Print Page  Close Window

SEC Filings

10-K
KEY ENERGY SERVICES INC filed this Form 10-K on 02/28/2018
Entire Document
 


General and administrative expenses
General and administrative expenses decreased $54.5 million, or 32.1%, to $115.3 million (26.4% of revenues) for the year ended December 31, 2017, compared to $169.8 million (40.7% of revenues) for the combined year ended December 31, 2016. The decrease is primarily due to a $24.0 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 $5.2 million increase in legal settlement accruals.
Impairment expense
During the year ended December 31, 2017, we recorded a $0.2 million impairment to reduce the carrying value of the assets and related liabilities of our Russian business unit, which was sold in the third quarter of 2017, to fair market value. During the combined year ended December 31, 2016, we recorded a $44.6 million impairment to reduce the carrying value of assets held for sale to fair market value related to our business unit in Mexico.
Reorganization items, net
Reorganization items primarily consist of $1.5 million of professional fees incurred in connection with our emergence from voluntary reorganization for the year ended December 31, 2017 compared to a $578.7 million gain on debt discharge partially offset by a $299.6 million loss on fresh start accounting revaluations, a $19.2 million write-off of deferred financing costs and debt premiums and discounts, and $15.2 million of professional fees incurred in connection with our emergence from voluntary reorganization for the combined year ended December 31, 2016.
Interest expense, net of amounts capitalized
Interest expense decreased $43.9 million to $31.8 million (7.3% of revenues), for the year ended December 31, 2017, compared to $75.7 million (18.1% of revenues) for the combined year ended December 31, 2016. The decrease is primarily related to the elimination of the Predecessor Company’s senior secured notes in connection with our emergence from voluntary reorganization.
Other (income) loss, net
During the year ended December 31, 2017, we recognized other income, net, of $7.2 million, compared to $2.4 million for the combined year ended December 31, 2016. Our foreign exchange (gain) loss relates to U.S. dollar-denominated transactions in our foreign locations and fluctuations in exchange rates between local currencies and the U.S. dollar.
The table below presents comparative detailed information about combined other loss, net at December 31, 2017 and 2016:
 
Successor
 
 
Predecessor
 
 
 
 
 
(a)
 
(b)
 
 
(c)
 
(a) - (b) - (c)
 
 
 
Year Ended December 31, 2017
 
Period from December 16, 2016 through December 31, 2016
 
 
Period from January 1, 2016 through December 15, 2016
 
Change
 
% Change
Interest income
$
(711
)
 
$
(20
)
 
 
$
(407
)
 
$
(284
)
 
67
 %
Foreign exchange (gain) loss
(33
)
 
17

 
 
1,005

 
$
(1,055
)
 
(103
)%
Other, net
(6,443
)
 
35

 
 
(3,041
)
 
$
(3,437
)
 
114
 %
Total
$
(7,187
)
 
$
32

 
 
$
(2,443
)
 
$
(4,776
)
 
198
 %
Income tax (expense) benefit
Our income tax benefit was $1.7 million (1.4% effective rate) on pre-tax loss of $122.3 million for the year ended December 31, 2017, compared to an income tax benefit of zero (0.00% effective rate) on a pre-tax loss of $10.2 million and a $2.8 million tax expense (2.2% effective rate) on pre-tax loss of $128.9 million for the period from December 16, 2016 through December 31, 2016 and for the period from January 1, 2016 through December 15, 2016, respectively. Our effective tax rates for such periods differ from the then-applicable 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 goodwill impairment expense and 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.

29