’s outstanding common stock. Upon completion of the offering, the vesting of certain of the Company’s RSUs (as defined herein) on January 2018 and the Company’s stock repurchase (as discussed herein), Keane Investor controls 53.1% of the Company’s outstanding common stock as of September 30, 2018. During the nine months ended September 30, 2018, the Company incurred $13.0 million of transaction costs on behalf of the selling stockholder, which were included under selling, general and administrative expenses within the unaudited condensed consolidated statements of operations and comprehensive loss. Transaction costs consist of the underwriters’ fees, other offering fees and expenses for professional services rendered specifically in connection with the offering.

On May 29, 2018, the Company repurchased 1,248,440 shares of its common stock from WDE RockPile Aggregate, LLC (“White Deer Energy”) for $16.02 per share or $20.0 million. At the time of the RockPile acquisition, the shares of the Company’s common stock that White Deer Energy acquired was valued at $15.00 per share. The Company recognized the entire transaction as

33

treasury stock that was subsequently retired, whereby the RockPile acquisition value of the shares of $18.7 million was recorded against paid-in capital in excess of par value and the remaining $1.3 million was recorded against retained earnings on the unaudited condensed consolidated balance sheet.

(19)Business Segments

Management operates the Company in two reporting segments: Completion Services and Other Services. Management evaluates the performance of these segments based on equipment utilization, revenue, segment gross profit and gross margin. All inter-segment transactions are eliminated in consolidation.

The following tables present financial information with respect to the Company’s segments. Corporate and Other represents costs not directly associated with an operating segment, such as interest expense, income taxes and corporate overhead. Corporate assets include cash, deferred financing costs, derivatives and entity-level machinery and equipment.

	(Thousands of Dollars)
		Three Months Ended September 30,						Nine Months Ended September 30,
		2018			2017			2018			2017
Operations by business segment
Revenue:
Completion Services		$	548,418		$	468,479		$	1,625,798		$	1,031,768
Other Services		10,490			8,823			24,659			8,823
Total revenue		$	558,908		$	477,302		$	1,650,457		$	1,040,591
Gross profit:
Completion Services		$	122,490		$	84,472		$	364,122		$	145,385
Other Services		(381		)	1,741			(1,557		)	1,741
Total gross profit		$	122,109		$	86,213		$	362,565		$	147,126
Operating income (loss):
Completion Services		$	56,771		$	42,362		$	186,731		$	49,807
Other Services		(1,221		)	1,055			(5,114		)	(1,894		)
Corporate and Other		(30,624		)	(32,302		)	(97,755		)	(78,881		)
Total operating income (loss)		$	24,926		$	11,115		$	83,862		$	(30,968	)
Depreciation and amortization:
Completion Services		$	64,579		$	41,542		$	174,376		$	96,674
Other Services		840			1,586			3,557			4,323
Corporate and Other		2,868			3,076			9,809			8,319
Total depreciation and amortization		$	68,287		$	46,204		$	187,742		$	109,316
(Gain) loss on disposal of assets
Completion Services		$	1,140		$	568		$	3,015		$	(1,096	)
Other Services		—			(900		)	—			(688		)
Corporate and Other		(27		)	634			2,154			1,647
Total (gain) loss on disposal of assets		$	1,113		$	302		$	5,169		$	(137	)
Exit Costs:
Corporate and Other		$	(1	)	$	677		$	(154	)	$	1,024
Total exit costs		$	(1	)	$	677		$	(154	)	$	1,024
Income tax provision:
Corporate and Other		$	(2,623	)	$	(797	)	$	(4,855	)	$	(1,862	)
Total income tax:		$	(2,623	)	$	(797	)	$	(4,855	)	$	(1,862	)

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Net income (loss):
Completion Services	$	56,771		$	42,362		$	186,731		$	49,807
Other Services	(1,221		)	1,055			(5,114		)	(1,894		)
Corporate and Other	(24,771		)	(39,352		)	(128,414		)	(128,001		)
Total net income (loss)	$	30,779		$	4,065		$	53,203		$	(80,088	)
Capital expenditures(1):
Completion Services	$	89,904		$	48,314		$	233,665		$	100,865
Other Services	98			—			1,642			1,718
Corporate and Other	3,122			2,190			4,008			2,582
Total capital expenditures	$	93,124		$	50,504		$	239,315		$	105,165

⁽¹⁾  Excludes expenditures for leasehold improvements and acquisitions.

	(Thousands of Dollars)
	September 30, 2018		December 31, 2017
Total assets by segment:
Completion Services	$	948,643	$	863,419
Other Services	17,702		21,877
Corporate and Other	147,984		157,820
Total assets	$	1,114,329	$	1,043,116
Total assets by geography:
United States	$	1,112,875	$	1,041,596
Canada	1,454		1,520
Total assets	$	1,114,329	$	1,043,116
Goodwill by segment:
Completion Services	$	132,524	$	134,967
Total goodwill	$	132,524	$	134,967

(20) New Accounting Pronouncements

(a) Recently Adopted Accounting Standards

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition” and most industry-specific guidance. ASU 2014-09 sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity is required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. Additional disclosures are required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers,” which deferred the effective date of ASU 2014-09 for all entities by one year and is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2017. The Company adopted this standard as of January 1, 2018. The adoption of this standard did not have a material impact on the Company’s current revenue recognition processes or the Company’s unaudited condensed consolidated financial statements and did not require any retrospective adjustments to the unaudited condensed consolidated financial statements.

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KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities,” which (i) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, (ii) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (iii) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and (iv) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. ASU 2016-01 is effective for annual periods beginning after December 15, 2017. The Company adopted the provisions of ASU 2016-01 effective January 1, 2018. The adoption of these standards did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

During 2016, FASB issued ASU 2016-08, “Principal versus Agent,” ASU 2016-10, “Licenses of Intellectual Property (IP) and Identification of Performance Obligations” and ASU 2016-12, “Narrow Scope Improvements and Practical Expedients”. During 2017, FASB issued ASC 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets”. All these ASUs are designed to address various issues raised by the constituents to the Transition Resource Group and help minimize diversity in practice in applying ASU 2014-09. The Company adopted these standards concurrently with the adoption of ASU 2014-09 as of January 1, 2018. The adoption of these standards did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16, “Intra-Entity Transfers of Asset Other Than Inventory,” which requires entities to recognize the tax consequences of intercompany asset transfers in the period in which the transfer takes place, with the exception of inventory transfers. ASU 2016-16 is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2017. Entities must adopt the standard using a modified retrospective approach with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The cumulative effect adjustments will include recognition of the income tax consequences of intra-entity transfers of assets, other than inventory, that occur before the adoption date. The Company adopted this standard as of January 1, 2018. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements, as the Company has minimal intra-entity transfers of qualifying assets.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805), Clarifying the Definition of a Business,” which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This update is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2017 and should be applied prospectively. The Company adopted this standard as of January 1, 2018. The adoption of this standard did not have an impact on the Company’s unaudited condensed consolidated financial statements.

In February 2018, the FASB issued ASU 2018-03, “Technical Corrections and Improvements of Financial Instruments - Overall,” to make targeted improvements that addressed certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The targeted improvements address the discontinuation of, adjustments to and transition guidance for equity securities without a readily determinable fair value, forward contracts and purchased options, presentation requirements for certain fair value option liabilities and the measurement of changes in fair value option liabilities denominated in a foreign currency. The Company adopted this standard as of July 1, 2018. The adoption of this standard did not have an impact on the Company’s unaudited condensed consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, “Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. This update is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2018. The Company early adopted this standard effective June 20, 2018. The adoption of this standard did not have an impact on the Company’s unaudited condensed consolidated financial statements, as the Company has only issued shares to employees or nonemployee directors and has previously recognized its nonemployee directors share-based payments in line with its recognition of share-based payments to employees, using the grant-date fair value of the equity instruments issued, amortized over the requisite service period.

(b) Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual

36

KEANE GROUP, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a purchase financed by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months, regardless of their classification. Leases with a term of 12 months or less may be accounted for similarly to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The Company anticipates the adoption of this standard will result in a significant increase in its assets and liabilities, as the Company has certain operating and real property lease arrangements for which it is the lessee. The Company is continuing to evaluate whether any of its arrangements would qualify the Company as a lessor; however, the Company currently anticipates it would only qualify as a lessor for real estate arrangements where it is the sublessor. The standard is effective for the Company beginning on January 1, 2019.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduces a new impairment model for financial instruments that is based on expected credit losses rather than incurred credit losses. The new impairment model applies to most financial assets, including trade accounts receivable and lease receivables. ASU 2016-13 is effective for annual periods beginning after December 15, 2019. The Company is currently in the process of evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows companies to reclassify from accumulated other comprehensive income (loss) to retained earnings, any stranded tax effects resulting from complying with the Tax Cuts and Jobs Act legislation passed in December 2017. ASU 2018-02 is effective for annual periods beginning after December 15, 2018, and the Company will implement the provisions of this ASU effective January 1, 2019. The Company does not expect the adoption of this standard to impact its consolidated financial statements, as due to the Company’s valuation allowance, there is no net tax effect stranded within accumulated other comprehensive income (loss).

In July 2018, the FASB issued ASU 2018-09, “Codification Improvements,” which made clarifications, correction of errors and minor improvements to ASC 220, “Income Statement - Reporting Comprehensive Income - Overall,” ASC 470-50, “Debt Modifications and Extinguishments,” ASC 480-10, “Distinguishing Liabilities from Equity - Overall,” ASC 718-740, “Compensation - Stock Compensation - Income Taxes,” ASC 805-740, “Business Combinations - Income Taxes,” ASC 815-10, “Derivatives and Hedging - Overall,” ASC 820-10, “Fair Value Measurement - Overall,” ASC 940-405, “Financial Services - Brokers and Dealers - Liabilities,” and ASC 962-325, “Plan Accounting - Defined Contribution to Pension Plans - Investments - Other.” The transition and effective dates of ASU 2018-09 vary for each amendment. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements, as it only has qualifying transactions that would be impacted by the amendments to ASC 718-740.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This standard removed, modified and added disclosure requirements from ASC 820. ASU 2018-13 is effective for annual periods beginning after December 15, 2019. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements, as this standard primarily addresses disclosure requirements for Level 3 fair value measurements. The Company does not currently have or anticipate having Level 3 fair value instruments.

In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” The amendments in this standard aligned the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 is effective for annual periods beginning after December 15, 2019. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements.

(21) Subsequent Events

(a) Stock Repurchase Program

Since the beginning of the fourth quarter of 2018, Keane has completed a further $18.2 millionof share repurchases. Effective October 26, 2018, Keane’s Board of Directors authorized a reset of capacity on its existing stock repurchase program back to $100 million. Additionally, the program’s expiration date was extended to September 2019 from a previous expiration of February 2019.

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

The following discussion and analysis of Keane Group, Inc.’s (the “Company”, “Keane”, “KGI” or “our”) financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related condensed footnotes included within Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)” in this Quarterly Report on Form 10-Q, as well as our 2017 Annual Report on Form 10-K for the year ended December 31, 2017.

EXECUTIVE OVERVIEW

Organization

We are one of the largest pure-play providers of integrated well completion services in the U.S., with a focus on complex, technically demanding completion solutions. Our primary service offerings include hydraulic fracturing, wireline perforation and logging and engineered solutions, cementing as well as other value-added service offerings. Our total capacity includes approximately 1.4 million hydraulic horsepower. Our assets are primarily comprised of 27 hydraulic fracturing fleets (“fleets”), 34 wireline trucks, 24 cementing units and other ancillary assets. Our geographic footprint includes the Permian Basin, the Marcellus Shale/Utica Shale, the Eagle Ford Formation, the Bakken Formation and other active oil and gas basins. Keane is dedicated to providing industry-leading completion services with a strict focus on health, safety and environmental stewardship, combined with cost-effective customer-centric solutions. We distinguish ourselves through our partnerships with our customers, our laser-focus on safety, our transparency concerning value creation and our responsibilities to employees and customers.

We are organized into two reportable segments, consisting of Completion Services, which includes our hydraulic fracturing and wireline divisions and ancillary services; and Other Services, which includes our cementing division. We evaluate the performance of these segments based on equipment utilization, revenue, segment gross profit and gross margin. Segment gross profit is a key metric that we use to evaluate segment operating performance and to determine resource allocation between segments and across geographies. We define segment gross profit as segment revenue less segment direct and indirect cost of services, excluding depreciation and amortization.

Additionally, our operations management are able to make rapid and informed decisions, including price adjustments to offset commodity inflation and align with market rates, decisions to strategically deploy and mobilize our existing and new fleets and real-time supply chain management decisions, by utilizing revenue, as well as individual direct and indirect costs on a per stage and per fleet basis.

Acquisition of Hydraulic Fracturing Equipment

On July 24, 2018, we executed a purchase agreement with Refinery Specialties, Incorporated (“RSI”) to acquire approximately 90,000 hydraulic horsepower and related support equipment for approximately $35.4 million, inclusive of $0.8 million for deposit reimbursement related to future equipment deliveries. This acquisition was partially funded by the insurance proceeds we received in connection with a portion of one hydraulic fracturing fleet that was damaged in an accidental fire in July 2018 (for further details see Note (6) Property and Equipment, netof Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)”). We also assumed operating leases for light duty vehicles. In September 2018, we reached an agreement with RSI to refund us $0.8 million of the purchase price due to repair costs required for certain acquired equipment. The resulting purchase price after the refund was $34.6 million. A portion of the acquired horsepower replaced the equipment damaged during the fire, with the remainder integrated into our existing fleets.

Financial results

Revenue during the three months ended September 30, 2018 totaled $558.9 million, an increase of 17% compared to revenue during the three months ended September 30, 2017 of $477.3 million. During the three months ended September 30, 2018, we had an average of 27.0 fleets deployed, of which utilization averaged 89% driven by unanticipated white space in the frac calendar, resulting in the equivalent of 24.0 fully-utilized fleets, as compared to an average of 24.7 deployed fleets working at 100% utilization during the three months ended September 30, 2017. Revenue growth reflects our strategy of aligning with high quality and efficient customers under dedicated agreements with periodic price re-openers, which allows for market adjustments and inflation recovery. Average annualized revenue per fleet deployed increased 20%, to $91.4 million during three months ended September 30, 2018 from $75.9 million during three months ended September 30, 2017. This strategy allowed us to promote a continued partnership on improving operational performance and adjust pricing to offset changes in input costs. Improved fleet performance and overall pricing also had a

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favorable impact on operating margins, which is calculated by dividing operating income (loss) by revenue. We continued to experience input cost inflation for our underlying commodity costs, particularly labor, fuel, chemicals and sand trucking, which continue to face supply constraints across all markets. This input cost inflation was partially offset by declines in proppant pricing, driven by increased production of lower cost in-basin sand and increased availability of Northern White sand. Consistent with our efforts to maintain and grow the supply of key commodities and skilled workforce, as influenced by market capacity, we continued to secure key contracts with suppliers, as well as position labor rates to facilitate retaining skilled employees and attracting new talent. We reported operating income of $24.9 million during the three months ended September 30, 2018, as compared to operating income of $11.1 million during the three months ended September 30, 2017.

We reported net income of $30.8 million, or $0.28 per basic and diluted share, during the three months ended September 30, 2018, compared to net income of $4.1 million, or $0.04 per basic and diluted share, during the three months ended September 30, 2017. Net income during the three months ended September 30, 2018 includes approximately $6.8 million of management adjustments to arrive at Adjusted EBITDA (as defined herein), driven by $14.9 gain from the insurance proceeds received in connection with the July 1, 2018 accidental fire, $4.8 million of non-cash stock compensation expense, $2.8 million of legal contingencies and $0.5 million of integration costs associated with the asset acquisition from Refinery Specialties, Incorporated (“RSI”). Net income during the three months ended September 30, 2017 includes approximately $13.3 million of management adjustments to arrive at Adjusted EBITDA, driven primarily by $7.9 million of acquisition and integration costs associated with the acquisition of RockPile, $3.3 million of non-cash stock compensation expense and $1.6 million of commissioning costs for our idled fleets. Excluding the adjustments discussed above, net income during the three months ended September 30, 2018 and 2017 was $24.0 million and $17.4 million, respectively, or $0.22 and $0.16 per basic and diluted share, respectively.

Business outlook

In 2017 and through the first half of 2018, our industry experienced an increase in the level of drilling activity, driven by growth in E&P capital spending budgets. Commodity prices improved, with crude oil and natural gas prices well above levels prevailing at the beginning of 2017. These dynamics, combined with the completion of previously drilled wells, led to significant growth in the demand for U.S. completion services. At the same time, the availability and supply of completions services was impacted by higher completions intensity, which drove increases in the amount of equipment that must be utilized per fleet and acceleration of maintenance cycles, both of which had a tightening effect on available supply.

Beginning in the second quarter of 2018, concerns began to emerge regarding a potential temporary shortage of takeaway capacity in the Permian Basin. We continue to believe any potential impact to the industry from takeaway capacity shortages will be transitory, as additional pipeline capacity is under development and expected to come online throughout 2019 and 2020. Furthermore, we believe takeaway shortages could be partially offset by alternative methods of transportation and a reallocation of activity to other basins.

During the third quarter of 2018, a divergence between the efficiencies of completion service companies and drilling companies created unexpected downtime on the calendar for highly-efficient completion service operators, negatively impacting fleet utilization. For the fourth quarter of 2018, we expect these efficiency-driven impacts to continue. Additionally, we expect factors such as E&P capital budget exhaustion, early achievement of E&P production targets, price differentials and normal seasonality, to create softness in demand for the fourth quarter and the early part of 2019. We believe all of these factors are temporary, and we expect them to ameliorate as we progress through 2019.

We believe our strategy of keeping our assets well-maintained and partnering with top-tier customers under dedicated agreements, combined with supportive, long-term completions services supply and demand, position us well for the supportive industry dynamics we expect in 2019, including refreshed E&P capital budgets, strong fundamentals for crude oil and natural gas prices, stable or growing rig counts and an increasing number of drilled but uncompleted wells.

Financial markets, liquidity, and capital resources

At September 30, 2018, we had a cash balance of approximately $82.8 million. We also had $207.9 million available under our asset-based revolving credit facility as of September 30, 2018, which, with our cash balance, we believe provides us with sufficient liquidity for at least the next 12 months, including capital expenditures and working capital investments.

During the nine months ended September 30, 2018, we filed a Registration Statement on Form S-1 (File No. 333-222500) that was declared effective on January 17, 2018 by the Securities and Exchange Commission for an offering of shares of our common stock on behalf of Keane Investor Holdings LLC (“Keane Investor” or the “selling stockholder”). 15,320,015 shares were registered and sold by the selling stockholder (including 1,998,262 shares sold pursuant to the exercise of the underwriters’ over-allotment

39

option) at a price to the public of $18.25 per share. We did not sell any common stock in, and did not receive any of the proceeds from, the secondary offering. Following completion of the secondary offering, the vesting of certain of the Company’s RSUs (as defined herein) on January 2018 and the Company’s stock repurchase (as discussed herein), at September 30, 2018, Keane Investor owns approximately 53.1% of the Company’s outstanding common stock.

For additional information on market conditions and our liquidity and capital resources, see “Liquidity and Capital Resources,” and “Business Environment and Results of Operations” herein.

BUSINESS ENVIRONMENT AND RESULTS OF OPERATIONS

We provide our services in several of the most active basins in the U.S., including the Permian Basin, the Marcellus Shale/Utica Shale, Eagle Ford Basin and the Bakken Formation. According to Spears & Associates, these regions are expected to account for approximately 68% of all new horizontal wells anticipated to be drilled between 2018 and 2022. In addition, the high density of our operations in the basins in which we are most active provides us the opportunity to leverage our fixed costs and to quickly respond with what we believe are highly efficient, integrated solutions that are best suited to address customer requirements.

In particular, we are one of the largest providers in the Permian Basin and the Marcellus Shale/Utica Shale, the most prolific and cost-competitive oil and natural gas basins in the U.S. According to Spears & Associates, the Permian Basin and the Marcellus Shale/Utica Shale are expected to account for 54% of total active rigs in the U.S. between 2018 and 2022 based on forecasted rig counts. These basins have experienced a recovery in activity since the spring of 2016, with a 230% increase in rig count from their combined May 2016 low of 170 to 561 as of September 30, 2018.

Activity within our business segments is significantly impacted by spending on upstream exploration, development, and production programs by our customers. Also impacting our activity is the status of the global economy, which impacts oil and natural gas consumption.

Some of the more significant determinants of current and future spending levels of our customers are oil and natural gas prices, global oil supply, the world economy, the availability of credit, government regulation and global stability, which together drive worldwide drilling activity. Our financial performance is significantly affected by rig and well count in North America, as well as oil and natural gas prices, which are summarized in the tables below.

The following table shows the average oil and natural gas prices for West Texas Intermediate (“WTI”) and Henry Hub natural gas:

	Three Months Ended September 30,				Nine Months Ended September 30,				Year Ended December 31,
	2018		2017		2018		2017		2017
Oil price - WTI(1)	$	69.76	$	48.16	$	66.89	$	49.39	$	50.88
Natural gas price - Henry Hub(2)	2.93		2.95		2.95		3.01		2.99
(1)  Oil price measured in dollars per barrel (2)  Natural gas price measured in dollars per million British thermal units (Btu), or MMBtu

The historical average U.S. rig counts based on the weekly Baker Hughes Incorporated rig count information were as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,		Year Ended December 31,
Product Type	2018	2017	2018	2017	2017
Oil	863	759	829	690	703
Natural Gas	186	186	189	170	172
Other	2	1	1	1	1
Total	1,051	946	1,019	861	876

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	Three Months Ended September 30,		Nine Months Ended September 30,		Year Ended December 31,
Drilling Type	2018	2017	2018	2017	2017
Horizontal	921	799	890	720	736
Vertical	63	70	61	72	70
Directional	67	77	68	69	70
Total	1,051	946	1,019	861	876

Our customers’ cash flows, in most instances, depend upon the revenue they generate from the sale of oil and natural gas. Lower oil and natural gas prices usually translate into lower exploration and production budgets.

Following a trough in early 2016, oil prices and natural gas prices have recovered to $73.16 and $3.01, respectively, or approximately 179% and 102%, respectively, as of September 28, 2018, from their lows in early 2016 of $26.19 and $1.49, respectively. The US Energy Information Administration (the “EIA”) projects WTI spot prices to average $69.00 in 2019. The EIA expects Henry Hub natural gas prices to average $3.12 in 2019.

With the rebound in commodity prices from their lows in early 2016, drilling and completion activity has continued to increase in 2018, with U.S. active rig count at the end of September 2018 more than 160% above the trough in the active rig count registered in May 2016. The significant growth in production resulting from increased drilling activity has contributed to increased uncertainty concerning the direction of oil and gas prices over the near term, and market volatility has continued to persist. Despite this market volatility, we continue to experience increased demand for our services, as we partner with companies with longer-term drilling programs.

The EIA projects that the average WTI spot price will increase through 2040 from growing demand and the development of more costly oil resources. Global liquids demand is expected to average 101.6 million barrels per day in 2019. The EIA anticipates continued growth in the long-term U.S. domestic demand for natural gas, supported by various factors, including (i) increased likelihood of favorable regulatory and legislative initiatives, (ii) increased acceptance of natural gas as a clean and abundant domestic fuel source and (iii) the emergence of low-cost natural gas shale developments. Natural gas demand in North America is expected to average 80.4 billion cubic feet per day in 2019.

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RESULTS OF OPERATIONS IN2018COMPARED TO2017

Three Months Ended September 30, 2018 Compared with Three Months Ended September 30, 2017

	Three Months Ended September 30,
(Thousands of Dollars)							As a % of Revenue				Variance
Description	2018			2017			2018		2017		$			%
Completion Services	$	548,418		$	468,479		98	%	98	%	$	79,939		17	%
Other Services	10,490			8,823			2	%	2	%	1,667			19	%
Revenue	558,908			477,302			100	%	100	%	81,606			17	%
Completion Services	425,928			384,007			76	%	80	%	41,921			11	%
Other Services	10,871			7,082			2	%	1	%	3,789			54	%
Costs of services (excluding depreciation and amortization, shown separately)	436,799			391,089			78	%	82	%	45,710			12	%
Completion Services	122,490			84,472			22	%	18	%	38,018			45	%
Other Services	(381		)	1,741			0	%	0	%	(2,122		)	(122	%)
Gross profit	122,109			86,213			22	%	18	%	35,896			42	%
Depreciation and amortization	68,287			46,204			12	%	10	%	22,083			48	%
Selling, general and administrative expenses	27,783			28,592			5	%	6	%	(809		)	(3	%)
Loss on disposal of assets	1,113			302			0	%	0	%	811			269	%
Operating income	24,926			11,115			4	%	2	%	13,811			124	%
Other income	14,454			942			3	%	0	%	13,512			1,434	%
Interest expense	(5,978		)	(7,195		)	(1	%)	(2	%)	1,217			(17	%)
Total other income (expense)	8,476			(6,253		)	2	%	(1	%)	14,729			(236	%)
Income tax expense	(2,623		)	(797		)	0	%	0	%	(1,826		)	229	%
Net income	$	30,779		$	4,065		6	%	1	%	$	26,714		657	%

Revenue:     Total revenue is comprised of revenue from Completion Services and Other Services. Revenue during the three months ended September 30, 2018increased by $81.6 million, or 17%, to $558.9 million from $477.3 million during the three months ended September 30, 2017. This change in revenue by reportable segment is discussed below.

Completion Services:     Completion Services segment revenue increased by $79.9 million, or 17%, to $548.4 million during the three months ended September 30, 2018 from $468.5 million during the three months ended September 30, 2017. During the three months ended September 30, 2018, we had an average of 27.0 fleets deployed, of which utilization averaged 89% driven by unanticipated white space in the frac calendar, resulting in the equivalent of 24.0 fully-utilized fleets, as compared to 24.7 average deployed fleets working at 100% utilization during the three months ended September 30, 2017. Despite this reduction in deployed fleets, the increase in revenue of 17% was due to improvements in efficiencies, net pricing increases over the term, and continued bundling coupled with newly introduced technology employed in performing our wireline services.

Other Services:     Other Services segment revenue increased by $1.7 million, or 19%, to $10.5 million during the three months ended September 30, 2018 from $8.8 million during the three months ended September 30, 2017. This change in revenue was primarily attributable to the acquisition of Other Services divisions from RockPile and the ramp-up of idle cement assets acquired during the acquisition of a majority of the U.S. assets and assumed certain liabilities of Trican Well Service, L.P. (the "Acquired Trican Operations"). Revenue during the three months ended September 30, 2018 was earned in our cementing division.

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Cost of services:     Cost of services during the three months ended September 30, 2018 decreased as a percentage of revenue to 78% from 82% during the three months ended September 30, 2017. This decrease as a percentage of revenue was driven by overall operational efficiency and higher net pricing. Total cost of services during the three months ended September 30, 2018 increased by $45.7 million, or 12%, to $436.8 million from $391.1 million during the three months ended September 30, 2017, driven by by (i) price inflation on our key input costs, (ii) increased maintenance costs associated with increased service intensity stemming from larger sand volumes and well configurations, including longer laterals and (iii) increased activities in our cementing business, all partially offset by (iv) declines in proppant pricing, driven by increased production of lower cost in-basin sand and increased availability of Northern White sand. During the three months ended September 30, 2018, we had management adjustments of $0.2 million in integration costs related to our asset acquisition from RSI. During the three months ended September 30, 2017, we had management adjustments of $1.9 million of acquisition and integration costs associated with the acquisition of RockPile and $1.6 million of commissioning costs for our idle fleets. Excluding the above-mentioned management adjustments, total cost of services was $436.6 million and $387.6 million during the three months ended September 30, 2018 and 2017, respectively.

Cost of services, as a percentage of total revenue is presented below:

Description	2018		2017		% Change
Segment cost of services as a percentage of segment revenue:
Completion Services	78	%	82	%	(4	)%
Other Services	104	%	80	%	24	%
Total cost of services as a percentage of total revenue	78	%	82	%	(4	)%

The change in cost of services by reportable segment is further discussed below.

Completion Services:     As a percentage of segment revenue, total cost of services was 78% and 82%, during the three months ended September 30, 2018 and 2017, respectively, a decrease as a percentage of revenue of 4%. This decrease was driven by overall operational efficiency and higher net pricing, partially offset by overall higher net inflation on input costs. During the three months ended September 30, 2018, we had management adjustments of $0.2 million in integration costs related to our asset acquisition from RSI. During the three months ended September 30, 2017, we had management adjustments of $1.8 million of acquisition and integration costs associated with the acquisition of RockPile and $1.6 million of commissioning costs for our idle fleets. Excluding the above-mentioned management adjustments, Completion Services segment cost of services was $425.7 million and $380.6 million during the three months ended September 30, 2018 and 2017, respectively, a decrease as a percentage of revenue of 3%.

Other Services:     Other Services segment cost of services increased by $3.8 million, or 54%, to $10.9 million during the three months ended September 30, 2018 from $7.1 million during the three months ended September 30, 2017. This change was driven by the change in cost of services mix, as we divested our workover assets during the third and fourth quarters of 2017, coupled with increased costs associated with the ramp-up of the cementing business line. During the three months ended September 30, 2017, we had management adjustments of $0.1 million of acquisition and integration costs associated with the acquisition of RockPile.

Depreciation and amortization:     Depreciation and amortization expense as a percentage of revenues was 12% and 10% during the three months ended September 30, 2018 and 2017, respectively. However, total depreciation expense increased by $22.1 million, or 48%, to $68.3 million during the three months ended September 30, 2018 from $46.2 million during the three months ended September 30, 2017. This change was primarily attributable to the purchase of newbuild equipment and the asset acquisition from RSI, combined with changes in the estimated useful lives of certain assets during the first half of 2018.

