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SEC Filings

10-Q
KEY ENERGY SERVICES INC filed this Form 10-Q on 08/10/2017
Entire Document
 

Other (Income) Loss, Net
During the quarter ended June 30, 2017, we recognized other income, net, of $1.0 million, compared to other loss, net, of $0.4 million for the quarter ended June 30, 2016. Our foreign exchange loss relates to U.S. dollar-denominated transactions in our foreign businesses and fluctuations in exchange rates between local currencies and the U.S. dollar.
The following table summarizes the components of other (income) loss, net for the periods indicated:
 
Successor
 
 
Predecessor
 
Three Months Ended June 30, 2017
 
 
Three Months Ended June 30, 2016
Interest income
$
(155
)
 
 
$
(134
)
Foreign exchange (gain) loss
(5
)
 
 
1,013

Other, net
(801
)
 
 
(467
)
Total
$
(961
)
 
 
$
412

Reorganization Items, Net
Reorganization item expenses were $0.1 million for the three months ended June 30, 2017, and there were no reorganization item expenses for the same period in 2016. Reorganization items consist of professional fees incurred in connection with our emergence from voluntary reorganization.
Income Tax Benefit
We recorded an income tax benefit of $0.9 million on a pre-tax loss of $14.0 million in the three months ended June 30, 2017, compared to an income tax benefit of $0.1 million on a pre-tax loss of $92.9 million in the three months ended June 30, 2016. Our effective tax rate was 6.1% for the three months ended June 30, 2017, compared to 0.1% for the three months ended June 30, 2016. Our effective tax rates for such periods differ from the U.S. statutory rate of 35% due to a number of factors, including the mix of profit and loss between domestic and international taxing jurisdictions and the impact of permanent items, including expenses subject to statutorily imposed limitations such as meals and entertainment expenses, that affect book income but do not affect taxable income and discrete tax adjustments, such as valuation allowances against deferred tax assets and tax expense or benefit recognized for uncertain tax positions.
Segment Operating Results — Three Months Ended June 30, 2017 and 2016
The following table shows operating results for each of our segments for the three months ended June 30, 2017 and 2016 (in thousands):
Successor company as of and for the three months ended June 30, 2017
 
 
U.S. Rig Services
 
Fluid Management Services
 
Coiled Tubing Services
 
Fishing and Rental Services
 
International
 
Functional
Support
 
Total
Revenues from external customers
 
$
61,802

 
$
18,867

 
$
9,165

 
$
15,776

 
$
2,170

 
$

 
$
107,780

Operating expenses
 
61,979

 
22,094

 
8,840

 
(1,718
)
 
3,522

 
20,087

 
114,804

Operating loss
 
(177
)
 
(3,227
)
 
325

 
17,494

 
(1,352
)
 
(20,087
)
 
(7,024
)
Predecessor company as of and for the three months ended June 30, 2016
 
 
U.S. Rig Services
 
Fluid Management Services
 
Coiled Tubing Services
 
Fishing and Rental Services
 
International
 
Functional
Support
 
Total
Revenues from external customers
 
$
51,502

 
$
19,591

 
$
7,617

 
$
13,412

 
$
2,890

 
$

 
$
95,012

Operating expenses
 
65,176

 
27,146

 
13,674

 
22,188

 
7,791

 
30,203

 
166,178

Operating loss
 
(13,674
)
 
(7,555
)
 
(6,057
)
 
(8,776
)
 
(4,901
)
 
(30,203
)
 
(71,166
)
U.S. Rig Services
Revenues for our U.S. Rig Services segment increased $10.3 million, or 20.0%, to $61.8 million for the three months ended June 30, 2017, compared to $51.5 million for the three months ended June 30, 2016. The increase for this segment is primarily due to an increase in completion and production spending from our customers as they plan for continuing recovery of commodity prices.
Operating expenses for our U.S. Rig Services segment were $62.0 million during the three months ended June 30, 2017,

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