0001564590-19-002207.txt : 20190207 0001564590-19-002207.hdr.sgml : 20190207 20190207060404 ACCESSION NUMBER: 0001564590-19-002207 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20190207 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20190207 DATE AS OF CHANGE: 20190207 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PATTERSON UTI ENERGY INC CENTRAL INDEX KEY: 0000889900 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [1381] IRS NUMBER: 752504748 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22664 FILM NUMBER: 19573325 BUSINESS ADDRESS: STREET 1: 10713 WEST SAM HOUSTON PARKWAY NORTH STREET 2: SUITE 800 CITY: HOUSTON STATE: TX ZIP: 77064 BUSINESS PHONE: 2817657100 MAIL ADDRESS: STREET 1: 10713 WEST SAM HOUSTON PARKWAY NORTH STREET 2: SUITE 800 CITY: HOUSTON STATE: TX ZIP: 77064 FORMER COMPANY: FORMER CONFORMED NAME: PATTERSON ENERGY INC DATE OF NAME CHANGE: 19940228 8-K 1 pten-8k_20190207.htm 8-K pten-8k_20190207.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): February 7, 2019

 

Patterson-UTI Energy, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

0-22664

 

75-2504748

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

10713 W. Sam Houston Pkwy N, Suite 800, Houston, Texas

 

 

 

77064

(Address of principal executive offices)

 

 

 

(Zip Code)

 

Registrant’s telephone number, including area code: 281-765-7100

 

Not Applicable

Former name or former address, if changed since last report

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b 2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 


 


 

Item 2.02 Results of Operations and Financial Condition.

On February 7, 2019, Patterson-UTI Energy, Inc. (the "Company") announced financial results for the three and twelve months ended December 31, 2018. The press release, dated February 7, 2019, is furnished as Exhibit 99.1 to this report and incorporated by reference herein.

The information furnished pursuant to Item 2.02, including Exhibit 99.1 shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, shall not otherwise be subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) The following exhibit is furnished herewith:

 

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

Patterson-UTI Energy, Inc.

 

 

 

 

 

February 7, 2019

 

By:

 

/s/ C. Andrew Smith

 

 

 

 

Name: C. Andrew Smith

 

 

 

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

EX-99.1 2 pten-ex991_6.htm EX-99.1 pten-ex991_6.htm

Exhibit 99.1

Contact: Mike Drickamer

Vice President, Investor Relations

Patterson-UTI Energy, Inc.

(281) 765-7170

Patterson-UTI Energy Reports Financial Results for Three and Twelve Months Ended December 31, 2018

Share Repurchases of $150 Million in 2018; Share Repurchase Authorization Increased to $250 Million

HOUSTON, Texas – February 7, 2019 – PATTERSON-UTI ENERGY, INC. (NASDAQ: PTEN) today reported financial results for the three and twelve months ended December 31, 2018.  The Company reported a net loss of $201 million, or $0.93 per share, for the fourth quarter of 2018, compared to a net profit of $195.4 million, or $0.88 per share, for the quarter ended December 31, 2017, which included the positive impact of the 2017 tax law change.  The Company recorded a non-cash goodwill impairment charge in the fourth quarter of 2018 of $211 million ($192 million after-tax or $0.89 per share).  Excluding the goodwill impairment charge, the net loss for the fourth quarter of 2018 would have been $9.0 million, or $0.04 per share.  Revenues for the fourth quarter of 2018 were $796 million, compared to $787 million for the fourth quarter of 2017.  

For the year ended December 31, 2018, the Company reported a net loss of $321 million, or $1.47 per share, compared to a net profit of $5.9 million, or $0.03 per share, for the year ended December 31, 2017.  Excluding non-cash impairment charges incurred during the third and fourth quarters of 2018, the net loss for 2018 would have been $74.7 million, or $0.34 per share.  Revenues for the year ended December 31, 2018 were $3.3 billion, compared to $2.4 billion for the same period in 2017.

During the fourth quarter, the Company repurchased approximately 3.8 million of its outstanding shares for $50.0 million.  During the year ended December 31, 2018, the Company repurchased 9.3 million shares on the open market, or 4.2% of its outstanding shares at the beginning of the year, for approximately $150 million.  At December 31, 2018, the remaining amount under the Company’s share repurchase authorization was approximately $150 million, and the Company’s Board has authorized an increase to bring the current authorization up to $250 million.

