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SEC Filings

10-Q
KEY ENERGY SERVICES INC filed this Form 10-Q on 11/09/2017
Entire Document
 

Self-Insurance Reserves
We maintain reserves for workers’ compensation and vehicle liability on our balance sheet based on our judgment and estimates using an actuarial method based on claims incurred. We estimate general liability claims on a case-by-case basis. We maintain insurance policies for workers’ compensation, vehicle liability and general liability claims. These insurance policies carry self-insured retention limits or deductibles on a per occurrence basis. The retention limits or deductibles are accounted for in our accrual process for all workers’ compensation, vehicular liability and general liability claims. As of September 30, 2017 and December 31, 2016, we have recorded $53.5 million and $58.7 million, respectively, of self-insurance reserves related to workers’ compensation, vehicular liabilities and general liability claims. Partially offsetting these liabilities, we had $17.6 million and $16.3 million of insurance receivables as of September 30, 2017 and December 31, 2016, respectively. We believe that the liabilities we have recorded are appropriate based on the known facts and circumstances and do not expect further losses materially in excess of the amounts already accrued for existing claims.
Environmental Remediation Liabilities
For environmental reserve matters, including remediation efforts for current locations and those relating to previously disposed properties, we record liabilities when our remediation efforts are probable and the costs to conduct such remediation efforts can be reasonably estimated. As of September 30, 2017 and December 31, 2016, we have recorded $2.1 million and $3.4 million, respectively, for our environmental remediation liabilities. We believe that the liabilities we have recorded are appropriate based on the known facts and circumstances and do not expect further losses materially in excess of the amounts already accrued.
NOTE 11. LOSS PER SHARE
Basic loss per share is determined by dividing net loss attributable to Key by the weighted average number of common shares actually outstanding during the period. Diluted loss per common share is based on the increased number of shares that would be outstanding assuming conversion of potentially dilutive outstanding securities using the treasury stock and “as if converted” methods.
The components of our loss per share are as follows (in thousands, except per share amounts):
 
Successor
 
 
Predecessor
 
Successor
 
 
Predecessor
 
Three Months Ended September 30, 2017
 
 
Three Months Ended September 30, 2016
 
Nine Months Ended September 30, 2017
 
 
Nine Months Ended September 30, 2016
Basic and Diluted EPS Calculation:
 
 
 
 
 
 
 
 
 
Numerator
 
 
 
 
 
 
 
 
 
Net loss
$
(38,220
)
 
 
$
(130,752
)
 
$
(98,262
)
 
 
$
(305,168
)
Denominator
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
20,106

 
 
160,846

 
20,101

 
 
160,626

Basic and diluted loss per share
$
(1.90
)
 
 
$
(0.81
)
 
$
(4.89
)
 
 
$
(1.90
)
Restricted stock units (“RSUs”), stock options, stock appreciation rights (“SARs”) and warrants are included in the computation of diluted earnings per share using the treasury stock method. Restricted stock awards are legally considered issued and outstanding when granted and are included in basic weighted average shares outstanding.
The company has issued potentially dilutive instruments such as RSUs, stock options, SARs and warrants. However, the company did not include these instruments in its calculation of diluted loss per share during the periods presented, because to include them would be anti-dilutive. The following table shows potentially dilutive instruments (in thousands):
 
Successor
 
 
Predecessor
 
Successor
 
 
Predecessor
 
Three Months Ended September 30, 2017
 
 
Three Months Ended September 30, 2016
 
Nine Months Ended September 30, 2017
 
 
Nine Months Ended September 30, 2016
RSUs
641

 
 
60

 
641

 
 
60

Stock options
645

 
 
301

 
645

 
 
812

SARs

 
 
240

 

 
 
240

Warrants
1,838

 
 

 
1,838

 
 

Total
3,124

 
 
601

 
3,124

 
 
1,112


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