Company Quick10K Filing
Superior Energy Services
Price0.09 EPS-6
Shares157 P/E-0
MCap14 P/FCF0
Net Debt1,037 EBIT-895
TEV1,051 TEV/EBIT-1
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-21
10-K 2019-12-31 Filed 2020-02-28
10-Q 2019-09-30 Filed 2019-11-06
10-Q 2019-06-30 Filed 2019-07-24
10-Q 2019-03-31 Filed 2019-04-24
10-K 2018-12-31 Filed 2019-02-21
10-Q 2018-09-30 Filed 2018-10-23
10-Q 2018-06-30 Filed 2018-07-25
10-Q 2018-03-31 Filed 2018-04-25
10-K 2017-12-31 Filed 2018-02-22
10-Q 2017-09-30 Filed 2017-10-25
10-Q 2017-06-30 Filed 2017-07-27
10-Q 2017-03-31 Filed 2017-04-27
10-K 2016-12-31 Filed 2017-02-24
10-Q 2016-09-30 Filed 2016-10-26
10-Q 2016-06-30 Filed 2016-07-27
10-Q 2016-03-31 Filed 2016-04-29
10-K 2015-12-31 Filed 2016-02-25
10-Q 2015-09-30 Filed 2015-10-30
10-Q 2015-06-30 Filed 2015-08-04
10-Q 2015-03-31 Filed 2015-05-04
10-K 2014-12-31 Filed 2015-02-26
10-Q 2014-09-30 Filed 2014-11-04
10-Q 2014-06-30 Filed 2014-08-05
10-Q 2014-03-31 Filed 2014-05-02
10-K 2013-12-31 Filed 2014-02-27
10-Q 2013-09-30 Filed 2013-11-06
10-Q 2013-06-30 Filed 2013-08-07
10-Q 2013-03-31 Filed 2013-05-03
10-K 2012-12-31 Filed 2013-02-28
10-Q 2012-09-30 Filed 2012-11-08
10-Q 2012-06-30 Filed 2012-08-06
10-Q 2012-03-31 Filed 2012-05-10
10-K 2011-12-31 Filed 2012-02-28
8-K 2020-06-03
8-K 2020-06-01
8-K 2020-05-21
8-K 2020-04-28
8-K 2020-03-30
8-K 2020-03-26
8-K 2020-03-25
8-K 2020-02-20
8-K 2020-02-20
8-K 2020-02-20
8-K 2020-02-19
8-K 2020-02-19
8-K 2020-02-14
8-K 2020-02-06
8-K 2020-01-31
8-K 2020-01-27
8-K 2020-01-22
8-K 2020-01-16
8-K 2020-01-06
8-K 2019-12-18
8-K 2019-12-18
8-K 2019-12-18
8-K 2019-12-10
8-K 2019-11-05
8-K 2019-10-01
8-K 2019-08-09
8-K 2019-07-23
8-K 2019-06-06
8-K 2019-04-23
8-K 2019-02-18
8-K 2018-10-22
8-K 2018-07-24
8-K 2018-05-22
8-K 2018-04-24
8-K 2018-02-28
8-K 2018-02-19
8-K 2018-01-29

SPN 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Item 2. Management’S Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 spn-20160331xex31_1.htm
EX-31.2 spn-20160331xex31_2.htm
EX-32.1 spn-20160331xex32_1.htm
EX-32.2 spn-20160331xex32_2.htm

Superior Energy Services Earnings 2016-03-31

Balance SheetIncome StatementCash Flow
10.08.06.04.02.00.02012201420172020
Assets, Equity
1.30.90.4-0.0-0.5-0.92012201420172020
Rev, G Profit, Net Income
0.40.30.1-0.0-0.2-0.32012201420172020
Ops, Inv, Fin

10-Q 1 spn-20160331x10q.htm 10-Q spn-20160331 10Q Q1_Taxonomy2015

 

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549







FORM 10-Q





(Mark One)

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





For the quarterly period ended March 31, 2016



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 No. 001-34037







SUPERIOR ENERGY SERVICES, INC.