Andy Hendricks, Patterson-UTI’s Chief Executive Officer, stated, “In contract drilling, our rig count averaged 183 rigs during the fourth quarter, an increase of five rigs from the third quarter.  The sharp drop in oil prices in December resulted in some of our customers notifying us of their intent to release rigs.  Recently, with the sharp rebound in oil prices above $50, we have seen an improvement in operator sentiment.  We expect our rig count will average 174 rigs during the first quarter of 2019.”

Mr. Hendricks added, “We achieved an increase in average rig margin per day of $920 to $9,390.  Dayrates for super-spec rigs were strong during the fourth quarter, leading to an increase in average rig revenue per day of $690 to $22,970.  Average rig operating costs per day for the fourth quarter decreased $230 to $13,580.  Average rig revenue, costs and margin on a per day basis were all better than expected during the fourth quarter.      

“We completed 14 major upgrades throughout 2018 and one additional major upgrade in January 2019.  We currently have only one additional major rig upgrade contracted for delivery in 2019.  Given the significant capital investment for major upgrades, we require term contracts for a major upgrade.  We have not delivered any major drilling rig upgrades without a term contract, nor do we intend to do so.

“As of December 31, 2018, we had term contracts for drilling rigs providing for approximately $770 million of future dayrate drilling revenue.  Based on contracts currently in place, we expect an average of 122 rigs operating under term contracts during the first quarter, and an average of 78 rigs operating under term contracts during 2019.  


“In pressure pumping, we generated a better than expected gross profit for the fourth quarter of $62.2 million on revenues of $320 million compared to gross profit of $79.1 million on revenues of $422 million for the third quarter.  The sequential decrease in both revenues and gross profit was a function of lower activity levels, primarily as a result of year-end E&P budget exhaustion.  We continue to make progress in improving our pressure pumping performance, where the fourth quarter showed increasing internal efficiencies with reduced non-productive time and an increase in average number of stages per pumping day.  With the weakness in commodity prices late in the fourth quarter, operators have been delaying starting new completion projects in the first quarter, and pricing remains extremely competitive.  As such, we have made the decision to idle spreads rather than work at unreasonably low prices.  We ended the fourth quarter with 20 active spreads and idled three spreads early in the first quarter of 2019.    

“In directional drilling, revenues for the fourth quarter increased to $56.4 million from $51.6 million in the third quarter due to higher activity levels, as well as progress made to improve pricing and reduce equipment rental expense.  Adjusted EBITDA improved to $4.1 million from $3.3 million in the third quarter.”  

Mark S. Siegel, Chairman of Patterson-UTI, stated, “The magnitude and speed of the oil price decline during the fourth quarter was surprising, even for those who have witnessed many major fluctuations in oil prices.  The timing of the sharp decline no doubt impacted plans for first quarter 2019 drilling and completion programs.  

“With oil prices in the mid-$50’s, operator sentiment has improved.  However, we suspect some of our E&P customers will wait to see if these prices, or possibly even higher prices, remain in effect before solidifying their drilling and completion plans.  If oil prices do move higher, we expect activity levels will improve.  With this market backdrop, and based on near-term activity levels, we expect 2019 capital expenditures of $465 million, a 27% decrease from the $641 million spent in 2018.”

Mr. Siegel continued, “We will continue to focus on the things that have made us a leader in our markets and served us well in prior periods of uncertainty: efficient and high-quality services, our operational flexibility, the strength of our balance sheet, and prudent capital allocation.  In 2018 we used our cash flow to repurchase $150 million of our stock, or more than 4% of the stock that was outstanding at the beginning of the year.  We will continue to evaluate opportunities to repurchase our shares, particularly when we feel our stock is significantly undervalued,” he concluded.

The Company declared a quarterly dividend on its common stock of $0.04 per share, to be paid on March 21, 2019, to holders of record as of March 7, 2019.

Financial results for the fourth quarter include pre-tax, non-cash impairment charges totaling $211 million ($192 million after-tax or $0.89 per share) related to the impairment of all of the goodwill associated with the Company’s pressure pumping and directional drilling businesses.  For the year ended December 31, 2018, financial results also include pre-tax, non-cash impairment charges totaling $65.9 million related to the impairment of certain legacy drilling rigs and sand handling equipment during the third quarter of 2018.  For the year ended December 31, 2017, financial results include a benefit of $219 million related to a non-cash revaluation of deferred tax items and $83.8 million of net pre-tax costs that include merger and integration expenses, non-cash impairment charges, and gains on the sale of certain real estate and oil and gas interests. Excluding these items, the net loss for 2017 would have been $158 million or $0.80 per share.    