Selling, general and administrative expense:     Selling, general and administrative (“SG&A”) expense, which represents costs associated with managing and supporting our operations, decreased by 3% to $27.8 million during the three months ended September 30, 2018 from $28.6 million during the three months ended September 30, 2017. Total management adjustments were $7.9 million during the three months ended September 30, 2018, driven primarily by $4.8 million of non-cash stock compensation expense, $2.8 million of legal contingencies and $0.3 million in integration costs related to our asset acquisition from RSI. Management adjustments were $11.1 million during the three months ended September 30, 2017, driven by $6.9 million of transaction costs related to the acquisition of RockPile, $3.3 million of non-cash stock compensation expense and $0.6 of legal contingencies. Excluding these

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management adjustments, SG&A expense as a percentage of revenue was 4% during each of the three months ended September 30, 2018 and 2017.

Loss on disposal of assets:     Loss on disposal of assets in 2018 increased by $0.8 million to a loss of $1.1 million during the three months ended September 30, 2018 from a loss of $0.3 million during the three months ended September 30, 2017. This change was primarily attributable to early disposals of various hydraulic fracturing pump components during the three months ended September 30, 2018.

Other income (expense), net.     Other income (expense), net, in 2018 increased by $13.5 million to income of $14.5 million during the three months ended September 30, 2018 from income of $0.9 million during the three months ended September 30, 2017. This change is primarily due to the $14.9 gain recognized during the three months ended September 30, 2018 on the insurance proceeds received for losses resulting from the July 1, 2018 accidental fire.

Interest expense, net.     Interest expense, net of interest income, decreased by $1.2 million, or 17%, to $6.0 million during the three months ended September 30, 2018 from $7.2 million during the three months ended September 30, 2017. This change was primarily attributable to lower interest rates under our 2018 Term Loan Facility than our 2017 Term Loan Facility.

Net income.     Net income was $30.8 million during the three months ended September 30, 2018, as compared with net income of $4.1 million during the three months ended September 30, 2017. The improvements in our net results during the three months ended September 30, 2018 were due to the changes in revenue and expenses discussed above.

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Nine Months Ended September 30, 2018 Compared with Nine Months Ended September 30, 2017

	Nine Months Ended September 30,
(Thousands of Dollars)							As a % of Revenue				Variance
Description	2018			2017			2018		2017		$			%
Completion Services	$	1,625,798		$	1,031,768		99	%	99	%	$	594,030		58	%
Other Services	24,659			8,823			1	%	1	%	15,836			179	%
Revenue	1,650,457			1,040,591			100	%	100	%	609,866			59	%
Completion Services	1,261,676			886,383			76	%	85	%	375,293			42	%
Other Services	26,216			7,082			2	%	1	%	19,134			270	%
Costs of services (excluding depreciation and amortization, shown separately)	1,287,892			893,465			78	%	86	%	394,427			44	%
Completion Services	364,122			145,385			22	%	14	%	218,737			150	%
Other Services	(1,557		)	1,741			0	%	0	%	(3,298		)	(189	%)
Gross profit	362,565			147,126			22	%	14	%	215,439			146	%
Depreciation and amortization	187,742			109,316			11	%	11	%	78,426			72	%
Selling, general and administrative expenses	85,792			68,915			5	%	7	%	16,877			24	%
(Gain) loss on disposal of assets	5,169			(137		)	0	%	0	%	5,306			(3,873	%)
Operating income (loss)	83,862			(30,968		)	5	%	(3	%)	114,830			(371	%)
Other income	1,481			4,647			0	%	0	%	(3,166		)	(68	%)
Interest expense	(27,285		)	(51,905		)	(2	%)	(5	%)	24,620			(47	%)
Total other expense	(25,804		)	(47,258		)	(2	%)	(5	%)	21,454			(45	%)
Income tax expense	(4,855		)	(1,862		)	0	%	0	%	(2,993		)	161	%
Net income (loss)	$	53,203		$	(80,088	)	3	%	(8	%)	$	133,291		(166	%)

Revenue:     Total revenue is comprised of revenue from Completion Services and Other Services. Revenue during the nine months ended September 30, 2018increased by $609.9 million, or 59%, to $1.7 billion from $1.0 billion during the nine months ended September 30, 2017. This change in revenue by reportable segment is discussed below.

Completion Services:     Completion Services segment revenue increased by $594.0 million, or 58%, to $1.6 billion during the nine months ended September 30, 2018 from $1.0 billion during the nine months ended September 30, 2017. This change was primarily attributable to (i) the 30% growth in our average number of deployed and 100% utilized fleets, (ii) increased operational efficiency with increased service intensity and (iii) improved net pricing.

Other Services:     Other Services segment revenue increased by $15.8 million, or 179%, to $24.7 million during the nine months ended September 30, 2018 from $8.8 million during the nine months ended September 30, 2017. This change in revenue was primarily attributable to the acquisition of Other Services divisions from RockPile and the ramp-up of idle cement assets acquired during the acquisition of the Acquired Trican Operations, partially offset by the divestiture of our workover and coiled tubing assets during the third and fourth quarters of 2017. Revenue during the nine months ended September 30, 2018 was earned in our cementing division.

Cost of services:     Cost of services during the nine months ended September 30, 2018 decreased as a percentage of revenue to 78% from 86% during the nine months ended September 30, 2017. This decrease as a percentage of revenue was driven by overall operational efficiency and higher net pricing. Total cost of services during the nine months ended September 30, 2018increased by $394.4 million, or 44%, to $1.3 billion from $893.5 million during the nine months ended September 30, 2017, driven by (i) price inflation in our key input costs, (ii) increased maintenance costs associated with increased service intensity stemming from larger sand

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volumes and well configurations, including longer laterals and (iii) increased activities in our cementing business, all partially offset by (iv) declines in proppant pricing, driven by increased production of lower cost in-basin sand. During the nine months ended September 30, 2018. we had management adjustments of $0.2 million in integration costs related to our asset acquisition from RSI. During the nine months ended September 30, 2017, we had management adjustments of $14.8 million related to $11.6 million of commissioning costs for our idle fleets, $1.9 million of acquisition and integration costs associated with the acquisition of RockPile and $1.3 million for bonuses paid to key operational employees in connection with our initial public offering (“IPO”). Excluding the above-mentioned management adjustments, total cost of services was $1.3 billion and $878.7 million during the nine months ended September 30, 2018 and 2017, respectively.

Cost of services, as a percentage of total revenue is presented below:

	Nine Months Ended September 30,
Description	2018		2017		% Change
Segment cost of services as a percentage of segment revenue:
Completion Services	78	%	86	%	(8	)%
Other Services	106	%	80	%	26	%
Total cost of services as a percentage of total revenue	78	%	86	%	(8	)%

The change in cost of services by reportable segment is further discussed below.

Completion Services:     As a percentage of segment revenue, total cost of services was 78% and 86%, during the nine months ended September 30, 2018 and 2017, respectively, a decrease as a percentage of revenue of 8%. This decrease was driven by operational efficiency and increased net pricing, which more than offset the cost inflation on our key input costs. During the nine months ended September 30, 2018, we had management adjustments of $0.2 million in integration costs related to our asset acquisition from RSI. During the nine months ended September 30, 2017, we had management adjustments of $14.7 million related to $11.6 million of commissioning costs for our idle fleets, $1.8 million acquisition and integration costs associated with the acquisition of RSI and $1.3 million for bonuses paid to key operational employees in connection with our IPO. Excluding the above-mentioned management adjustments, Completion Services segment cost of services was $1.3 billion and $871.7 million during the nine months ended September 30, 2018 and 2017, or 78% and 84% of segment revenue, respectively, a decrease as a percentage of revenue of 6%.

Other Services:     Other Services segment cost of services increased by $19.1 million, or 270%, to $26.2 million, in the nine months ended September 30, 2018, from 7.1 million in the nine months ended September 30, 2017. This change was driven by (i) change in our cost of services mix, as we divested our workover assets in the third and fourth quarters of 2017 and (ii) increased costs associated with the ramp-up of the cement business line.

Depreciation and amortization:     Depreciation and amortization expense as a percentage of revenues was 11% during the nine months ended September 30, 2018 and 2017. However, total depreciation expense increased by $78.4 million, or 72%, to $187.7 million during the nine months ended September 30, 2018 from $109.3 million during the nine months ended September 30, 2017. This change was primarily attributable to changes in the estimated useful lives of certain assets during the nine months ended September 30, 2018, the purchase of newbuild equipment, the asset acquisition from RSI and equipment acquired in the acquisition of RockPile.

Selling, general and administrative expense:     SG&A expense, which represents costs associated with managing and supporting our operations was 5% and 7% of revenues during the nine months ended September 30, 2018 and 2017, respectively. Total management adjustments were $29.1 million during the nine months ended September 30, 2018, driven primarily by $13.0 million of transaction costs related to the secondary offering, $11.9 million of non-cash stock compensation expense, $2.8 million of legal contingencies, $0.9 million of refinancing costs and $0.4 million of integration costs associated with our asset acquisition from RSI. Management adjustments were $28.2 million during the nine months ended September 30, 2017, driven primarily by $10.3 million of transaction costs related to the acquisition of RockPile, $7.3 million in non-cash stock compensation expense, $5.6 million in legal contingencies, $4.6 million in IPO transaction costs and $0.2 million of commissioning costs. Excluding these management adjustments, SG&A expense as a percentage of revenue was 3% and 4% during the nine months ended September 30, 2018 and 2017, respectively, a decrease as a percentage of revenue of 1%.

(Gain) loss on disposal of assets:  Loss on disposal of assets in 2018increased by $5.3 million to a loss of $5.2 million during the nine months ended September 30, 2018 from a gain of $0.1 million during the three months ended September 30, 2017.

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This change was primarily attributable to the markdown to fair value of our idle real estate pending for sale in Mathis, Texas, upon classification as held for sale and early disposals of hydraulic fracturing pump components during the nine months ended September 30, 2018.

Other income (expense), net.     Other income (expense), net, in 2018 decreased by $3.2 million, or 68%, to income of $1.5 million during the nine months ended September 30, 2018 from income of $4.6 million during the nine months ended September 30, 2017. This change is primarily due to the $14.9 million gain recognized on the insurance proceeds received for losses resulting from the accidental fire during the nine months ended September 30, 2018, offset by the $13.2 million adjustment to the contingent value rights (“CVR”) liability and the $3.6 million gain on the indemnification settlement with Trican recognized during the nine months ended September 30, 2017. See Note (3)Acquisitions”to the unaudited condensed consolidated financial statements in Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)” for a detailed discussion of the CVR.

Interest expense, net.     Interest expense, net of interest income, decreased by $24.6 million, or 47%, to $27.3 million during the nine months ended September 30, 2018 from $51.9 million during the nine months ended September 30, 2017. This change was primarily attributable to prepayment premiums of $15.8 million and write-offs of deferred financing costs of $15.3 million incurred in 2017, in connection with the refinancing of our asset-based revolving credit facility and debt extinguishment of our pre-existing term loan facility (the “2016 Term Loan Facility”) and our secured notes due 2019 (the “Senior Secured Notes”), offset by write-offs of deferred financing costs of $7.6 million in 2018, in connection with the debt extinguishment of the 2017 Term Loan Facility.

Income tax expense.     Income tax expense increased by $3.0 million, or 161%, to expense of $4.9 million during the nine months ended September 30, 2018 from expense of $1.9 million during the nine months ended September 30, 2017. Our effective tax rate on continuing operations for the nine months ended September 30, 2018 was 6.44%. The difference between the effective tax rate and the U.S. federal statutory rate is due to state taxes, change in valuation allowance and discrete tax effects related to secondary transaction costs and stock-based compensation benefits. For further discussion on our effective tax rate during the nine months ended September 30, 2018, see Note (16) Income Taxesto the unaudited condensed consolidated financial statements in Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)”.

Net income.     Net income was $53.2 million during the nine months ended September 30, 2018, as compared with net loss of $80.1 million during the nine months ended September 30, 2017. The improvements in our net results during the nine months ended September 30, 2018 were due to the changes in revenue and expenses discussed above.

ENVIRONMENTAL MATTERS

We are subject to numerous environmental, legal and regulatory requirements related to our operations worldwide. For information related to environmental matters, see Note (17) Commitments and Contingenciesto the unaudited condensed consolidated financial statements in Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited).”

LIQUIDITY AND CAPITAL RESOURCES

Liquidity represents a company’s ability to adjust its future cash flows to meet needs and opportunities, both expected and unexpected.

As of September 30, 2018, we had $82.8 million of cash and $351.7 million of debt, compared to $96.1 million of cash and $282.9 million of debt as of December 31, 2017. During the nine months ended September 30, 2018 and 2017, we had capital expenditures, including non-cash purchases of property and equipment and excluding leasehold improvements, of $239.3 million and $105.2 million, respectively.

	(Thousands of Dollars)
	Nine Months Ended September 30,
	2018			2017
Net cash provided by operating activities	$	251,104		$	4,614
Net cash used in investing activities	(233,477		)	(202,676		)
Net cash provided by (used in) financing activities	(30,835		)	220,689

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Significant sources and uses of cash during the nine months ended September 30, 2018:

Sources of cash:

• Operating activities:

– Net cash generated by operating activities during the nine months ended September 30, 2018 of $251.1 million was primarily driven by higher utilization of our combined asset base and increased gross profit in our Completion Services segment.

• Financing activities:

– Cash provided by the 2018 Term Loan Facility, net of debt discount was $348.2 million.

Uses of cash:

• Operating activities:

– $7.9 million related to the portion of the cash settlement of the CVR liability that exceeded its acquisition-date fair value.

Investing activities:

– Net cash used in investing activities of $233.5 million was primarily associated with our asset acquisition from RSI and our newbuild and maintenance capital spend on active fleets, offset by the insurance proceeds we received for our equipment that was damaged in July 2018 in an accidental fire (for further details see Note (6) Property and Equipment, netof Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)”).This activity primarily related to our Completion Services segment.

• Financing activities:

– Cash used to repay our debt facilities, including capital leases but excluding interest, was $287.0 million.

– Cash used to pay debt issuance costs associated with our debt facilities was $7.3 million.

– Shares repurchased and retired related to our stock repurchase program totaled$69.4 million.

– Shares repurchased and retired related to payroll tax withholdings on our share-based compensation totaled $3.4 million.

– $12.0 million related to the portion of the cash settlement of the CVR liability that is reflective of its acquisition-date fair value.

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Significant sources and uses of cash during the nine months ended September 30, 2017:

Sources of cash:

• Operating activities:

– Net cash generated by operating activities during the nine months ended September 30, 2017 of $4.6 million was primarily driven by increased gross profit, partially offset by cash used for working capital, resulting from the growth in and increased utilization of our combined asset base, as well as proceeds of $2.1 million from the indemnification settlement with Trican.

• Financing activities:

– Net cash provided by the IPO proceeds, after giving effect to the repayments of our 2016 Term Loan Facility and the secured notes and payments for the capitalized costs directly attributable to the completion of the IPO, was $92.2 million.

– The majority of the net proceeds from the 2017 Term Loan Facility, entered into on March 15, 2017, of $145.0 million were used to repay the then-outstanding balance of the secured notes and prepayment premium of $140.6 million.

– Additionally, the 2017 Incremental Term Loan Facility, entered into on July 3, 2017, provided for $131.1 million, net of associated origination and other transaction fees.

Uses of cash:

• Investing activities:

– Net cash used in investing activities of $202.7 million was primarily associated with the acquisition of RockPile, maintenance capital spend on active fleets and commissioning costs associated with the deployment of our idle fleets, offset by total proceeds of $10.5 million from the sale of assets relating to our facilities in Woodward, Oklahoma and Searcy, Arkansas, certain air compressor units and six of the twelve workover rigs acquired in the acquisition of RockPile.

• Financing activities:

– $3.8 million of debt issuance costs incurred in connection with the initial borrowings under the 2017 ABL Facility.

– Cash used to repay our 2017 outstanding debt facilities, including capital leases but excluding interest, was $2.8 million.

Future sources and use of cash

Capital expenditures for 2018 will be related to maintenance capital spend to support our existing active fleets as well as spend for the completion of three newbuild hydraulic fracturing fleets of approximately 150,000 hydraulic horsepower and three wireline spreads. We anticipate our capital expenditures will be funded by cash flows from operations. We currently estimate our capital expenditures for 2018 will be between $270.0 million and $280.0 million, excluding the asset acquisition from Refinery Specialists, Incorporated and the impact of expected insurance proceeds.

Debt service for the twelve months period ended December 31, 2018, excluding write-offs of deferred financing charges, is projected to be approximately $32.6 million. We anticipate our debt service will be funded by cash flows from operations.

During the third quarter of 2018, we completed approximately $29.3 million of total share repurchases, representing a total of approximately 2.6 million common shares. Repurchases were made as part of our $100 million stock repurchase program previously announced on February 26, 2018 and amended on July 26, 2018. The stock repurchase program does not obligate us to purchase any particular number of shares of common stock during any period and the program may be modified or suspended at any time our discretion. Effective October 26, 2018, Keane’s Board of Directors authorized a reset of capacity on our existing stock repurchase program back to $100 million. Additionally, the program’s expiration date was extended to September 2019 from a previous expiration

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of February 2019. For further details, see Note (12) Stockholders’ Equityof Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)”.

Other factors affecting liquidity

Financial position in current market. As of September 30, 2018, we had $82.8 million of cash and a total of $207.9 million available under our revolving credit facility. Furthermore, we have no material adverse change provisions in our bank agreements, and our debt maturities extend over a long period of time. We currently believe that our cash on hand, cash flow generated from operations and availability under our revolving credit facility will provide sufficient liquidity for at least the next 12 months, including for capital expenditures, debt service, working capital investments, contingent liabilities and stock repurchase.

Guarantee agreements. In the normal course of business, we have agreements with a financial institution under which $2.5 million of letters of credit were outstanding as of September 30, 2018.

Customer receivables. In line with industry practice, we bill our customers for our services in arrears and are, therefore, subject to our customers delaying or failing to pay our invoices. The majority of our trade receivables have payment terms of 30 days or less. In weak economic environments, we may experience increased delays and failures to pay our invoices due to, among other reasons, a reduction in our customers’ cash flow from operations and their access to the credit markets, as well as unsettled political conditions. If our customers delay paying or fail to pay us a significant amount of our outstanding receivables, it could have a material adverse effect on our liquidity, consolidated results of operations and consolidated financial condition.

Contractual Obligations

In the normal course of business, we enter into various contractual obligations that impact or could impact our liquidity. The table below contains our known contractual commitments, undiscounted to present value, as of September 30, 2018.

(Thousands of Dollars) Contractual obligations	Total		2018		2019-2021		2022-2024		2025+
Long-term debt, including current portion(1)	$	349,125	$	875	$	10,500	$	10,500	$	327,250
Estimated interest payments(2)	156,405		5,754		71,292		70,425		8,934
Capital lease obligations(3)	11,673		1,314		9,681		678		—
Operating lease obligations(4)	43,168		4,206		30,059		8,335		568
Purchase commitments(5)	109,417		21,501		87,916		—		—
Equity-method investment(6)	3,146		2,729		417		—		—
Legal contingency(7)	4,250		4,250		—		—		—
	$	677,184	$	40,629	$	209,865	$	89,938	$	336,752

⁽¹⁾  Long-term debt excludes interest payments on each obligation and represents our obligations under our 2018 Term Loan Facility. In addition, these amounts exclude $8.1 million of unamortized debt discount and debt issuance costs.

⁽²⁾  Estimated interest payments are based on debt balances outstanding as of September 30, 2018 and include interest related to the 2018 Term Loan Facility and outstanding swap.Interest rates used for variable rate debt are based on the prevailing forward-looking LIBOR as of June 30, 2018.

⁽³⁾  Capital lease obligations consist of obligations on our capital leases of hydraulic fracturing equipment and ancillary equipment with CIT Finance LLC and F.N.B. Commercial Leasing and light weight vehicles with ARI Financial Services Inc. and Stonebriar Commercial Finance LLC and includes interest payments.

⁽⁴⁾  Operating lease obligations are related to our real estate, rail cars with Anderson Rail Group, Compass Rail VIII, SMBC Rail Services and Trinity Industries Leasing Company, and light duty vehicles with ARI Financial Services Inc, Enterprise FM Trust and PNC Bank.

⁽⁵⁾  Purchase commitments primarily relate to our agreements with vendors for sand purchases and deposits on equipment. The purchase commitments to sand suppliers represent our annual obligations to purchase a minimum amount of sand from vendors. If the minimum purchase requirement is not met, the shortfall at the end of the year is settled in cash or, in some cases, carried forward to the next year.

⁽⁶⁾  Related to the research and development commitments with our equity-method investee. See Notes (17) Commitments and Contingencies and (18)Related Party Transactions of Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)” for further details on our equity-method investment.

⁽⁷⁾  The legal contingency is related to the settlement of Hickson and Villa v. Keane Group Holdings, LLC, et al. See Note (17) Commitments and Contingencies of Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)” for further details.

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Principal Debt Agreements

2017 ABL Facility

Structure.    As of March 31, 2018, the Company’s asset-based revolving credit facility established on February 17, 2017 (the “2017 ABL Facility”) provided for a $300.0 million revolving credit facility (with a $20.0 million subfacility for letters of credit), subject to a borrowing base in accordance with the terms agreed between us and the lenders. In addition, subject to approval by the applicable lenders and other customary conditions, the 2017 ABL Facility allows for an additional increase in commitments of up to $150.0 million. The 2017 ABL Facility is subject to customary fees, guarantees of subsidiaries, restrictions and covenants, including certain restricted payments.

Maturity.    The loans arising under the initial commitments under the 2017 ABL Facility mature on December 22, 2022. The loans arising under any tranche of extended loans or additional commitments mature as specified in the applicable extension amendment or increase joinder, respectively.

Interest.    Pursuant to the terms of the 2017 ABL Facility, amounts outstanding under the 2017 ABL Facility bear interest at a rate per annum equal to, at Keane Group Holdings LLC and its subsidiaries' ("Keane Group") option, (a) the base rate, plus an applicable margin equal to (x) if the average excess availability is less than 33%, 1.00%, (y) if the average excess availability is greater than or equal to 33% but less than 66%, 0.75% or (z) if the average excess availability is greater than or equal to 66%, 0.50%, or (b) the adjusted LIBOR rate for such interest period, plus an applicable margin equal to (x) if the average excess availability is less than 33%, 2.00%, (y) if the average excess availability is greater than or equal to 33% but less than 66%, 1.75% or (z) if the average excess availability is greater than or equal to 66%, 1.50%. The average excess availability is set on the first day of each full fiscal quarter ending after December, 22, 2017. On or after June 22, 2018, at any time when consolidated EBITDA as of the then most recently ended four fiscal quarters for which financial statements are required to be delivered is greater than or equal to $250.0 million, the applicable margin will be reduced by 0.25%; provided that if consolidated EBITDA is less than $250.0 million as of a later four consecutive fiscal quarters, the applicable margin will revert to the levels set forth above.

2018 Term Loan Facility

On May 25, 2018, Keane Group and the 2018 Term Loan Guarantors (as defined below) entered into a term loan facility (the “2018 Term Loan Facility”) with each lender from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent. The proceeds of the 2018 Term Loan Facility were used to refinance Keane Group’s then-existing term loan facility and to repay related fees and expenses, with the excess proceeds to fund general corporate purposes. The following is a summary of the material provisions of the 2018 Term Loan Facility. It does not include all of the provisions of the 2018 Term Loan Facility, does not purport to be complete and is qualified in its entirety by reference to the full text of the 2018 Term Loan Facility, which is filed herewith as Exhibit 10.1 and incorporated herein by reference.

Structure.      The 2018 Term Loan Facility provides for a term loan facility in an initial aggregate principal amount of $350.0 million (the loans incurred under the 2018 Term Loan Facility, the “2018 Term Loans”). In addition, subject to certain customary conditions, the 2018 Term Loan Facility allows for additional incremental term loans to be incurred thereunder in an amount equal to the sum of (a) $200.0 million plus the aggregate principal amount of voluntary prepayments of 2018 Term Loans made on or prior to the date of determination (less amounts incurred in reliance on the capacity described in this subclause (a)), plus (b) an unlimited amount, subject to, (x) in the case of debt secured on a pari passu basis with the 2018 Term Loans, immediately after giving effect to the incurrence thereof, a first lien net leverage ratio being less than or equal to 2.00:1.00, (y) in the case of debt secured on a junior basis with the 2018 Term Loans, immediately after giving effect to the incurrence thereof, a secured net leverage ratio being less than or equal to 3.00:1.00 and (z) in the case of unsecured debt, immediately after giving effect to the incurrence thereof, a total net leverage ratio being less than or equal to 3.50:1.00.

Maturity.      May 25, 2025 or, if earlier, the stated maturity date of any other term loans or term commitments.

Amortization.      The loans under the 2018 Term Loan Facility amortize in quarterly installments equal to 1.00% per annum of the aggregate principal amount of all initial term loans outstanding, commencing with September 30, 2018.

Interest.          The 2018 Term Loans bear interest at a rate per annum equal to, at Keane Group’s option, (a) the base rate plus 2.75%, or (b) the adjusted LIBOR for such interest period (subject to a 1.00% floor) plus 3.75%, subject to, on and after the fiscal quarter ending September 30, 2018, a pricing grid with three 0.25% per annum step-ups and one 0.25% per annum step-down determined based on total net leverage for the relevant period. Following a payment event of default, the 2018 Term Loans bear interest at the rate

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otherwise applicable to such 2018 Term Loans at such time plus an additional 2.00% per annum during the continuance of such event of default.

Prepayments.      The 2018 Term Loan Facility is required to be prepaid with: (a) 100% of the net cash proceeds of certain asset sales, casualty events and other dispositions, subject to the terms of an intercreditor agreement between the agent for the 2018 Term Loan Facility and the agent for the 2017 ABL Facility and certain exceptions; (b) 100% of the net cash proceeds of debt incurrences or issuances (other than debt incurrences permitted under the 2018 Term Loan Facility, which exclusion is not applicable to permitted refinancing debt) and (c) 50% (subject to step-downs to 25% and 0%, upon and during achievement of certain total net leverage ratios) of excess cash flow in excess of a certain amount, minus certain voluntary prepayments made under the 2018 Term Loan Facility or other debt secured on a pari passu basis with the 2018 Term Loans and voluntary prepayments of loans under the 2017 ABL Facility to the extent the commitments under the 2017 ABL Facility are permanently reduced by such prepayments.

Guarantees.      Subject to certain exceptions as set forth in the definitive documentation for the 2018 Term Loan Facility, the amounts outstanding under the 2018 Term Loan Facility are guaranteed by the Company, Keane Frac, LP, KS Drilling, LLC, KGH Intermediate Holdco I, LLC, KGH Intermediate Holdco II, LLC, and Keane Frac GP, LLC, and each subsidiary of the Company that will be required to execute and deliver a facility guaranty in the future pursuant to the terms of the 2018 Term Loan Facility (collectively, the “2018 Term Loan Guarantors”).

Security.      Subject to certain exceptions as set forth in the definitive documentation for the 2018 Term Loan Facility, the obligations under the 2018 Term Loan Facility are secured by (a) a first-priority security interest in and lien on substantially all of the assets of Keane Group and the 2018 Term Loan Guarantors to the extent not constituting ABL Facility Priority Collateral (as defined below) and (b) a second-priority security interest in and lien on substantially all of the accounts receivable, inventory, and frac iron equipment, and certain other assets and property related to the foregoing including certain chattel paper, investment property, documents, letter of credit rights, payment intangibles, general intangibles, commercial tort claims, books and records and supporting obligations of the borrowers and guarantors under the 2017 ABL Facility (the “ABL Facility Priority Collateral”).

Fees.          Certain customary fees are payable to the lenders and the agents under the 2018 Term Loan Facility.

Restricted Payment Covenant.     The 2018 Term Loan Facility includes a covenant restricting the ability of the Company and its restricted subsidiaries to pay dividends and make certain other restricted payments, subject to certain exceptions. The 2018 Term Loan Facility provides that the Company and its restricted subsidiaries may, among things, make cash dividends and other restricted payments in an aggregate amount during the life of the facility not to exceed (a) $100.0 million, plus (b) the amount of net proceeds received by Keane Group from the funding of the 2018 Term Loans in excess of the of such net proceeds required to finance the refinancing of the pre-existing term loan facility and pay fees and expenses related thereto and to the entry into the 2018 Term Loan Facility, plus (c) an unlimited amount so long as, after giving effect to such restricted payment, the total net leverage ratio would not exceed 2.00:1.00. In addition, the Company and its restricted subsidiaries may make restricted payments utilizing the Cumulative Credit (as defined below), subject to certain conditions including, if any portion of the Cumulative Credit utilized is comprised of amounts under clause (b) of the definition thereof below, the pro forma total net leverage ratio being no greater than 2.50:1.00.

“Cumulative Credit”, generally, is defined as an amount equal to (a) $25.0 million, (b) 50% of consolidated net income of the Company and its restricted subsidiaries on a cumulative basis from April 1, 2018 (which cumulative amount shall not be less than zero), plus (c) other customary additions, and reduced by the amount of Cumulative Credit used prior to such time (whether for restricted payments, junior debt payments or investments).

Affirmative and Negative Covenants.  The 2018 Term Loan Facility contains various affirmative and negative covenants (in each case, subject to customary exceptions as set forth in the definitive documentation for the 2018 Term Loan Facility). The 2018 Term Loan Facility does not contain any financial maintenance covenants.

Events of Default. The 2018 Term Loan Facility contains customary events of default (subject to exceptions, thresholds and grace periods as set forth in the definitive documentation for the 2018 Term Loan Facility).

Off-Balance Sheet Arrangements

Except for our normal operating leases, we do not have any material off-balance sheet financing arrangements, transactions or special purpose entities.

