Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 21, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Superior Energy Services Inc | |
Entity Central Index Key | 886,835 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 152,831,563 | |
Trading Symbol | spn |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 151,766 | $ 187,591 |
Accounts receivable, net of allowance for doubtful accounts of $29,034 and $29,740 at March 31, 2017 and December 31, 2016, respectively | 329,770 | 297,164 |
Income taxes receivable | 121,309 | 101,578 |
Prepaid expenses | 42,976 | 37,288 |
Inventory and other current assets | 139,631 | 130,772 |
Assets held for sale | 27,411 | 27,158 |
Total current assets | 812,863 | 781,551 |
Property, plant and equipment, net of accumulated depreciation and depletion of $2,537,156 and $2,454,339 at March 31, 2017 and December 31, 2016, respectively | 1,513,282 | 1,605,365 |
Goodwill | 804,436 | 803,917 |
Notes receivable | 57,423 | 56,650 |
Intangible and other long-term assets, net of accumulated amortization of $73,228 and $69,588 at March 31, 2017 and December 31, 2016, respectively | 190,707 | 222,772 |
Total assets | 3,378,711 | 3,470,255 |
Current liabilities: | ||
Accounts payable | 102,221 | 94,831 |
Accrued expenses | 236,978 | 218,192 |
Income taxes payable | 694 | |
Current portion of decommissioning liabilities | 22,188 | 22,164 |
Liabilities held for sale | 7,401 | 8,653 |
Total current liabilities | 368,788 | 344,534 |
Deferred income taxes | 213,855 | 243,611 |
Decommissioning liabilities | 103,186 | 101,513 |
Long-term debt, net | 1,286,210 | 1,284,600 |
Other long-term liabilities | 193,974 | 192,077 |
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 - 152,831,563 at March 31, 2017, Authorized-250,000,000, Issued and Outstanding - 151,861,661 at December 31, 2016 | 153 | 152 |
Additional Paid in Capital | 2,690,265 | 2,691,553 |
Accumulated other comprehensive loss, net | (78,524) | (80,248) |
Retained deficit | (1,399,196) | (1,307,537) |
Total stockholders' equity | 1,212,698 | 1,303,920 |
Total liabilities and stockholders' equity | $ 3,378,711 | $ 3,470,255 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Allowance for doubtful accounts | $ 29,034 | $ 29,740 |
Accumulated depreciation and depletion on Property, plant and equipment | 2,537,156 | 2,454,339 |
Accumulated amortization of Intangible and other long-term assets | $ 73,228 | $ 69,588 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 152,831,563 | 151,861,661 |
Common stock, shares outstanding | 152,831,563 | 151,861,661 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues: | ||
Services | $ 334,450 | $ 313,928 |
Rentals | 66,486 | 99,205 |
Total Revenues | 400,936 | 413,133 |
Costs and expenses: | ||
Cost of Services (exclusive of depreciation, depletion, amortization and accretion) | 296,434 | 252,543 |
Cost of rentals (exclusive of depreciation, depletion, amortization and accretion) | 25,552 | 32,796 |
Depreciation, depletion, amortization and accretion - services | 95,330 | 103,853 |
Depreciation, depletion, amortization and accretion - rentals | 18,951 | 32,819 |
General and administrative expenses | 75,493 | 103,155 |
Income from operations | (110,824) | (112,033) |
Other income (expense): | ||
Interest expense, net | (24,250) | (23,806) |
Other income | 649 | 7,755 |
Loss from continuing operations before income taxes | (134,425) | (128,084) |
Income taxes | (44,764) | (43,548) |
Net loss from continuing operations | (89,661) | (84,536) |
Loss from discontinued operations, net of income tax | (1,998) | (2,267) |
Net loss | $ (91,659) | $ (86,803) |
Basic and diluted: | ||
Continuing Operations | $ (0.59) | $ (0.56) |
Discontinued Operations | (0.01) | (0.01) |
Basic and diluted loss per share | $ (0.60) | (0.57) |
Cash dividends declared per share | $ 0.08 | |
Weighted average common shares used in computing loss per share: | ||
Basic and diluted | 152,701 | 151,324 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Condensed Consolidated Statement of Comprehensive Loss [Abstract] | ||
Net loss | $ (91,659) | $ (86,803) |
Change in cumulative translation adjustment, net of tax | 1,724 | (4,755) |
Comprehensive loss | $ (89,935) | $ (91,558) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (91,659) | $ (86,803) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation, depletion, amortization and accretion | 114,281 | 136,672 |