All references to "per share" in this press release are diluted earnings per common share as defined within Accounting Standards Codification Topic 260.

The Company's quarterly conference call to discuss the operating results for the quarter ended December 31, 2018, is scheduled for today, February 7, 2019, at 9:00 a.m. Central Time. The dial-in information for participants is (844) 704-2496 (Domestic) and (647) 253-8661 (International).  The conference ID for both numbers is 3519209.  The call is also being webcast and can be accessed through the Investor Relations section of the Company’s


website at http://investor.patenergy.com.  A replay of the conference call will be on the Company’s website for two weeks.  

About Patterson-UTI

Patterson-UTI is a provider of oilfield services and products to oil and natural gas exploration and production companies in North America, including market leading positions in contract drilling, pressure pumping and directional drilling services.  For more information, visit www.patenergy.com.  

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements which are protected as forward-looking statements under the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts, but reflect Patterson-UTI’s current beliefs, expectations or intentions regarding future events.  Words such as “anticipate,” “believe,” “budgeted,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “potential,” “project,” “pursue,” “should,” “strategy,” “target,” or “will,” and similar expressions are intended to identify such forward-looking statements.  The statements in this press release that are not historical statements, including statements regarding Patterson-UTI’s future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts, are forward-looking statements within the meaning of the federal securities laws.  These statements are subject to numerous risks and uncertainties, many of which are beyond Patterson-UTI's control, which could cause actual results to differ materially from the results expressed or implied by the statements.  These risks and uncertainties include, but are not limited to: volatility in customer spending and in oil and natural gas prices, which could adversely affect demand for Patterson-UTI’s services and their associated effect on rates, utilization, margins and planned capital expenditures; global economic conditions; excess availability of land drilling rigs and pressure pumping equipment, including as a result of low commodity prices, reactivation, improvement or construction; liabilities from operations; weather; decline in, and ability to realize, backlog; equipment specialization and new technologies; shortages, delays in delivery and interruptions of supply of equipment and materials; ability to hire and retain personnel; loss of, or reduction in business with, key customers; cybersecurity risk; difficulty with growth and in integrating acquisitions and new technology; governmental regulation; product liability; legal proceedings, including technology disputes, and actions by governmental or other regulatory agencies; political, economic and social instability risk; ability to effectively identify and enter new markets; dependence on our subsidiaries to meet our long-term debt obligations; variable rate indebtedness risk; ability to maintain credit rating and service debt; and anti-takeover measures in our charter documents; contingent tax liabilities; and ability to use net operating losses.

Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in Patterson-UTI’s SEC filings.  Patterson-UTI’s filings may be obtained by contacting Patterson-UTI or the SEC or through Patterson-UTI’s website at http://www.patenergy.com or through the SEC's Electronic Data Gathering and Analysis Retrieval System (EDGAR) at http://www.sec.gov.  Patterson-UTI undertakes no obligation to publicly update or revise any forward-looking statement.


PATTERSON-UTI ENERGY, INC.

Condensed Consolidated Statements of Operations

(unaudited, in thousands, except per share data)

 

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

REVENUES

 

$

795,937

 

 

$

787,334

 

 

$

3,326,997

 

 

$

2,356,684

 

COSTS AND EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct operating costs

 

 

557,685

 

 

 

567,930

 

 

 

2,402,487

 

 

 

1,717,540

 

Depreciation, depletion, amortization and impairment

 

 

212,390

 

 

 

211,154

 

 

 

916,318

 

 

 

783,341

 

Impairment of goodwill

 

 

211,129

 

 

 

 

 

 

211,129

 

 

 

 

Selling, general and administrative

 

 

32,771

 

 

 

34,700

 

 

 

134,071

 

 

 

105,847

 

Merger and integration expenses

 

 

 

 

 

8,653

 

 

 

2,738

 

 

 

74,451

 

Other operating income, net

 

 

(7,248

)

 

 

(13,456

)

 

 

(17,569

)

 

 

(31,957

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total costs and expenses

 

 

1,006,727

 

 

 

808,981

 

 

 

3,649,174

 

 

 

2,649,222

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

 

(210,790

)

 

 

(21,647

)

 

 

(322,177

)

 

 