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Related Party Transactions

 Our Board of Directors has adopted a written policy and procedures (the “Related Party Policy”) for the review, approval and ratification of the related party transactions by the independent members of the audit and risk committee of our Board of Directors. For purposes of the Related Party Policy, a “Related Party Transaction” is any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including the incurrence or issuance of any indebtedness or the guarantee of indebtedness) in which (1) the aggregate amount involved will or may be reasonably expected to exceed $120,000 in any fiscal year, (2) the company or any of its subsidiaries is a participant, and (3) any Related Party (as defined herein) has or will have a direct or indirect material interest. All Related Party Transactions will be reviewed in accordance with the standards set forth in the Related Party Policy after full disclosure of the Related Party’s interests in the transaction.

 The Related Party Policy defines “Related Party” as any person who is, or, at any time since the beginning of the Company’s last fiscal year, was (1) an executive officer, director or nominee for election as a director of the Company or any of its subsidiaries, (2) a person with greater than five percent (5%) beneficial interest in the Company, (3) an immediate family member of any of the individuals or entities identified in (1) or (2) of this paragraph and (4) any firm, corporation or other entity in which any of the foregoing individuals or entities is employed or is a general partner or principal or in a similar position or in which such person or entity has a five percent (5%) or greater beneficial interest. Immediate family members includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone residing in such person’s home, other than a tenant or employee.

 For further details about our transactions with Related Parties, see Note (18)Related Party Transactionsof Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)”.

Critical Accounting Policies and Estimates

The preparation of our unaudited condensed consolidated financial statements and related notes to the unaudited condensed consolidated financial statements included within Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)” requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. We base these estimates on historical results and various other assumptions believed to be reasonable, all of which form the basis for making estimates concerning the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates.

A critical accounting estimate is one that requires a high level of subjective judgment by management and has a material impact to our financial condition or results of operations. We believe the following are the critical accounting policies used in the preparation of our unaudited condensed 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 condensed consolidated financial statements and related notes included within Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited).”

(a) Business combinations

We allocate the purchase price of businesses we acquire to the identifiable assets acquired and liabilities assumed based on their estimated fair values. Any excess purchase price over the fair value of the net identifiable assets acquired is recorded as goodwill. We use all available information to estimate fair values, including quoted market prices, the carrying value of acquired assets and assumed liabilities and valuation techniques such as discounted cash flows, multi-period excess earning or income-based-relief-from- royalty methods. We engage third-party appraisal firms to assist in the fair value determination of inventories, identifiable long-lived assets, identifiable intangible assets as well as any contingent consideration or earn-out provisions that provide for additional consideration to be paid to the seller if certain future conditions are met. These estimates are reviewed during the 12-month measurement period and adjusted based on actual results. The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed as well as asset lives can materially impact our financial condition or results of operations. See Note (3)Acquisitionsof Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)” for further discussion of our business combination of RockPile.

(b) Asset acquisitions

Asset acquisitions are measured based on their cost to us, including transaction costs incurred by us. An asset acquisition’s cost or the consideration transferred by us is assumed to be equal to the fair value of the net assets acquired. If the consideration transferred is cash, measurement is based on the amount of cash we paid to the seller as well as transaction costs incurred by us. Consideration given in the form of nonmonetary assets, liabilities incurred or equity interests issued is measured based on either the

53

cost to us or the fair value of the assets or net assets acquired, whichever is more clearly evident. The cost of an asset acquisition is allocated to the assets acquired based on their estimated relative fair values. We engage third-party appraisal firms to assist in the fair value determination of inventories, identifiable long-lived assets and identifiable intangible assets. Goodwill is not recognized in an asset acquisition. We made an asset acquisition from RSI in July 2018. See Note (3)Acquisitionsof Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)” for further discussion of our asset acquisition from RSI.

(c) Legal and environmental contingencies

From time to time, we are subject to legal and administrative proceedings, settlements, investigations, claims and actions, as is typical of the industry. These claims include, but are not limited to, contract claims, environmental claims, employment related claims, claims alleging injury or claims related to operational issues. Our assessment of the likely outcome of litigation matters is based on our judgment of a number of factors, including experience with similar matters, past history, precedents, relevant financial information and other evidence and facts specific to the matter. We accrue for contingencies when the occurrence of a material loss is probable and can be reasonably estimated, based on our best estimate of the expected liability. The estimate of probable costs related to a contingency is developed in consultation with internal and outside legal counsel representing us. The accuracy of these estimates is impacted by, among other things, the complexity of the issues and the amount of due diligence we have been able to perform. Differences between the actual settlement costs, final judgments or fines from our estimates could have a material adverse effect on our financial position or results of operations. See Note (17) Commitments and Contingenciesof Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)” for further discussion of our legal, environmental and other regulatory contingencies during the nine months ended September 30, 2018 and 2017.

(d) Valuation of long-lived assets, indefinite-lived assets and goodwill

We assess our long-lived assets, such as definite-lived intangible assets and property and equipment, for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. We assess our goodwill and indefinite-lived assets for impairment annually, as of October 31, or whenever events or circumstances indicate that the carrying amount of goodwill or the indefinite-lived assets may not be recoverable. If the carrying value of an asset exceeds its fair value, we record an impairment charge that reduces our earnings.

We perform our qualitative assessments of the likelihood of impairment by considering qualitative factors relevant to each of our reporting segments, such as macroeconomic, industry, market or any other factors that have a significant bearing on fair value. The expected future cash flows used for impairment reviews and related fair value calculations are based on subjective, judgmental assessments of projected revenue growth, fleet count, utilization, gross margin rates, SG&A rates, working capital fluctuations, capital expenditures, discount rates and terminal growth rates. Many of these judgments are driven by crude oil prices. If the crude oil market declines and remains at low levels for a sustained period of time, we would expect to perform our impairment assessments more frequently and could record impairment charges.

(e) Income Taxes

We account for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, “Income Taxes,” which requires an asset and liability approach for financial accounting and reporting of income taxes. Under ASC 740, income taxes are accounted for based upon the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss carry-forwards using enacted tax rates in effect in the year the differences are expected to reverse. We estimate our annual effective tax rate at each interim period based on the facts and circumstances available at that time, while the actual effective tax rate is calculated at year-end. Our effective tax rates will vary due to changes in estimates of our future taxable income or losses, fluctuations in the tax jurisdictions in which we operate and favorable or unfavorable adjustments to our estimated tax liabilities related to proposed or probable assessments. As a result, our effective tax rate may fluctuate significantly on a quarterly or annual basis.

 In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In addition to our historical financial results, we consider forecasted market growth, earnings and taxable income, the mix of earnings in the jurisdictions in which we operate and the implementation of prudent and feasible tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates we use to manage our underlying businesses. We establish a valuation allowance against the carrying value of deferred tax assets, when we determine that it is more likely than not that the asset will not be realized through future taxable income. Such amounts are charged to earnings in the period in which we make such determination. Likewise, if we later determine that it is more likely than not

54

that the net deferred tax assets would be realized, we would reverse the applicable portion of the previously provided valuation allowance.

We calculate our income tax liability based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed during the subsequent year. Significant judgment is required in assessing, among other things, the timing and amounts of deductible and taxable items. Due to the complexity of some of these uncertainties, the ultimate resolution may result in payment that is materially different from our current estimate of its tax liabilities. These differences are reflected as increases or decreases to income tax expense in the period in which they are determined.

The amount of income tax we pay is subject to ongoing audits by federal and state tax authorities, which may result in proposed assessments. Our estimate for the potential outcome for any uncertain tax issue is highly judgmental. We believe we have adequately provided for any reasonably foreseeable outcome related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved or when statutes of limitation on potential assessments expire. Additionally, the jurisdictions in which our earnings or deductions are realized may differ from our current estimates. We recognize interest and penalties, if any, related to uncertain tax positions in income tax expense.

On December 22, 2017, new tax reform legislation, commonly referred to as the Tax Cuts and Jobs Act was signed into law. We evaluated the provisions of the Tax Cuts and Jobs Act and determined only the reduced corporate tax rate from 35% to 21% would have an impact on our unaudited condensed consolidated financial statements. Accordingly, as of December 31, 2017, we recorded a provision to income taxes for management’s assessment of the tax impact of the Tax Cuts and Jobs Act on ending deferred tax assets and liabilities and the corresponding valuation allowance. The effects of other provisions of the Tax Cuts and Job Act are not expected to have an adverse impact on our consolidated financial statements. We will continue to analyze the impacts of the Tax Cuts and Jobs Act on the Company and refine estimates during 2018.

(f) New Accounting Pronouncements

For discussion on the potential impact of new accounting pronouncements issued but not yet adopted, see Note (20) New Accounting Pronouncementsof Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited).”

NON-GAAP FINANCIAL MEASURES

From time to time in our financial reports, we will use certain non-GAAP financial measures to provide supplemental information that we believe is useful to analysts and investors to evaluate our ongoing results of operations, when considered alongside other GAAP measures such as net income, operating income and gross profit. These non-GAAP measures exclude the financial impact of items management does not consider in assessing Keane’s ongoing operating performance, and thereby facilitates review of Keane’s operating performance on a period-to-period basis. Other companies may have different capital structures, and comparability to Keane’s results of operations may be impacted by the effects of acquisition accounting on our depreciation and amortization. As a result of the effects of these factors and factors specific to other companies, we believe Adjusted EBITDA and Adjusted Gross Profit provide helpful information to analysts and investors to facilitate a comparison of Keane’s operating performance to that of other companies.

Adjusted EBITDA is defined as net income (loss) adjusted to eliminate the impact of interest, income taxes, depreciation and amortization, along with certain items management does not consider in assessing ongoing performance. Adjusted Gross Profit is defined as Adjusted EBITDA, further adjusted to eliminate the impact of all activities in the Corporate segment, such as selling, general and administrative expenses, along with cost of services items that management does not consider in assessing ongoing performance.

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Item 3. Quantitative and Qualitative Disclosure About Market Risk

At September 30, 2018, we held no significant derivative instruments that materially increased our exposure to market risks for interest rates, foreign currency rates, commodity prices or other market price risks.

Our material and fuel purchases expose us to commodity price risk. Our material costs primarily include the cost of inventory consumed while performing our stimulation services such as proppant, chemicals and guar. Our fuel costs consist primarily of diesel fuel used by our various trucks and other motorized equipment. The prices for fuel and the raw materials (particularly guar and proppant) in our inventory are volatile and are impacted by changes in supply and demand, as well as market uncertainty and regional shortages. Depending on market conditions, we have generally been able to pass along price increases to our customers; however, we may be unable to do so in the future. We generally do not engage in commodity price hedging activities. However, we have purchase commitments with certain vendors to supply a majority of the proppant used in our operations. Some of these agreements are take-or-pay agreements with minimum purchase obligations. As a result of future decreases in the market price of proppants, we could be required to purchase goods and pay prices in excess of market prices at the time of purchase. Refer to Part I, “Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations” for the contractual commitments and obligations table as of September 30, 2018.

Our operations are currently conducted entirely within the U.S.; therefore, we had no significant exposure to foreign currency exchange rate risk as of September 30, 2018.

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Item 4. Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financing reporting that occurred during the nine months ended September 30, 2018 that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

Item 1. Legal Proceedings

Information related to this Part II, “Item 1. Legal Proceedings” is included in Note (17) Commitments and Contingenciesof Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited)”.

Item 1(a).Risk Factors

The statements in this section describe the known material risks to our business and should be considered carefully. As of September 30, 2018, there have been no material changes from the risk factors previously disclosed in Part I, “Item 1A. Risk Factors” of our 2017 Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Sales of Equity Securities

None.

(b) Use of Proceeds

None.

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(c) Purchases of Equity Securities

Issuer Purchases of Equity Securities
Settlement Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(1)
April 1, 2018 through April 30, 2018	—	$	—	—	$	100,000,000
May 1, 2018 through May 31, 2018	1,789,123	$	15.86	1,789,123	$	71,624,509
June 1, 2018 through June 30, 2018	844,969	$	13.92	844,969	$	59,862,541
July 1, 2018 through July 31, 2018	—	$	—	—	$	100,000,000
August 1, 2018 through August 31, 2018	881,942	$	13.58	881,942	$	88,023,228
September 1, 2018 through September 30, 2018	1,524,400	$	11.37	1,524,400	$	70,690,800
October 1, 2018 through October 26, 2018	1,551,330	$	11.70	1,551,330	$	52,540,239
October 26, 2018 through October 31, 2018	—	$	—	—	$	100,000,000
Total	6,591,764	$	13.29	6,591,764	$	100,000,000

(1) Commission costs incurred by the Company to repurchase its shares are not included in the calculation of Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs.

In February 2018, the Company’s Board of Directors authorized the repurchase of up to $100 million of the Company’s common stock under a stock repurchase plan. This repurchase plan permit the Company to repurchase its common stock in the open market, pursuant to preset trading plans meeting the requirements of Rule 10b-18 and Rule 10b5-1 under the Securities Exchange Act of 1934 or through privately negotiated transactions. The duration of the stock repurchase program will be 12 months.

During the three and nine months ended September 30, 2018, the Company repurchased 2,406,342 and 5,040,434 shares, respectively, totaling approximately $29.3 million and $69.4 million, respectively. Of the total amount of shares repurchased, 1,248,440 shares were repurchased from White Deer Energy. Reference is made to the discussion in Note (12) Stockholders’ Equity, of Part I, “Item 1. Condensed Consolidated Financial Statements (Unaudited).”

On July 26, 2018, subsequent to the end of the second quarter of 2018, the Company’s Board of Directors authorized a reset of capacity on its existing stock repurchase program back to $100 million.

Effective October 26, 2018, subsequent to the end of the third quarter of 2018, the Company’s Board of Directors authorized a reset of capacity on its existing stock repurchase program back to $100 million. Additionally, the program’s expiration date was extended to September 2019 from a previous expiration of February 2019.

Item 3.Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

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Item 5. Other Information

None.

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Item 6.Exhibits

The documents listed in the Exhibit Index of this Quarterly Report on Form 10-Q are incorporated by reference or are filed or furnished with this Quarterly Report on Form 10-Q, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).

			Incorporated by Reference
Exhibit Number	Exhibit Description	Filed/ Furnished Herewith	Form	File No.	Exhibit	Filing Date
10.1	Employment Agreement, dated as of May 11, 2018, by and between Keane Group, Inc. and Robert W. Drummond	*	8-K	001-37988	10.1	08/08/2018
31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	*
31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	*
32.1	Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	**
101.INS	XBRL Instance Document	*
101.SCH	XBRL Taxonomy Extension Schema Document	*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	*
* Filed herewith. ** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on November 2, 2018.

Keane Group, Inc. (Registrant)
By:	/s/ Phung Ngo-Burns
	Phung Ngo-Burns
	Chief Accounting Officer and Duly Authorized Officer

61

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

EXCHANGE ACT RULE 13a-14(a) AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert W. Drummond, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Keane Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 2, 2018	By:	/s/ Robert W. Drummond
		Robert W. Drummond
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

EXCHANGE ACT RULE 13a-14(a) AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory L. Powell, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Keane Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 2, 2018	By:	/s/ Gregory L. Powell
		Gregory L. Powell
		President and Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL

FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Robert W. Drummond, the Chief Executive Officer of Keane Group, Inc. (the “Company”), and Gregory L. Powell, the President and Chief Financial Officer of the Company, hereby certify that, to their knowledge:

1. The Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 of the Company (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 2, 2018	By:	/s/ Robert W. Drummond
		Robert W. Drummond
		Chief Executive Officer
		(Principal Executive Officer)
Date: November 2, 2018	By:	/s/ Gregory L. Powell
		Gregory L. Powell
		President and Chief Financial Officer
		(Principal Financial Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 30, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Trading Symbol	FRAC
Entity Registrant Name	Keane Group, Inc.
Entity Central Index Key	0001688476
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding		105,669,227

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 82,848	$ 96,120
Trade and other accounts receivable, net	246,345	238,018
Inventories, net	28,772	33,437
Prepaid and other current assets	9,982	8,519
Total current assets	367,947	376,094
Property and equipment, net	550,273	468,000
Goodwill	132,524	134,967
Intangible assets	53,253	57,280
Other noncurrent assets	10,332	6,775
Total assets	1,114,329	1,043,116
Current liabilities:
Accounts payable	125,524	92,348
Accrued expenses	113,877	135,175
Customer contract liabilities	1,280	5,000
Current maturities of capital lease obligations	4,173	3,097
Current maturities of long-term debt	2,116	1,339
Stock-based compensation - current	4,281	4,281
Other current liabilities	217	914
Total current liabilities	251,468	242,154
Capital lease obligations, less current maturities	6,522	4,796
Long-term debt, net of unamortized deferred financing costs and unamortized debt discount, less current maturities	338,915	273,715
Stock-based compensation - noncurrent	0	4,281
Other noncurrent liabilities	4,849	5,078
Total noncurrent liabilities	350,286	287,870
Total liabilities	601,754	530,024
Stockholders’ equity
Common stock, par value $0.01 per share (authorized 500,000 shares, issued 107,221 shares)	1,072	1,118
Paid-in capital in excess of par value	485,754	541,074
Retained earnings (deficit)	24,558	(27,372)
Accumulated other comprehensive income (loss)	1,191	(1,728)
Total stockholders’ equity	512,575	513,092
Total liabilities and stockholders’ equity	$ 1,114,329	$ 1,043,116

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock authorized (in shares)	500,000,000	500,000,000
Common stock issued (in shares)	107,221,000

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenue		$ 558,908	$ 477,302	$ 1,650,457	$ 1,040,591
Operating costs and expenses:
Cost of services	[1]	436,799	391,089	1,287,892	893,465
Depreciation and amortization		68,287	46,204	187,742	109,316
Selling, general and administrative expenses		27,783	28,592	85,792	68,915
(Gain) loss on disposal of assets		1,113	302	5,169	(137)
Total operating costs and expenses		533,982	466,187	1,566,595	1,071,559
Operating income (loss)		24,926	11,115	83,862	(30,968)
Other income (expense):
Other income		14,454	942	1,481	4,647
Interest expense	[2]	(5,978)	(7,195)	(27,285)	(51,905)
Total other income (expense)		8,476	(6,253)	(25,804)	(47,258)
Income (loss) before income taxes		33,402	4,862	58,058	(78,226)
Income tax expense		(2,623)	(797)	(4,855)	(1,862)
Net income (loss)		30,779	4,065	53,203	(80,088)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		28	64	(37)	108
Hedging activities		1,119	(178)	3,429	(167)
Total comprehensive income (loss)		$ 31,926	$ 3,951	$ 56,595	$ (80,147)
Net income (loss) per share:
Basic net income (loss) per share (in dollars per share)	[3]	$ 0.28	$ 0.04	$ 0.48	$ (0.77)
Diluted net income (loss) per share (in dollars per share)	[3]	$ 0.28	$ 0.04	$ 0.48	$ (0.77)
Weighted-average shares outstanding: basic (in shares)	[3]	108,825	111,509	110,706	104,496
Weighted-average shares outstanding: diluted (in shares)	[3]	108,990	111,755	110,871	104,496
Predecessor
Other income (expense):
Net income (loss)		$ 0	$ 0	$ 0	$ (7,918)
Keane Group, Inc.
Other income (expense):
Net income (loss)		$ 30,779	$ 4,065	$ 53,203	$ (72,170)

[1] Cost of services during the three and nine months ended September 30, 2018 excludes depreciation of $65.4 million and $177.9 million, respectively. Cost of services during the three and nine months ended September 30, 2017 excludes depreciation of $43.8 million and $103.3 million, respectively. Depreciation related to cost of services is presented within depreciation and amortization disclosed separately.

[2] Interest expense during the nine months ended September 30, 2018 includes $7.6 million in write-offs of deferred financing costs incurred in connection with the extinguishment of the Company’s 2017 Term Loan Facility (as defined within). Interest expense during the nine months ended September 30, 2017 includes $15.8 million of prepayment penalties and $15.3 million in write-offs of deferred financing costs, incurred in connection with the refinancing by the Company (as defined herein) of its then-existing revolving credit and security agreement, entered into on March 16, 2016, between certain of the Company’s subsidiaries and certain financial institutions (the “2016 ABL Facility”) and the Company’s early debt extinguishment of its then-existing credit agreement, entered into on March 16, 2016, between certain of the Company’s subsidiaries and certain financial institutions (the “2016 Term Loan Facility”) and Senior Secured Notes (as defined herein).

[3] The earnings per share amounts for 2017 have been computed to give effect to the Organizational Transactions (as defined herein) as if they had occurred on January 1, 2017, including the limited liability company agreement of Keane Investor (as defined herein) to, among other things, exchange all of the Existing Owners’ (as defined herein) membership interests for the newly-created ownership interests.

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Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Depreciation	$ 65,400	$ 43,800	$ 177,900	$ 103,300
Loss on debt extinguishment, including prepayment premiums			7,550	31,084
Prepayment penalty			$ 0	15,817
Write off of deferred debt issuance cost				$ 15,300

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Condensed Consolidated Statements of Changes in Stockholders' Equity - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands		Total	Common stock	Paid-in capital in excess of par value	Retained earnings (deficit)	Accumulated other comprehensive income (loss)
Balance as of December 31, 2017 at Dec. 31, 2017		$ 513,092	$ 1,118	$ 541,074	$ (27,372)	$ (1,728)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation	[1]	16,202	5	16,197
Shares repurchased and retired related to share-based compensation		(3,415)	(1)	(3,414)
Shares repurchased and retired related to stock repurchase program		(69,426)	(50)	(68,103)	(1,273)
Other comprehensive income		2,919				2,919
Net income		53,203			53,203
Balance as of September 30, 2018 at Sep. 30, 2018		$ 512,575	$ 1,072	$ 485,754	$ 24,558	$ 1,191

[1] Stock-based compensation during the nine months ended September 30, 2018 includes stock-based compensation expense recognized during the period of $11.9 million and the vested deferred stock awards of $4.3 million. Refer to Note (11) Stock-Based Compensation for further discussion of the Company’s stock-based compensation.

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
Compensation cost	$ 11,924
Deferred stock awards
Compensation cost	3,211
Vested awards	$ 4,300

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net income (loss)	$ 53,203	$ (80,088)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization	187,742	109,316
Amortization of deferred financing fees	2,329	4,621
Loss on debt extinguishment, including prepayment premiums	7,550	31,084
(Gain) loss on disposal of assets	5,169	(137)
Loss on contingent consideration liability	13,254	0
Realized (gain) loss on derivative	(473)	173
Stock-based compensation	11,924	7,334
Gain on insurance proceeds recognized in other income	(14,892)	0
Other non-cash (expense)	0	(322)
Unrealized gain (loss) on derivative	3,429	(167)
Changes in operating assets and liabilities
Increase in trade and other accounts receivable, net	(8,432)	(94,237)
Decrease (increase) in inventories	4,171	(21,417)
Decrease (increase) in prepaid and other current assets	(1,463)	8,410
Decrease (increase) in other assets	(3,129)	258
Increase in accounts payable	15,345	25,920
Increase (decrease) in accrued expenses	(19,980)	5,537
Decrease in customer contract liabilities	(3,720)	0
Increase (decrease) in other liabilities	(923)	8,329
Net cash provided by operating activities	251,104	4,614
Cash flows from investing activities
Acquisition of business	(35,003)	(124,374)
Purchase of property and equipment	(211,962)	(84,348)
Advances of deposit on equipment	(3,801)	(3,667)
Implementation of software	(708)	(660)
Proceeds from sale of assets	2,512	10,530
Payments for leasehold improvements	(1,574)	(157)
Equity method investment	(1,163)	0
Proceeds from insurance recoveries	18,222	0
Net cash used in investing activities	(233,477)	(202,676)
Cash flows from financing activities:
Proceeds from the term loan facility, net of debt discount	348,250	285,000
Payments on the secured notes and term loan facility	(284,077)	(289,190)
Payment of debt issuance costs	(7,331)	(12,739)
Prepayment premiums on early debt extinguishment	0	(15,817)
Payments on capital leases	(2,874)	(2,059)
Proceeds from issuance of common stock	0	255,494
Shares repurchased and retired related to share repurchase program	(69,426)	0
Shares repurchased and retired related to share-based compensation	(3,415)	0
Payments on contingent consideration liability	(11,962)	0
Net cash provided by (used in) financing activities	(30,835)	220,689
Non-cash effect of foreign translation adjustments	(64)	182
Net increase (decrease) in cash and cash equivalents	(13,272)	22,809
Cash and cash equivalents, beginning	96,120	48,920
Cash and cash equivalents, ending	82,848	71,729
Cash paid during the period for:
Interest expense, net	18,454	18,697
CVR Settlement	19,918	0
Income taxes	5,226	0
Non-cash investing and financing activities:
Non-cash purchases of property and equipment	23,552	17,151
Non-cash issuance of acquisition shares	0	130,290
Non-cash reduction in capital lease obligations	121	20
Non-cash additions to capital lease obligations	$ 5,784	$ 1,689

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Basis of Presentation and Nature of Operations

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Nature of Operations

Basis of Presentation and Nature of Operations

Keane Group, Inc. (the “Company”, “KGI” or “Keane”) was formed on October 13, 2016 as a Delaware corporation to be a holding corporation for Keane Group Holdings, LLC and its subsidiaries (collectively referred to as “Keane Group”), for the purpose of facilitating the initial public offering (the “IPO”) of shares of common stock of the Company. On January 25, 2017, the Company completed the IPO of 30,774,000 shares of its common stock at the public offering price of $19.00 per share, which included 15,700,000 shares offered by the Company and 15,074,000 shares offered by the selling stockholder. Upon completion of the IPO and the reorganization, the Company had 103,128,019 shares of common stock outstanding.

In connection with the IPO, the Company completed a series of organizational transactions (the “Organizational Transactions”), including the following:

• Certain entities affiliated with Cerberus Capital Management, L.P., certain members of the Keane family, Trican Well Service Ltd. (“Trican”) and certain members of the Company’s management team (collectively, the “Existing Owners”) contributed all of their direct and indirect equity interests in Keane Group to Keane Investor Holdings LLC (“Keane Investor”);

• Keane Investor contributed all of its equity interests in Keane Group to the Company in exchange for common stock of the Company; and

• The Company’s independent directors received grants of restricted stock of the Company in substitution for their interests in Keane Group.

The Organizational Transactions represented a transaction between entities under common control and were accounted for similarly to pooling of interests in a business combination. The common stock of the Company issued to Keane Investor in exchange for its equity interests in Keane Group was recognized by the Company at the carrying value of the equity interests in Keane Group. In addition, the Company became the successor and Keane Group the predecessor for the purposes of financial reporting. The financial statements for the periods prior to the IPO and Organizational Transactions have been adjusted to combine and consolidate the previously separate entities for presentation purposes.

Earnings per share and weighted-average shares outstanding for the three and nine months ended September 30, 2017 have been presented giving pro forma effect to the Organizational Transactions as if they had occurred on January 1, 2016.

The accompanying unaudited condensed consolidated financial statements were prepared using United States Generally Accepted Accounting Principles (“GAAP”) and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with the Company’s 2017 Annual Report on Form 10-K filed on March 1, 2018.

The Company’s accounting policies are in accordance with GAAP. The preparation of financial statements in conformity with these accounting principles requires the Company to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and (2) the reported amounts of revenue and expenses during the reporting period. Ultimate results could differ from the Company’s estimates.

Management believes the unaudited condensed consolidated financial statements included herein contain all adjustments necessary to present fairly the Company’s financial position as of September 30, 2018 and the results of its operations and cash flows for the three and nine months ended September 30, 2018 and 2017. Such adjustments are of a normal recurring nature.

The unaudited condensed consolidated financial statements include the accounts of Keane and Keane Group.

All intercompany transactions and balances have been eliminated.

The unaudited condensed consolidated financial statements for the period from January 1, 2017 to July 2, 2017 reflect only the historical results of the Company prior to the completion of the Company’s acquisition of RockPile (as defined herein).

Secondary Offering

On January 17, 2018, the Company’s Registration Statement on Form S-1 (File No. 333-222500) was declared effective by the Securities and Exchange Commission (the “SEC”) for an offering on behalf of Keane Investor (the “selling stockholder”), pursuant to which 15,320,015 shares were sold by the selling stockholder (including 1,998,262 shares sold pursuant to the exercise of the underwriters’ over-allotment option) at a price to the public of $18.25 per share. The Company did not sell any common stock in, and did not receive any of the proceeds from, the offering. From the completion of the secondary offering, the vesting of certain of the Company’s RSUs (as defined herein) on January 2018 and the Company’s stock repurchase (as discussed herein), Keane Investor controls 53.1% of the Company’s outstanding common stock as of September 30, 2018.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(a) Business Combinations and Asset Acquisitions

Business combinations are accounted for using the acquisition method of accounting in accordance with the Accounting Standards Codification (“ASC”) 805, “Business Combinations”, as amended by Accounting Standards Update (“ASU”) 2017-01, “Business Combinations (Topic 805), Clarifying the Definition of a Business.” The purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values. Fair value of the acquired assets and liabilities is measured in accordance with the guidance of ASC 850, “Fair Value Measurements”, using discounted cash flows and other applicable valuation techniques. Any acquisition related costs incurred by the Company are expensed as incurred. Any excess purchase price over the fair value of the net identifiable assets acquired is recorded as goodwill if the definition of a business is met. Fair value of the acquired assets and liabilities is measured in accordance with the guidance of ASC 850 using discounted cash flows and other applicable valuation techniques. Operating results of an acquired business are included in our results of operations from the date of acquisition.

Asset acquisitions, as defined in ASU 2017-01, are measured based on their cost to the Company, including transaction costs. An asset acquisition’s cost or the consideration transferred by the Company is assumed to be equal to the fair value of the net assets acquired. If the consideration transferred is cash, measurement is based on the amount of cash the Company paid to the seller as well as transaction costs incurred. Consideration given in the form of nonmonetary assets, liabilities incurred or equity interests issued is measured based on either the cost to the Company or the fair value of the assets or net assets acquired, whichever is more clearly evident. The cost of an asset acquisition is allocated to the assets acquired based on their estimated relative fair values. Goodwill is not recognized in an asset acquisition.