Deferred income taxes | (29,747) | (55,371) |
Stock based compensation expense | 10,691 | 10,783 |
Other reconciling items, net | (1,430) | (63) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (32,441) | 71,602 |
Inventory and other current assets | (8,826) | (6,529) |
Accounts payable | 11,731 | (14,979) |
Accrued expenses | 17,673 | (5,307) |
Income taxes | (20,496) | 8,987 |
Other, net | (12,592) | 3,543 |
Net cash provided by (used in) operating activities | (42,815) | 62,535 |
Cash flows from investing activities: | ||
Payments for capital expenditures | (21,188) | (38,015) |
Decrease in cash held in escrow | 30,600 | |
Other | 4,090 | 1,880 |
Net cash provided by (used in) investing activities | 13,502 | (36,135) |
Cash flows from financing activities: | ||
Cash dividends | (12,111) | |
Proceeds from revolving line of credit | 325,000 | |
Principal payments of long-term debt | (329,106) | |
Tax withholdings for vested restricted stock units | (8,220) | (3,435) |
Other | (486) | (7,295) |
Net cash used in financing activities | (8,706) | (26,947) |
Effect of exchange rate changes on cash | 2,194 | (4,232) |
Net decrease in cash and cash equivalents | (35,825) | (4,779) |
Cash and cash equivalents at beginning of period | 187,591 | 564,017 |
Cash and cash equivalents at end of period | $ 151,766 | $ 559,238 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | (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, 2016 , 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, 2017 and 2016 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 2017 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. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2017 | |
Inventory [Abstract] | |
Inventory | (2) Inventory Inventories are state d at the lower of cost or net realizable value . The Company applies net realizable value and obsolescence to the gross value of the inventory. 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, 2017 December 31, 2016 Finished goods $ 61,724 $ 49,888 Raw materials 13,443 17,948 Work-in-process 7,445 5,214 Supplies and consumables 29,450 30,029 Total $ 112,062 $ 103,079 |
Notes Receivable
Notes Receivable | 3 Months Ended |
Mar. 31, 2017 | |
Notes Receivable [Abstract] | |
Notes Receivable | (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. 8 million and $0.9 million for the three months ended March 31, 2017 and 2016, respectively . |
Decommissioning Liabilities
Decommissioning Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Decommissioning Liabilities [Abstract] | |
Decommissioning Liabilities | (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 $125.4 million and $123.7 million at March 3 1, 2017 and December 31, 2016 , respectively. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt [Abstract] | |
Debt | (5 ) Debt The Company’s outstanding debt is as follows (in thousands): March 31, 2017 December 31, 2016 Long-term Long-term Senior Notes due May 2019 $ 500,000 $ 500,000 Senior Notes due December 2021 800,000 800,000 Total debt, gross 1,300,000 1,300,000 Unamortized debt issuance costs (13,790) (15,400) Total debt, net $ 1,286,210 $ 1,284,600 Credit Facility In February 2017, the Company amended its credit facility to, among other things, reduce the size of the credit facility from $400.0 million to $300.0 million (with a $100.0 million accordion feature) and amend the financial covenants, in part to suspend the interest coverage ratio until the third quarter of 2017. Borrowings under the credit facility bear interest at LIBOR plus margins that depend on the Company’s credit rating. Indebtedness under the credit facility is secured by substantially all of the Company’s assets, including the pledge of the stock of its principal domestic subsidiaries. The credit facility contains customary events of default and requires that the Company satisfy various financial covenants. The credit facility also limits the Company’s ability to pay dividends or make distributions, make acquisitions, create liens or incur additional indebtedness. 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. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Financial Instruments [Abstract] | |