(292,538

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

997

 

 

 

717

 

 

 

5,597

 

 

 

1,866

 

Interest expense, net of amount capitalized

 

 

(12,910

)

 

 

(10,543

)

 

 

(51,578

)

 

 

(37,472

)

Other

 

 

84

 

 

 

117

 

 

 

750

 

 

 

343

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other expense

 

 

(11,829

)

 

 

(9,709

)

 

 

(45,231

)

 

 

(35,263

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

 

(222,619

)

 

 

(31,356

)

 

 

(367,408

)

 

 

(327,801

)

INCOME TAX BENEFIT

 

 

(21,370

)

 

 

(226,758

)

 

 

(45,987

)

 

 

(333,711

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

(201,249

)

 

$

195,402

 

 

$

(321,421

)

 

$

5,910

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.93

)

 

$

0.88

 

 

$

(1.47

)

 

$

0.03

 

Diluted

 

$

(0.93

)

 

$

0.88

 

 

$

(1.47

)

 

$

0.03

 

WEIGHTED AVERAGE NUMBER OF COMMON

   SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

215,700

 

 

 

219,843

 

 

 

218,643

 

 

 

198,447

 

Diluted

 

 

215,700

 

 

 

221,904

 

 

 

218,643

 

 

 

199,882

 

CASH DIVIDENDS PER COMMON SHARE

 

$

0.04

 

 

$

0.02

 

 

$

0.14

 

 

$

0.08

 

 


PATTERSON-UTI ENERGY, INC.

 

Additional Financial and Operating Data

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract Drilling:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

387,487

 

 

$

309,580

 

 

$

1,430,492

 

 

$

1,040,033

 

Direct operating costs

 

$

229,074

 

 

$

191,269

 

 

$

885,704

 

 

$

667,105

 

Margin (1)

 

$

158,413

 

 

$

118,311

 

 

$

544,788

 

 

$

372,928

 

Selling, general and administrative

 

$

1,697

 

 

$

1,428

 

 

$

6,296

 

 

$

5,934

 

Depreciation, amortization and impairment

 

$

129,773

 

 

$

133,315

 

 

$

571,607

 

 

$

538,891

 

Operating income (loss)

 

$

26,943

 

 

$

(16,432

)

 

$

(33,115

)

 

$

(171,897

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating days – United States

 

 

16,732

 

 

 

14,638

 

 

 

63,971

 

 

 

49,751

 

Operating days – Canada

 

 

137

 

 

 

138

 

 

 

508

 

 

 

676

 

Operating days – Total

 

 

16,869

 

 

 

14,776

 

 

 

64,479

 

 

 

50,427

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average revenue per operating day – United States

 

$

23.00

 

 

$

20.95

 

 

$

22.22

 

 

$

20.63

 

Average direct operating costs per operating day – United States

 

$

13.58

 

 

$

12.89

 

 

$

13.71

 

 

$

13.18

 

Average margin per operating day – United States (1)

 

$

9.43

 

 

$

8.06

 

 

$

8.50

 

 

$

7.45

 

Average rigs operating – United States

 

 

182

 

 

 

159

 

 

 

175

 

 

 

136

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average revenue per operating day – Canada

 

$

19.15

 

 

$

20.90

 

 

$

18.29

 

 

$

20.20

 

Average direct operating costs per operating day – Canada

 

$

14.10

 

 

$

18.57

 

 

$

16.85

 

 

$

16.71

 

Average margin per operating day – Canada (1)

 

$

5.04

 

 

$

2.33

 

 

$

1.45

 

 

$

3.50

 

Average rigs operating – Canada

 

 

1

 

 

 

2

 

 

 

1

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average revenue per operating day – Total

 

$

22.97

 

 

$

20.95

 

 

$

22.19

 

 

$

20.62

 

Average direct operating costs per operating day – Total

 

$

13.58

 

 

$

12.94

 

 

$

13.74

 

 

$

13.23

 

Average margin per operating day – Total (1)

 

$

9.39

 

 

$

8.01

 

 

$

8.45

 

 

$

7.40

 

Average rigs operating – Total

 

 

183

 

 

 

161

 

 

 

177

 

 

 

138

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

94,958

 

 

$

131,999

 

 

$

394,595

 

 

$

354,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pressure Pumping:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

319,703

 

 

$

406,652

 

 

$

1,573,396

 

 

$

1,200,311

 

Direct operating costs

 

$

257,497

 