(Exact name of registrant as specified in its charter)











 

 



 

 



 

 

Delaware

 

75-2379388

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)



 

 



 

 



 

 



 

 



 

 

1001 Louisiana Street, Suite 2900

 

77002

Houston, TX

 

(Zip Code)

(Address of principal executive offices)

 

 



Registrant’s telephone number, including area code: (713)  654-2200



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



Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes 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    

(do not check if smaller reporting company)

Smaller reporting company          



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



The number of shares of the registrant’s common stock outstanding on April 25, 2016 was 151,412,233.



 

 

 


 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Quarterly Report on Form 10-Q for

the Quarterly Period Ended March 31, 2016



TABLE OF CONTENTS





 

 



 

 



 

Page

PART I.

FINANCIAL INFORMATION

 



 

 

Item 1.

Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

13 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

16 

Item 4.

Controls and Procedures

17 



 

 

PART II.

OTHER INFORMATION

 



 

 

Item 1A.

Risk Factors

18 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

18 

Item 6.

Exhibits

18 





2

 


 



PART I.  FINANCIAL INFORMATION



Item 1. Financial Statements





 

 

 

 

 

 



 

 

 

 

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2016 and December 31, 2015

(in thousands, except share data)

(unaudited)



 

3/31/2016

 

12/31/2015

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

559,238 

 

$

564,017 

Accounts receivable, net of allowance for doubtful accounts of $32,055 and

 

 

 

 

 

 

$28,242 at March 31, 2016 and December 31, 2015, respectively

 

 

356,842 

 

 

428,514 

Prepaid expenses

 

 

49,291 

 

 

42,298 

Inventory and other current assets

 

 

154,503 

 

 

165,062 

Assets held for sale

 

 

66,713 

 

 

95,234 

Total current assets

 

 

1,186,587 

 

 

1,295,125 

Property, plant and equipment, net of accumulated depreciation and depletion of

      $2,343,681 and $2,278,856 at March 31, 2016 and December 31, 2015, respectively

 

 

2,065,528 

 

 

2,123,291 

Goodwill

 

 

1,139,625 

 

 

1,140,101 

Notes receivable

 

 

53,325 

 

 

52,382 

Intangible and other long-term assets, net of accumulated amortization of $87,429

      and $83,520 at March 31, 2016 and December 31, 2015, respectively

 

 

301,033 

 

 

303,345 

Total assets

 

$

4,746,098 

 

$

4,914,244 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

95,912 

 

$

114,475 

Accrued expenses

 

 

275,381 

 

 

271,246 

Income taxes payable

 

 

17,856 

 

 

9,185 

Current maturities of long-term debt

 

 

6,028 

 

 

29,957 

Current portion of decommissioning liabilities

 

 

22,625 

 

 

19,052 

Liabilities held for sale

 

 

3,495 

 

 

4,661 

Total current liabilities

 

 

421,297 

 

 

448,576 

Deferred income taxes

 

 

332,694 

 

 

383,069 

Decommissioning liabilities

 

 

97,011 

 

 

98,890 

Long-term debt, net

 

 

1,608,575 

 

 

1,588,263 

Other long-term liabilities

 

 

179,499 

 

 

184,634 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock of $0.01 par value.  Authorized - 5,000,000 shares; none issued

 

 

 -

 

 

 -

Common stock of $0.001 par value

 

 

 

 

 

 

Authorized-250,000,000, Issued and Outstanding-151,412,233 at March 31, 2016

Authorized-250,000,000, Issued and Outstanding-150,861,500 at December 31, 2015

 

 

151 

 

 

151 

Additional paid in capital

 

 

2,664,761 

 

 

2,664,517 

Accumulated other comprehensive loss, net

 

 

(50,449)

 

 

(45,694)

Retained deficit

 

 

(507,441)

 

 

(408,162)

Total stockholders’ equity

 

 

2,107,022 

 

 

2,210,812 

Total liabilities and stockholders’ equity

 

$

4,746,098 

 

$

4,914,244 

 

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements.