Derivative Financial Instruments | (6 ) Derivative Financial Instruments At December 31, 2016, the Company had three interest rate swaps for notional amounts of $ 100 million each related to its 7 1/8% senior notes maturing in December 2021. In January 2017, the Company sold these interest rate swaps to the counterparties for a net amount of $0.8 million. The remaining balance of the derivative asset is being amortized to interest expense over the remaining term of the related notes. For the three months ended March 31, 2017, $0.5 million of expense related to the amortization was recorded. T he 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): Effect of derivative instrument Location of (gain) loss recognized Three Months Ended March 31, 2016 Interest rate swap Interest expense, net $ (5,197) Hedged item - debt Interest expense, net 2,490 $ (2,707) For the three months ended March 31, 2016 , approximately $2.7 million of interest income was related to the ineffectiveness associated with these fair value hedges. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | (7 ) Fair 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, 2017 Level 1 Level 2 Level 3 Intangible and other long-term assets, net Non-qualified deferred compensation assets $ 12,965 $ 368 $ 12,597 - Accounts payable Non-qualified deferred compensation liabilities $ 967 - $ 967 - Other long-term liabilities Non-qualified deferred compensation liabilities $ 18,926 - $ 18,926 - December 31, 2016 Level 1 Level 2 Level 3 Intangible and other long-term assets, net Non-qualified deferred compensation assets $ 12,360 $ 368 $ 11,992 - Interest rate swaps $ 8,579 - $ 8,579 - Accounts payable Non-qualified deferred compensation liabilities $ 1,115 - $ 1,115 - Other long-term liabilities Non-qualified deferred compensation liabilities $ 18,489 - $ 18,489 - 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 $ 1,314. 6 million and $1,307.6 million as of March 31, 2017 and December 31, 2016 , 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. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Information [Abstract] | |
Segment Information | (8 ) Segment 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 a nd 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, reduction in value of assets and allocated corporate general and administrative expenses. Corporate g eneral 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 that 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, 2017 Onshore Drilling Completion Products and and Workover Production Technical Consolidated Services Services Services Solutions Unallocated Total Revenues $ 68,431 $ 204,979 $ 68,605 $ 58,921 $ - $ 400,936 Cost of services and rentals (exclusive of depreciation, depletion, amortization and accretion) 29,150 193,566 61,181 38,089 - 321,986 Depreciation, depletion, amortization and accretion 34,975 49,883 20,836 8,587 - 114,281 General and administrative expenses 17,473 24,771 15,800 17,449 - 75,493 Loss from operations (13,167) (63,241) (29,212) (5,204) - (110,824) Interest expense, net - - - 790 (25,040) (24,250) Other expense - - - - 649 649 Loss from continuing operations before income taxes $ (13,167) $ (63,241) $ (29,212) $ (4,414) $ (24,391) $ (134,425) Three Months Ended March 31, 2016 Onshore Drilling Completion Products and and Workover Production Technical Consolidated Services Services Services Solutions Unallocated Total Revenues $ 88,422 $ 132,472 $ 104,894 $ 87,345 $ - $ 413,133 Cost of services and rentals (exclusive of depreciation, depletion, amortization and accretion) 33,921 123,330 77,487 50,601 - 285,339 Depreciation, depletion, amortization and accretion 45,140 54,627 25,229 11,676 - 136,672 General and administrative expenses 27,083 25,050 25,895 25,127 - 103,155 Loss from operations (17,722) (70,535) (23,717) (59) - (112,033) Interest income (expense), net - - (793) 943 (23,956) (23,806) Other expense - - - - 7,755 7,755 Income (loss) from continuing operations before income taxes $ (17,722) $ (70,535) $ (24,510) $ 884 $ (16,201) $ (128,084) Identifiable Assets Onshore Drilling Completion Products and and Workover Production Technical Consolidated Services Services Services Solutions Total March 31, 2017 $ 772,561 $ 1,593,298 $ 585,434 $ 427,418 $ 3,378,711 December 31, 2016 $ 849,046 $ 1,573,801 $ 598,909 $ 448,499 $ 3,470,255 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, 2017 2016 United States $ 333,609 $ 303,576 Other Countries 67,327 109,557 Total $ 400,936 $ 413,133 Long-Lived Assets March 31, 2017 December 31, 2016 United States $ 1,210,392 $ 1,288,077 Other Countries 302,890 317,288 Total, net $ 1,513,282 $ 1,605,365 |