 

$

323,607

 

 

$

1,263,850

 

 

$

966,835

 

Margin (2)

 

$

62,206

 

 

$

83,045

 

 

$

309,546

 

 

$

233,476

 

Selling, general and administrative

 

$

3,989

 

 

$

3,926

 

 

$

15,420

 

 

$

14,442

 

Depreciation, amortization and impairment

 

$

58,640

 

 

$

56,677

 

 

$

250,010

 

 

$

198,006

 

Impairment of goodwill

 

$

121,444

 

 

$

 

 

$

121,444

 

 

$

 

Operating income (loss)

 

$

(121,867

)

 

$

22,442

 

 

$

(77,328

)

 

$

21,028

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fracturing jobs

 

 

181

 

 

 

180

 

 

 

812

 

 

 

622

 

Other jobs

 

 

250

 

 

 

300

 

 

 

1,081

 

 

 

1,262

 

Total jobs

 

 

431

 

 

 

480

 

 

 

1,893

 

 

 

1,884

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average revenue per fracturing job

 

$

1,737.50

 

 

$

2,225.56

 

 

$

1,909.42

 

 

$

1,894.40

 

Average revenue per other job

 

$

20.86

 

 

$

20.17

 

 

$

21.23

 

 

$

17.43

 

Average revenue per total job

 

$

741.77

 

 

$

847.19

 

 

$

831.17

 

 

$

637.11

 

Average costs per total job

 

$

597.44

 

 

$

674.18

 

 

$

667.64

 

 

$

513.18

 

Average margin per total job (2)

 

$

144.33

 

 

$

173.01

 

 

$

163.52

 

 

$

123.93

 

Margin as a percentage of revenues (2)

 

 

19.5

%

 

 

20.4

%

 

 

19.7

%

 

 

19.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

47,870

 

 

$

86,013

 

 

$

173,848

 

 

$

171,436

 

 




 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Directional Drilling:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

56,398

 

 

$

45,580

 

 

$

209,275

 

 

$

45,580

 

Direct operating costs

 

$

49,715

 

 

$

32,172

 

 

$

175,829

 

 

$

32,172

 

Margin (3)

 

$

6,683

 

 

$

13,408

 

 

$

33,446

 

 

$

13,408

 

Selling, general and administrative

 

$

2,631

 

 

$

4,082

 

 

$

15,941

 

 

$

4,082

 

Depreciation and amortization

 

$

10,278

 

 

$

9,347

 

 

$

45,317

 

 

$

9,347

 

Impairment of goodwill

 

$

89,685

 

 

$

 

 

$

89,685

 

 

$

 

Operating loss

 

$

(95,911

)

 

$

(21

)

 

$

(117,497

)

 

$

(21

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Margin as a percentage of revenues (3)

 

 

11.8

%

 

 

29.4

%

 

 

16.0

%

 

 

29.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

6,211

 

 

$

7,795

 

 

$

35,929

 

 

$

7,795

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

32,349

 

 

$

25,522

 

 

$

113,834

 

 

$

70,760

 

Direct operating costs

 

$

21,399

 

 

$

20,882

 

 

$

77,104

 

 

$

51,428

 

Margin (4)

 

$

10,950

 

 

$

4,640

 

 

$

36,730

 

 

$

19,332

 

Selling, general and administrative

 

$

3,620

 

 

$

2,847

 

 

$

13,439

 

 

$

10,743

 

Depreciation, depletion and impairment

 

$

11,824

 

 

$

9,576

 

 

$

41,512

 

 

$

29,402

 

Operating loss

 

$

(4,494

)

 

$

(7,783

)

 

$

(18,221

)

 

$

(20,813

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

11,136

 

 

$

10,531

 

 

$

34,660

 

 

$

31,547

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

$

20,834

 

 

$

22,417

 

 

$

82,975

 

 

$

70,646

 

Merger and integration expenses

 

$

 

 

$

8,653

 

 

$

2,738

 

 

$

74,451

 

Depreciation

 

$

1,875

 

 

$

2,239

 

 

$

7,872

 

 

$

7,695

 

Other operating income, net

 

$

(7,248

)

 

$

(13,456

)

 

$

(17,569

)

 

$

(31,957

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

715

 

 

$

898

 

 

$

2,426

 

 

$

1,884

 

Total capital expenditures

 

$

160,890

 

 

$

237,236

 

 

$

641,458

 

 

$

567,087

 

 

 

(1)

For Contract Drilling, margin is defined as revenues less direct operating costs and excludes depreciation, amortization and impairment and selling, general and administrative expenses. Average margin per operating day is defined as margin divided by operating days.