Refer to Note (3)Acquisitions for discussion of the acquisitions completed in 2018 and 2017.

(b) Revenue Recognition

The Company adopted ASU 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers, effective January 1, 2018, using the modified retrospective method. Changes were made to the relevant business processes and the related control activities, including information systems, in order to monitor and maintain appropriate controls over financial reporting. There were no significant changes to the Company’s internal control over financial reporting due to the Company’s adoption of ASU 2014-09.

Revenue from the Company’s Completion Services and Other Services segments are earned as services are rendered, which is generally on a per stage or fixed monthly rate for the Company’s Completions Services segment and on a per job basis for the Other Services segment. All revenue is recognized when a contract with a customer exists, the performance obligations under the contract have been satisfied over time, the amount to which the Company has the right to invoice has been determined and collectability of amounts subject to invoice is probable. Contract fulfillment costs, such as mobilization costs and shipping and handling costs, are expensed as incurred and are recorded in cost of services in the unaudited condensed consolidated statements of operations and comprehensive income (loss). To the extent fulfillment costs are considered separate performance obligations that are billable to the customer, the amounts billed are recorded as revenue in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The Company does not incur contract acquisition and origination costs. Taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from revenues in the unaudited condensed consolidated statements of operations and comprehensive income (loss) and net cash provided by operating activities in the unaudited condensed consolidated statements of cash flows.

The Company has elected the practical expedient to recognize revenue based upon the transactional value it has the right to invoice upon completion of each performance obligation per the contract terms, as the Company believes its right to consideration corresponds directly with the value transferred to the customer, and this expedient does not lend itself to the application of significant judgment. The Company has also elected the practical expedient to expense immediately mobilization costs, as the amortization period would always be less than one year. As a result of electing these practical expedients, there was no material impact on the Company’s current revenue recognition processes and no retrospective adjustments were necessary.

The Company’s obligations for refunds as well as the warranties and related obligations stated in its contracts with its customers are standard to the industry and are related to the correction of any defectiveness in the execution of its performance obligations.

Revenue from the Company’s Completion Services and Other Services segments are recognized as follows:

Completion Services

The Company provides hydraulic fracturing and wireline services pursuant to contractual arrangements, such as term contracts and pricing agreements. Revenue is recognized upon the completion of each performance obligation. The Company’s performance obligations under its Completion Services segment represent each stage frac’d or each stage perforated. Once a stage has been completed, a field ticket is created that includes charges for the service performed and the chemicals and proppant consumed during the course of the service. The field ticket may also include charges for the mobilization of the equipment to the location, any additional equipment used on the job and other miscellaneous items. The field ticket represents the amounts to which the Company has the right to invoice and to recognize as revenue.

Other Services

The Company provides cementing services pursuant to contractual arrangements, such as term contracts or on a spot market basis. Revenue is recognized upon the completion of each performance obligation, which for cementing services, represents the portion of the well cemented: surface casing, intermediate casing or production liner. The performance obligations are satisfied over time. Jobs for these services are typically short term in nature, with most jobs completed in a day. Once the well has been cemented, a field ticket is created that includes charges for the services performed and the consumables used during the course of service. The field ticket represents the amounts to which the Company has the right to invoice and to recognize as revenue.

Disaggregation of Revenue

Revenue activities during the three and nine months ended September 30, 2018 and 2017 were as follows:

	(Thousands of Dollars)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Revenue by segment:
Completion Services	$	548,418	$	468,479	$	1,625,798	$	1,031,768
Other Services	10,490		8,823		24,659		8,823
Total revenue	$	558,908	$	477,302	$	1,650,457	$	1,040,591
Revenue by geography:
East	$	192,977	$	155,698	$	622,496	$	396,983
North	71,263		100,939		199,242		166,892
South	294,668		220,665		828,719		476,716
Total revenue	$	558,908	$	477,302	$	1,650,457	$	1,040,591

Contract Balances

In line with industry practice, the Company bills its customers for its services in arrears, typically when the stage or well is completed or at month-end. The majority of the Company’s jobs are completed in less than 30 days. Furthermore, it is currently not standard practice for the Company to execute contracts with prepayment features. As such, the Company’s contract liabilities are immaterial to its condensed consolidated balance sheets. Payment terms after invoicing are typically 30 days or less.

(c) Property and Equipment

Property and equipment, inclusive of equipment under capital lease, are generally stated at cost.

Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from 6 months to 40 years. Management bases the estimate of the useful lives and salvage values of property and equipment on expected utilization, technological change and effectiveness of maintenance programs. When components of an item of property and equipment are identifiable and have different useful lives, they are accounted for separately as major components of property and equipment. Equipment held under capital leases are generally amortized on a straight-line basis over the shorter of the estimated useful life of the underlying asset and the term of the lease.

Gains and losses on disposal of property and equipment are determined by comparing the proceeds from disposal with the carrying amount of property and equipment and are recognized net within operating costs and expenses in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

Major classifications of property and equipment and their respective useful lives are as follows:

Land	Indefinite life
Building and leasehold improvements	3 months – 40 years
Machinery and equipment	13 months – 10 years
Office furniture, fixtures and equipment	3 years – 5 years

Leasehold improvements are assigned a useful life equal to the term of the related lease.

In the first quarter of 2018, the Company reassessed the estimated useful lives of select machinery and equipment. The Company concluded that due to an increase in service intensity driven by a shift to more 24-hour work, higher stage volumes, larger stages and more proppant usage per stage, the estimated useful lives of these select machinery and equipment should be reduced by approximately 50%.

In accordance with ASC 250, “Accounting Changes and Error Corrections,” the change in the estimated useful lives of the Company’s property and equipment was accounted for as a change in accounting estimate, on a prospective basis, effective January 1, 2018. This change resulted in an increase in depreciation expense and decrease in net income during the nine months ended September 30, 2018 of $13.1 million in the unaudited condensed consolidated statement of operations and comprehensive income (loss).

As a result of a system upgrade to its fixed asset accounting module, in the third quarter of 2018, the Company changed its depreciation method from mid-month straight-line depreciation to days straight-line depreciation. The impact of this change in depreciation method to the Company’s unaudited condensed consolidated statement of operations and comprehensive income (loss) was immaterial.

Depreciation methods, useful lives and residual values are reviewed annually.

(d) Derivative Instruments and Hedging Activities

The Company is exposed to certain risks relating to its ongoing business operations. The Company utilizes interest rate derivatives to manage interest rate risk associated with its floating-rate borrowings. The Company recognizes all derivative instruments as either assets or liabilities on the condensed consolidated balance sheets at their respective fair values. For derivatives designated in hedging relationships, changes in the fair value are either offset through earnings against the change in fair value of the hedged item attributable to the risk being hedged or recognized in accumulated other comprehensive income (loss) until the hedged item affects earnings.

The Company only enters into derivative contracts that it intends to designate as hedges for the variability of cash flows to be received or paid related to a recognized asset or liability (i.e. cash flow hedge). For all hedging relationships, the Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged and how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively. The Company also formally assesses, both at the inception of the hedging relationship and on an ongoing basis, whether the derivatives that are used in hedging relationships are highly effective in offsetting changes in cash flows of hedged transactions. For derivative instruments that are designated and qualify as part of a cash flow hedging relationship, the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

The Company discontinues hedge accounting prospectively, when it determines that the derivative is no longer highly effective in offsetting cash flows attributable to the hedged risk, the derivative expires or is sold, terminated, or exercised, the originally forecasted transaction is no longer probable of occurring, or if management decides to remove the designation of the cash flow hedge. The net derivative instrument gain or loss related to a discontinued cash flow hedge shall continue to be reported in accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the originally hedged transaction affects earnings, unless it is probable that the forecasted transaction will not occur by the end of the originally specified time period. When it is probable that the originally forecasted transaction will not occur by the end of the originally specified time period, the Company recognizes immediately, in earnings, any gains and losses related to the hedging relationship that were recognized in accumulated other comprehensive income (loss). In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the Company continues to carry the derivative at its fair value on the condensed consolidated balance sheet and recognizes any subsequent changes in the derivative’s fair value in earnings.

(e) Stock-based compensation

The Company recognizes compensation expense for restricted stock awards, restricted stock units to be settled in common stock (“RSUs”) and non-qualified stock options (“stock options”) based on the fair value of the awards at the date of grant. The fair value of restricted stock awards and RSUs is determined based on the number of shares or RSUs granted and the closing price of the Company’s common stock on the date of grant. The fair value of stock options is determined by applying the Black-Scholes model to the grant date market value of the underlying common shares of the Company. The Company has elected to recognize forfeiture credits for these awards as they are incurred, as this method better reflects actual stock-based compensation expense.

Compensation expense from time-based restricted stock awards, RSUs and stock options is amortized on a straight-line basis over the requisite service period, which is generally the vesting period.

Deferred compensation expense associated with liability-based awards, such as deferred stock awards that are expected to settle with the issuance of a variable number of shares based on a fixed monetary amount at inception, is recognized at the fixed monetary amount at inception and is amortized on a straight-line basis over the requisite service period, which is generally the vesting period. Upon settlement, the holders receive an amount of common stock equal to the fixed monetary amount at inception, based on the closing price of the Company’s stock on the date of settlement.

Tax deductions on the stock-based compensation awards are not realized until the awards are vested or exercised. The Company recognizes deferred tax assets for stock-based compensation awards that will result in future deductions on its income tax returns, based on the amount of stock-based compensation recognized at the statutory tax rate in the jurisdiction in which the Company will receive a tax deduction. If the tax deduction for a stock-based award is greater than the cumulative GAAP compensation expense for that award upon realization of a tax deduction, an excess tax benefit will be recognized and recorded as a favorable impact on the effective tax rate. If the tax deduction for an award is less than the cumulative GAAP compensation expense for that award upon realization of the tax deduction, a tax shortfall will be recognized and recorded as an unfavorable impact on the effective tax rate. Any excess tax benefits or shortfalls will be recorded discretely in the period in which they occur. The cash flows resulting from any excess tax benefit will be classified as financing cash flows in the unaudited condensed consolidated statements of cash flows.

The Company provides its employees with the election to settle the income tax obligations arising from the vesting of their restricted or deferred stock-based compensation awards by the Company withholding shares equal to such income tax obligations. Shares acquired from employees in connection with the settlement of the employees’ income tax obligations are accounted for as treasury shares that are subsequently retired.

Restricted stock awards and RSUs are not considered issued and outstanding for purposes of earnings per share calculations until vested.

For additional information, see Note (11) Stock-Based Compensation.

(f) Taxes

Upon consummation of the Organizational Transactions and the IPO, the Company became subject to U.S. federal income taxes. A provision for U.S. federal income tax has been provided in the unaudited condensed consolidated financial statements for the nine months ended September 30, 2018 and 2017.

In addition, the Company has a Canadian subsidiary, which is treated as a corporation for Canadian federal and provincial tax purposes. For Canadian tax purposes, the Company is subject to foreign income tax.

The Company is responsible for certain state income and franchise taxes, which include Colorado, Montana, New Mexico, North Dakota, Oklahoma, Pennsylvania, Texas and West Virginia.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and tax carryforwards, if applicable. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date.

See Note (16) Income Taxes for a detailed discussion of the Company’s taxes and activities thereof during the nine months ended September 30, 2018 and 2017.

(g) Equity-method investments

Investments in non-controlled entities over which the Company has the ability to exercise significant influence over the non-controlled entities’ operating and financial policies are accounted for under the equity-method. Under the equity-method, the investment in the non-controlled entity is initially recognized at cost and subsequently adjusted to reflect the Company’s share of the entity’s income (losses), any dividends received by the Company and any other-than-temporary impairments.Investments accounted for under the equity-method are presented within other noncurrent assets in the condensed consolidated balance sheets.

As of September 30, 2018 and December 31, 2017, the Company recognized $1.2 million and $0.6 million, respectively, for its only equity-method investment.

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Acquisitions

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Acquisitions

Acquisitions

(a) RockPile

On July 3, 2017 (the “RockPile Acquisition Date”), the Company acquired 100% of the outstanding equity interests of RockPile Energy Services, LLC and its subsidiaries (“RockPile”) from RockPile Energy Holdings, LLC (the “Principal Seller”). RockPile was a multi-basin provider of integrated well completion services in the United States, whose primary service offerings included hydraulic fracturing, wireline perforation and workover rigs. Through this acquisition, the Company deepened its existing presence in the Permian Basin and Bakken Formation and further solidified its position as one of the largest pure-play providers of integrated well completion services in the United States. This acquisition also enabled the Company to expand certain service offerings and capabilities within its Other Services segment.

The acquisition of RockPile was completed for cash consideration of $116.6 million, subject to post-closing adjustments, 8,684,210 shares of the Company’s common stock (the “Acquisition Shares”) and contingent value rights, as described below. The fair value of the Acquisition Shares, which was recorded in stockholders’ equity in the condensed consolidated balance sheets, was calculated using the closing price of the Company’s common stock on July 3, 2017, of $16.29, discounted by 7.9% to reflect the lack of marketability resulting from the 180-day lock-up period during which resale of the Acquisition Shares was restricted.

Subject to the terms and conditions of the Contingent Value Rights Agreement (the “CVR Agreement”) by and among the Company, the Principal Seller and Permitted Holders (as defined in the CVR Agreement and, together with the Principal Seller, the “RockPile Holders”), the Company agreed to pay contingent consideration (the “Aggregate CVR Payment Amount”), which would equal the product of the Acquisition Shares held by RockPile on April 10, 2018 and the CVR Payment Amount, provided that the CVR Payment Amount did not exceed $2.30. The “CVR Payment Amount” was the difference between (a) $19.00 and (b) the arithmetic average of the dollar volume weighted average price of the Company’s common stock on each trading day for twenty (20) trading days randomly selected by the Company during the thirty (30) trading day period immediately preceding the last business day prior to April 3, 2018 (the “Twenty-Day VWAP”). The Aggregate CVR Payment Amount was agreed to be reduced on a dollar for dollar basis if the sum of the following exceeds $165.0 million:

• (i) the aggregate gross proceeds received in connection with the resale of any Acquisition Shares, plus

• (ii) the product of the number of Acquisition Shares held by the RockPile Holders on April 10, 2018 and the Twenty-Day VWAP, plus

• (iii) the Aggregate CVR Payment Amount.

In early April 2018, in accordance with the terms and conditions of the CVR Agreement, the Company calculated and paid the final Aggregate CVR Payment Amount, due to the RockPile Holders, of $19.9 million and recognized a loss of $13.2 million during the nine months ended September 30, 2018 in other income (expense), net in the unaudited condensed consolidated statement of operations and comprehensive income (loss).

The Company accounted for the acquisition of RockPile using the acquisition method of accounting. Assets acquired, liabilities assumed and equity issued in connection with the acquisition were recorded based on their fair values. The purchase accounting is subject to the twelve-month measurement adjustment period to reflect any new information that may be obtained in the future about facts and circumstances that existed as of the RockPile Acquisition Date that, if known, would have affected the measurement of the amounts recognized as of that date. The measurement period for the acquisition of RockPile ended on July 3, 2018.

The following tables summarize the fair value of the consideration transferred for the acquisition of RockPile and the preliminary allocation of the purchase price to the fair values of the assets acquired, liabilities assumed and equity consideration at the RockPile Acquisition Date:

	(Thousands of Dollars)
Total Purchase Consideration:	Preliminary Purchase Price Allocation			Adjustments			Purchase Price Allocation as of September 30, 2018
Cash consideration	$	123,293		$	(6,717	)	$	116,576
Equity consideration	130,290			—			130,290
Contingent consideration	11,962			—			11,962
Less: Cash acquired	(20,379		)	20,379			—
Total purchase consideration, less cash acquired	$	245,166		$	13,662		$	258,828
Trade and other accounts receivable	$	57,117		$	1,484		$	58,601
Inventories, net	2,853			138			2,991
Prepaid and other current assets	13,630			(717		)	12,913
Property and equipment, net	157,654			8,653			166,307
Intangible assets	20,967			(1,267		)	19,700
Notes receivable	250			(250		)	—
Other noncurrent assets	363			(57		)	306
Total identifiable assets acquired	252,834			7,984			260,818
Accounts payable	(38,999		)	16,180			(22,819		)
Accrued expenses	(22,161		)	(13,315		)	(35,476		)
Deferred revenue	(23,053		)	698			(22,355		)
Other non-current liabilities	(827		)	(2,412		)	(3,239		)
Total liabilities assumed	(85,040		)	1,151			(83,889		)
Goodwill	77,372			4,527			81,899
Total purchase price consideration	$	245,166		$	13,662		$	258,828

Goodwill is calculated as the excess of the consideration transferred over the fair value of the net assets acquired. The goodwill in this acquisition is primarily attributable to expected synergies and new customer relationships and was allocated to the Completions Services segment. All the goodwill recognized for the acquisition of RockPile is tax deductible with an amortization period of 15 years.

(b) Asset Acquisition from Refinery Specialties, Incorporated

On July 24, 2018, the Company executed a purchase agreement with Refinery Specialties, Incorporated (“RSI”) to acquire approximately 90,000 hydraulic horsepower and related support equipment for approximately $35.4 million, inclusive of an $0.8 million for deposit reimbursement related to future equipment deliveries. This acquisition was partially funded by the insurance proceeds the Company received in connection with a fire that resulted in damage to a portion of one of the Company’s fleets (for further details see Note (6) Property and Equipment, net). The Company also assumed operating leases for light duty vehicles in connection with the RSI transaction, and RSI entered into a non-compete arrangement in turn with the Company. In September 2018, the Company and RSI reached an agreement to refund the Company $0.8 million of the purchase price due to repair costs required for certain acquired equipment. The resulting purchase price after the refund was $34.6 million and the Company incurred $0.4 million of transaction costs related to the acquisition, bringing total cash consideration related to the acquisition to $35.0 million.

The Company accounted for this acquisition as an asset acquisition pursuant to ASU 2017-01 and allocated the purchase price of the acquisition plus the transactions costs amongst the acquired hydraulic horsepower and related support equipment, as the fair value of the acquired hydraulic horsepower and related support equipment represented substantially all of the fair value of the gross assets acquired in the asset acquisition with RSI.

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Intangible Assets

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

The intangible assets balance in the Company’s condensed consolidated balance sheets represents the fair value, net of amortization, as applicable, related to the following:

	(Thousands of Dollars)
	September 30, 2018
	Weighted Average Remaining Amortization Period (Years)	Gross Carrying Amounts		Accumulated Amortization			Net Carrying Amount
Customer contracts	8.5	$	68,600	$	(27,356	)	$	41,244
Non-compete agreements	7.5	700		(350		)	350
Trade name	Indefinite life	10,200		—			10,200
Technology	2.1	2,087		(628		)	1,459
Total		$	81,587	$	(28,334	)	$	53,253

	(Thousands of Dollars)
	December 31, 2017
	Weighted Average Remaining Amortization Period (Years)	Gross Carrying Amounts		Accumulated Amortization			Net Carrying Amount
Customer contracts	9.1	$	68,600	$	(23,049	)	$	45,551
Non-compete agreements	8.1	750		(360		)	390
Trade name	Indefinite life	10,200		—			10,200
Technology	2.1	3,023		(1,884		)	1,139
Total		$	82,573	$	(25,293	)	$	57,280

Amortization expense related to the intangible assets for the three months ended September 30, 2018 and 2017 was $1.5 million and $2.0 million, respectively. Amortization expense related to the intangible assets for the nine months ended September 30, 2018 and 2017 was $4.7 million and $5.1 million, respectively.

Amortization for the intangible assets excluding trade name of $10.2 million with an indefinite useful life and in process software, over the next five years, is as follows:

Year-end December 31,	(Thousands of Dollars)
2018	$	1,524
2019	5,399
2020	5,275
2021	4,994
2022	4,972

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Inventories, net

9 Months Ended

Sep. 30, 2018

Inventory Disclosure [Abstract]

Inventories, net

Inventories, net

Inventories, net, consisted of the following at September 30, 2018 and December 31, 2017:

	(Thousands of Dollars)
	September 30, 2018		December 31, 2017
Sand, including freight	$	10,620	$	11,551
Chemicals and consumables	7,109		7,940
Materials and supplies	11,043		13,946
Total inventory, net	$	28,772	$	33,437

Inventories are reported net of obsolescence reserves of $1.2 million and $0.3 million as of September 30, 2018 and December 31, 2017, respectively. The Company recognized $0.5 million and $0.1 million of obsolescence expense during the three months ended September 30, 2018 and 2017, respectively. The Company recognized $0.9 million and $0.2 million of obsolescence expense during the nine months ended September 30, 2018 and 2017, respectively.

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Property and Equipment, net

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and Equipment, net

Property and Equipment, net consisted of the following at September 30, 2018 and December 31, 2017:

	(Thousands of Dollars)
	September 30, 2018			December 31, 2017
Land	$	4,771		$	5,186
Building and leasehold improvements	32,386			30,322
Office furniture, fixtures and equipment	7,515			6,338
Machinery and equipment	1,010,140			773,516
	1,054,812			815,362
Less accumulated depreciation	(510,311		)	(372,617		)
Construction in progress	5,772			25,255
Total property and equipment, net	$	550,273		$	468,000

The machinery and equipment balance as of September 30, 2018 and December 31, 2017 included $10.1 million of hydraulic fracturing equipment under capital leases. The machinery and equipment balance as of September 30, 2018 and December 31, 2017 also included approximately $10.4 million and $5.1 million, respectively, of vehicles under capital leases. Accumulated depreciation for the hydraulic fracturing equipment under capital leases was $9.4 million and $8.3 million as of September 30, 2018 and December 31, 2017, respectively. Accumulated depreciation for the vehicles under capital leases was $2.9 million and $1.6 million as of September 30, 2018 and December 31, 2017, respectively.

All (gains) and losses are presented within (gain) loss on disposal of assets in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

The following summarizes the primary proceeds received and (gains) losses recognized on the disposal of certain assets for the three and nine months ended September 30, 2018 and 2017:

Three and Nine Months Ended September 30, 2018

During the three months ended September 30, 2018, the Company

• recognized a loss of $4.1 million relating to early disposals of various hydraulic fracturing pump components, offset by $3.2 million salvage value on transmission cores from failed transmissions. These assets were within the Completion Services segment.

During the nine months ended September 30, 2018, the Company

• divested its idle field operations facility in Mathis, Texas, acquired as part of the Acquired Trican Operations, for net proceeds of $1.2 million and a net loss of $2.7 million, within the Corporate segment.

• recognized a loss of $9.3 million relating to early disposals of hydraulic fracturing pump component, offset by $6.8 million salvage value on transmission cores from failed transmissions. These assets were within the Completion Services segment.

Three and Nine Months Ended September 30, 2017

During the three months ended September 30, 2017, the Company divested the following assets:

• Idle facility in Searcy, Arkansas, acquired as part of the Acquired Trican Operations, divested for net proceeds of $0.5 million and a net loss of $0.6 million, within the Corporate segment,

• Air compressor units, divested for net proceeds of $0.9 million and a net gain of $0.9 million, within the Other Services segment,

• six workover rigs acquired in the acquisition of RockPile, within the Other Services segment, divested for net proceeds of $6.8 million with no (gain) or loss, and

• Hydraulic fracturing operating equipment, divested for a net loss of $0.6 million, within the Completions segment.

During the nine months ended September 30, 2017, the Company also divested its idle facility in Woodward, Oklahoma, acquired as part of the Acquired Trican Operations, for net proceeds of $2.4 million and a net gain of $0.5 million, within the Completions Services segment.

Casualty Loss

On July 1, 2018, one of the Company’s hydraulic frac fleets operating in the Permian Basin was involved in an accidental fire, which resulted in damage to a portion of the equipment in that fleet. The Company received $18.1 million of insurance proceeds for replacement cost of the damaged equipment, which offset the $3.2 million impairment loss recognized on the damaged equipment. The resulting gain of $14.9 million was recognized in other income (expense), net in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

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Long-Term Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Long-term debt as of September 30, 2018 and December 31, 2017 consisted of the following:

	(Thousands of Dollars)
	September 30, 2018			December 31, 2017
2018 Term Loan Facility	$	349,125		$	—
2017 Term Loan Facility	—			283,202
Capital leases	10,706			7,918
Less: Unamortized debt discount and debt issuance costs	(8,105		)	(8,173		)
Total debt, net of unamortized debt discount and debt issuance costs	351,726			282,947
Less: Current portion	(6,289		)	(4,436		)
Long-term debt, net of unamortized debt discount and debt issuance costs, including capital leases	$	345,437		$	278,511

Credit Facilities

On May 25, 2018, Keane Group Holdings, LLC, a subsidiary of the Company, and the 2018 Term Loan Guarantors (as defined below) entered into a term loan facility (the “2018 Term Loan Facility”) with each lender from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent. The proceeds of the 2018 Term Loan Facility were used to repay the Company’s pre-existing term loan facility (the “2017 Term Loan Facility”), along with related fees and expenses, with the excess proceeds allocated to fund general corporate purposes. The 2018 Term Loan Facility was executed with a debt discount of $1.8 million, which will be amortized using the effective interest method and netted against the carrying amount of the 2018 Term Loan Facility. The Company did not incur any prepayment premiums to repay the 2017 Term Loan Facility.

Subject to certain exceptions as set forth in the definitive documentation for the 2018 Term Loan Facility, the amounts outstanding under the 2018 Term Loan Facility are guaranteed by the Company, Keane Frac, LP, KS Drilling, LLC, KGH Intermediate Holdco I, LLC, KGH Intermediate Holdco II, LLC, and Keane Frac GP, LLC, and each subsidiary of the Company that will be required to execute and deliver a facility guaranty in the future pursuant to the terms of the 2018 Term Loan Facility (collectively, the “2018 Term Loan Guarantors”).

Below is a summary of the Company’s credit facilities outstanding as of September 30, 2018:

	(Thousands of Dollars)
	2017 ABL Facility(1)		2018 Term Loan Facility(1)
Original facility size	$	300,000	$	350,000
Outstanding balance	—		350,000
Letters of credit issued	2,500		—
Available borrowing base commitment	207,887		n/a
Interest Rate(2)	LIBOR or base rate plus applicable margin		LIBOR or base rate plus applicable margin
Maturity Date	December 22, 2022		May 25, 2025

⁽¹⁾ For detailed discussion on the Company’s credit facilities, see “Liquidity and Capital Resources” under Part I. “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

⁽²⁾ London Interbank Offer Rate (“LIBOR”) is subject to a 1.00% floor.

Maturities of the 2018 Term Loan Facility for the next five years are presented below:

Year-end December 31,	(Thousands of Dollars)
2018	$	875
2019	3,500
2020	3,500
2021	3,500
2022	3,500
	$	14,875

Deferred Charges and Other Costs

Deferred charges include deferred financing costs and debt discounts or debt premiums. Deferred charges are capitalized and amortized using the effective interest method and netted against the carrying amount of the related borrowing. The amortization is recorded in interest expense on the unaudited condensed consolidated statements of operations and comprehensive income (loss). Amortization expense related to the capitalized deferred charges for the three months ended September 30, 2018 and 2017 was $1.0 million and $0.6 million, respectively. Amortization expense related to the capitalized deferred charges for the nine months ended September 30, 2018 and 2017 was $2.3 million and $4.6 million, respectively.

Deferred charges associated with the 2018 Term Loan Facility that were capitalized upon recognition of the 2018 Term Loan Facility were $9.0 million. Unamortized deferred charges associated with the 2018 Term Loan Facility were $8.1 million and nil as of as of September 30, 2018 and December 31, 2017, respectively, and are recorded in long-term debt, net of unamortized deferred charges and unamortized debt discount, less current maturities on the condensed consolidated balance sheets. Deferred charges associated with the 2017 Term Loan Facility that were expensed upon repayment of the 2017 Term Loan Facility were $7.6 million. Unamortized deferred charges associated with the 2016 ABL Facility and the Company’s $300 million asset-based revolving credit facility obtained on February 17, 2017 and as amended on December 22, 2017 (the “2017 ABL Facility”) were $4.2 million and $5.0 million as of September 30, 2018 and December 31, 2017, respectively, and are recorded in other noncurrent assets on the condensed consolidated balance sheets.

Interest expense during the nine months ended September 30, 2017 included $15.8 million of prepayment penalties and $15.3 million in write-offs of deferred charges, incurred in connection with the Company’s refinancing of its 2016 ABL Facility and the Company’s early debt extinguishment of its 2016 Term Loan Facility and secured notes due 2019 (the “Senior Secured Notes”) in 2017.

Capital Leases

The Company leases certain machinery, equipment and vehicles under capital leases that expire between 2018 and 2022. Total remaining principal balance outstanding on the Company’s capital leases as of September 30, 2018 and December 31, 2017 was $10.7 million and $7.9 million, respectively. Total interest expense incurred on these capital leases was $0.1 million during the three months ended September 30, 2018 and 2017 and $0.3 million and $0.2 million and for the nine months ended September 30, 2018 and 2017, respectively.

Depreciation of assets held under capital leases is included within depreciation expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). See Note (6) Property and Equipment, netfor further details.

Future annual capital lease commitments, including the interest component and exclusive of deferred financing costs, as of September 30, 2018 for the next five years are listed below:

Year-end December 31,	(Thousands of Dollars)
2018	$	1,314
2019	5,191
2020	2,356
2021	2,134
2022	678
Subtotal	11,673
Less amount representing interest	(964)
	$	10,709

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Significant Risks and Uncertainties

9 Months Ended

Sep. 30, 2018

Risks and Uncertainties [Abstract]

Significant Risks and Uncertainties

Significant Risks and Uncertainties

The Company operates in two reportable segments: Completion Services and Other Services, with significant concentration in the Completion Services segment.