 

 

 

 

 

 

3

 


 









 

 

 

 

 

 



 

 

 

 

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

Three Months Ended March 31, 2016 and 2015

(in thousands, except per share data)

(unaudited)



 

 

 

 

 

 



 

2016

 

2015

Revenues:

 

 

 

 

 

 

Services

 

$

313,928 

 

$

685,465 

Rentals

 

 

99,205 

 

 

231,770 

Total revenues

 

 

413,133 

 

 

917,235 

Costs and expenses:

 

 

 

 

 

 

Cost of services (exclusive of items shown separately below)

 

 

252,543 

 

 

481,993 

Cost of rentals (exclusive of items shown separately below)

 

 

32,796 

 

 

100,253 

Depreciation, depletion, amortization and accretion

 

 

136,672 

 

 

162,220 

General and administrative expenses

 

 

103,155 

 

 

150,962 

Income (loss) from operations

 

 

(112,033)

 

 

21,807 

Other income (expense):

 

 

 

 

 

 

Interest expense, net

 

 

(23,806)

 

 

(23,209)

Other income (expense):

 

 

7,755 

 

 

(971)

Loss from continuing operations before income taxes

 

 

(128,084)

 

 

(2,373)

Income taxes

 

 

(43,548)

 

 

(878)

Net loss from continuing operations

 

 

(84,536)

 

 

(1,495)

Loss from discontinued operations, net of income tax

 

 

(2,267)

 

 

(9,640)

Net loss

 

$

(86,803)

 

$

(11,135)

Loss per share information:

 

 

 

 

 

 

Basic and diluted:

 

 

 

 

 

 

Continuing operations

 

$

(0.56)

 

$

(0.01)

Discontinued operations

 

 

(0.01)

 

 

(0.06)

Basic and diluted loss per share

 

$

(0.57)

 

$

(0.07)

Cash dividends declared per share

 

$

0.08 

 

$

0.08 

Weighted average common shares used in computing
loss per share:

 

 

 

 

 

 

Basic and diluted

 

 

151,324 

 

 

149,881 



 

 

 

 

 

 



































 

 

 

 

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Loss

Three Months Ended March 31, 2016 and 2015

(in thousands)

(unaudited)



 

 

 

 

 

 



 

2016

 

2015

Net loss

 

$

(86,803)

 

$

(11,135)

Change in cumulative translation adjustment, net of tax

 

 

(4,755)

 

 

(14,679)

Comprehensive loss

 

$

(91,558)

 

$

(25,814)



 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements.



















4

 


 





 

 

 

 

 

 



 

 

 

 

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2016 and 2015

(in thousands)

(unaudited)



 

2016

 

2015

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(86,803)

 

$

(11,135)

Adjustments to reconcile net loss to net cash provided by operating
  activities:

 

 

 

 

 

 

Depreciation, depletion, amortization and accretion

 

 

136,672 

 

 

162,223 

Deferred income taxes

 

 

(55,371)

 

 

(4,767)

Stock based compensation expense

 

 

10,783 

 

 

11,816 

Other reconciling items, net

 

 

(63)

 

 

4,681 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

Accounts receivable

 

 

71,602 

 

 

168,412 

Inventory and other current assets

 

 

(6,529)

 

 

(14,992)

Accounts payable

 

 

(14,979)

 

 

(20,800)

Accrued expenses

 

 

(5,307)

 

 

(38,152)

Income taxes

 

 

8,987 

 

 

(30,973)

Other, net

 

 

3,543 

 

 

11,955 

Net cash provided by operating activities

 

 

62,535 

 

 

238,268 

Cash flows from investing activities:

 

 

 

 

 

 

Payments for capital expenditures

 

 

(38,015)

 

 

(127,487)

Purchase of leased vessels

 

 

 -

 

 

(46,442)

Other

 

 

1,880 

 

 

1,900 

         Net cash used in investing activities

 