 

(2)

For Pressure Pumping, margin is defined as revenues less direct operating costs and excludes depreciation, amortization and impairment, impairment of goodwill and selling, general and administrative expenses. Average margin per total job is defined as margin divided by total jobs. Margin as a percentage of revenues is defined as margin divided by revenues.

 

(3)

For Directional Drilling, margin is defined as revenues less direct operating costs and excludes depreciation and amortization, impairment of goodwill and selling, general and administrative expenses. Margin as a percentage of revenues is defined as margin divided by revenues.

 

(4)

For Other Operations, margin is defined as revenues less direct operating costs and excludes depreciation, depletion and impairment and selling, general and administrative expenses.

 

 

 

 

December 31,

 

 

December 31,

 

Selected Balance Sheet Data (unaudited, in thousands):

 

2018

 

 

2017

 

Cash and cash equivalents

 

$

 

245,029

 

 

$

 

42,828

 

Current assets

 

$

 

950,197

 

 

$

 

746,855

 

Current liabilities

 

$

 

526,316

 

 

$

 

546,250

 

Working capital

 

$

 

423,881

 

 

$

 

200,605

 

Borrowings under revolving credit facility

 

$

 

 

 

$

 

268,000

 

Other long-term debt

 

$

 

1,119,205

 

 

$

 

598,783

 


PATTERSON-UTI ENERGY, INC.

Non-U.S. GAAP Financial Measures

(unaudited, dollars in thousands)

 

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Adjusted Earnings Before Interest, Taxes, Depreciation

   and Amortization (Adjusted EBITDA)(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(201,249

)

 

$

195,402

 

 

$

(321,421

)

 

$

5,910

 

Income tax benefit

 

 

(21,370

)

 

 

(226,758

)

 

 

(45,987

)

 

 

(333,711

)

Net interest expense

 

 

11,913

 

 

 

9,826

 

 

 

45,981

 

 

 

35,606

 

Depreciation, depletion, amortization and impairment

 

 

212,390

 

 

 

211,154

 

 

 

916,318

 

 

 

783,341

 

Impairment of goodwill

 

 

211,129

 

 

 

 

 

 

211,129

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

212,813

 

 

$

189,624

 

 

$

806,020

 

 

$

491,146

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$

795,937

 

 

$

787,334

 

 

$

3,326,997

 

 

$

2,356,684

 

Adjusted EBITDA margin

 

 

26.7

%

 

 

24.1

%

 

 

24.2

%

 

 

20.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA by operating segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

$

156,716

 

 

$

116,883

 

 

$

538,492

 

 

$

366,994

 

Pressure pumping

 

 

58,217

 

 

 

79,119

 

 

 

294,126

 

 

 

219,034

 

Directional drilling

 

 

4,052

 

 

 

9,326

 

 

 

17,505

 

 

 

9,326

 

Other operations

 

 

7,330

 

 

 

1,793

 

 

 

23,291

 

 

 

8,589

 

Corporate

 

 

(13,502

)

 

 

(17,497

)

 

 

(67,394

)

 

 

(112,797

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Adjusted EBITDA

 

$

212,813

 

 

$

189,624

 

 

$

806,020

 

 

$

491,146

 

 

 

(1)

Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) is not defined by accounting principles generally accepted in the United States of America (“U.S. GAAP”). We define Adjusted EBITDA as net income (loss) plus net interest expense, income tax expense (benefit) and depreciation, depletion, amortization and impairment expense (including impairment of goodwill).  We present Adjusted EBITDA because we believe it provides to both management and investors additional information with respect to the performance of our fundamental business activities and a comparison of the results of our operations from period to period and against our peers without regard to our financing methods or capital structure.  We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired.  Adjusted EBITDA should not be construed as an alternative to the U.S. GAAP measure of net income (loss). Our computations of Adjusted EBITDA may not be the same as similarly titled measures of other companies.



PATTERSON-UTI ENERGY, INC.

Pro Forma Net Loss Per Share

(unaudited, dollars in thousands)

 

 

Three Months Ended December 31, 2018

 

 

As Reported

 

 

Pro Forma

 

 

Total

 

 

Per Share

 

 

Total

 

 

Per Share (1)