During the three months ended September 30, 2018 and 2017, sales to Completion Services customers represented 99% and 98% of the Company’s consolidated revenue, respectively. During the three months ended September 30, 2018 and 2017, sales to Completion Services customers represented 100% and 98% of the Company’s consolidated gross profit, respectively.

During the nine months ended September 30, 2018 and 2017, sales to Completion Services customers represented 99% of the Company’s consolidated revenue. During the nine months ended September 30, 2018 and 2017, sales to Completion Services customers represented 100% of the Company’s consolidated gross profit.

Oil and natural gas prices are significant drivers behind the pace and location of the Company’s customer activity. The Company actively monitors trends in oil and natural gas prices and focuses on maintaining flexibility. While commodity prices have improved, the Company expects volatility and uncertainty to remain in place throughout 2018, driven by economic activity, geopolitical factors and regional dynamics throughout the U.S, including pipeline availability within the Permian Basin.     

The industry is subject to strains in sand supply, driven by weather-induced rail congestion, combined with mine-related issues due to rail-related output constraints, flooding impacts, delays on local mine start-ups and continued growth in demand. While the industry faced significant strain in sand supply throughout the first quarter of 2018 and into the beginning of the second quarter of 2018, these transitory issues were largely resolved by the second quarter of 2018.

For the three months ended September 30, 2018, revenue from the Company’s top three customers individually represented 16%, 11% and 10% of the Company’s consolidated revenue, respectively. For the three months ended September 30, 2017, revenue from the Company’s top customer represented 11% of the Company’s consolidated revenue, respectively.

For the nine months ended September 30, 2018, revenue from the Company’s top four customers individually represented 16%, 12%, 11% and 10% of the Company’s consolidated revenue, respectively. For the nine months ended September 30, 2017, revenue from the Company’s top customer individually represented 10% of the Company’s consolidated revenue.

Revenue is earned from each of these customers within the Completion Services segment.

For the three and nine months ended September 30, 2018 and 2017, two suppliers represented approximately 5% to 15% of the Company’s overall purchases. The costs for each of these suppliers were incurred within the Completion Services segment.

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Derivatives

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

The Company uses interest-rate-related derivative instruments to manage its variability of cash flows associated with changes in interest rates on its variable-rate debt.

On May 25, 2018, the Company entered into the 2018 Term Loan Facility, which has an initial aggregate principal amount of $350 million, and repaid its pre-existing 2017 Term Loan Facility. The 2018 Term Loan Facility has a variable interest rate based on LIBOR, subject to a 1.0% floor. As a result of this transaction, the Company desired to hedge additional notional amounts to continue to hedge approximately 50% of its expected LIBOR exposure and to extend the terms of its swaps to align with the 2018 Term Loan Facility.

On June 22, 2018, the Company unwound its existing interest rate swaps and received $3.2 million in proceeds. The Company used the $3.2 million of proceeds to execute a new off-market interest rate swap. Under the terms of the new interest rate swap, the Company receives 1-month LIBOR, subject to a 1% floor, and makes payments based on a fixed rate of 2.625%. The new interest rate swap is effective through March 31, 2025 and has a notional amount of $175.0 million. The new interest rate swap was designated in a new cash flow hedge relationship.

The Company discontinued hedge accounting on the pre-existing interest rate swaps upon termination. At the time hedge accounting was discontinued, the exiting interest rate swaps had $3.5 million of deferred gains in accumulated other comprehensive income. This amount was not reclassified from accumulated other comprehensive income into earnings, as it remained probable that the originally forecasted transaction will occur.

The following table presents the fair value of the Company’s derivative instruments on a gross and net basis as of the periods shown below:

	(Thousands of Dollars)
	Derivatives Designated  As Hedging Instruments			Derivatives Not Designated  As Hedging Instruments		Gross Amounts of Recognized Assets and Liabilities			Gross Amounts Offset in the Balance Sheet(1)		Net Amounts Presented in the Balance Sheet(2)
As of September 30, 2018:
Other noncurrent asset	$	3,888		$	—	$	3,888		$	—	$	3,888
Other noncurrent liability	(24		)	—		(24		)	—		(24		)
As of December 31, 2017:
Other noncurrent asset	$	324		$	—	$	324		$	—	$	324
Other noncurrent liability	(254		)	—		(254		)	—		(254		)

⁽¹⁾  With all of the Company’s financial trading counterparties, agreements are in place that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements.

⁽²⁾  There are no amounts subject to an enforceable master netting arrangement that are not netted in these amounts. There are no amounts of related financial collateral received or pledged.

The following table presents gains and losses for the Company’s interest rate derivatives designated as cash flow hedges (in thousands of dollars):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2018		2017			2018		2017			Location
Amount of gain (loss) recognized in other comprehensive income on derivative	$	1,119	$	(178	)	$	3,429	$	(167	)	OCI
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) (“AOCI”) into earnings	163		—			473		(73		)	Interest Expense
Amount of loss reclassified from AOCI into earnings as a result of originally forecasted transaction becoming probable of not occurring	—		—			—		(100		)	Interest Expense

The gain recognized in other comprehensive income for the derivative instrument is presented within hedging activities in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

There were no gains or losses recognized in earnings as a result of excluding amounts from the assessment of hedge effectiveness. Based on recorded values at September 30, 2018, $1.1 million of net gains will be reclassified from accumulated other comprehensive income into earnings within the next 12 months.

The following table presents gains and losses for the Company’s interest rate derivatives not designated in a hedge relationship under ASC 815, “Derivative Financial Instruments,” (in thousands of dollars):

		Three months ended September 30,					Nine Months Ended September 30,
Description	Location	2018		2017			2018		2017
Loss on interest contracts	Interest expense	$	—	$	(29	)	$	—	$	(367	)

See Note (10)Fair Value Measurements and Financial Information for further information related to the Company’s derivative instruments.

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Fair Value Measurements and Financial Information

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements and Financial Information

Fair Value Measurements and Financial Information

The Company discloses the required fair values of financial instruments in its assets and liabilities under the hierarchy guidelines, in accordance with GAAP. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, derivative instruments, long-term debt, capital lease obligations and contingent liabilities. As of September 30, 2018 and December 31, 2017, the carrying values of the Company’s financial instruments, included in its condensed consolidated balance sheets, approximated or equaled their fair values.

Recurring Fair Value Measurement

At September 30, 2018 and December 31, 2017, the financial instruments measured by the Company at fair value on a recurring basis were its interest rate derivatives.

The fair market value of the derivative financial instruments reflected on the condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 were determined using industry-standard models that consider various assumptions, including current market and contractual rates for the underlying instruments, time value, implied volatilities, nonperformance risk as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument and can be supported by observable data.

The following tables present the placement in the fair value hierarchy of assets and liabilities that were measured at fair value on a recurring basis at September 30, 2018 and December 31, 2017 (in thousands of dollars):

				Fair value measurements at reporting date using
	September 30, 2018			Level 1		Level 2			Level 3
Assets:
Interest rate derivatives	$	3,888		$	—	$	3,888		$	—
Liabilities:
Interest rate derivatives	(24		)	—		(24		)	—

				Fair value measurements at reporting date using
	December 31, 2017			Level 1		Level 2			Level 3
Assets:
Interest rate derivatives	$	70		$	—	$	70		$	—
Liabilities:
Aggregate CVR Payment	(6,665		)	—		(6,665		)	—

Non-Recurring Fair Value Measurement

The fair values of indefinite-lived assets and long-lived assets are determined with internal cash flow models based on significant unobservable inputs. The Company measures the fair value of its property, plant and equipment using the discounted cash flow method, the fair value of its customer contracts using the multi-period excess earning method and income based “with and without” method, the fair value of its trade names and acquired technology using the “income-based relief-from-royalty” method and the fair value of its non-compete agreement using the “lost income” approach. Assets acquired as a result of the acquisition of RockPile were recorded at their fair values on the date of acquisition. See Note (3)Acquisitionsfor further details.

Given the unobservable nature of the inputs used in the Company’s internal cash flow models, the cash flow models are deemed to use Level 3 inputs.

During the nine months ended September 30, 2018 and 2017, the Company determined there were no events that would indicate the carrying amount of its indefinite-lived assets and long-lived assets may not be recoverable, and as such, no impairment charge was recognized.

Credit Risk

The Company’s financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents, derivative contracts and trade receivables.

The Company’s cash balances on deposit with financial institutions totaled $82.8 million and $96.1 million as of September 30, 2018 and December 31, 2017, respectively, which exceeded Federal Deposit Insurance Corporation insured limits. The Company regularly monitors these institutions’ financial condition.

The credit risk from the derivative contract derives from the potential failure of the counterparty to perform under the terms of the derivative contracts. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with high-quality counterparties, whose Standard & Poor’s credit rating is higher than BBB. The derivative instruments entered into by the Company do not contain credit-risk-related contingent features.

The majority of the Company’s trade receivables have payment terms of 30 days or less. As of September 30, 2018, trade receivables from the Company’s top two customers individually represented 20% of total accounts receivable. As of December 31, 2017, trade receivables from the Company’s top customer represented 17% of total accounts receivable. The Company mitigates the associated credit risk by performing credit evaluations and monitoring the payment patterns of its customers. The Company has not had to write-off any bad debts for its customers during the nine months ended September 30, 2018 or in 2017 and has a process in place to collect all receivables within 30 to 60 days of aging.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

As of September 30, 2018, the Company has four types of stock-based compensation under the Equity and Incentive Award Plan: (i) deferred stock awards for three executive officers, (ii) restricted stock awards issued to independent directors, (iii) restricted stock units and (iv) non-qualified stock options. RSUs and non-qualified stock options are issued to executive officers and other key management personnel. The Company has reserved 7,734,601 shares of its common stock for awards that may be issued under the Equity and Incentive Award Plan.

The following table summarizes stock-based compensation costs for the three and nine months ended September 30, 2018 and 2017 (in thousands of dollars):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Deferred stock awards	$	1,070	$	1,070	$	3,211	$	3,211
Restricted stock awards	185		94		366		245
Restricted stock units	2,864		1,643		6,620		3,217
Non-qualified stock options	690		322		1,727		661
Equity-based compensation cost	$	4,809	$	3,129	$	11,924	$	7,334

(a) Deferred stock awards

Upon consummation of the IPO, the executive officers of the Company identified in the table below became eligible for retention payments, the first on January 1, 2018 and the second on January 1, 2019, in the bonus amounts set forth in the table below. On March 16, 2017, the compensation committee of the board of directors of the Company (the “Board of Directors”) approved, and each executive officer agreed, that in lieu of the executive officer’s cash retention payments, the executive officer was granted a deferred stock award under the Equity and Incentive Award Plan. Each executive officer’s deferred stock award provides that, subject to the executive officer remaining employed through the applicable vesting date and complying with the restrictive covenants imposed on him under his employment agreement with the Company, the executive officer will be entitled to receive payment of a stock bonus equal to the variable number of shares of the Company’s common stock having a fair market value on the payment date equal to the bonus amount set forth in the table below:

	Bonus Amounts
	First		Second
James C. Stewart	$	1,975,706	$	1,975,706
Gregory L. Powell	1,646,422		1,646,422
M. Paul DeBonis Jr.	658,569		658,569

The Company accounted for these deferred stock awards as liability-classified awards and recorded them at fair value based on the fixed monetary value on the date of grant. The Company recognized $8.6 million as a deferred compensation expense liability and contra-equity during the first quarter of 2017.

The first stock bonuses vested on January 1, 2018 and were settled for 177,872 shares, net of withholdings, based on the February 15, 2018 close price of $14.98. The second stock bonus will vest on January 1, 2019 and will be settled on February 15, 2019. For the three months ended September 30, 2018 and 2017, the Company recognized $1.1 million of non-cash stock compensation expense. For the nine months ended September 30, 2018 and 2017, the Company recognized $3.2 million of non-cash stock compensation expense into earnings, which is presented within selling, general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). As of September 30, 2018, total unamortized compensation cost related to unvested deferred stock awards was $1.1 million, which the Company expects to recognize over the remaining weighted-average period of 0.25 years.

(b) Restricted stock awards

For the three months ended September 30, 2018 and 2017, the Company recognized $0.2 million and $0.1 million, respectively, of non-cash stock compensation expense. For the nine months ended September 30, 2018 and 2017, the Company recognized $0.4 million and $0.2 million, respectively, of non-cash stock compensation expense into earnings, which is presented within selling, general and administrative expense in the unaudited condensed consolidated and statements of operations and comprehensive income (loss). As of September 30, 2018, total unamortized compensation cost related to unvested restricted stock awards was $0.9 million, which the Company expects to recognize over the remaining weighted-average period of 1.01 years.

Rollforward of restricted stock awards as of September 30, 2018 is as follows:

	Number of Restricted Stock Awards		Weighted average grant date fair value
Total non-vested at December 31, 2017	95,335		$	20.51
Shares issued	42,936		14.17
Shares vested	(6,315	)	14.49
Shares forfeited	—		—
Non-vested balance at September 30, 2018	131,956		$	18.73

(c) Restricted stock units

Restricted stock units are stock awards that vest over a one- to three-year service period. The compensation expense associated with these RSUs will be amortized into earnings on a straight-line basis over the vesting period. For the three months ended September 30, 2018 and 2017, the Company recognized $2.9 million and $1.6 million of non-cash stock compensation expense, respectively. For the nine months ended September 30, 2018 and 2017, the Company recognized $6.6 million and $3.2 million, respectively, of non-cash stock compensation expense into earnings, which is presented within selling, general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). As of September 30, 2018, total unamortized compensation cost related to unvested restricted stock units was $24.1 million, which the Company expects to recognize over the remaining weighted-average period of 2.11 years.

Rollforward of restricted stock units as of September 30, 2018 is as follows:

	Number of Restricted Stock Units		Weighted average grant date fair value
Total non-vested at December 31, 2017	1,099,620		$	14.62
Units issued	1,501,095		14.99
Units vested	(355,035	)	14.59
Actual units forfeited	(203,149	)	15.07
Non-vested balance at September 30, 2018	2,042,531		$	14.86

(d) Non-qualified stock options

For the three months ended September 30, 2018 and 2017, the company recognized $0.7 million and $0.3 million, respectively, of non-cash compensation expense into earnings. For the nine months ended September 30, 2018 and 2017, the Company recognized $1.7 million and $0.7 million, respectively, of non-cash compensation expense into earnings, which is presented within selling, general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). As of September 30, 2018, total unamortized compensation cost related to unvested stock options was $5.4 million, which the Company expects to recognize over the remaining weighted-average period of 2.10 years.

Rollforward of stock options as of September 30, 2018 is as follows:

	Number of Stock Options		Weighted average grant date fair value
Total outstanding at December 31, 2017	589,977		$	6.16
Options granted	647,768		7.28
Options exercised	—		—
Actual options forfeited	(18,728	)	6.68
Options expired	—		—
Total outstanding at June 30, 2018	1,219,017		$	6.75

There were 196,657 stock options vested and exercisable at September 30, 2018.

Assumptions used in calculating the fair value of the stock options granted during the year are summarized below:

	2018 Options Granted			2017 Options Granted
Valuation assumptions:
Expected dividend yield	0		%	0		%
Expected equity volatility	46.3		%	51.5		%
Expected term (years)	6			6
Risk-free interest rate	2.7		%	1.6		%
Weighted average:
Exercise price per stock option	$	15.31		$	19.00
Market price per share	$	15.31		$	14.49
Fair value per stock option	$	7.28		$	6.16

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Stockholders’ Equity

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Stockholders’ Equity

Stockholders’ Equity

(a) Vesting of Stock Awards

During the three and nine months ended September 30, 2018, 14,701 shares and 436,130 shares were issued, respectively, net of share settlements for payment of payroll taxes, upon the vesting of certain RSUs and deferred stock awards. Shares withheld during the period were immediately retired by the Company.

(b) Secondary Offering

On January 17, 2018, the Company’s Registration Statement on Form S-1 (File No. 333-222500) was declared effective by the SEC for an offering on behalf of Keane Investor, pursuant to which 15,320,015 shares were sold by the selling stockholder (including 1,998,262 shares sold pursuant to the exercise of the underwriters’ over-allotment option) at a price to the public of $18.25 per share. The Company did not sell any common stock in, and did not receive any of the proceeds from, the offering. Upon completion of the offering, the vesting of certain of the Company’s RSUs (as defined herein) on January 2018 and the Company’s stock repurchase, Keane Investor controlled 53.1% of the Company’s outstanding common stock as of September 30, 2018.

(c) Stock Repurchase

During the three and nine months ended September 30, 2018, the Company completed $29.3 million and $69.4 million of total share repurchases of its common stock at an average price of $12.18 and $13.78 per share, representing a total of 2,406,342 and 5,040,434 common shares of the Company, respectively. As of September 30, 2018, the Company had $70.6 million remaining for future share repurchases under its existing stock repurchase program. Of the total amount of shares repurchased, 1,248,440 shares were repurchased from White Deer Energy (as defined herein). For further details of this related-party transaction with White Deer Energy, see Note (18)Related Party Transactions.

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) in the equity section of the condensed consolidated balance sheets includes the following:

	(Thousands of Dollars)
	Foreign currency items			Interest rate contract		AOCI
December 31, 2017	$	(2,507	)	$	779	$	(1,728	)
Other comprehensive income (loss), before tax	(37		)	2,956		2,919
Income tax expense(1)	—			—		—
September 30, 2018	$	(2,544	)	$	3,735	$	1,191

⁽¹⁾  The deferred tax liability created by other comprehensive income was netted against the Company’s deferred tax asset, which was offset by a valuation allowance.

The following table summarizes reclassifications out of accumulated other comprehensive income (loss) during the three and nine months ended September 30, 2018 and 2017 and (in thousands of dollars):

										Affected line item in the unaudited condensed consolidated statements of operations and comprehensive income (loss)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Interest rate derivatives, hedging	$	163	$	—	$	473	$	(173	)	Interest expense
Foreign currency items	—		—		—		—			Other income
Total reclassifications	$	163	$	—	$	473	$	(173	)

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Earnings per Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Earnings per Share

Earnings per Share

Basic income or (loss) per share is based on the weighted average number of common shares outstanding during the period. Diluted income or (loss) per share includes additional common shares that would have been outstanding if potential common shares with a dilutive effect, such as stock awards from the Company’s Equity and Incentive Award Plan, had been issued. Anti-dilutive securities represent potentially dilutive securities which are excluded from the computation of diluted income or (loss) per share as their impact would be anti-dilutive.

A reconciliation of the numerators and denominators used for the basic and diluted net income (loss) per share computations is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Numerator:
Net income (loss)	$	30,779	$	4,065	$	53,203	$	(80,088	)
Denominator:
Basic weighted-average common shares outstanding(1)	108,825		111,509		110,706		104,496
Dilutive effect of restricted stock awards granted to Board of Directors	53		73		52		66
Dilutive effect of deferred stock award granted to named executive officers	—		—		—		—
Dilutive effect of RSUs granted under stock incentive plans	112		173		113		104
Diluted weighted-average common shares outstanding(2)	108,990		111,755		110,871		104,666

⁽¹⁾   The basic weighted-average common shares outstanding have been computed to give effect to the Organizational Transactions, including the limited liability company agreement of Keane Investor to, among other things, exchange all of the Company’s Existing Owners’ membership interests for the newly-created ownership interests.

⁽²⁾  As a result of the net loss incurred by the Company for the nine months ended September 30, 2017, the calculation of diluted net loss per share on the unaudited condensed consolidated statements of operations and comprehensive income (loss) gives no consideration to the potentially anti-dilutive securities shown in the above reconciliation, and as such is the same as basic net loss per share.

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Operating Leases

9 Months Ended

Sep. 30, 2018

Leases [Abstract]

Operating Leases

Operating Leases

The Company has certain operating leases related to its real estate, rail cars and light duty vehicles. Certain leases include escalation clauses for adjusting rental payments to reflect changes in price indices. There are no significant restrictions imposed on the Company by the leasing agreements with regard to asset dispositions or borrowing ability. Some lease arrangements include renewal and purchase options or escalation clauses. In addition, certain lease contracts include rent holidays, rent concessions and leasehold improvement incentives. Leasehold improvements made at the inception of a lease or during the lease term are amortized over the remaining period of 3 months to 4.5 years.

Rental expense associated with the Company’s operating leases was $3.4 million and $3.6 million for the three months ended September 30, 2018 and 2017, respectively. Rental expense associated with the Company’s operating leases was $9.8 million and $8.5 million for the nine months ended September 30, 2018 and 2017, respectively.

Sublease proceeds were nil and $0.1 million for the three months ended September 30, 2018 and 2017, respectively. Sublease proceeds were nil and $0.3 million for the nine months ended September 30, 2018 and 2017, respectively. All sublease proceeds related to the subleased properties of the Company’s Canadian operations. These sublease proceeds were recorded as a reduction of the Company’s Canadian operations’ exit costs liability.

Additionally, the Company has sale-leasebacks that expire in 2020. Future minimum lease payments include $2.4 million related to the sale-leasebacks.

Minimum lease commitments remaining under operating leases for the next five years are $38.6 million as listed below:

Year-end December 31,	(Thousands of Dollars)
2018	$	4,206
2019	15,450
2020	9,451
2021	5,158
2022	4,320
Total	$	38,585

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Income Taxes

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Keane Group Holdings, LLC was originally organized as a limited liability company and treated as a flow-through entity for federal and most state income tax purposes. As such, taxable income and any related tax credits were passed through to its members and included in their tax returns. As a result of the IPO and related Organizational Transactions, Keane Group, Inc. was formed as a corporation to hold all of the operational assets of Keane Group. Because Keane Group, Inc. is a taxable entity, the Company established a provision for deferred income taxes as of January 20, 2017. Accordingly, a provision for federal and state corporate income taxes has been made for the operations of Keane Group, Inc. from January 1, 2018 through September 30, 2018 in the unaudited condensed consolidated financial statements.

Deferred income taxes are provided to reflect the future tax consequences or benefits of differences between the tax basis of assets and liabilities and their reported amounts in the condensed consolidated balance sheets using enacted tax rates. Furthermore, as a result of the Company’s evaluation of both the positive and negative evidence, the Company determined it does not believe it is more likely than not that its deferred tax assets will be utilized in the foreseeable future and has recorded a valuation allowance. 

Included in the Company’s recording of its initial deferred taxes upon contribution to Keane Group, Inc. are deferred tax liabilities related to certain indefinite-lived intangible assets. The deferred tax liability related to these indefinite-lived intangible assets will only reverse at the time of ultimate sale or impairment. Due to the uncertain timing of this reversal, the temporary differences associated with indefinite-lived intangibles cannot be considered a source of future taxable income for purposes of determining a valuation allowance. As such, the deferred tax liability cannot be used to support an equal amount of the deferred tax asset. This is often referred to as a “naked credit.” The Company recognized a deferred tax liability of $1.9 million associated with this naked credit upon the IPO. This is presented within other noncurrent liabilities in the condensed consolidated balance sheets. This amount will increase as additional tax amortization is recognized, but will only decrease if the indefinite-lived intangibles are sold or impaired. Total deferred tax liability as of September 30, 2018 was $1.7 million, which was comprised of the naked credit and state tax deferred liabilities.

The Company’s effective tax rate on continuing operations for the nine months ended September 30, 2018 was 6.44%. The difference between the effective tax rate and the U.S. federal statutory rate is due to state taxes, change in valuation allowance and discrete tax effects related to secondary transaction costs and stock-based compensation benefits.

  Deferred taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities, given the provisions of enacted tax laws. Tax positions are evaluated for recognition using a more-likely-than-not threshold, and those tax positions requiring recognition are measured as the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. The Company’s policy is to record interest and penalties related to uncertain tax positions in income tax expense. At September 30, 2018, the Company did not have any accrued liabilities for uncertain tax positions and does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months.

As a result of market conditions and their corresponding impact on the Company’s business outlook, management determined that a valuation allowance was appropriate, as it is not more likely than not that the Company will not utilize its net deferred tax assets. The remaining tax impact not offset by a valuation allowance is related to tax amortization on the Company’s indefinite-lived intangible assets, state tax deferred liabilities, and secondary transaction costs and stock-based compensation benefits, which are treated discretely from the annualized effective tax rate for 2018.

On December 22, 2017, new tax reform legislation, commonly referred to as the Tax Cuts and Jobs Act was signed into law. The Company evaluated the provisions of the Tax Cuts and Jobs Act and determined only the reduced corporate tax rate from 35% to 21% would have an impact on its consolidated financial statements as of December 31, 2017. Accordingly, the Company recorded a provision to income taxes for its assessment of the tax impact of the Tax Cuts and Jobs Act on ending deferred tax assets and liabilities and the corresponding valuation allowance. The effects of other provisions of the Tax Cuts and Job Act are not expected to have an adverse impact on the Company’s consolidated financial statements. Management will continue to analyze the impacts of the Tax Cuts and Jobs Act on the Company and refine its estimates during 2018.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

As of September 30, 2018 and December 31, 2017, the Company had $3.8 million and $19.8 million of deposits on equipment, respectively. Outstanding purchase commitments on equipment were $22.9 million and $82.5 million, as of September 30, 2018 and December 31, 2017, respectively.

As of September 30, 2018 and December 31, 2017, the Company had committed $1.3 million and nil, respectively, to research and development with its equity-method investee, that is expected to generate economic benefits in 2019. As of September 30, 2018, future commitments associated with this research and development activity is anticipated to be approximately $3.1 million.

As of September 30, 2018 and December 31, 2017, the Company had issued letters of credit of $2.5 million and $2.0 million under the 2017 ABL Facility which secured performance obligations related to the Company’s capital lease with CIT Finance LLC and its general liability insurance.

In the normal course of operations, the Company enters into certain long-term raw material supply agreements for the supply of proppant to be used in hydraulic fracturing. As part of these agreements, the Company is subject to minimum tonnage purchase requirements and may pay penalties in the event of any shortfall.

Aggregate minimum commitments under long-term raw material supply contracts for the next five years as of September 30, 2018 are listed below:

	(Thousands of Dollars)
2018	$	7,324
2019	35,835
2020	32,475
2021	10,850
2022	—
	$	86,484

Litigation

From time to time, the Company is subject to legal and administrative proceedings, settlements, investigations, claims and actions, as is typical of the industry. These claims include, but are not limited to, contract claims, environmental claims, employment related claims, claims alleging injury or claims related to operational issues. The Company’s assessment of the likely outcome of litigation matters is based on its judgment of a number of factors, including experience with similar matters, past history, precedents, relevant financial information and other evidence and facts specific to the matter. In accordance with GAAP, the Company accrues for contingencies where the occurrence of a material loss is probable and can be reasonably estimated, based on the Company’s best estimate of the expected liability. The Company may increase or decrease its legal accruals in the future, on a matter-by-matter basis, to account for developments in such matters. Notwithstanding the uncertainty as to the final outcome and based upon the information currently available to it, the Company does not currently believe these matters in aggregate will have a material adverse effect on its financial position or results of operations.

The Company has been served with class and collective action claims alleging that the Company failed to pay a nationwide class of workers overtime in compliance with the Fair Labor Standards Act (“FLSA”) and state laws. On December 27, 2016, two former employees filed a complaint for a proposed collective action in United States District Court for the Southern District of Texas entitled Hickson and Villa v. Keane Group Holdings, LLC, et al., alleging certain field professionals were not properly classified under the FLSA and Pennsylvania law. In the first quarter of 2018, the parties agreed to settle the claims for $4.2 million. The Company has recognized a liability for the full settlement, which is recorded in accrued expenses on the condensed consolidated balance sheet as of September 30, 2018. The Company funded this settlement in the fourth quarter of 2018.

The Company is involved in a commercial dispute whereby a former customer has commenced an arbitration proceeding, captioned Halcon Operating Co., Inc. and Halcon Energy Properties, Inc. v. Keane Frac LP and Keane Frac GP, LLC, and on December 15, 2017, made a contested claim for contractual damages of approximately $4.3 million. The Company intends to vigorously dispute the merits of this claim and has asserted affirmative counterclaims for unpaid bills and other tort damages. Additionally, the Company has been served with a class or collective action claim alleging that the Company failed to pay a class of workers in Texas overtime in compliance with the FLSA and state laws. The Company intends to vigorously dispute the merits of these claims based on the Motor Carrier Act overtime exemption. The Company has recognized a liability of $2.8 million for these disputes which is recorded in accrued expenses on the condensed consolidated balance sheet as of September 30, 2018.

Environmental

The Company is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for protection of the environment. The Company cannot predict the future impact of such standards and requirements, which are subject to change and can have retroactive effectiveness. The Company continues to monitor the status of these laws and regulations. Currently, the Company has not been fined, cited or notified of any environmental violations that would have a material adverse effect upon its financial position, liquidity or capital resources. However, management does recognize that by the very nature of the Company’s business, material costs could be incurred in the near term to maintain compliance. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible regulation or liabilities, the unknown timing and extent of the corrective actions which may be required, the determination of the Company’s liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification.

Regulatory Audits

In 2017, the Company was notified by the Texas Comptroller of Public Accounts that it will conduct a routine audit of Keane Frac TX, LLC’s direct payment sales tax for the period from January 2014 through May 2017. The audit commenced in March 2018. The Company is currently unable to estimate the range of loss, if any, that may result from this matter.

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Related Party Transactions

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Cerberus Operations and Advisory Company, an affiliate of the Company’s principal equity holder, provides certain consulting services to the Company. The Company paid $0.1 million and $0.3 million during the three and nine months ended September 30, 2018 and $0.1 million during the three and nine months ended September 30, 2017.

In connection with the Company’s reorganization, the Company engaged in transactions with affiliates. See Note (1)Basis of Presentation and Nature of Operationsand Note (12) Stockholders’ Equity for a description of these transactions.

In connection with the Company’s research and development initiatives, the Company has engaged in transactions with its equity-method investee. See Note (17) Commitments and Contingencies for a description of these commitments. As of September 30, 2018, the Company has purchased $1.2 million of shares in its equity-method investee.

