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SEC Filings

10-Q
KEY ENERGY SERVICES INC filed this Form 10-Q on 11/09/2017
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Operating expenses for our Fishing and Rental Services segment were $16.5 million during the three months ended September 30, 2017, which represented a decrease of $4.5 million, or 21.3%, compared to $21.0 million for the same period in 2016. These expenses decreased primarily as a result of reduced depreciation expense and a decrease in and a decrease in employee compensation on a per hour basis as we took steps to reduce our cost structure.
International
Revenues for our International segment decreased $1.7 million, or 56.7%, to $1.3 million for the three months ended September 30, 2017, compared to $3.1 million for the three months ended September 30, 2016. The decrease was primarily attributable to lower customer activity in Russia and due to the sale during the third quarter of 2017 of these operations and our exit from operations in Mexico which was sold in 2016.
Operating expenses for our International segment decreased $45.0 million, or 94.8%, to $2.5 million for the three months ended September 30, 2017, compared to $47.5 million for the three months ended September 30, 2016. These expenses decreased primarily as a result of a decrease in employee compensation costs and equipment expense primarily related to the exit from operations in Mexico and Russia and a $40.0 million impairment to reduce the carrying value of the assets and related liabilities of our Mexican business unit, which was sold in 2016, to fair market value.
Functional Support
Operating expenses for Functional Support, which represent expenses associated with managing our U.S. and International reporting segments, decreased $6.3 million, or 19.9%, to $25.3 million (22.9% of consolidated revenues) for the three months ended September 30, 2017 compared to $31.6 million (30.9% of consolidated revenues) for the same period in 2016. The decrease is primarily due to decrease of $13.1 million in professional fees related to the 2016 corporate restructuring.
Consolidated Results of Operations — Nine Months Ended September 30, 2017 and 2016
Revenues
Our revenues for the nine months ended September 30, 2017 increased $11.4 million, or 3.7%, to $319.9 million from $308.5 million for the nine months ended September 30, 2016, due to an increase in spending from our customers as they react to improving commodity prices. Internationally, we had lower revenue as a result of the sale our operations in Mexico, a decrease in activity in Russia and the sale during the third quarter of 2017 of our Russian operations. See “Segment Operating Results — Nine Months Ended September 30, 2017 and 2016 below for a more detailed discussion of the change in our revenues.
Direct Operating Expenses
Our direct operating expenses decreased $38.1 million, to $238.0 million (74.4% of revenues), for the nine months ended September 30, 2017, compared to $276.1 million (89.5% of revenues) for the nine months ended September 30, 2016. The decrease is primarily related to a $21.0 million gain on the sale of certain assets and a decrease in employee compensation costs, fuel expense and repair and maintenance expense as we took steps to reduce our cost structure.
Depreciation and Amortization Expense
Depreciation and amortization expense decreased $41.8 million, or 39.7%, to $63.3 million during the nine months ended September 30, 2017, compared to $105.1 million for the nine months ended September 30, 2016. The decrease is primarily attributable to the reduction of property, plant and equipment due to the implementation of fresh start accounting in the fourth quarter of 2016.
General and Administrative Expenses
General and administrative expenses decreased $31.1 million, to $98.5 million (30.8% of revenues), for the nine months ended September 30, 2017, compared to $129.6 million (42.0% of revenues) for the nine months ended September 30, 2016. The decrease is primarily due to a $20.9 million decrease in professional fees related to our 2016 corporate restructuring and lower employee compensation costs due to reduced staffing levels and a reduction in wages partially offset by a $11.6 million increase in legal settlement accruals.

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