 

(36,135)

 

 

(172,029)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from revolving line of credit

 

 

325,000 

 

 

 -

Principal payments on long-term debt

 

 

(329,106)

 

 

(5,233)

Payment of debt issuance costs

 

 

(2,364)

 

 

 -

Cash dividends

 

 

(12,111)

 

 

(11,984)

Payment to extinguish capital lease obligation

 

 

 -

 

 

(20,933)

Proceeds from exercise of stock options

 

 

 -

 

 

6,208 

Other

 

 

(8,366)

 

 

(6,367)

         Net cash used in financing activities

 

 

(26,947)

 

 

(38,309)

         Effect of exchange rate changes on cash

 

 

(4,232)

 

 

(6,147)

         Net increase (decrease) in cash and cash equivalents

 

 

(4,779)

 

 

21,783 

Cash and cash equivalents at beginning of period

 

 

564,017 

 

 

393,046 

Cash and cash equivalents at end of period

 

$

559,238 

 

$

414,829 



 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements.























5

 


 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

Three Months Ended March 31, 2016

(1)Basis of Presentation



Certain information and footnote disclosures normally in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC); however, management believes the disclosures that are made are adequate to make the information presented not misleading.  These financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in Superior Energy Services, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015, and Management’s Discussion and Analysis of Financial Condition and Results of Operations herein.



The financial information of Superior Energy Services, Inc. and subsidiaries (the Company) for the three months ended March 31, 2016 and 2015 has not been audited.  However, in the opinion of management, all adjustments necessary to present fairly the results of operations for the periods presented have been included therein.  Certain previously reported amounts have been reclassified to conform to the 2016 presentation.  The results of operations for the first three months of the year are not necessarily indicative of the results of operations that might be expected for the entire year. 



Due to the nature of the Company’s business, the Company is involved, from time to time, in routine litigation or subject to disputes or claims regarding its business activities. Legal costs related to these matters are expensed as incurred.  In management’s opinion, none of the pending litigation, disputes or claims is expected to have a material adverse effect on the Company’s financial condition, results of operations or liquidity.



The Company evaluates events that occur after the balance sheet date but before the financial statements are issued for potential recognition or disclosure.  Based on the evaluation, the Company determined that there were no material subsequent events for recognition or disclosure other than those disclosed herein.





(2)Inventory



Inventories are stated at the lower of cost or market.  Cost is determined using the first-in, first-out or weighted-average cost methods for finished goods and work-in-process.  Supplies and consumables consist principally of products used in our services provided to customers. The components of the inventory balances are as follows (in thousands):





 

 

 

 

 

 



 

 

 

 

 

 



 

March 31, 2016

 

December 31, 2015

Finished goods

 

$

71,377 

 

$

71,951 

Raw materials

 

 

17,387 

 

 

23,418 

Work-in-process

 

 

6,276 

 

 

18,203 

Supplies and consumables

 

 

36,271 

 

 

35,189 

Total

 

$

131,311 

 

$

148,761 



 

 

 

 

 

 









(3) Notes Receivable



Notes receivable consist of a commitment from the seller of an oil and gas property acquired by the Company related to costs associated with the abandonment of the acquired property.  Pursuant to an agreement with the seller, the Company will invoice the seller an agreed upon amount at the completion of certain decommissioning activities.  The gross amount of this obligation totals $115.0 million and is recorded at present value using an effective interest rate of 6.58%.  The related discount is amortized to interest income based on the expected timing of completion of the decommissioning activities.  The Company recorded interest income related to notes receivable of $0.9 million and $0.4 million for the three months ended March 31, 2016 and 2015.  





(4)Decommissioning Liabilities



The Company’s decommissioning liabilities associated with an oil and gas property and its related assets consist of costs related to the plugging of wells, the removal of the related platform and equipment, and site restoration.  The Company reviews the adequacy of its decommissioning liabilities whenever indicators suggest that the estimated cash flows needed to satisfy the liabilities have changed materially.  The Company had decommissioning liabilities of $119.6 million and $117.9 million at March 31, 2016 and December 31, 2015, respectively.