In connection with the Company’s acquisition of RockPile, the Company agreed to pay contingent consideration, which was settled in early April 2018. See Note (3)Acquisitions for further detail.

On January 17, 2018, the Company’s Registration Statement on Form S-1 (File No. 333-222500) was declared effective by the SEC for an offering on behalf of Keane Investor, pursuant to which 15,320,015 shares were sold by the selling stockholder (including 1,998,262 shares sold pursuant to the exercise of the underwriters’ over-allotment option) at a price to the public of $18.25 per share. The Company did not sell any common stock in, and did not receive any of the proceeds from, the offering. Upon completion of the offering, Keane Investor controlled 50.9% of the Company’s outstanding common stock. Upon completion of the offering, the vesting of certain of the Company’s RSUs (as defined herein) on January 2018 and the Company’s stock repurchase (as discussed herein), Keane Investor controls 53.1% of the Company’s outstanding common stock as of September 30, 2018. During the nine months ended September 30, 2018, the Company incurred $13.0 million of transaction costs on behalf of the selling stockholder, which were included under selling, general and administrative expenses within the unaudited condensed consolidated statements of operations and comprehensive loss. Transaction costs consist of the underwriters’ fees, other offering fees and expenses for professional services rendered specifically in connection with the offering.

On May 29, 2018, the Company repurchased 1,248,440 shares of its common stock from WDE RockPile Aggregate, LLC (“White Deer Energy”) for $16.02 per share or $20.0 million. At the time of the RockPile acquisition, the shares of the Company’s common stock that White Deer Energy acquired was valued at $15.00 per share. The Company recognized the entire transaction as treasury stock that was subsequently retired, whereby the RockPile acquisition value of the shares of $18.7 million was recorded against paid-in capital in excess of par value and the remaining $1.3 million was recorded against retained earnings on the unaudited condensed consolidated balance sheet.

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Business Segments

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Business Segments

Business Segments

Management operates the Company in two reporting segments: Completion Services and Other Services. Management evaluates the performance of these segments based on equipment utilization, revenue, segment gross profit and gross margin. All inter-segment transactions are eliminated in consolidation.

The following tables present financial information with respect to the Company’s segments. Corporate and Other represents costs not directly associated with an operating segment, such as interest expense, income taxes and corporate overhead. Corporate assets include cash, deferred financing costs, derivatives and entity-level machinery and equipment.

	(Thousands of Dollars)
		Three Months Ended September 30,						Nine Months Ended September 30,
		2018			2017			2018			2017
Operations by business segment
Revenue:
Completion Services		$	548,418		$	468,479		$	1,625,798		$	1,031,768
Other Services		10,490			8,823			24,659			8,823
Total revenue		$	558,908		$	477,302		$	1,650,457		$	1,040,591
Gross profit:
Completion Services		$	122,490		$	84,472		$	364,122		$	145,385
Other Services		(381		)	1,741			(1,557		)	1,741
Total gross profit		$	122,109		$	86,213		$	362,565		$	147,126
Operating income (loss):
Completion Services		$	56,771		$	42,362		$	186,731		$	49,807
Other Services		(1,221		)	1,055			(5,114		)	(1,894		)
Corporate and Other		(30,624		)	(32,302		)	(97,755		)	(78,881		)
Total operating income (loss)		$	24,926		$	11,115		$	83,862		$	(30,968	)
Depreciation and amortization:
Completion Services		$	64,579		$	41,542		$	174,376		$	96,674
Other Services		840			1,586			3,557			4,323
Corporate and Other		2,868			3,076			9,809			8,319
Total depreciation and amortization		$	68,287		$	46,204		$	187,742		$	109,316
(Gain) loss on disposal of assets
Completion Services		$	1,140		$	568		$	3,015		$	(1,096	)
Other Services		—			(900		)	—			(688		)
Corporate and Other		(27		)	634			2,154			1,647
Total (gain) loss on disposal of assets		$	1,113		$	302		$	5,169		$	(137	)
Exit Costs:
Corporate and Other		$	(1	)	$	677		$	(154	)	$	1,024
Total exit costs		$	(1	)	$	677		$	(154	)	$	1,024
Income tax provision:
Corporate and Other		$	(2,623	)	$	(797	)	$	(4,855	)	$	(1,862	)
Total income tax:		$	(2,623	)	$	(797	)	$	(4,855	)	$	(1,862	)

Net income (loss):
Completion Services	$	56,771		$	42,362		$	186,731		$	49,807
Other Services	(1,221		)	1,055			(5,114		)	(1,894		)
Corporate and Other	(24,771		)	(39,352		)	(128,414		)	(128,001		)
Total net income (loss)	$	30,779		$	4,065		$	53,203		$	(80,088	)
Capital expenditures(1):
Completion Services	$	89,904		$	48,314		$	233,665		$	100,865
Other Services	98			—			1,642			1,718
Corporate and Other	3,122			2,190			4,008			2,582
Total capital expenditures	$	93,124		$	50,504		$	239,315		$	105,165

⁽¹⁾  Excludes expenditures for leasehold improvements and acquisitions.

	(Thousands of Dollars)
	September 30, 2018		December 31, 2017
Total assets by segment:
Completion Services	$	948,643	$	863,419
Other Services	17,702		21,877
Corporate and Other	147,984		157,820
Total assets	$	1,114,329	$	1,043,116
Total assets by geography:
United States	$	1,112,875	$	1,041,596
Canada	1,454		1,520
Total assets	$	1,114,329	$	1,043,116
Goodwill by segment:
Completion Services	$	132,524	$	134,967
Total goodwill	$	132,524	$	134,967

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New Accounting Pronouncements

9 Months Ended

Sep. 30, 2018

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements

New Accounting Pronouncements

(a) Recently Adopted Accounting Standards

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition” and most industry-specific guidance. ASU 2014-09 sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity is required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. Additional disclosures are required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers,” which deferred the effective date of ASU 2014-09 for all entities by one year and is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2017. The Company adopted this standard as of January 1, 2018. The adoption of this standard did not have a material impact on the Company’s current revenue recognition processes or the Company’s unaudited condensed consolidated financial statements and did not require any retrospective adjustments to the unaudited condensed consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities,” which (i) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, (ii) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (iii) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and (iv) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. ASU 2016-01 is effective for annual periods beginning after December 15, 2017. The Company adopted the provisions of ASU 2016-01 effective January 1, 2018. The adoption of these standards did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

During 2016, FASB issued ASU 2016-08, “Principal versus Agent,” ASU 2016-10, “Licenses of Intellectual Property (IP) and Identification of Performance Obligations” and ASU 2016-12, “Narrow Scope Improvements and Practical Expedients”. During 2017, FASB issued ASC 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets”. All these ASUs are designed to address various issues raised by the constituents to the Transition Resource Group and help minimize diversity in practice in applying ASU 2014-09. The Company adopted these standards concurrently with the adoption of ASU 2014-09 as of January 1, 2018. The adoption of these standards did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16, “Intra-Entity Transfers of Asset Other Than Inventory,” which requires entities to recognize the tax consequences of intercompany asset transfers in the period in which the transfer takes place, with the exception of inventory transfers. ASU 2016-16 is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2017. Entities must adopt the standard using a modified retrospective approach with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The cumulative effect adjustments will include recognition of the income tax consequences of intra-entity transfers of assets, other than inventory, that occur before the adoption date. The Company adopted this standard as of January 1, 2018. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements, as the Company has minimal intra-entity transfers of qualifying assets.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805), Clarifying the Definition of a Business,” which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This update is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2017 and should be applied prospectively. The Company adopted this standard as of January 1, 2018. The adoption of this standard did not have an impact on the Company’s unaudited condensed consolidated financial statements.

In February 2018, the FASB issued ASU 2018-03, “Technical Corrections and Improvements of Financial Instruments - Overall,” to make targeted improvements that addressed certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The targeted improvements address the discontinuation of, adjustments to and transition guidance for equity securities without a readily determinable fair value, forward contracts and purchased options, presentation requirements for certain fair value option liabilities and the measurement of changes in fair value option liabilities denominated in a foreign currency. The Company adopted this standard as of July 1, 2018. The adoption of this standard did not have an impact on the Company’s unaudited condensed consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, “Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. This update is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2018. The Company early adopted this standard effective June 20, 2018. The adoption of this standard did not have an impact on the Company’s unaudited condensed consolidated financial statements, as the Company has only issued shares to employees or nonemployee directors and has previously recognized its nonemployee directors share-based payments in line with its recognition of share-based payments to employees, using the grant-date fair value of the equity instruments issued, amortized over the requisite service period.

(b) Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a purchase financed by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months, regardless of their classification. Leases with a term of 12 months or less may be accounted for similarly to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The Company anticipates the adoption of this standard will result in a significant increase in its assets and liabilities, as the Company has certain operating and real property lease arrangements for which it is the lessee. The Company is continuing to evaluate whether any of its arrangements would qualify the Company as a lessor; however, the Company currently anticipates it would only qualify as a lessor for real estate arrangements where it is the sublessor. The standard is effective for the Company beginning on January 1, 2019.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduces a new impairment model for financial instruments that is based on expected credit losses rather than incurred credit losses. The new impairment model applies to most financial assets, including trade accounts receivable and lease receivables. ASU 2016-13 is effective for annual periods beginning after December 15, 2019. The Company is currently in the process of evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows companies to reclassify from accumulated other comprehensive income (loss) to retained earnings, any stranded tax effects resulting from complying with the Tax Cuts and Jobs Act legislation passed in December 2017. ASU 2018-02 is effective for annual periods beginning after December 15, 2018, and the Company will implement the provisions of this ASU effective January 1, 2019. The Company does not expect the adoption of this standard to impact its consolidated financial statements, as due to the Company’s valuation allowance, there is no net tax effect stranded within accumulated other comprehensive income (loss).

In July 2018, the FASB issued ASU 2018-09, “Codification Improvements,” which made clarifications, correction of errors and minor improvements to ASC 220, “Income Statement - Reporting Comprehensive Income - Overall,” ASC 470-50, “Debt Modifications and Extinguishments,” ASC 480-10, “Distinguishing Liabilities from Equity - Overall,” ASC 718-740, “Compensation - Stock Compensation - Income Taxes,” ASC 805-740, “Business Combinations - Income Taxes,” ASC 815-10, “Derivatives and Hedging - Overall,” ASC 820-10, “Fair Value Measurement - Overall,” ASC 940-405, “Financial Services - Brokers and Dealers - Liabilities,” and ASC 962-325, “Plan Accounting - Defined Contribution to Pension Plans - Investments - Other.” The transition and effective dates of ASU 2018-09 vary for each amendment. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements, as it only has qualifying transactions that would be impacted by the amendments to ASC 718-740.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This standard removed, modified and added disclosure requirements from ASC 820. ASU 2018-13 is effective for annual periods beginning after December 15, 2019. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements, as this standard primarily addresses disclosure requirements for Level 3 fair value measurements. The Company does not currently have or anticipate having Level 3 fair value instruments.

In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” The amendments in this standard aligned the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 is effective for annual periods beginning after December 15, 2019. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements.

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

(a) Stock Repurchase Program

Since the beginning of the fourth quarter of 2018, Keane has completed a further $18.2 millionof share repurchases. Effective October 26, 2018, Keane’s Board of Directors authorized a reset of capacity on its existing stock repurchase program back to $100 million. Additionally, the program’s expiration date was extended to September 2019 from a previous expiration of February 2019.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Basis of accounting

The accompanying unaudited condensed consolidated financial statements were prepared using United States Generally Accepted Accounting Principles (“GAAP”) and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with the Company’s 2017 Annual Report on Form 10-K filed on March 1, 2018.

Use of estimates

The Company’s accounting policies are in accordance with GAAP. The preparation of financial statements in conformity with these accounting principles requires the Company to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and (2) the reported amounts of revenue and expenses during the reporting period. Ultimate results could differ from the Company’s estimates.

Business Combinations and Asset Acquisition

Business Combinations and Asset Acquisitions

Business combinations are accounted for using the acquisition method of accounting in accordance with the Accounting Standards Codification (“ASC”) 805, “Business Combinations”, as amended by Accounting Standards Update (“ASU”) 2017-01, “Business Combinations (Topic 805), Clarifying the Definition of a Business.” The purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values. Fair value of the acquired assets and liabilities is measured in accordance with the guidance of ASC 850, “Fair Value Measurements”, using discounted cash flows and other applicable valuation techniques. Any acquisition related costs incurred by the Company are expensed as incurred. Any excess purchase price over the fair value of the net identifiable assets acquired is recorded as goodwill if the definition of a business is met. Fair value of the acquired assets and liabilities is measured in accordance with the guidance of ASC 850 using discounted cash flows and other applicable valuation techniques. Operating results of an acquired business are included in our results of operations from the date of acquisition.

Asset acquisitions, as defined in ASU 2017-01, are measured based on their cost to the Company, including transaction costs. An asset acquisition’s cost or the consideration transferred by the Company is assumed to be equal to the fair value of the net assets acquired. If the consideration transferred is cash, measurement is based on the amount of cash the Company paid to the seller as well as transaction costs incurred. Consideration given in the form of nonmonetary assets, liabilities incurred or equity interests issued is measured based on either the cost to the Company or the fair value of the assets or net assets acquired, whichever is more clearly evident. The cost of an asset acquisition is allocated to the assets acquired based on their estimated relative fair values. Goodwill is not recognized in an asset acquisition.

Revenue Recognition

Revenue Recognition

The Company adopted ASU 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers, effective January 1, 2018, using the modified retrospective method. Changes were made to the relevant business processes and the related control activities, including information systems, in order to monitor and maintain appropriate controls over financial reporting. There were no significant changes to the Company’s internal control over financial reporting due to the Company’s adoption of ASU 2014-09.

Revenue from the Company’s Completion Services and Other Services segments are earned as services are rendered, which is generally on a per stage or fixed monthly rate for the Company’s Completions Services segment and on a per job basis for the Other Services segment. All revenue is recognized when a contract with a customer exists, the performance obligations under the contract have been satisfied over time, the amount to which the Company has the right to invoice has been determined and collectability of amounts subject to invoice is probable. Contract fulfillment costs, such as mobilization costs and shipping and handling costs, are expensed as incurred and are recorded in cost of services in the unaudited condensed consolidated statements of operations and comprehensive income (loss). To the extent fulfillment costs are considered separate performance obligations that are billable to the customer, the amounts billed are recorded as revenue in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The Company does not incur contract acquisition and origination costs. Taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from revenues in the unaudited condensed consolidated statements of operations and comprehensive income (loss) and net cash provided by operating activities in the unaudited condensed consolidated statements of cash flows.

The Company has elected the practical expedient to recognize revenue based upon the transactional value it has the right to invoice upon completion of each performance obligation per the contract terms, as the Company believes its right to consideration corresponds directly with the value transferred to the customer, and this expedient does not lend itself to the application of significant judgment. The Company has also elected the practical expedient to expense immediately mobilization costs, as the amortization period would always be less than one year. As a result of electing these practical expedients, there was no material impact on the Company’s current revenue recognition processes and no retrospective adjustments were necessary.

The Company’s obligations for refunds as well as the warranties and related obligations stated in its contracts with its customers are standard to the industry and are related to the correction of any defectiveness in the execution of its performance obligations.

Revenue from the Company’s Completion Services and Other Services segments are recognized as follows:

Completion Services

The Company provides hydraulic fracturing and wireline services pursuant to contractual arrangements, such as term contracts and pricing agreements. Revenue is recognized upon the completion of each performance obligation. The Company’s performance obligations under its Completion Services segment represent each stage frac’d or each stage perforated. Once a stage has been completed, a field ticket is created that includes charges for the service performed and the chemicals and proppant consumed during the course of the service. The field ticket may also include charges for the mobilization of the equipment to the location, any additional equipment used on the job and other miscellaneous items. The field ticket represents the amounts to which the Company has the right to invoice and to recognize as revenue.

Other Services

The Company provides cementing services pursuant to contractual arrangements, such as term contracts or on a spot market basis. Revenue is recognized upon the completion of each performance obligation, which for cementing services, represents the portion of the well cemented: surface casing, intermediate casing or production liner. The performance obligations are satisfied over time. Jobs for these services are typically short term in nature, with most jobs completed in a day. Once the well has been cemented, a field ticket is created that includes charges for the services performed and the consumables used during the course of service. The field ticket represents the amounts to which the Company has the right to invoice and to recognize as revenue.

Property and Equipment

Property and Equipment

Property and equipment, inclusive of equipment under capital lease, are generally stated at cost.

Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from 6 months to 40 years. Management bases the estimate of the useful lives and salvage values of property and equipment on expected utilization, technological change and effectiveness of maintenance programs. When components of an item of property and equipment are identifiable and have different useful lives, they are accounted for separately as major components of property and equipment. Equipment held under capital leases are generally amortized on a straight-line basis over the shorter of the estimated useful life of the underlying asset and the term of the lease.

Gains and losses on disposal of property and equipment are determined by comparing the proceeds from disposal with the carrying amount of property and equipment and are recognized net within operating costs and expenses in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

Major classifications of property and equipment and their respective useful lives are as follows:

Land	Indefinite life
Building and leasehold improvements	3 months – 40 years
Machinery and equipment	13 months – 10 years
Office furniture, fixtures and equipment	3 years – 5 years

Leasehold improvements are assigned a useful life equal to the term of the related lease.

In the first quarter of 2018, the Company reassessed the estimated useful lives of select machinery and equipment. The Company concluded that due to an increase in service intensity driven by a shift to more 24-hour work, higher stage volumes, larger stages and more proppant usage per stage, the estimated useful lives of these select machinery and equipment should be reduced by approximately 50%.

In accordance with ASC 250, “Accounting Changes and Error Corrections,” the change in the estimated useful lives of the Company’s property and equipment was accounted for as a change in accounting estimate, on a prospective basis, effective January 1, 2018.

As a result of a system upgrade to its fixed asset accounting module, in the third quarter of 2018, the Company changed its depreciation method from mid-month straight-line depreciation to days straight-line depreciation. The impact of this change in depreciation method to the Company’s unaudited condensed consolidated statement of operations and comprehensive income (loss) was immaterial.

Depreciation methods, useful lives and residual values are reviewed annually.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

The Company is exposed to certain risks relating to its ongoing business operations. The Company utilizes interest rate derivatives to manage interest rate risk associated with its floating-rate borrowings. The Company recognizes all derivative instruments as either assets or liabilities on the condensed consolidated balance sheets at their respective fair values. For derivatives designated in hedging relationships, changes in the fair value are either offset through earnings against the change in fair value of the hedged item attributable to the risk being hedged or recognized in accumulated other comprehensive income (loss) until the hedged item affects earnings.

The Company only enters into derivative contracts that it intends to designate as hedges for the variability of cash flows to be received or paid related to a recognized asset or liability (i.e. cash flow hedge). For all hedging relationships, the Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged and how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively. The Company also formally assesses, both at the inception of the hedging relationship and on an ongoing basis, whether the derivatives that are used in hedging relationships are highly effective in offsetting changes in cash flows of hedged transactions. For derivative instruments that are designated and qualify as part of a cash flow hedging relationship, the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

The Company discontinues hedge accounting prospectively, when it determines that the derivative is no longer highly effective in offsetting cash flows attributable to the hedged risk, the derivative expires or is sold, terminated, or exercised, the originally forecasted transaction is no longer probable of occurring, or if management decides to remove the designation of the cash flow hedge. The net derivative instrument gain or loss related to a discontinued cash flow hedge shall continue to be reported in accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the originally hedged transaction affects earnings, unless it is probable that the forecasted transaction will not occur by the end of the originally specified time period. When it is probable that the originally forecasted transaction will not occur by the end of the originally specified time period, the Company recognizes immediately, in earnings, any gains and losses related to the hedging relationship that were recognized in accumulated other comprehensive income (loss). In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the Company continues to carry the derivative at its fair value on the condensed consolidated balance sheet and recognizes any subsequent changes in the derivative’s fair value in earnings.

Stock-based compensation

Stock-based compensation

The Company recognizes compensation expense for restricted stock awards, restricted stock units to be settled in common stock (“RSUs”) and non-qualified stock options (“stock options”) based on the fair value of the awards at the date of grant. The fair value of restricted stock awards and RSUs is determined based on the number of shares or RSUs granted and the closing price of the Company’s common stock on the date of grant. The fair value of stock options is determined by applying the Black-Scholes model to the grant date market value of the underlying common shares of the Company. The Company has elected to recognize forfeiture credits for these awards as they are incurred, as this method better reflects actual stock-based compensation expense.

Compensation expense from time-based restricted stock awards, RSUs and stock options is amortized on a straight-line basis over the requisite service period, which is generally the vesting period.

Deferred compensation expense associated with liability-based awards, such as deferred stock awards that are expected to settle with the issuance of a variable number of shares based on a fixed monetary amount at inception, is recognized at the fixed monetary amount at inception and is amortized on a straight-line basis over the requisite service period, which is generally the vesting period. Upon settlement, the holders receive an amount of common stock equal to the fixed monetary amount at inception, based on the closing price of the Company’s stock on the date of settlement.

Tax deductions on the stock-based compensation awards are not realized until the awards are vested or exercised. The Company recognizes deferred tax assets for stock-based compensation awards that will result in future deductions on its income tax returns, based on the amount of stock-based compensation recognized at the statutory tax rate in the jurisdiction in which the Company will receive a tax deduction. If the tax deduction for a stock-based award is greater than the cumulative GAAP compensation expense for that award upon realization of a tax deduction, an excess tax benefit will be recognized and recorded as a favorable impact on the effective tax rate. If the tax deduction for an award is less than the cumulative GAAP compensation expense for that award upon realization of the tax deduction, a tax shortfall will be recognized and recorded as an unfavorable impact on the effective tax rate. Any excess tax benefits or shortfalls will be recorded discretely in the period in which they occur. The cash flows resulting from any excess tax benefit will be classified as financing cash flows in the unaudited condensed consolidated statements of cash flows.

The Company provides its employees with the election to settle the income tax obligations arising from the vesting of their restricted or deferred stock-based compensation awards by the Company withholding shares equal to such income tax obligations. Shares acquired from employees in connection with the settlement of the employees’ income tax obligations are accounted for as treasury shares that are subsequently retired.

Restricted stock awards and RSUs are not considered issued and outstanding for purposes of earnings per share calculations until vested.

Taxes

Taxes

Upon consummation of the Organizational Transactions and the IPO, the Company became subject to U.S. federal income taxes. A provision for U.S. federal income tax has been provided in the unaudited condensed consolidated financial statements for the nine months ended September 30, 2018 and 2017.

In addition, the Company has a Canadian subsidiary, which is treated as a corporation for Canadian federal and provincial tax purposes. For Canadian tax purposes, the Company is subject to foreign income tax.

The Company is responsible for certain state income and franchise taxes, which include Colorado, Montana, New Mexico, North Dakota, Oklahoma, Pennsylvania, Texas and West Virginia.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and tax carryforwards, if applicable. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date.

Equity-method investments

Equity-method investments

Investments in non-controlled entities over which the Company has the ability to exercise significant influence over the non-controlled entities’ operating and financial policies are accounted for under the equity-method. Under the equity-method, the investment in the non-controlled entity is initially recognized at cost and subsequently adjusted to reflect the Company’s share of the entity’s income (losses), any dividends received by the Company and any other-than-temporary impairments.Investments accounted for under the equity-method are presented within other noncurrent assets in the condensed consolidated balance sheets.

New Accounting Pronouncements

New Accounting Pronouncements

(a) Recently Adopted Accounting Standards

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition” and most industry-specific guidance. ASU 2014-09 sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity is required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. Additional disclosures are required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers,” which deferred the effective date of ASU 2014-09 for all entities by one year and is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2017. The Company adopted this standard as of January 1, 2018. The adoption of this standard did not have a material impact on the Company’s current revenue recognition processes or the Company’s unaudited condensed consolidated financial statements and did not require any retrospective adjustments to the unaudited condensed consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities,” which (i) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, (ii) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (iii) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and (iv) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. ASU 2016-01 is effective for annual periods beginning after December 15, 2017. The Company adopted the provisions of ASU 2016-01 effective January 1, 2018. The adoption of these standards did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

During 2016, FASB issued ASU 2016-08, “Principal versus Agent,” ASU 2016-10, “Licenses of Intellectual Property (IP) and Identification of Performance Obligations” and ASU 2016-12, “Narrow Scope Improvements and Practical Expedients”. During 2017, FASB issued ASC 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets”. All these ASUs are designed to address various issues raised by the constituents to the Transition Resource Group and help minimize diversity in practice in applying ASU 2014-09. The Company adopted these standards concurrently with the adoption of ASU 2014-09 as of January 1, 2018. The adoption of these standards did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16, “Intra-Entity Transfers of Asset Other Than Inventory,” which requires entities to recognize the tax consequences of intercompany asset transfers in the period in which the transfer takes place, with the exception of inventory transfers. ASU 2016-16 is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2017. Entities must adopt the standard using a modified retrospective approach with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The cumulative effect adjustments will include recognition of the income tax consequences of intra-entity transfers of assets, other than inventory, that occur before the adoption date. The Company adopted this standard as of January 1, 2018. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements, as the Company has minimal intra-entity transfers of qualifying assets.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805), Clarifying the Definition of a Business,” which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This update is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2017 and should be applied prospectively. The Company adopted this standard as of January 1, 2018. The adoption of this standard did not have an impact on the Company’s unaudited condensed consolidated financial statements.

In February 2018, the FASB issued ASU 2018-03, “Technical Corrections and Improvements of Financial Instruments - Overall,” to make targeted improvements that addressed certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The targeted improvements address the discontinuation of, adjustments to and transition guidance for equity securities without a readily determinable fair value, forward contracts and purchased options, presentation requirements for certain fair value option liabilities and the measurement of changes in fair value option liabilities denominated in a foreign currency. The Company adopted this standard as of July 1, 2018. The adoption of this standard did not have an impact on the Company’s unaudited condensed consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, “Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. This update is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2018. The Company early adopted this standard effective June 20, 2018. The adoption of this standard did not have an impact on the Company’s unaudited condensed consolidated financial statements, as the Company has only issued shares to employees or nonemployee directors and has previously recognized its nonemployee directors share-based payments in line with its recognition of share-based payments to employees, using the grant-date fair value of the equity instruments issued, amortized over the requisite service period.

(b) Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a purchase financed by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months, regardless of their classification. Leases with a term of 12 months or less may be accounted for similarly to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The Company anticipates the adoption of this standard will result in a significant increase in its assets and liabilities, as the Company has certain operating and real property lease arrangements for which it is the lessee. The Company is continuing to evaluate whether any of its arrangements would qualify the Company as a lessor; however, the Company currently anticipates it would only qualify as a lessor for real estate arrangements where it is the sublessor. The standard is effective for the Company beginning on January 1, 2019.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduces a new impairment model for financial instruments that is based on expected credit losses rather than incurred credit losses. The new impairment model applies to most financial assets, including trade accounts receivable and lease receivables. ASU 2016-13 is effective for annual periods beginning after December 15, 2019. The Company is currently in the process of evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows companies to reclassify from accumulated other comprehensive income (loss) to retained earnings, any stranded tax effects resulting from complying with the Tax Cuts and Jobs Act legislation passed in December 2017. ASU 2018-02 is effective for annual periods beginning after December 15, 2018, and the Company will implement the provisions of this ASU effective January 1, 2019. The Company does not expect the adoption of this standard to impact its consolidated financial statements, as due to the Company’s valuation allowance, there is no net tax effect stranded within accumulated other comprehensive income (loss).

In July 2018, the FASB issued ASU 2018-09, “Codification Improvements,” which made clarifications, correction of errors and minor improvements to ASC 220, “Income Statement - Reporting Comprehensive Income - Overall,” ASC 470-50, “Debt Modifications and Extinguishments,” ASC 480-10, “Distinguishing Liabilities from Equity - Overall,” ASC 718-740, “Compensation - Stock Compensation - Income Taxes,” ASC 805-740, “Business Combinations - Income Taxes,” ASC 815-10, “Derivatives and Hedging - Overall,” ASC 820-10, “Fair Value Measurement - Overall,” ASC 940-405, “Financial Services - Brokers and Dealers - Liabilities,” and ASC 962-325, “Plan Accounting - Defined Contribution to Pension Plans - Investments - Other.” The transition and effective dates of ASU 2018-09 vary for each amendment. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements, as it only has qualifying transactions that would be impacted by the amendments to ASC 718-740.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This standard removed, modified and added disclosure requirements from ASC 820. ASU 2018-13 is effective for annual periods beginning after December 15, 2019. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements, as this standard primarily addresses disclosure requirements for Level 3 fair value measurements. The Company does not currently have or anticipate having Level 3 fair value instruments.