Stock Based Compensation Plans
Stock Based Compensation Plans | 3 Months Ended |
Mar. 31, 2017 | |
Stock-Based Compensation Plans [Abstract] | |
Stock-Based Compensation Plans | (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. 3 million and $ 10.4 million for the three months ended March 31, 2017 and 2016 , respectively, which is reflected in general and administrative expenses. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | (10 ) Income Taxes The Company had $ 29 .9 million of unrecorded tax benefits as of March 31, 2017 and December 31, 2016 , 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. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share | (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 3 1 , 201 7 and 2016 , the Company incurred a loss from continuing operations; therefore the impact of any incremental shares would be anti-dilutive. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2017 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | (12 ) Discontinued Operations At March 31, 2017 , the assets of the subsea construction business were being actively marketed and the Company’s management is committed to selli ng the remaining assets, which were classified as held for sale. The following summarizes the assets and liabilities related to the businesses reported as discontinued operations (in thousands): March 31, 2017 December 31, 2016 Current assets $ 411 $ 158 Property, plant and equipment, net 27,000 27,000 Total assets $ 27,411 $ 27,158 Current liabilities $ 7,401 $ 8,653 Loss from discontinued operations for the three months ended March 31, 2017 and 2016 was $2.0 million and $2.3 million, respectively. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | (13) New Accounting Pronouncements Standards adopted In January, 2017, the Financial Accounting Standards Board (FASB) issued accounting standards update (ASU) 2017-04, Intangibles- Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments eliminate Step 2 from the goodwill impairment test. The annual or interim goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The amendments should be applied on a prospective basis. The new standard is effective for the Company on January 1, 2020. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted the accounting guidance as of January 1, 2017. The newly adopted accounting principle is preferable because it reduces the cost and complexity of evaluating goodwill for impairment. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements. In March, 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which relates to the accounting for employee share-based payments. The guidance in this update addresses several aspects of the accounting for share-based payments, including income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The Company adopted the accounting guidance as of January 1, 2017. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory – Simplifying the Measurement of Inventory , which applies to inventory measured using first-in, first-out or average cost. The guidance in this update states that inventory within its scope shall be measured at the lower of cost or net realizable value, and when the net realizable value of inventory is lower than its cost, the difference shall be recognized as a loss in earnings. The Company adopted the accounting guidance as of January 1, 2017. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements. Standards not yet adopted In January, 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments affect all companies and other reporting organizations that must determine whether they have acquired or sold a business. The amendments are intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments provide a more robust framework to use in determining when a set of assets and activities is a business. The new standard is effective for the Company beginning on January 1, 2018. The Company does not expect the adoption of this ASU to have a material impact on its condensed consolidated financial statements. In November, 