6

 


 

(5)Debt



The Company’s outstanding debt is as follows (in thousands):





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

March 31, 2016

 

December 31, 2015



 

Long-term

 

Current

 

Long-term

 

Current

Revolving credit facility due February 2019

 

$

325,000 

 

$

 -

 

$

 -

 

$

 -

Senior Notes due May 2019

 

 

500,000 

 

 

 -

 

 

500,000 

 

 

 -

Senior Notes due December 2021

 

 

800,000 

 

 

 -

 

 

800,000 

 

 

 -

Term loan

 

 

 -

 

 

 -

 

 

305,000 

 

 

20,000 

Other

 

 

2,387 

 

 

6,028 

 

 

3,089 

 

 

9,957 

Total debt, gross

 

 

1,627,387 

 

 

6,028 

 

 

1,608,089 

 

 

29,957 

Unamortized debt issuance costs

 

 

(18,812)

 

 

 -

 

 

(19,826)

 

 

 -

Total debt

 

$

1,608,575 

 

$

6,028 

 

$

1,588,263 

 

$

29,957 



Credit Facility



At December 31, 2015, the Company had a bank credit facility, comprised of a $600.0 million revolving credit facility and a $325.0 million term loan.  In February 2016, the Company amended and extended its credit facility, resulting in a $470.3 million revolving credit facility which matures in 2019 and no longer has a term loan component. At March 31, 2016, the Company had $325.0 million of borrowings and $46.6 million of letters of credit outstanding under the credit facility. Amounts borrowed under the credit facility bear interest at LIBOR plus margins that depend on the Company’s credit rating. 



Senior Unsecured Notes



The Company has outstanding $500 million of 6 3/8% unsecured senior notes due 2019.  The indenture governing the 6 3/8% senior notes requires semi-annual interest payments on May 1 and November 1 of each year through the maturity date of May 1, 2019. 



The Company also has outstanding $800 million of 7 1/8% unsecured senior notes due 2021.  The indenture governing the 7 1/8% senior notes requires semi-annual interest payments on June 15 and December 15 of each year through the maturity date of December 15, 2021. 



(6Derivative Financial Instruments



From time to time, the Company may employ interest rate swaps in an attempt to achieve a more balanced debt portfolio between fixed and variable interest.  The Company does not use derivative financial instruments for trading or speculative purposes.



The Company has three interest rate swap agreements related to its fixed rate debt maturing in 2021 for notional amounts of $100 million each, whereby the Company is entitled to receive semi-annual interest payments at a fixed rate of 7 1/8% per annum and is obligated to make semi-annual interest payments at floating rates, which are adjusted every 90 days, based on LIBOR plus a fixed margin. The swap agreements, scheduled to terminate on December 15, 2021, are designated as fair value hedges of a portion of the Company’s 7 1/8% senior notes, as the derivatives have been tested to be highly effective in offsetting changes in the fair value of the underlying notes.  As these derivatives are classified as fair value hedges, the changes in the fair value of the derivatives are offset against the changes in the fair value of the underlying note in interest expense, netThe Company recorded a derivative asset relating to these swaps of $9.6 million and $6.9 million within intangible and other long term assets in the consolidated balance sheets at March 31, 2016 and December 31, 2015, respectively



The location and effect of the derivative instruments on the condensed consolidated statement of operations, presented on a pre-tax basis, are as follows (in thousands):







 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 



 

 

 

 

Three Months Ended March 31,

Effect of derivative instrument

 

Location of (gain) loss 
recognized

 

 

2016

 

 

2015

Interest rate swap

 

Interest expense, net

 

 

$

(5,197)

 

 

$

(3,448)

Hedged item - debt

 

Interest expense, net

 

 

 

2,490 

 

 

 

2,185 



 

 

 

 

$

(2,707)

 

 

$

(1,263)



 

 

 

 

 

 

 

 

 

 





7

 


 

For the three months ended March 31, 2016 and 2015,  approximately $2.7 million and $1.3 million of interest income, respectively, was related to the ineffectiveness associated with these fair value hedges.  Hedge ineffectiveness represents the difference between the changes in fair value of the derivative instruments and the changes in fair value of the fixed rate debt attributable to changes in the benchmark interest rate. 