In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” The amendments in this standard aligned the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 is effective for annual periods beginning after December 15, 2019. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial statements.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Disaggregated revenue

Revenue activities during the three and nine months ended September 30, 2018 and 2017 were as follows:

	(Thousands of Dollars)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Revenue by segment:
Completion Services	$	548,418	$	468,479	$	1,625,798	$	1,031,768
Other Services	10,490		8,823		24,659		8,823
Total revenue	$	558,908	$	477,302	$	1,650,457	$	1,040,591
Revenue by geography:
East	$	192,977	$	155,698	$	622,496	$	396,983
North	71,263		100,939		199,242		166,892
South	294,668		220,665		828,719		476,716
Total revenue	$	558,908	$	477,302	$	1,650,457	$	1,040,591

Schedule of property and equipment

Major classifications of property and equipment and their respective useful lives are as follows:

Land	Indefinite life
Building and leasehold improvements	3 months – 40 years
Machinery and equipment	13 months – 10 years
Office furniture, fixtures and equipment	3 years – 5 years

Property and Equipment, net consisted of the following at September 30, 2018 and December 31, 2017:

	(Thousands of Dollars)
	September 30, 2018			December 31, 2017
Land	$	4,771		$	5,186
Building and leasehold improvements	32,386			30,322
Office furniture, fixtures and equipment	7,515			6,338
Machinery and equipment	1,010,140			773,516
	1,054,812			815,362
Less accumulated depreciation	(510,311		)	(372,617		)
Construction in progress	5,772			25,255
Total property and equipment, net	$	550,273		$	468,000

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Schedule of fair value of consideration transferred and allocation of purchase price

The following tables summarize the fair value of the consideration transferred for the acquisition of RockPile and the preliminary allocation of the purchase price to the fair values of the assets acquired, liabilities assumed and equity consideration at the RockPile Acquisition Date:

	(Thousands of Dollars)
Total Purchase Consideration:	Preliminary Purchase Price Allocation			Adjustments			Purchase Price Allocation as of September 30, 2018
Cash consideration	$	123,293		$	(6,717	)	$	116,576
Equity consideration	130,290			—			130,290
Contingent consideration	11,962			—			11,962
Less: Cash acquired	(20,379		)	20,379			—
Total purchase consideration, less cash acquired	$	245,166		$	13,662		$	258,828
Trade and other accounts receivable	$	57,117		$	1,484		$	58,601
Inventories, net	2,853			138			2,991
Prepaid and other current assets	13,630			(717		)	12,913
Property and equipment, net	157,654			8,653			166,307
Intangible assets	20,967			(1,267		)	19,700
Notes receivable	250			(250		)	—
Other noncurrent assets	363			(57		)	306
Total identifiable assets acquired	252,834			7,984			260,818
Accounts payable	(38,999		)	16,180			(22,819		)
Accrued expenses	(22,161		)	(13,315		)	(35,476		)
Deferred revenue	(23,053		)	698			(22,355		)
Other non-current liabilities	(827		)	(2,412		)	(3,239		)
Total liabilities assumed	(85,040		)	1,151			(83,889		)
Goodwill	77,372			4,527			81,899
Total purchase price consideration	$	245,166		$	13,662		$	258,828

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Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of finite-lived intangible assets

The intangible assets balance in the Company’s condensed consolidated balance sheets represents the fair value, net of amortization, as applicable, related to the following:

	(Thousands of Dollars)
	September 30, 2018
	Weighted Average Remaining Amortization Period (Years)	Gross Carrying Amounts		Accumulated Amortization			Net Carrying Amount
Customer contracts	8.5	$	68,600	$	(27,356	)	$	41,244
Non-compete agreements	7.5	700		(350		)	350
Trade name	Indefinite life	10,200		—			10,200
Technology	2.1	2,087		(628		)	1,459
Total		$	81,587	$	(28,334	)	$	53,253

	(Thousands of Dollars)
	December 31, 2017
	Weighted Average Remaining Amortization Period (Years)	Gross Carrying Amounts		Accumulated Amortization			Net Carrying Amount
Customer contracts	9.1	$	68,600	$	(23,049	)	$	45,551
Non-compete agreements	8.1	750		(360		)	390
Trade name	Indefinite life	10,200		—			10,200
Technology	2.1	3,023		(1,884		)	1,139
Total		$	82,573	$	(25,293	)	$	57,280

Schedule of indefinite-lived intangible assets

The intangible assets balance in the Company’s condensed consolidated balance sheets represents the fair value, net of amortization, as applicable, related to the following:

	(Thousands of Dollars)
	September 30, 2018
	Weighted Average Remaining Amortization Period (Years)	Gross Carrying Amounts		Accumulated Amortization			Net Carrying Amount
Customer contracts	8.5	$	68,600	$	(27,356	)	$	41,244
Non-compete agreements	7.5	700		(350		)	350
Trade name	Indefinite life	10,200		—			10,200
Technology	2.1	2,087		(628		)	1,459
Total		$	81,587	$	(28,334	)	$	53,253

	(Thousands of Dollars)
	December 31, 2017
	Weighted Average Remaining Amortization Period (Years)	Gross Carrying Amounts		Accumulated Amortization			Net Carrying Amount
Customer contracts	9.1	$	68,600	$	(23,049	)	$	45,551
Non-compete agreements	8.1	750		(360		)	390
Trade name	Indefinite life	10,200		—			10,200
Technology	2.1	3,023		(1,884		)	1,139
Total		$	82,573	$	(25,293	)	$	57,280

Schedule of finite-lived intangible assets amortization expense

Amortization for the intangible assets excluding trade name of $10.2 million with an indefinite useful life and in process software, over the next five years, is as follows:

Year-end December 31,	(Thousands of Dollars)
2018	$	1,524
2019	5,399
2020	5,275
2021	4,994
2022	4,972

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Inventories, net (Tables)

9 Months Ended

Sep. 30, 2018

Inventory Disclosure [Abstract]

Schedule of inventories

Inventories, net, consisted of the following at September 30, 2018 and December 31, 2017:

	(Thousands of Dollars)
	September 30, 2018		December 31, 2017
Sand, including freight	$	10,620	$	11,551
Chemicals and consumables	7,109		7,940
Materials and supplies	11,043		13,946
Total inventory, net	$	28,772	$	33,437

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Property and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Major classifications of property and equipment and their respective useful lives are as follows:

Land	Indefinite life
Building and leasehold improvements	3 months – 40 years
Machinery and equipment	13 months – 10 years
Office furniture, fixtures and equipment	3 years – 5 years

Property and Equipment, net consisted of the following at September 30, 2018 and December 31, 2017:

	(Thousands of Dollars)
	September 30, 2018			December 31, 2017
Land	$	4,771		$	5,186
Building and leasehold improvements	32,386			30,322
Office furniture, fixtures and equipment	7,515			6,338
Machinery and equipment	1,010,140			773,516
	1,054,812			815,362
Less accumulated depreciation	(510,311		)	(372,617		)
Construction in progress	5,772			25,255
Total property and equipment, net	$	550,273		$	468,000

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of long-term debt

Long-term debt as of September 30, 2018 and December 31, 2017 consisted of the following:

	(Thousands of Dollars)
	September 30, 2018			December 31, 2017
2018 Term Loan Facility	$	349,125		$	—
2017 Term Loan Facility	—			283,202
Capital leases	10,706			7,918
Less: Unamortized debt discount and debt issuance costs	(8,105		)	(8,173		)
Total debt, net of unamortized debt discount and debt issuance costs	351,726			282,947
Less: Current portion	(6,289		)	(4,436		)
Long-term debt, net of unamortized debt discount and debt issuance costs, including capital leases	$	345,437		$	278,511

Schedule of line of credit facilities

Below is a summary of the Company’s credit facilities outstanding as of September 30, 2018:

	(Thousands of Dollars)
	2017 ABL Facility(1)		2018 Term Loan Facility(1)
Original facility size	$	300,000	$	350,000
Outstanding balance	—		350,000
Letters of credit issued	2,500		—
Available borrowing base commitment	207,887		n/a
Interest Rate(2)	LIBOR or base rate plus applicable margin		LIBOR or base rate plus applicable margin
Maturity Date	December 22, 2022		May 25, 2025

⁽¹⁾ For detailed discussion on the Company’s credit facilities, see “Liquidity and Capital Resources” under Part I. “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

⁽²⁾ London Interbank Offer Rate (“LIBOR”) is subject to a 1.00% floor.

Schedule of maturities of long-term debt

Maturities of the 2018 Term Loan Facility for the next five years are presented below:

Year-end December 31,	(Thousands of Dollars)
2018	$	875
2019	3,500
2020	3,500
2021	3,500
2022	3,500
	$	14,875

Schedule of future minimum lease payments for capital leases

Future annual capital lease commitments, including the interest component and exclusive of deferred financing costs, as of September 30, 2018 for the next five years are listed below:

Year-end December 31,	(Thousands of Dollars)
2018	$	1,314
2019	5,191
2020	2,356
2021	2,134
2022	678
Subtotal	11,673
Less amount representing interest	(964)
	$	10,709

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Derivatives (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of offsetting assets

The following table presents the fair value of the Company’s derivative instruments on a gross and net basis as of the periods shown below:

	(Thousands of Dollars)
	Derivatives Designated  As Hedging Instruments			Derivatives Not Designated  As Hedging Instruments		Gross Amounts of Recognized Assets and Liabilities			Gross Amounts Offset in the Balance Sheet(1)		Net Amounts Presented in the Balance Sheet(2)
As of September 30, 2018:
Other noncurrent asset	$	3,888		$	—	$	3,888		$	—	$	3,888
Other noncurrent liability	(24		)	—		(24		)	—		(24		)
As of December 31, 2017:
Other noncurrent asset	$	324		$	—	$	324		$	—	$	324
Other noncurrent liability	(254		)	—		(254		)	—		(254		)

⁽¹⁾  With all of the Company’s financial trading counterparties, agreements are in place that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements.

⁽²⁾  There are no amounts subject to an enforceable master netting arrangement that are not netted in these amounts. There are no amounts of related financial collateral received or pledged.

Schedule of offsetting liabilities

The following table presents the fair value of the Company’s derivative instruments on a gross and net basis as of the periods shown below:

	(Thousands of Dollars)
	Derivatives Designated  As Hedging Instruments			Derivatives Not Designated  As Hedging Instruments		Gross Amounts of Recognized Assets and Liabilities			Gross Amounts Offset in the Balance Sheet(1)		Net Amounts Presented in the Balance Sheet(2)
As of September 30, 2018:
Other noncurrent asset	$	3,888		$	—	$	3,888		$	—	$	3,888
Other noncurrent liability	(24		)	—		(24		)	—		(24		)
As of December 31, 2017:
Other noncurrent asset	$	324		$	—	$	324		$	—	$	324
Other noncurrent liability	(254		)	—		(254		)	—		(254		)

⁽¹⁾  With all of the Company’s financial trading counterparties, agreements are in place that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements.

⁽²⁾  There are no amounts subject to an enforceable master netting arrangement that are not netted in these amounts. There are no amounts of related financial collateral received or pledged.

Schedule of cash flow hedges included in AOCI

The following table presents gains and losses for the Company’s interest rate derivatives designated as cash flow hedges (in thousands of dollars):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2018		2017			2018		2017			Location
Amount of gain (loss) recognized in other comprehensive income on derivative	$	1,119	$	(178	)	$	3,429	$	(167	)	OCI
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) (“AOCI”) into earnings	163		—			473		(73		)	Interest Expense
Amount of loss reclassified from AOCI into earnings as a result of originally forecasted transaction becoming probable of not occurring	—		—			—		(100		)	Interest Expense

Schedule of gains and losses for interest rate derivatives

The following table presents gains and losses for the Company’s interest rate derivatives not designated in a hedge relationship under ASC 815, “Derivative Financial Instruments,” (in thousands of dollars):

		Three months ended September 30,					Nine Months Ended September 30,
Description	Location	2018		2017			2018		2017
Loss on interest contracts	Interest expense	$	—	$	(29	)	$	—	$	(367	)

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Fair Value Measurements and Financial Information (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Schedule of fair value of assets and liabilities measured on recurring basis

The following tables present the placement in the fair value hierarchy of assets and liabilities that were measured at fair value on a recurring basis at September 30, 2018 and December 31, 2017 (in thousands of dollars):

				Fair value measurements at reporting date using
	September 30, 2018			Level 1		Level 2			Level 3
Assets:
Interest rate derivatives	$	3,888		$	—	$	3,888		$	—
Liabilities:
Interest rate derivatives	(24		)	—		(24		)	—

				Fair value measurements at reporting date using
	December 31, 2017			Level 1		Level 2			Level 3
Assets:
Interest rate derivatives	$	70		$	—	$	70		$	—
Liabilities:
Aggregate CVR Payment	(6,665		)	—		(6,665		)	—

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of equity-based compensation costs

The following table summarizes stock-based compensation costs for the three and nine months ended September 30, 2018 and 2017 (in thousands of dollars):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Deferred stock awards	$	1,070	$	1,070	$	3,211	$	3,211
Restricted stock awards	185		94		366		245
Restricted stock units	2,864		1,643		6,620		3,217
Non-qualified stock options	690		322		1,727		661
Equity-based compensation cost	$	4,809	$	3,129	$	11,924	$	7,334

Schedule of compensation award by executive officer

Upon consummation of the IPO, the executive officers of the Company identified in the table below became eligible for retention payments, the first on January 1, 2018 and the second on January 1, 2019, in the bonus amounts set forth in the table below. On March 16, 2017, the compensation committee of the board of directors of the Company (the “Board of Directors”) approved, and each executive officer agreed, that in lieu of the executive officer’s cash retention payments, the executive officer was granted a deferred stock award under the Equity and Incentive Award Plan. Each executive officer’s deferred stock award provides that, subject to the executive officer remaining employed through the applicable vesting date and complying with the restrictive covenants imposed on him under his employment agreement with the Company, the executive officer will be entitled to receive payment of a stock bonus equal to the variable number of shares of the Company’s common stock having a fair market value on the payment date equal to the bonus amount set forth in the table below:

	Bonus Amounts
	First		Second
James C. Stewart	$	1,975,706	$	1,975,706
Gregory L. Powell	1,646,422		1,646,422
M. Paul DeBonis Jr.	658,569		658,569

Rollforward of restricted stock awards

Rollforward of restricted stock awards as of September 30, 2018 is as follows:

	Number of Restricted Stock Awards		Weighted average grant date fair value
Total non-vested at December 31, 2017	95,335		$	20.51
Shares issued	42,936		14.17
Shares vested	(6,315	)	14.49
Shares forfeited	—		—
Non-vested balance at September 30, 2018	131,956		$	18.73

Rollforward of restricted stock units

Rollforward of restricted stock units as of September 30, 2018 is as follows:

	Number of Restricted Stock Units		Weighted average grant date fair value
Total non-vested at December 31, 2017	1,099,620		$	14.62
Units issued	1,501,095		14.99
Units vested	(355,035	)	14.59
Actual units forfeited	(203,149	)	15.07
Non-vested balance at September 30, 2018	2,042,531		$	14.86

Rollforward of stock options

Rollforward of stock options as of September 30, 2018 is as follows:

	Number of Stock Options		Weighted average grant date fair value
Total outstanding at December 31, 2017	589,977		$	6.16
Options granted	647,768		7.28
Options exercised	—		—
Actual options forfeited	(18,728	)	6.68
Options expired	—		—
Total outstanding at June 30, 2018	1,219,017		$	6.75

Assumption used in calculation of fair value of stock option granted

Assumptions used in calculating the fair value of the stock options granted during the year are summarized below:

	2018 Options Granted			2017 Options Granted
Valuation assumptions:
Expected dividend yield	0		%	0		%
Expected equity volatility	46.3		%	51.5		%
Expected term (years)	6			6
Risk-free interest rate	2.7		%	1.6		%
Weighted average:
Exercise price per stock option	$	15.31		$	19.00
Market price per share	$	15.31		$	14.49
Fair value per stock option	$	7.28		$	6.16

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Schedule of AOCI

Accumulated other comprehensive income (loss) in the equity section of the condensed consolidated balance sheets includes the following:

	(Thousands of Dollars)
	Foreign currency items			Interest rate contract		AOCI
December 31, 2017	$	(2,507	)	$	779	$	(1,728	)
Other comprehensive income (loss), before tax	(37		)	2,956		2,919
Income tax expense(1)	—			—		—
September 30, 2018	$	(2,544	)	$	3,735	$	1,191

⁽¹⁾  The deferred tax liability created by other comprehensive income was netted against the Company’s deferred tax asset, which was offset by a valuation allowance.

Reclassification out of AOCI

The following table summarizes reclassifications out of accumulated other comprehensive income (loss) during the three and nine months ended September 30, 2018 and 2017 and (in thousands of dollars):

										Affected line item in the unaudited condensed consolidated statements of operations and comprehensive income (loss)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Interest rate derivatives, hedging	$	163	$	—	$	473	$	(173	)	Interest expense
Foreign currency items	—		—		—		—			Other income
Total reclassifications	$	163	$	—	$	473	$	(173	)

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Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule of earnings per share

A reconciliation of the numerators and denominators used for the basic and diluted net income (loss) per share computations is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Numerator:
Net income (loss)	$	30,779	$	4,065	$	53,203	$	(80,088	)
Denominator:
Basic weighted-average common shares outstanding(1)	108,825		111,509		110,706		104,496
Dilutive effect of restricted stock awards granted to Board of Directors	53		73		52		66
Dilutive effect of deferred stock award granted to named executive officers	—		—		—		—
Dilutive effect of RSUs granted under stock incentive plans	112		173		113		104
Diluted weighted-average common shares outstanding(2)	108,990		111,755		110,871		104,666

⁽¹⁾   The basic weighted-average common shares outstanding have been computed to give effect to the Organizational Transactions, including the limited liability company agreement of Keane Investor to, among other things, exchange all of the Company’s Existing Owners’ membership interests for the newly-created ownership interests.

⁽²⁾  As a result of the net loss incurred by the Company for the nine months ended September 30, 2017, the calculation of diluted net loss per share on the unaudited condensed consolidated statements of operations and comprehensive income (loss) gives no consideration to the potentially anti-dilutive securities shown in the above reconciliation, and as such is the same as basic net loss per share.

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Operating Leases (Tables)

9 Months Ended

Sep. 30, 2018

Leases [Abstract]

Schedule of future minimum lease commitments

Minimum lease commitments remaining under operating leases for the next five years are $38.6 million as listed below:

Year-end December 31,	(Thousands of Dollars)
2018	$	4,206
2019	15,450
2020	9,451
2021	5,158
2022	4,320
Total	$	38,585

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of aggregate minimum commitments

Aggregate minimum commitments under long-term raw material supply contracts for the next five years as of September 30, 2018 are listed below:

	(Thousands of Dollars)
2018	$	7,324
2019	35,835
2020	32,475
2021	10,850
2022	—
	$	86,484

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Business Segments (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Schedule of segment reporting information by segment

The following tables present financial information with respect to the Company’s segments. Corporate and Other represents costs not directly associated with an operating segment, such as interest expense, income taxes and corporate overhead. Corporate assets include cash, deferred financing costs, derivatives and entity-level machinery and equipment.

	(Thousands of Dollars)
		Three Months Ended September 30,						Nine Months Ended September 30,
		2018			2017			2018			2017
Operations by business segment
Revenue:
Completion Services		$	548,418		$	468,479		$	1,625,798		$	1,031,768
Other Services		10,490			8,823			24,659			8,823
Total revenue		$	558,908		$	477,302		$	1,650,457		$	1,040,591
Gross profit:
Completion Services		$	122,490		$	84,472		$	364,122		$	145,385
Other Services		(381		)	1,741			(1,557		)	1,741
Total gross profit		$	122,109		$	86,213		$	362,565		$	147,126
Operating income (loss):
Completion Services		$	56,771		$	42,362		$	186,731		$	49,807
Other Services		(1,221		)	1,055			(5,114		)	(1,894		)
Corporate and Other		(30,624		)	(32,302		)	(97,755		)	(78,881		)
Total operating income (loss)		$	24,926		$	11,115		$	83,862		$	(30,968	)
Depreciation and amortization:
Completion Services		$	64,579		$	41,542		$	174,376		$	96,674
Other Services		840			1,586			3,557			4,323
Corporate and Other		2,868			3,076			9,809			8,319
Total depreciation and amortization		$	68,287		$	46,204		$	187,742		$	109,316
(Gain) loss on disposal of assets
Completion Services		$	1,140		$	568		$	3,015		$	(1,096	)
Other Services		—			(900		)	—			(688		)
Corporate and Other		(27		)	634			2,154			1,647
Total (gain) loss on disposal of assets		$	1,113		$	302		$	5,169		$	(137	)
Exit Costs:
Corporate and Other		$	(1	)	$	677		$	(154	)	$	1,024
Total exit costs		$	(1	)	$	677		$	(154	)	$	1,024
Income tax provision:
Corporate and Other		$	(2,623	)	$	(797	)	$	(4,855	)	$	(1,862	)
Total income tax:		$	(2,623	)	$	(797	)	$	(4,855	)	$	(1,862	)

Net income (loss):
Completion Services	$	56,771		$	42,362		$	186,731		$	49,807
Other Services	(1,221		)	1,055			(5,114		)	(1,894		)
Corporate and Other	(24,771		)	(39,352		)	(128,414		)	(128,001		)
Total net income (loss)	$	30,779		$	4,065		$	53,203		$	(80,088	)
Capital expenditures(1):
Completion Services	$	89,904		$	48,314		$	233,665		$	100,865
Other Services	98			—			1,642			1,718
Corporate and Other	3,122			2,190			4,008			2,582
Total capital expenditures	$	93,124		$	50,504		$	239,315		$	105,165

⁽¹⁾  Excludes expenditures for leasehold improvements and acquisitions.

	(Thousands of Dollars)
	September 30, 2018		December 31, 2017
Total assets by segment:
Completion Services	$	948,643	$	863,419
Other Services	17,702		21,877
Corporate and Other	147,984		157,820
Total assets	$	1,114,329	$	1,043,116
Total assets by geography:
United States	$	1,112,875	$	1,041,596
Canada	1,454		1,520
Total assets	$	1,114,329	$	1,043,116
Goodwill by segment:
Completion Services	$	132,524	$	134,967
Total goodwill	$	132,524	$	134,967

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Basis of Presentation and Nature of Operations (Details) - $ / shares	Sep. 30, 2018	Jan. 17, 2018	Jan. 25, 2017
Class of Stock [Line Items]
Sale of stock, number of shares issued in transaction (in shares)		15,320,015
Common stock outstanding (in shares)			103,128,019
IPO
Class of Stock [Line Items]
Sale of stock, number of shares issued in transaction (in shares)			30,774,000
Offering price (in dollars per share)			$ 19.00
IPO, Shares Sold by Reporting Entity
Class of Stock [Line Items]
Sale of stock, number of shares issued in transaction (in shares)			15,700,000
IPO, Shares Sold by Selling Stockholders
Class of Stock [Line Items]
Sale of stock, number of shares issued in transaction (in shares)			15,074,000
Public Stock Offering
Class of Stock [Line Items]
Sale of stock, number of shares issued in transaction (in shares)		15,320,015
Offering price (in dollars per share)		$ 18.25
Over-Allotment Option
Class of Stock [Line Items]
Sale of stock, number of shares issued in transaction (in shares)		1,998,262
Offering price (in dollars per share)		$ 18.25
Keane Investor
Class of Stock [Line Items]
Ownership percent	53.10%	50.90%

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Summary of Significant Accounting Policies - Revenue Activities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Disaggregation of Revenue [Line Items]
Revenue	$ 558,908	$ 477,302	$ 1,650,457	$ 1,040,591
Typical job completion period			30
Payment term			30 days
East
Disaggregation of Revenue [Line Items]
Revenue	192,977	155,698	$ 622,496	396,983
North
Disaggregation of Revenue [Line Items]
Revenue	71,263	100,939	199,242	166,892
South
Disaggregation of Revenue [Line Items]
Revenue	$ 294,668	$ 220,665	$ 828,719	$ 476,716

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Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2018	Mar. 31, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Property, Plant and Equipment [Line Items]
Amortization rate decrease, percent		50.00%
Depreciation and amortization	$ 68,287		$ 46,204	$ 187,742	$ 109,316
Decrease in net income	$ (30,779)		$ (4,065)	$ (53,203)	$ 80,088
Minimum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life				6 months
Maximum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life				40 years
Building and leasehold improvements | Minimum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life				3 months
Building and leasehold improvements | Maximum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life				40 years
Machinery and equipment | Minimum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life				13 months
Machinery and equipment | Maximum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life				10 years
Office furniture, fixtures and equipment | Minimum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life				3 years
Office furniture, fixtures and equipment | Maximum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life				5 years
Change in Accounting Method Accounted for as Change in Estimate
Property, Plant and Equipment [Line Items]
Depreciation and amortization				$ 13,100
Decrease in net income				$ 13,100

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Summary of Significant Accounting Policies - Equity-method Investments (Details) - USD ($) $ in Thousands			9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2018	Sep. 30, 2017
Accounting Policies [Abstract]
Income from equity method investments	$ 1,200	$ 600	$ 1,163	$ 0

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Acquisitions - RockPile, Narrative (Details) - USD ($)			9 Months Ended
	Sep. 30, 2018	Jul. 03, 2017	Sep. 30, 2018	Sep. 30, 2017	May 29, 2018	Apr. 03, 2018	Dec. 31, 2017
Business Acquisition [Line Items]
Cash consideration			$ 35,003,000	$ 124,374,000
Share price (in dollars per share)		$ 16.29			$ 15.00
Share price discount, percent		7.90%
Loss on contingent consideration liability			13,254,000	$ 0
Rockpile Energy Services, LLC
Business Acquisition [Line Items]
Interest acquired, percent		100.00%
Cash consideration	$ 116,576,000	$ 123,293,000
Equity interest issued (in shares)		8,684,210
Period of restriction of shares resale		180 days
Maximum deviation per acquisition share (in dollars per share)		$ 2.30
Contingent price per share (in dollars per share)		$ 19.00
Number of random trading days selected by the company		20 days
Contingent price, period used in calculation		30 days
Change in range of outcomes, contingent consideration, liability, value, maximum		$ 165,000,000.0
Loss on contingent consideration liability	$ (11,962,000)	$ (11,962,000)	$ 13,200,000
Recurring
Business Acquisition [Line Items]
Aggregate CVR Payment							$ 6,665,000
Recurring | Rockpile Energy Services, LLC
Business Acquisition [Line Items]
Aggregate CVR Payment						$ 19,900,000

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Acquisitions - RockPile, Total Purchase Consideration (Details) - USD ($) $ in Thousands			9 Months Ended		15 Months Ended
	Sep. 30, 2018	Jul. 03, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Dec. 31, 2017
Preliminary Purchase Price Allocation
Cash consideration			$ 35,003	$ 124,374
Contingent consideration			(13,254)	$ 0
Goodwill	$ 132,524		132,524		$ 132,524	$ 134,967
Rockpile Energy Services, LLC
Preliminary Purchase Price Allocation
Cash consideration	116,576	$ 123,293
Equity interests issued	130,290	130,290
Contingent consideration	11,962	11,962	(13,200)
Less: Cash acquired	0	(20,379)
Total consideration	258,828	245,166
Trade and other accounts receivable	58,601	57,117	58,601		58,601
Inventories, net	2,991	2,853	2,991		2,991
Prepaid and other current assets	12,913	13,630	12,913		12,913
Property and equipment, net	166,307	157,654	166,307		166,307
Intangible assets	19,700	20,967	19,700		19,700
Notes receivable	0	250	0		0
Other noncurrent assets	306	363	306		306
Total identifiable assets acquired	260,818	252,834	260,818		260,818
Accounts payable	(22,819)	(38,999)	(22,819)		(22,819)
Accrued expenses	(35,476)	(22,161)	(35,476)		(35,476)
Deferred revenue	(22,355)	(23,053)	(22,355)		(22,355)
Other non-current liabilities	(3,239)	(827)	(3,239)		(3,239)
Total liabilities assumed	(83,889)	(85,040)	(83,889)		(83,889)
Goodwill	81,899	77,372	81,899		81,899
Total purchase price consideration	$ 258,828	$ 245,166	$ 258,828		258,828
Adjustments
Cash consideration					(6,717)
Less: Cash acquired					20,379
Trade and other accounts receivable					1,484
Inventories, net					138
Prepaid and other current assets					(717)
Property and equipment, net					8,653
Intangible assets					(1,267)
Notes receivable					(250)
Other noncurrent assets					(57)
Total identifiable assets acquired					7,984
Accounts payable					16,180
Accrued expenses					(13,315)
Deferred revenue					698
Other non-current liabilities					(2,412)
Total liabilities assumed					1,151
Goodwill					4,527
Total purchase price consideration					$ 13,662

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Acquisitions - Refinery Acquisition (Details) hp in Thousands, $ in Thousands		1 Months Ended	9 Months Ended
	Jul. 24, 2018 USD ($) hp	Sep. 30, 2018 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)
Business Acquisition [Line Items]
Cash consideration			$ 35,003	$ 124,374
Refinery Specialties, Incorporated - Horsepower And Related Supposed Equipment
Business Acquisition [Line Items]
Power measurement of equipment | hp	90
Purchase of property and equipment	$ 35,400	$ 34,600
Purchase price consideration		800
Acquisition costs		400
Cash consideration		$ 35,000
Deposit Reimbursement For Future Equipment Deliveries | Refinery Specialties, Incorporated - Horsepower And Related Supposed Equipment
Business Acquisition [Line Items]
Deposit reimbursement for future equipment deliveries	$ 800

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Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amounts	$ 81,587	$ 82,573
Accumulated Amortization	(28,334)	(25,293)
Net Carrying Amount	53,253	57,280
Trade name
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amounts	10,200	10,200
Accumulated Amortization	0	0
Net Carrying Amount	$ 10,200	$ 10,200
Customer contracts
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Amortization Period (Years)	8 years 5 months 24 days	9 years 1 month 6 days
Gross Carrying Amounts	$ 68,600	$ 68,600
Accumulated Amortization	(27,356)	(23,049)
Net Carrying Amount	$ 41,244	$ 45,551
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Amortization Period (Years)	7 years 6 months	8 years 1 month 6 days
Gross Carrying Amounts	$ 700	$ 750
Accumulated Amortization	(350)	(360)
Net Carrying Amount	$ 350	$ 390
Technology
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Amortization Period (Years)	2 years 1 month 24 days	2 years 1 month 6 days
Gross Carrying Amounts	$ 2,087	$ 3,023
Accumulated Amortization	(628)	(1,884)
Net Carrying Amount	$ 1,459	$ 1,139

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Intangible Assets - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 1.5	$ 2.0	$ 4.7	$ 5.1
Trade name
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset amortization expense	$ 10.2		$ 10.2

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Intangible Assets - Schedule of Amortization Expense (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2018	$ 1,524
2019	5,399
2020	5,275
2021	4,994
2022	$ 4,972