2016, the FASB issued ASU 2016-18, Statements of Cash Flows (Topic 230): Restricted Cash. The guidance in this update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new standard is effective for the Company beginning on January 1, 2018 and should be applied on a retrospective basis. The Company does not expect the adoption of this ASU to have a material impact on its condensed consolidated financial statements. In October, 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The guidance in this update requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfers other than inventory. The new standard is effective for the Company beginning on January 1, 2018. The Company is evaluating the effect that ASU 2016-16 will have on its condensed consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases , which requires lessees to recognize the assets and liabilities arising from leases on the balance sheet. This new guidance will require the lessee to recognize a lease liability equal to the present value of the lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases longer than 12 months. For leases with a term of 12 month or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities and recognize the lease expense for such leases generally on a straight-line basis over the lease term. Under the new guidance, the Company will revise its leasing policies to require most of the leases, where the Company is the lessee, to be recognized on the balance sheet as a lease and lease liability. Further, the Company will separate leases from other contracts where the Company is either the lessor or lessee when the rights conveyed under the contracts indicate there is a lease. The Company is evaluating the effect ASU 2016-02 will have on the Company; however, at this time, the Company cannot calculate the impact the new standard will have on the Company’s condensed consolidated financial statements, although the Company anticipates that its assets and liabilities will increase by a significant amount. The new standard is effective for the Company beginning on January 1, 2019. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which will replace most existing revenue recognition guidance in GAAP. The guidance in this update requires an entity to recognize the amount of revenue that it expects to be entitled for the transfer of promised goods or services to customers. The new standard is effective for the Company on January 1, 2018. The Company is in the process of determining the impacts of the new standard on its various revenue streams. The Company’s approach includes performing a detailed review of key contracts representative of the different businesses and comparing historical accounting policies and practices to the new accounting guidance. The Company’s services and rental contracts are primarily short-term in nature, and therefore, based on the initial assessment, the Company does not expect the adoption of this ASU to have a material impact on its condensed consolidated financial statements. Remaining implementation matters include establishing new policies, procedures, and controls and quantifying any adoption date adjustments. The Company will adopt this standard on January 1, 2018 utilizing the modified retrospective method. |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventory [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | March 31, 2017 December 31, 2016 Finished goods $ 61,724 $ 49,888 Raw materials 13,443 17,948 Work-in-process 7,445 5,214 Supplies and consumables 29,450 30,029 Total $ 112,062 $ 103,079 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | March 31, 2017 December 31, 2016 Long-term Long-term Senior Notes due May 2019 $ 500,000 $ 500,000 Senior Notes due December 2021 800,000 800,000 Total debt, gross 1,300,000 1,300,000 Unamortized debt issuance costs (13,790) (15,400) Total debt, net $ 1,286,210 $ 1,284,600 |
Derivative Financial Instrume22
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Financial Instruments [Abstract] | |