(7Fair Value Measurements



Fair value is defined as the price that would be received to sell an asset or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Inputs used in determining fair value are characterized according to a hierarchy that prioritizes those inputs based on the degree to which they are observable.  The three input levels of the fair value hierarchy are as follows.  



Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.



Level 2: Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical assets or liabilities in inactive markets; or model-derived valuations or other inputs that can be corroborated by observable market data.



Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.



The following tables provide a summary of the financial assets and liabilities measured at fair value on a recurring basis (in thousands):



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

Fair Value Measurements at Reporting Date Using



 

March 31, 2016

 

Level 1

 

Level 2

 

Level 3

Intangible and other long-term assets, net

 

 

 

 

 

 

 

 

 

 

 

 

Non-qualified deferred compensation assets

 

$

11,653 

 

$

368 

 

$

11,285 

 

 

 -

Interest rate swaps

 

$

9,612 

 

 

 -

 

$

9,612 

 

 

 -

Accounts payable

 

 

 

 

 

 

 

 

 

 

 

 

Non-qualified deferred compensation liabilities

 

$

573 

 

 

 -

 

$

573 

 

 

 -

Other long-term liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Non-qualified deferred compensation liabilities

 

$

17,582 

 

 

 -

 

$

17,582 

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 



 

December 31, 2015

 

Level 1

 

Level 2

 

Level 3

Intangible and other long-term assets, net

 

 

 

 

 

 

 

 

 

 

 

 

Non-qualified deferred compensation assets

 

$

11,548 

 

$

368 

 

$

11,180 

 

 

 -

Interest rate swaps

 

$

6,905 

 

 

 -

 

$

6,905 

 

 

 -

Accounts payable

 

 

 

 

 

 

 

 

 

 

 

 

Non-qualified deferred compensation liabilities

 

$

721 

 

 

 -

 

$

721 

 

 

 -

Other long-term liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Non-qualified deferred compensation liabilities

 

$

17,367 

 

 

 -

 

$

17,367 

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

The Company’s non-qualified deferred compensation plans allow officers, certain highly compensated employees and non-employee directors to defer receipt of a portion of their compensation and contribute such amounts to one or more hypothetical investment funds.  The Company entered into separate trust agreements, subject to general creditors, to segregate assets of each plan and reports the accounts of the trusts in its condensed consolidated financial statements.  These investments are reported at fair value based on unadjusted quoted prices in active markets for identifiable assets and observable inputs for similar assets and liabilities, which represent Levels 1 and 2, respectively, in the fair value hierarchy. 



The fair value of the Company’s cash equivalents, accounts receivable and current maturities of long-term debt approximates their carrying amounts.  The fair value of the Company’s long-term debt was approximately $1,355.5 million and $1,508.0 million at March 31, 2016 and December 31, 2015, respectively.  The fair value of these debt instruments is determined by reference to the market value of the instruments as quoted in over-the-counter markets, which are Level 1 inputs.



8

 


 

(8Segment Information



Business Segments



The Drilling Products and Services segment rents and sells bottom hole assemblies, premium drill pipe, tubulars and specialized equipment for use with onshore and offshore oil and gas well drilling, completion, production and workover activities.  It also provides on-site accommodations and machining services.  The Onshore Completion and Workover Services segment provides pressure pumping services used to complete and stimulate production in new oil and gas wells, fluid handling services and well servicing rigs that provide a variety of well completion, workover and maintenance services.  The Production Services segment provides intervention services such as coiled tubing, cased hole and mechanical wireline, hydraulic workover and snubbing, production testing and optimization, and remedial pumping services.  The Technical Solutions segment provides services typically requiring specialized engineering, manufacturing or project planning, including well containment systems, stimulation and sand control services and well plug and abandonment services. It also includes production handling arrangements and the production and sale of oil and gas. 

