Print Page  Close Window

SEC Filings

S-4/A
KEY ENERGY SERVICES INC filed this Form S-4/A on 03/08/1996
Entire Document
 
<PAGE>


         For tax  purposes  WellTech  had  available,  as of December  31, 1994,
substantial  NOL  carryforwards  which begin to expire in 1998.  Utilization  of
pre-June  1991  Recapitalization  NOL  carryforwards  is  generally  limited  to
approximately  $1.3 million per year  effective as of June 1991.  As a result of
the 1994 recapitalization, utilization of NOL carryforwards from the period June
1991 through December 31, 1993, is expected to be generally  limited to $950,000
per year.  WellTech also has available  investment tax credit  carryforwards  of
approximately  $11  million,  portions of which  expire each year.  As presented
above, a valuation  allowance has been  established for those NOL  carryforwards
and tax credits which have not met the recognition requirements of SFAS No. 109.

(7)  Capital Accumulation 401(k) Plan

         WellTech established a capital accumulation 401(k) plan for the benefit
of its employees during 1987.  Employees may, after the completion of one year's
service, contribute up to 15% of their salaries (subject to certain maximums) to
the plan.  Contributions  to the plan by WellTech are made at the  discretion of
the Board of Directors.  WellTech did not make  contributions to the plan during
1994 or 1993.

         In November 1994, the Board of Directors  authorized  WellTech to begin
making contributions to the plan in 1995. These contributions are limited to 50%
of the employees'  contributions up to a maximum of $1,000.  While employees may
generally contribute up to 15% of their pay, WellTech's matching contribution is
limited to the first 6%.

(8)  Commitments and Contingencies

         At December 31,  1994,  the minimum  future  payments  under  long-term
non-cancelable operating lease obligations amounted to (in thousands):




          1995                  $   359
          1996                      313
          1997                      161
          1998                       94
          1999                       73
          Thereafter                168
                                  -----
                                 $1,168

         Total rentals under operating leases charged against income amounted to
approximately  $1,548,000 and $2,273,000 in 1994 and 1993,  respectively,  which
includes $1,231,000 and $1,727,000 in 1994 and 1993,  respectively,  for vehicle
rentals under cancelable leases.

         WellTech  accrues for the  self-insured  retention  under its  casualty
insurance  policies.  These  amounts  represent  losses  payable  as a result of
WellTech's claims  experience,  subject to certain policy maximums.  A charge to
income is provided  currently  based on the  assessment of the expected costs of
claims incurred. The estimated costs of casualty claims are based on WellTech's
historical  loss   experience,   type  of  claim,   knowledge  of  the  specific
circumstances  of the claim and  judgement  of the  possible  effect that future
economic and legal factors  might have on the ultimate  settlement of the claim.
As of December 31, 1994 and 1993, $4,254,000 and $4,004,000,  respectively,  was
accrued for the estimated  cost of resolving  actual and potential  claims under
casualty insurance policies.

                                      F-51