Location and Effect of the Derivative Instrument on the Statements of Operations | Effect of derivative instrument Location of (gain) loss recognized Three Months Ended March 31, 2016 Interest rate swap Interest expense, net $ (5,197) Hedged item - debt Interest expense, net 2,490 $ (2,707) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | Fair Value Measurements at Reporting Date Using March 31, 2017 Level 1 Level 2 Level 3 Intangible and other long-term assets, net Non-qualified deferred compensation assets $ 12,965 $ 368 $ 12,597 - Accounts payable Non-qualified deferred compensation liabilities $ 967 - $ 967 - Other long-term liabilities Non-qualified deferred compensation liabilities $ 18,926 - $ 18,926 - December 31, 2016 Level 1 Level 2 Level 3 Intangible and other long-term assets, net Non-qualified deferred compensation assets $ 12,360 $ 368 $ 11,992 - Interest rate swaps $ 8,579 - $ 8,579 - Accounts payable Non-qualified deferred compensation liabilities $ 1,115 - $ 1,115 - Other long-term liabilities Non-qualified deferred compensation liabilities $ 18,489 - $ 18,489 - |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Information [Abstract] | |
Schedule Of Segment Reporting Information By Segment | Three Months Ended March 31, 2017 Onshore Drilling Completion Products and and Workover Production Technical Consolidated Services Services Services Solutions Unallocated Total Revenues $ 68,431 $ 204,979 $ 68,605 $ 58,921 $ - $ 400,936 Cost of services and rentals (exclusive of depreciation, depletion, amortization and accretion) 29,150 193,566 61,181 38,089 - 321,986 Depreciation, depletion, amortization and accretion 34,975 49,883 20,836 8,587 - 114,281 General and administrative expenses 17,473 24,771 15,800 17,449 - 75,493 Loss from operations (13,167) (63,241) (29,212) (5,204) - (110,824) Interest expense, net - - - 790 (25,040) (24,250) Other expense - - - - 649 649 Loss from continuing operations before income taxes $ (13,167) $ (63,241) $ (29,212) $ (4,414) $ (24,391) $ (134,425) Three Months Ended March 31, 2016 Onshore Drilling Completion Products and and Workover Production Technical Consolidated Services Services Services Solutions Unallocated Total Revenues $ 88,422 $ 132,472 $ 104,894 $ 87,345 $ - $ 413,133 Cost of services and rentals (exclusive of depreciation, depletion, amortization and accretion) 33,921 123,330 77,487 50,601 - 285,339 Depreciation, depletion, amortization and accretion 45,140 54,627 25,229 11,676 - 136,672 General and administrative expenses 27,083 25,050 25,895 25,127 - 103,155 Loss from operations (17,722) (70,535) (23,717) (59) - (112,033) Interest income (expense), net - - (793) 943 (23,956) (23,806) Other expense - - - - 7,755 7,755 Income (loss) from continuing operations before income taxes $ (17,722) $ (70,535) $ (24,510) $ 884 $ (16,201) $ (128,084) |
Identifiable Assets | Identifiable Assets Onshore Drilling Completion Products and and Workover Production Technical Consolidated Services Services Services Solutions Total March 31, 2017 $ 772,561 $ 1,593,298 $ 585,434 $ 427,418 $ 3,378,711 December 31, 2016 $ 849,046 $ 1,573,801 $ 598,909 $ 448,499 $ 3,470,255 |
Company's Information by Geographic Area | Revenues Three Months Ended March 31, 2017 2016 United States $ 333,609 $ 303,576 Other Countries 67,327 109,557 Total $ 400,936 $ 413,133 Long-Lived Assets March 31, 2017 December 31, 2016 United States $ 1,210,392 $ 1,288,077 Other Countries 302,890 317,288 Total, net $ 1,513,282 $ 1,605,365 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Discontinued Operations [Abstract] | |
Assets and Liabilities of Disposal Groups | March 31, 2017 December 31, 2016 Current assets $ 411 $ 158 Property, plant and equipment, net 27,000 27,000 Total assets $ 27,411 $ 27,158 Current liabilities $ 7,401 $ 8,653 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory [Abstract] | ||
Finished Goods | $ 61,724 | $ 49,888 |
Raw materials | 13,443 | 17,948 |
Work-in-process | 7,445 | 5,214 |
Supplies and consumables | 29,450 | 30,029 |
Inventory | $ 112,062 | $ 103,079 |
Notes Receivable (Details)
Notes Receivable (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Notes Receivable [Abstract] | ||
Amount of notes receivable net | $ 115 | |
Interest rate percentage to record present value of notes receivable | 6.58% | |
Company recorded interest income | $ 0.8 | $ 0.9 |
Decommissioning Liabilities (De
Decommissioning Liabilities (Details) $ in Millions | Mar. 31, 2017USD ($) |
Summary of the activity for the Company's decommissioning liabilities | |
Decommissioning liabilities | $ 123.7 |
Total decommissioning liabilities | $ 123.7 |