 

The Company evaluates the performance of its reportable segments based on income or loss from operations.  The segment measure is calculated as follows: segment revenues less segment operating expenses, depreciation, depletion, amortization and accretion expense and allocated general and administrative expenses.  General and administrative expenses are allocated to the segments based primarily on specific identification and, to the extent that such identification is not practical, other methods which the Company believes to be a reasonable reflection of the utilization of services provided.  The Company believes this segment measure is useful in evaluating the performance of its reportable segments because it highlights operating trends and aids analytical comparisons.



Summarized financial information for the Company’s segments is as follows (in thousands): 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

Onshore

 

 

 

 

 

 

 

 

 

 

 

 



 

Drilling

 

Completion

 

 

 

 

 

 

 

 

 

 

 



 

Products and

 

and Workover

 

Production

 

Technical

 

 

 

 

Consolidated



 

Services

 

Services

 

Services

 

Solutions

 

Unallocated

 

Total

Revenues

 

$

96,570 

 

$

132,472 

 

$

96,746 

 

$

87,345 

 

$

 -

 

$

413,133 

Cost of services and rentals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(exclusive of items shown separately below)

 

 

37,534 

 

 

123,330 

 

 

73,874 

 

 

50,601 

 

 

 -

 

 

285,339 

Depreciation, depletion, amortization
    and accretion

 

 

46,784 

 

 

54,627 

 

 

23,585 

 

 

11,676 

 

 

 -

 

 

136,672 

General and administrative expenses

 

 

28,547 

 

 

25,050 

 

 

24,431 

 

 

25,127 

 

 

 -

 

 

103,155 

Loss from operations

 

 

(16,295)

 

 

(70,535)

 

 

(25,144)

 

 

(59)

 

 

 -

 

 

(112,033)

Interest income (expense), net

 

 

 -

 

 

 -

 

 

(793)

 

 

943 

 

 

(23,956)

 

 

(23,806)

Other income

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

7,755 

 

 

7,755 

Income (loss) from continuing operations
    before income taxes

 

$

(16,295)

 

$

(70,535)

 

$

(25,937)

 

$

884 

 

$

(16,201)

 

$

(128,084)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

Onshore

 

 

 

 

 

 

 

 

 

 

 

 



 

Drilling

 

Completion

 

 

 

 

 

 

 

 

 

 

 

 



 

Products and

 

and Workover

 

Production

 

Technical

 

 

 

 

Consolidated



 

Services

 

Services

 

Services

 

Solutions

 

Unallocated

 

Total

Revenues

 

$

196,636 

 

$

351,084 

 

$

251,379 

 

$

118,136 

 

$

 -

 

$

917,235 

Cost of services and rentals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(exclusive of items shown separately below)

 

 

61,801 

 

 

254,207 

 

 

191,222 

 

 

75,016 

 

 

 -

 

 

582,246 

Depreciation, depletion, amortization
    and accretion

 

 

48,767 

 

 

59,805 

 

 

39,046 

 

 

14,602 

 

 

 -

 

 

162,220 

General and administrative expenses

 

 

38,843 

 

 

38,264 

 

 

43,306 

 

 

30,549 

 

 

 -

 

 

150,962 

Income (loss) from operations

 

 

47,225 

 

 

(1,192)

 

 

(22,195)

 

 

(2,031)

 

 

 -

 

 

21,807 

Interest income (expense), net

 

 

 -

 

 

 -

 

 

235 

 

 

417 

 

 

(23,861)

 

 

(23,209)

Other expense

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

(971)

 

 

(971)

Income (loss) from continuing operations
    before income taxes

 

$

47,225 

 

$

(1,192)

 

$

(21,960)

 

$

(1,614)

 

$

(24,832)

 

$

(2,373)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





9

 


 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Identifiable Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

