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SEC Filings

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

Income tax (expense) benefit
Our income tax benefit was zero (0.0% effective rate) on pre-tax loss of $10.2 million and income tax expense of $2.8 million (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, compared to an income tax benefit of $192.8 million (17.4% effective rate) on a pre-tax loss of $1.1 billion for the year ended December 31, 2015. 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.
Segment Operating Results
Years Ended December 31, 2017 and 2016
The following table shows operating results for each of our reportable segments for the years ended December 31, 2017 and 2016 (in thousands):
For the year ended December 31, 2017
 
U.S. Rig Service
 
Fluid Management Services
 
Coiled Tubing Services
 
Fishing and Rental Services
 
International
 
Functional
Support
 
Total
Revenues from external customers
$
248,830

 
$
80,726

 
$
41,866

 
$
59,172

 
$
5,571

 
$

 
$
436,165

Operating expenses
252,450

 
100,258

 
40,235

 
51,666

 
10,564

 
77,172

 
532,345

Operating income (loss)
(3,620
)
 
(19,532
)
 
1,631

 
7,506

 
(4,993
)
 
(77,172
)
 
(96,180
)
For the Successor period from December 16, 2016 through December 31, 2016
 
U.S. Rig Service
 
Fluid Management Services
 
Coiled Tubing Services
 
Fishing and Rental Services
 
International
 
Functional
Support
 
Total
Revenues from external customers
$
8,549

 
$
3,208

 
$
1,392

 
$
3,389

 
$
1,292

 
$

 
$
17,830

Operating expenses
10,481

 
4,346

 
1,648

 
3,654

 
1,225

 
5,324

 
26,678

Operating income (loss)
(1,932
)
 
(1,138
)
 
(256
)
 
(265
)
 
67

 
(5,324
)
 
(8,848
)
For the Predecessor period from January 1, 2016 through December 15, 2016
 
U.S. Rig Service
 
Fluid Management Services
 
Coiled Tubing Services
 
Fishing and Rental Services
 
International
 
Functional
Support
 
Total
Revenues from external customers
$
222,877

 
$
76,008

 
$
30,569

 
$
55,790

 
$
14,179

 
$

 
$
399,423

Operating expenses
262,335

 
113,944

 
49,891

 
82,198

 
73,405

 
120,251

 
702,024

Operating loss
(39,458
)
 
(37,936
)
 
(19,322
)
 
(26,408
)
 
(59,226
)
 
(120,251
)
 
(302,601
)
U.S. Rig Services
Revenues for our U.S. Rig Services segment increased $17.4 million, or 7.5%, to $248.8 million for the year ended December 31, 2017, compared to $231.4 million for the combined year ended December 31, 2016. The increase for this segment is primarily due to an increase in completion and production spending from our customers as they reacted to improving commodity prices.
Operating expenses for our U.S. Rig Services segment were $252.5 million during the year ended December 31, 2017, which represented a decrease of $20.4 million, or 7.5%, compared to $272.8 million for the combined year ended December 31, 2016. These expenses decreased primarily as a result of reduced depreciation expense and a decrease in employee compensation on a per hour basis as we took steps to reduce our cost structure.

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