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Inventories, net - Schedule of Inventories, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Inventory [Line Items]
Inventories, net	$ 28,772	$ 33,437
Sand, including freight
Inventory [Line Items]
Inventories, net	10,620	11,551
Chemicals and consumables
Inventory [Line Items]
Inventories, net	7,109	7,940
Materials and supplies
Inventory [Line Items]
Inventories, net	$ 11,043	$ 13,946

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Inventories, net - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Inventory Disclosure [Abstract]
Inventory valuation reserves	$ 1.2		$ 1.2		$ 0.3
Obsolescence expense	$ 0.5	$ 0.1	$ 0.9	$ 0.2

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Property and Equipment, net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,054,812	$ 815,362
Less accumulated depreciation	(510,311)	(372,617)
Construction in progress	5,772	25,255
Total property and equipment, net	550,273	468,000
Land
Property, Plant and Equipment [Line Items]
Property and equipment, gross	4,771	5,186
Building and leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	32,386	30,322
Office furniture, fixtures and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	7,515	6,338
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,010,140	$ 773,516

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Property and Equipment, net - Additional Information (Details)		3 Months Ended		9 Months Ended
	Jul. 01, 2018 USD ($) fleet	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($) rig	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Property, Plant and Equipment [Line Items]
Gain (loss) on disposal of assets		$ (1,113,000)	$ (302,000)	$ (5,169,000)	$ 137,000
Proceeds from sale of assets				2,512,000	10,530,000
Proceeds from insurance recoveries				18,222,000	0
Gain on disposition				14,892,000	0
Fracturing Equipment
Property, Plant and Equipment [Line Items]
Capital lease assets, gross		10,100,000		10,100,000		$ 10,100,000
Accumulated depreciation of capital leased assets		9,400,000		9,400,000		8,300,000
Vehicles Under Capital Leases
Property, Plant and Equipment [Line Items]
Capital lease assets, gross		10,400,000		10,400,000		5,100,000
Accumulated depreciation of capital leased assets		2,900,000		2,900,000		$ 1,600,000
Hydraulic Fracturing Pump
Property, Plant and Equipment [Line Items]
Gain (loss) on disposal of assets		(4,100,000)		(9,300,000)
Transmission Core
Property, Plant and Equipment [Line Items]
Salvage value		3,200,000		3,200,000
Transmission Core
Property, Plant and Equipment [Line Items]
Salvage value		$ 6,800,000		6,800,000
Air Compressor Units
Property, Plant and Equipment [Line Items]
Gain (loss) on disposal of assets			900,000
Proceeds from sale of assets			900,000
Fracturing Operating Equipment
Property, Plant and Equipment [Line Items]
Gain (loss) on disposal of assets			(600,000)
Hydraulic Frac Fleet
Property, Plant and Equipment [Line Items]
Number of properties damaged | fleet	1
Proceeds from insurance recoveries	$ 18,100,000
Amount of impairment loss	3,200,000
Gain on disposition	$ 14,900,000
Acquired Trican Operations | Manufacturing Facility
Property, Plant and Equipment [Line Items]
Gain (loss) on disposal of assets			(600,000)	(2,700,000)	500,000
Proceeds from sale of assets			500,000	$ 1,200,000	$ 2,400,000
Rockpile Energy Services, LLC | Workover Rig Assets
Property, Plant and Equipment [Line Items]
Gain (loss) on disposal of assets			0
Proceeds from sale of assets			$ 6,800,000
Number of rigs acquired | rig			6

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Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Capital leases	$ 10,706	$ 7,918
Less: Unamortized debt discount and debt issuance costs	(8,105)	(8,173)
Total debt, net of unamortized debt discount and debt issuance costs	351,726	282,947
Less: Current portion	(6,289)	(4,436)
Long-term debt, net of unamortized debt discount and debt issuance costs, including capital leases	345,437	278,511
2018 Term Loan Facility | Medium-term Notes
Debt Instrument [Line Items]
Long-term debt, gross	349,125	0
2017 Term Loan Facility | Medium-term Notes
Debt Instrument [Line Items]
Long-term debt, gross	$ 0	$ 283,202

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Long-Term Debt - Credit Facility (Details) - USD ($)	9 Months Ended
	Sep. 30, 2018	May 25, 2018
2017 ABL Facility | Line of Credit | Revolving Credit Facility
Line of Credit Facility [Line Items]
Original facility size	$ 300,000,000
Outstanding balance	0
Letters of credit issued	2,500,000
Available borrowing base commitment	207,887,000
2018 Term Loan Facility | Medium-term Notes
Line of Credit Facility [Line Items]
Debt discount		$ 1,800,000
Original facility size	350,000,000	$ 350,000,000
Outstanding balance	350,000,000
Letters of credit issued	$ 0
LIBOR | Medium-term Notes
Line of Credit Facility [Line Items]
Variable rate floor	1.00%

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Long-Term Debt - Schedule of Maturities of Long-term Debt (Details) - Term Loan $ in Thousands	Sep. 30, 2018 USD ($)
Debt Instrument [Line Items]
2018	$ 875
2019	3,500
2020	3,500
2021	3,500
2022	3,500
Long-term debt	$ 14,875

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Long-Term Debt - Deferred Financing Costs and Other Costs (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Debt Instrument [Line Items]
Amortization of deferred financing fees	$ 1,000,000	$ 600,000	$ 2,329,000	$ 4,621,000
Prepayment penalties			0	15,817,000
Write off of deferred debt issuance cost				$ 15,300,000
Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Unamortized deferred financing costs	7,600,000		7,600,000
Revolving Credit Facility | Line of Credit | 2018 Term Loan Facility
Debt Instrument [Line Items]
Unamortized deferred financing costs	9,000,000		9,000,000
Unamortized deferred charges at the end of the period	8,100,000		8,100,000		$ 0
Revolving Credit Facility | Line of Credit | 2017 ABL Facility
Debt Instrument [Line Items]
Term loan, maximum capacity	300,000,000		300,000,000
Revolving Credit Facility | Line of Credit | 2016 ABL Facility
Debt Instrument [Line Items]
Unamortized deferred financing costs	$ 4,200,000		$ 4,200,000		$ 5,000,000

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Long-Term Debt - Capital Leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Operating Leased Assets [Line Items]
Capital leases	$ 10,706		$ 10,706		$ 7,918
Machinery and equipment
Operating Leased Assets [Line Items]
Capital leases	10,700		10,700		$ 7,900
Capital lease interest expense	$ 100	$ 100	$ 300	$ 200

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Long-Term Debt - Schedule of Capital Lease Future Minimum Payments (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Debt Disclosure [Abstract]
2018	$ 1,314
2019	5,191
2020	2,356
2021	2,134
2022	678
Subtotal	11,673
Less amount representing interest	(964)
Capital leases	$ 10,709

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Significant Risks and Uncertainties (Details) - segment	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Concentration Risk [Line Items]
Number of reportable segments			2
Completion Services | Customer Concentration Risk | Revenue
Concentration Risk [Line Items]
Concentration risk, percentage	99.00%	98.00%	99.00%	99.00%
Completion Services | Customer Concentration Risk | Revenue | Customer One
Concentration Risk [Line Items]
Concentration risk, percentage	16.00%	11.00%	16.00%	10.00%
Completion Services | Customer Concentration Risk | Revenue | Customer Two
Concentration Risk [Line Items]
Concentration risk, percentage	11.00%		12.00%
Completion Services | Customer Concentration Risk | Revenue | Customer Three
Concentration Risk [Line Items]
Concentration risk, percentage	10.00%		11.00%
Completion Services | Customer Concentration Risk | Revenue | Customer Four
Concentration Risk [Line Items]
Concentration risk, percentage			10.00%
Completion Services | Customer Concentration Risk | Gross Profit
Concentration Risk [Line Items]
Concentration risk, percentage	100.00%	98.00%	100.00%	100.00%
Minimum | Two Suppliers | Completion Services | Supplier Concentration Risk | Cost of Goods
Concentration Risk [Line Items]
Concentration risk, percentage	5.00%	5.00%	5.00%	5.00%
Maximum | Two Suppliers | Completion Services | Supplier Concentration Risk | Cost of Goods
Concentration Risk [Line Items]
Concentration risk, percentage	15.00%	15.00%	15.00%	15.00%

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Derivatives - Additional Information (Details) - USD ($)			9 Months Ended
	Jun. 22, 2018	May 25, 2018	Sep. 30, 2018
Derivative [Line Items]
Notional amount	$ 175,000,000
Net gains expected to be reclassified from AOCI into earnings in the next 12 months			$ 1,100,000
Amount of gain (loss) recognized in income on derivative (ineffective portion)			0
LIBOR
Derivative [Line Items]
Percent of debt hedged by interest rate derivatives		50.00%
Interest Rate Swap | Derivatives Not Designated As Hedging Instruments
Derivative [Line Items]
Proceeds from derivative instrument	3,200,000
Payments for derivative instrument	$ 3,200,000
Fixed interest rate (as a percent)	2.625%
Net gains expected to be reclassified from AOCI into earnings in the next 12 months			3,500,000
Interest Rate Swap | Derivatives Not Designated As Hedging Instruments | LIBOR
Derivative [Line Items]
Floor interest rate (as a percent)	1.00%
2018 Term Loan Facility | Medium-term Notes
Derivative [Line Items]
Original facility size		$ 350,000,000	$ 350,000,000
2018 Term Loan Facility | Medium-term Notes | LIBOR
Derivative [Line Items]
Floor interest rate		1.00%

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Derivatives - Schedule of Offsetting Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Other noncurrent asset
Assets:
Gross Amounts of Recognized Assets	$ 3,888	$ 324
Gross Amounts Offset in the Balance Sheet	0	0
Net Amounts Presented in the Balance Sheet	3,888	324
Other noncurrent liability
Liabilities:
Gross Amounts of Recognized Liabilities	(24)	(254)
Gross Amounts Offset in the Balance Sheet	0	0
Net Amounts Presented in the Balance Sheet	(24)	(254)
Derivatives Designated As Hedging Instruments | Other noncurrent asset
Assets:
Gross Amounts of Recognized Assets	3,888	324
Derivatives Designated As Hedging Instruments | Other noncurrent liability
Liabilities:
Gross Amounts of Recognized Liabilities	(24)	(254)
Derivatives Not Designated As Hedging Instruments | Other noncurrent asset
Assets:
Gross Amounts of Recognized Assets	0	0
Derivatives Not Designated As Hedging Instruments | Other noncurrent liability
Liabilities:
Gross Amounts of Recognized Liabilities	$ 0	$ 0

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Derivatives - Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) (Details) - Derivatives Designated As Hedging Instruments - Interest rate derivative - Cash Flow Hedging - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) recognized in other comprehensive income on derivative	$ 1,119	$ (178)	$ 3,429	$ (167)
Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) (“AOCI”) into earnings	163	0	473	(73)
Amount of loss reclassified from AOCI into earnings as a result of originally forecasted transaction becoming probable of not occurring	$ 0	$ 0	$ 0	$ (100)

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Derivatives - Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivatives Not Designated As Hedging Instruments | Interest rate derivatives | Interest expense
Derivative Instruments, Gain (Loss) [Line Items]
Loss on interest contracts	$ 0	$ (29)	$ 0	$ (367)

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Fair Value Measurements and Financial Information - Schedule of Fair Value Measured on Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Liabilities:
Aggregate CVR Payment		$ (6,665)
Level 1
Liabilities:
Aggregate CVR Payment		0
Level 2
Liabilities:
Aggregate CVR Payment		(6,665)
Level 3
Liabilities:
Aggregate CVR Payment		0
Interest rate derivatives
Assets:
Interest rate derivatives	$ 3,888	70
Liabilities:
Interest rate derivatives	(24)
Interest rate derivatives | Level 1
Assets:
Interest rate derivatives	0	0
Liabilities:
Interest rate derivatives	0
Interest rate derivatives | Level 2
Assets:
Interest rate derivatives	3,888	70
Liabilities:
Interest rate derivatives	(24)
Interest rate derivatives | Level 3
Assets:
Interest rate derivatives	0	$ 0
Liabilities:
Interest rate derivatives	$ 0

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Fair Value Measurements and Financial Information - Additional Information (Details) - USD ($)			9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2018	Sep. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of long-lived assets			$ 0	$ 0
Impairment of finite-lived intangible assets			0	$ 0
Cash and cash equivalents	$ 82,848,000	$ 96,120,000	$ 82,848,000
Receivables, payment terms (in days)			30 days
Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Receivables, payment terms (in days)			30 days	30 days
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Receivables, payment terms (in days)			60 days	60 days
Two Customers | Accounts Receivable | Credit Concentration Risk
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Concentration risk, percentage	20.00%
Customer One | Accounts Receivable | Credit Concentration Risk
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Concentration risk, percentage		17.00%

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Stock-Based Compensation - Additional Information (Details)	9 Months Ended
	Sep. 30, 2018 compensation_type executive_officer shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Number of types of equity-based compensation | compensation_type	4
Number of executive officers receiving deferred stock awards | executive_officer	3
Capital shares reserved for future issuance (in shares) | shares	7,734,601

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Stock-Based Compensation - Schedule of Equity-Based Compensation Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 4,809	$ 3,129	$ 11,924	$ 7,334
Deferred stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	1,070	1,070	3,211	3,211
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	185	94	366	245
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	2,864	1,643	6,620	3,217
Non-qualified stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 690	$ 322	$ 1,727	$ 661

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Stock-Based Compensation - Schedule of Deferred Compensation Arrangement with Named Executive Officers (Details) $ in Thousands	Mar. 16, 2017 USD ($)
First | James C. Stewart
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred compensation arrangement with individual, distributions paid	$ 1,975,706
First | Gregory L. Powell
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred compensation arrangement with individual, distributions paid	1,646,422
First | M. Paul DeBonis Jr.
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred compensation arrangement with individual, distributions paid	658,569
Second | James C. Stewart
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred compensation arrangement with individual, distributions paid	1,975,706
Second | Gregory L. Powell
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred compensation arrangement with individual, distributions paid	1,646,422
Second | M. Paul DeBonis Jr.
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred compensation arrangement with individual, distributions paid	$ 658,569

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Stock-Based Compensation - Deferred Stock Awards, Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Feb. 15, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	May 29, 2018	Jul. 03, 2017	Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued during period, share based compensation (in shares)		14,701		436,130
Share price (in dollars per share)						$ 15.00	$ 16.29
Compensation cost		$ 4,809	$ 3,129	$ 11,924	$ 7,334
Deferred stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred compensation expense								$ 8,600
Shares issued during period, share based compensation (in shares)	177,872
Share price (in dollars per share)	$ 14.98
Compensation cost		1,070	$ 1,070	3,211	$ 3,211
Unamortized compensation costs, non-options		$ 1,100		$ 1,100
Equity award compensation period for recognition				3 months

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Stock-Based Compensation - Restricted Stock Awards (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 4,809	$ 3,129	$ 11,924	$ 7,334
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	185	$ 94	366	$ 245
Unamortized compensation costs, non-options	$ 900		$ 900
Equity award compensation period for recognition			1 year 2 days

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Stock-Based Compensation - Schedule of Restricted Stock Awards (Details) - Restricted stock awards	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Number of Restricted Stock Awards
Total non-vested at the beginning of the period (in shares) | shares	95,335
Shares issued (in shares) | shares	42,936
Shares vested (in shares) | shares	(6,315)
Shares forfeited (in shares) | shares	0
Non-vested balance at the end of the period (in shares) | shares	131,956
Weighted average grant date fair value
Total non-vested at the beginning of the period (in dollars per share) | $ / shares	$ 20.51
Shares issued (in dollars per share) | $ / shares	14.17
Shares vested (in dollars per share) | $ / shares	14.49
Shares forfeited (in dollars per share) | $ / shares	0.00
Non-vested balance at the end of the period (in dollars per share) | $ / shares	$ 18.73

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Stock-Based Compensation - Restricted Stock Units (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 4,809	$ 3,129	$ 11,924	$ 7,334
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	2,864	$ 1,643	6,620	$ 3,217
Unrecognized compensation cost	$ 24,100		$ 24,100
Equity award compensation period for recognition			2 years 1 month 10 days
Minimum | Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			1 year
Maximum | Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years

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Stock-Based Compensation - Schedule of Restricted Stock Units (Details) - Restricted stock units	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Number of Restricted Stock Units
Total non-vested at the beginning of the period (in shares) | shares	1,099,620
Units issued (in shares) | shares	1,501,095
Units vested (in shares) | shares	(355,035)
Actual units forfeited (in shares) | shares	(203,149)
Non-vested balance at the end of the period (in shares) | shares	2,042,531
Weighted average grant date fair value
Total non-vested at the beginning of the period (in dollars per share) | $ / shares	$ 14.62
Units issued (in dollars per share) | $ / shares	14.99
Units vested (in dollars per share) | $ / shares	14.59
Actual units forfeited (in dollars per share) | $ / shares	15.07
Non-vested balance at the end of the period (in dollars per share) | $ / shares	$ 14.86

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Stock-Based Compensation - Non-qualified Stock Options (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 4,809	$ 3,129	$ 11,924	$ 7,334
Unamortized compensation cost, options	5,400		5,400
Non-qualified stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 690	$ 322	$ 1,727	$ 661
Equity award compensation period for recognition			2 years 1 month 6 days
Options exercisable (in shares)	196,657		196,657
Options vested (in shares)	196,657		196,657

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Stock-Based Compensation - Schedule of Non-qualified Stock Options (Details) - Non-qualified stock options	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Number of Stock Options
Total outstanding at the beginning of the period (in shares) | shares	589,977
Options granted (in shares) | shares	647,768
Options exercised (in shares) | shares	0
Actual options forfeited (in shares) | shares	(18,728)
Options expired (in shares) | shares	0
Total outstanding at the end of the period (in shares) | shares	1,219,017
Weighted average grant date fair value
Total outstanding at the beginning of the period (in dollars per share) | $ / shares	$ 6.16
Options granted (in dollars per share) | $ / shares	7.28
Options exercised (in dollars per share) | $ / shares	0.00
Actual options forfeited (in dollars per share) | $ / shares	6.68
Options expired (in dollars per share) | $ / shares	0.00
Total outstanding at the end of the period (in dollars per share) | $ / shares	$ 6.75

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Stock-Based Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Expected dividend yield	0.00%	0.00%
Expected equity volatility	46.30%	51.50%
Expected term (years)	6 years	6 years
Risk-free interest rate	2.70%	1.60%
Exercise price per stock option (in dollars per share)	$ 15.31	$ 19
Market price per share (in dollars per share)	15.31	14.49
Fair value per stock option (in dollars per share)	$ 7.28	$ 6.16

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Stockholders’ Equity - (Details) - USD ($) $ / shares in Units, $ in Millions			3 Months Ended	9 Months Ended
	Sep. 30, 2018	Jan. 17, 2018	Sep. 30, 2018	Sep. 30, 2018
Sale of Stock [Line Items]
Shares issued during period, share based compensation (in shares)			14,701	436,130
Sale of stock, number of shares issued in transaction (in shares)		15,320,015
Shares repurchased			$ 29.3	$ 69.4
Share price (in dollars per share)			$ 12.18	$ 13.78
Number of shares repurchased (in shares)			2,406,342	5,040,434
Remaining future share repurchases (in shares)	70,600,000		70,600,000	70,600,000
Public Stock Offering
Sale of Stock [Line Items]
Sale of stock, number of shares issued in transaction (in shares)		15,320,015
Offering price (in dollars per share)		$ 18.25
Over-Allotment Option
Sale of Stock [Line Items]
Sale of stock, number of shares issued in transaction (in shares)		1,998,262
Offering price (in dollars per share)		$ 18.25
Keane Investor
Sale of Stock [Line Items]
Ownership percent	53.10%	50.90%
White Deer Energy
Sale of Stock [Line Items]
Number of shares repurchased (in shares)			1,248,440	1,248,440

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Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
AOCI Attributable to Parent
Balance as of December 31, 2017	$ 513,092
Other comprehensive income (loss), before tax	2,919
Income tax expense	0
Balance as of September 30, 2018	512,575
Foreign currency items
AOCI Attributable to Parent
Balance as of December 31, 2017	(2,507)
Other comprehensive income (loss), before tax	(37)
Income tax expense	0
Balance as of September 30, 2018	(2,544)
Interest rate contract
AOCI Attributable to Parent
Balance as of December 31, 2017	779
Other comprehensive income (loss), before tax	2,956
Income tax expense	0
Balance as of September 30, 2018	3,735
AOCI
AOCI Attributable to Parent
Balance as of December 31, 2017	(1,728)
Balance as of September 30, 2018	$ 1,191

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Accumulated Other Comprehensive Income (Loss) - Reclassification Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense	[1]	$ 5,978	$ 7,195	$ 27,285	$ 51,905
Other income		14,454	942	1,481	4,647
Net income (loss)		30,779	4,065	53,203	(80,088)
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income (loss)		163	0	473	(173)
Interest rate derivatives, hedging | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense		163	0	473	(173)
Foreign currency items | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income		$ 0	$ 0	$ 0	$ 0

[1] Interest expense during the nine months ended September 30, 2018 includes $7.6 million in write-offs of deferred financing costs incurred in connection with the extinguishment of the Company’s 2017 Term Loan Facility (as defined within). Interest expense during the nine months ended September 30, 2017 includes $15.8 million of prepayment penalties and $15.3 million in write-offs of deferred financing costs, incurred in connection with the refinancing by the Company (as defined herein) of its then-existing revolving credit and security agreement, entered into on March 16, 2016, between certain of the Company’s subsidiaries and certain financial institutions (the “2016 ABL Facility”) and the Company’s early debt extinguishment of its then-existing credit agreement, entered into on March 16, 2016, between certain of the Company’s subsidiaries and certain financial institutions (the “2016 Term Loan Facility”) and Senior Secured Notes (as defined herein).

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Earnings per Share - Schedule of Earnings per Share, Basic and Diluted (Details) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Numerator:
Net income (loss)		$ 30,779	$ 4,065	$ 53,203	$ (80,088)
Denominator:
Basic weighted-average common shares outstanding (in shares)	[1]	108,825	111,509	110,706	104,496
Diluted weighted-average common shares outstanding (in shares)		108,990	111,755	110,871	104,666
Restricted stock awards
Denominator:
Dilutive effect of awards granted (in shares)		53	73	52	66
Deferred stock awards
Denominator:
Dilutive effect of awards granted (in shares)		0	0	0	0
Restricted stock units
Denominator:
Dilutive effect of awards granted (in shares)		112	173	113	104

[1] The earnings per share amounts for 2017 have been computed to give effect to the Organizational Transactions (as defined herein) as if they had occurred on January 1, 2017, including the limited liability company agreement of Keane Investor (as defined herein) to, among other things, exchange all of the Existing Owners’ (as defined herein) membership interests for the newly-created ownership interests.

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Operating Leases - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Operating Leased Assets [Line Items]
Operating leases, rent expense	$ 3,400,000	$ 3,600,000	$ 9,800,000	$ 8,500,000
Sublease proceeds	0	$ 100,000	0	$ 300,000
Future minimum lease payments, sale leaseback transactions	2,400,000		2,400,000
Operating leases, minimum lease commitments	$ 38,585,000		$ 38,585,000
Minimum
Operating Leased Assets [Line Items]
Property, plant and equipment, useful life			6 months
Maximum
Operating Leased Assets [Line Items]
Property, plant and equipment, useful life			40 years
Leasehold Improvements | Minimum
Operating Leased Assets [Line Items]
Property, plant and equipment, useful life			3 months
Leasehold Improvements | Maximum
Operating Leased Assets [Line Items]
Property, plant and equipment, useful life			4 years 6 months

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Operating Leases - Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Leases [Abstract]
2018	$ 4,206
2019	15,450
2020	9,451
2021	5,158
2022	4,320
Total	$ 38,585

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Income Taxes - Additional Information (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Jan. 25, 2017
Income Tax Disclosure [Abstract]
Deferred tax liability	$ 1.7	$ 1.9
Effective tax rate, percent	6.44%

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Commitments and Contingencies - Additional Information (Details)			3 Months Ended
	Dec. 15, 2017 USD ($)	Dec. 27, 2016 plaintiff	Mar. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Litigation liability				$ 2,800,000
Keane Group, Inc. vs. Workers
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Number of plaintiffs | plaintiff		2
Settlement awarded to other party			$ 4,200,000
Halcon v. Keane Frac
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Damages sought	$ 4,300,000
Letter of Credit | 2017 ABL Facility | Line of Credit
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Letters of credit outstanding				2,500,000	$ 2,000,000
Research and Development Arrangement
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Committed research and development				1,300,000	0
Anticipated investment				3,100,000
Purchase commitments on equipment
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Recorded unconditional purchase obligation				3,800,000	19,800,000
Outstanding purchase commitments				$ 22,900,000	$ 82,500,000

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Commitments and Contingencies - Schedule of Aggregate Minimum Commitments (Details) - Inventories $ in Thousands	Sep. 30, 2018 USD ($)
Unrecorded Unconditional Purchase Obligation [Line Items]
2018	$ 7,324
2019	35,835
2020	32,475
2021	10,850
2022	0
Total	$ 86,484

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Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Millions				3 Months Ended		9 Months Ended
	Sep. 30, 2018	May 29, 2018	Jan. 17, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Jul. 03, 2017
Related Party Transaction [Line Items]
Equity method investments	$ 1.2			$ 1.2		$ 1.2
Sale of stock, number of shares issued in transaction (in shares)			15,320,015
Payments of stock issuance costs						$ 13.0
Number of shares repurchased (in shares)				2,406,342		5,040,434
Share price (in dollars per share)				$ 12.18		$ 13.78
Shares repurchased				$ 29.3		$ 69.4
Share price (in dollars per share)		$ 15.00						$ 16.29
Keane Investor
Related Party Transaction [Line Items]
Ownership after transaction	53.10%		50.90%
Affiliated Entity | Consulting Services
Related Party Transaction [Line Items]
Amounts paid to related parties				$ 0.1	$ 0.1	$ 0.3	$ 0.1
Over-Allotment Option
Related Party Transaction [Line Items]
Sale of stock, number of shares issued in transaction (in shares)			1,998,262
Offering price (in dollars per share)			$ 18.25
Paid-in capital in excess of par value | White Deer Energy
Related Party Transaction [Line Items]
Shares repurchased and retired		$ 18.7
Retained earnings (deficit) | White Deer Energy
Related Party Transaction [Line Items]
Shares repurchased and retired		$ 1.3
White Deer Energy
Related Party Transaction [Line Items]
Number of shares repurchased (in shares)				1,248,440		1,248,440
White Deer Energy | Affiliated Entity
Related Party Transaction [Line Items]
Number of shares repurchased (in shares)		1,248,440
Share price (in dollars per share)		$ 16.02
Shares repurchased		$ 20.0

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Business Segments - Additional Information (Details)	9 Months Ended
	Sep. 30, 2018 segment
Segment Reporting [Abstract]
Number of reportable segments	2

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Business Segments - Schedule of Financial Information for Each of the Company's Business Segments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting Information [Line Items]
Revenue:	$ 558,908	$ 477,302	$ 1,650,457	$ 1,040,591
Gross profit:	122,109	86,213	362,565	147,126
Operating income (loss):	24,926	11,115	83,862	(30,968)
Depreciation and amortization:	68,287	46,204	187,742	109,316
(Gain) loss on disposal of assets	1,113	302	5,169	(137)
Exit Costs:	(1)	677	(154)	1,024
Income tax provision:	(2,623)	(797)	(4,855)	(1,862)
Net income (loss):	30,779	4,065	53,203	(80,088)
Capital expenditures:	93,124	50,504	239,315	105,165
Operating Segments | Completion Services
Segment Reporting Information [Line Items]
Revenue:	548,418	468,479	1,625,798	1,031,768
Gross profit:	122,490	84,472	364,122	145,385
Operating income (loss):	56,771	42,362	186,731	49,807
Depreciation and amortization:	64,579	41,542	174,376	96,674
(Gain) loss on disposal of assets	1,140	568	3,015	(1,096)
Net income (loss):	56,771	42,362	186,731	49,807
Capital expenditures:	89,904	48,314	233,665	100,865
Operating Segments | Other Services
Segment Reporting Information [Line Items]
Revenue:	10,490	8,823	24,659	8,823
Gross profit:	(381)	1,741	(1,557)	1,741
Operating income (loss):	(1,221)	1,055	(5,114)	(1,894)
Depreciation and amortization:	840	1,586	3,557	4,323
(Gain) loss on disposal of assets	0	(900)	0	(688)
Net income (loss):	(1,221)	1,055	(5,114)	(1,894)
Capital expenditures:	98	0	1,642	1,718
Corporate and Other
Segment Reporting Information [Line Items]
Operating income (loss):	(30,624)	(32,302)	(97,755)	(78,881)
Depreciation and amortization:	2,868	3,076	9,809	8,319
(Gain) loss on disposal of assets	(27)	634	2,154	1,647
Exit Costs:	(1)	677	(154)	1,024
Net income (loss):	(24,771)	(39,352)	(128,414)	(128,001)
Capital expenditures:	$ 3,122	$ 2,190	$ 4,008	$ 2,582

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Business Segments - Schedule of Assets and Goodwill by Segment (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ 1,114,329	$ 1,043,116
Goodwill	132,524	134,967
Completion Services
Segment Reporting, Asset Reconciling Item [Line Items]
Goodwill	132,524	134,967
United States
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	1,112,875	1,041,596
Canada
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	1,454	1,520
Operating Segments | Completion Services
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	948,643	863,419
Operating Segments | Other Services
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	17,702	21,877
Corporate and Other
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ 147,984	$ 157,820

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Subsequent Events (Details) - Subsequent Event - USD ($) shares in Millions	1 Months Ended
	Nov. 01, 2018	Oct. 26, 2018
Subsequent Event [Line Items]
Stock repurchased during the period (in shares)	18.2
Share repurchase program, repurchase amount		$ 100,000,000