Debt (Details)
Debt (Details) - USD ($) | Mar. 31, 2017 | Feb. 28, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 300,000,000 | ||
Line of credit facility, accordion feature | $ 100,000,000 | ||
Long-term Debt, Gross | $ 1,300,000,000 | $ 1,300,000,000 | |
Unamortized debt issuance costs | 13,790,000 | 15,400,000 | |
Total debt, net | 1,286,210,000 | 1,284,600,000 | |
Unsecured Senior Notes Due 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Senior Notes | $ 500,000,000 | ||
Stated interest rate on unsecured senior notes | 6.375% | ||
Long-term Debt, Gross | $ 500,000,000 | ||
Unsecured Senior Notes Due 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Senior Notes | $ 800,000,000 | ||
Stated interest rate on unsecured senior notes | 7.125% | 7.125% | |
Long-term Debt, Gross | $ 800,000,000 | $ 800,000,000 |
Derivative Financial Instrume30
Derivative Financial Instruments (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Derivatives, Fair Value [Line Items] | ||||
Sale of interest rate swaps | $ 0.8 | |||
Interest income (expense) related to the ineffectiveness associated with the fair value hedge | $ 2.7 | |||
Interest rate swap agreement for notional amount | $ 100 | |||
Interest Rate Swap [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Interest expense | $ 0.5 | |||
Unsecured Senior Notes Due 2021 [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Stated interest rate on unsecured senior notes | 7.125% | 7.125% |
Derivative Financial Instrume31
Derivative Financial Instruments (The location and effect of the derivative instrument on the condensed consolidated statement of operations, pre-tax basis) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Derivative Instruments, (Gain) Loss [Line Items] | |
Amount of (gain) loss recognized | $ (2,707) |
Interest Rate Swap [Member] | Interest Expense, Net [Member] | |
Derivative Instruments, (Gain) Loss [Line Items] | |
Amount of (gain) loss recognized | (5,197) |
Hedged Item Debt [Member] | Interest Expense, Net [Member] | |
Derivative Instruments, (Gain) Loss [Line Items] | |
Amount of (gain) loss recognized | $ 2,490 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value Measurements [Abstract] | ||
Fair value of long term debt | $ 1,314.6 | $ 1,307.6 |
Fair Value Measurements (Financ
Fair Value Measurements (Financial assets and liabilities measured at fair value on a recurring basis) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Non-Qualified Deferred Compensation Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Intangible and other long-term assets, net | $ 12,965 | $ 12,360 |
Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Intangible and other long-term assets, net | 8,579 | |
Non Qualified Deferred Compensation Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Accounts payable | 967 | 1,115 |
Other long-term liabilities | 18,926 | 18,489 |
Level 1 [Member] | Non-Qualified Deferred Compensation Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Intangible and other long-term assets, net | 368 | 368 |
Level 1 [Member] | Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Intangible and other long-term assets, net | ||
Level 1 [Member] | Non Qualified Deferred Compensation Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Accounts payable | ||
Other long-term liabilities | ||
Level 2 [Member] | Non-Qualified Deferred Compensation Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Intangible and other long-term assets, net | 12,597 | 11,992 |
Level 2 [Member] | Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Intangible and other long-term assets, net | 8,579 | |
Level 2 [Member] | Non Qualified Deferred Compensation Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Accounts payable | 967 | 1,115 |
Other long-term liabilities | 18,926 | 18,489 |
Level 3 [Member] | Non-Qualified Deferred Compensation Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Intangible and other long-term assets, net | ||
Level 3 [Member] | Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Intangible and other long-term assets, net | ||
Level 3 [Member] | Non Qualified Deferred Compensation Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Accounts payable | ||
Other long-term liabilities |
Segment Information (Financial