Onshore

 

 

 

 

 

 

 

 

 

 

 

 



 

Drilling

 

Completion

 

 

 

 

 

 

 

 

 

 

 



 

Products and

 

and Workover

 

Production

 

Technical

 

 

 

 

Consolidated



 

Services

 

Services

 

Services

 

Solutions

 

Unallocated

 

Total

March 31, 2016

 

$

1,288,642 

 

$

1,854,210 

 

$

870,763 

 

$

732,483 

 

$

 -

 

$

4,746,098 

December 31, 2015

 

$

1,223,191 

 

$

1,929,185 

 

$

967,719 

 

$

794,149 

 

$

 -

 

$

4,914,244 



Geographic Segments



The Company attributes revenue to various countries based on the location of where services are performed or the destination of the drilling products or equipment sold or rented.  Long-lived assets consist primarily of property, plant and equipment and are attributed to various countries based on the physical location of the asset at the end of a period.  The Company’s revenue attributed to the U.S. and to other countries and the value of its long-lived assets by those locations are as follows (in thousands):















 

 

 

 

 

 



 

 

 

 

 

 

Revenues

 

 

 



 

Three Months Ended March 31,



 

2016

 

2015

United States

 

$

303,576 

 

$

760,443 

Other Countries

 

 

109,557 

 

 

156,792 

Total

 

$

413,133 

 

$

917,235 



 

 

 

 

 

 

Long-Lived Assets

 

 

 

 

 

 



 

March 31, 2016

 

December 31, 2015

United States

 

$

1,726,577 

 

$

1,799,418 

Other Countries

 

 

338,951 

 

 

323,873 

Total, net

 

$

2,065,528 

 

$

2,123,291 



 

 

 

 

 

 















(9)Stock-Based Compensation Plans



The Company maintains various stock incentive plans that provide long-term incentives to the Company’s key employees, including officers, directors, consultants and advisors (Eligible Participants).  Under the stock incentive plans, the Company may grant incentive stock options, non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights, other stock-based awards or any combination thereof to Eligible Participants.  The Company’s total compensation expense related to these plans was approximately $10.4 million and $11.6 million for the three months ended March 31, 2016 and 2015, respectively, which is reflected in general and administrative expenses.



(10Income Taxes



The Company had $29.7 million of unrecorded tax benefits at March 31, 2016 and December 31, 2015, all of which would impact the Company’s effective tax rate if recognized.  It is the Company’s policy to recognize interest and applicable penalties, if any, related to uncertain tax positions in income tax expense. 



(11) Earnings per Share



Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period.  Diluted earnings per share is computed in the same manner as basic earnings per share except that the denominator is increased to include the number of additional common shares that could have been outstanding assuming the exercise of stock options and the conversion of restricted stock units.



For the three months ended March 31, 2016 and 2015, the Company incurred a loss from continuing operations; therefore the impact of any incremental shares would be anti-dilutive.



(12) Discontinued Operations



During the first quarter of 2016, the Company’s management determined that the conventional decommissioning business no longer met the held for sale criteria at March 31, 2016.  Accordingly, property, plant and equipment related to the conventional decommissioning business was reclassified back to continuing operations.

10

 


 



At March 31, 2016, the assets of the subsea construction business were being actively marketed and the Company’s management is committed to selling the remaining assets.    At March 31, 2016, the assets and liabilities of the subsea construction business were classified as held for sale. 



The following table summarizes the components of loss from discontinued operations, net of tax (in thousands):



 

 

 

 

 

 



 

Three Months Ended March 31,



 

2016

 

2015

Revenues

 

$

 -

 

$

2,940 



 

 

 

 

 

 

Loss from discontinued operations, net of tax benefit of $0 and
$1,373, respectively

 

 

(2,267)

 

 

(9,640)



For the three months ended March 31, 2015, loss from discontinued operations included $0.5 million of loss related to the conventional decommissioning business.



The following summarizes the assets and liabilities related to the businesses reported as discontinued operations (in thousands):