Segment Information (Financial information for Company's segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 400,936 | $ 413,133 | |
Cost of services (exclusive of depreciation, depletion, amortization, and accretion) | 321,986 | 285,339 | |
Depreciation, depletion, amortization and accretion | 114,281 | 136,672 | |
General and administrative expenses | 75,493 | 103,155 | |
Income from operations | (110,824) | (112,033) | |
Interest income (expense), net | (24,250) | (23,806) | |
Other expense | 649 | 7,755 | |
Loss from continuing operations before income taxes | (134,425) | (128,084) | |
Identifiable Assets | 3,378,711 | $ 3,470,255 | |
Technical Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 58,921 | 87,345 | |
Cost of services (exclusive of depreciation, depletion, amortization, and accretion) | 38,089 | 50,601 | |
Depreciation, depletion, amortization and accretion | 8,587 | 11,676 | |
General and administrative expenses | 17,449 | 25,127 | |
Income from operations | (5,204) | (59) | |
Interest income (expense), net | 790 | 943 | |
Loss from continuing operations before income taxes | (4,414) | 884 | |
Identifiable Assets | 427,418 | 448,499 | |
Production Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 68,605 | 104,894 | |
Cost of services (exclusive of depreciation, depletion, amortization, and accretion) | 61,181 | 77,487 | |
Depreciation, depletion, amortization and accretion | 20,836 | 25,229 | |
General and administrative expenses | 15,800 | 25,895 | |
Income from operations | (29,212) | (23,717) | |
Interest income (expense), net | (793) | ||
Loss from continuing operations before income taxes | (29,212) | (24,510) | |
Identifiable Assets | 585,434 | 598,909 | |
Onshore Completion and Workover Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 204,979 | 132,472 | |
Cost of services (exclusive of depreciation, depletion, amortization, and accretion) | 193,566 | 123,330 | |
Depreciation, depletion, amortization and accretion | 49,883 | 54,627 | |
General and administrative expenses | 24,771 | 25,050 | |
Income from operations | (63,241) | (70,535) | |
Loss from continuing operations before income taxes | (63,241) | (70,535) | |
Identifiable Assets | 1,593,298 | 1,573,801 | |
Drilling Products and Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 68,431 | 88,422 | |
Cost of services (exclusive of depreciation, depletion, amortization, and accretion) | 29,150 | 33,921 | |
Depreciation, depletion, amortization and accretion | 34,975 | 45,140 | |
General and administrative expenses | 17,473 | 27,083 | |
Income from operations | (13,167) | (17,722) | |
Loss from continuing operations before income taxes | (13,167) | (17,722) | |
Identifiable Assets | 772,561 | $ 849,046 | |
Unallocated [Member] | |||
Segment Reporting Information [Line Items] | |||
Interest income (expense), net | (25,040) | (23,956) | |
Other expense | 649 | 7,755 | |
Loss from continuing operations before income taxes | $ (24,391) | $ (16,201) |
Segment Information (Company's
Segment Information (Company's information by geographic area) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 400,936 | $ 413,133 | |
Long-lived assets | 1,513,282 | 1,605,365 | $ 1,605,365 |
UNITED STATES | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 333,609 | 303,576 | |
Long-lived assets | 1,210,392 | 1,288,077 | |
Other Countries [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 67,327 | $ 109,557 | |
Long-lived assets | $ 302,890 | $ 317,288 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-Based Compensation Plans [Abstract] | ||
Compensation expense | $ 10.3 | $ 10.4 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Income Taxes [Abstract] | ||
Unrecorded tax benefits | $ 29.9 | $ 29.9 |
Discontinued Operations (Narrat
Discontinued Operations (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Discontinued Operations [Abstract] | ||
Loss from discontinued operations, net of income tax | $ (1,998) | $ (2,267) |
Discontinued Operations (Assets
Discontinued Operations (Assets and liabilities of disposal groups) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Current assets | $ 27,411 | $ 27,158 |
Segment, Discontinued Operations [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Current assets | 411 | 158 |
Property, plant and equipment, net | 27,000 | 27,000 |
Total assets | 27,411 | 27,158 |
Current liabilities | $ 7,401 | $ 8,653 |