Annual report pursuant to Section 13 and 15(d)

Fresh Start Accounting (Tables)

v3.19.3.a.u2
Fresh Start Accounting (Tables)
12 Months Ended
Dec. 31, 2019
Reorganizations [Abstract]  
Reconciliation of Enterprise Value to Estimated Fair Value of Successor Common Stock
The following table reconciles the enterprise value to the estimated fair value of our Successor Common Stock as of the Fresh Start Reporting Date:
Dollars in thousands
 
Enterprise value
$
425,000

Cash and cash equivalents and other
127,800

Fair value of term loan
(210,000
)
Fair value of successor stockholders’ equity
$
342,800

The following table reconciles the enterprise value to the reorganization value of the Successor’s assets to be allocated to the Company’s individual assets as of the Fresh Start Reporting Date:
Dollars in thousands
 
Enterprise value
$
425,000

Cash and cash equivalents and other
127,800

Current liabilities
140,596

Non-current liabilities excluding long-term debt
20,985

Reorganization value of successor assets
$
714,381


Schedule of Fresh-Start Adjustments
Dollars in thousands
Predecessor
 
Reorganization Adjustments
 
Fresh Start Adjustments
 
Successor
ASSETS
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
51,777

 
$
76,072

(1)
$

 
$
127,849

Restricted cash
11,070

 
10,366

(2)

 
21,436

Accounts and notes receivable, net
168,444

 

 

 
168,444

Rig materials and supplies
39,024

 

 
(21,185
)
(15)
17,839

Deferred costs
3,718

 

 
(3,603
)
(16)
115

Other tax assets
2,725

 

 

 
2,725

Other current assets
25,501

 
(8,764
)
(3)

 
16,737

Total current assets
302,259

 
77,674

 
(24,788
)
 
355,145

Property, plant, and equipment, net
533,938

 

 
(229,968
)
(17)
303,970

Intangible assets, net
4,245

 

 
13,755

(18)
18,000

Deferred income taxes
2,518

 

 
1,751

(19)
4,269

Rig materials and supplies
10,703

 


 
(6,845
)
(20)
3,858

Other non-current assets
27,342

 
1,253

(4)
544

(20)
29,139

Total assets
$
881,005

 
$
78,927

 
$
(245,551
)
 
$
714,381

LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
 
 
 
 
 
 
 
Debtor in possession financing
$
10,000

 
$
(10,000
)
(5)
$

 
$

Accounts payable
68,633

 

 

 
68,633

Accrued liabilities
65,828

 
4,990

(6)
(3,868
)
(21)
66,950

Accrued income taxes
5,013

 

 

 
5,013

Total current liabilities
149,474

 
(5,010
)
 
(3,868
)
 
140,596

Long-term debt

 
210,000

(7)

 
210,000

Other long-term liabilities
20,901

 

 
(866
)
(22)
20,035

Long-term deferred tax liability
28,445

 

 
(27,495
)
(19)
950

Commitments and contingencies


 


 


 


Total liabilities not subject to compromise
198,820

 
204,990

 
(32,229
)
 
371,581

Liabilities subject to compromise
600,996

 
(600,996
)
(8)

 

Total liabilities
799,816

 
(396,006
)
 
(32,229
)
 
371,581

Stockholders’ equity:
 
 
 
 
 
 
 
Predecessor preferred stock
500

 
(500
)
(9)

 

Predecessor common stock
1,398

 
(1,398
)
(10)

 

Predecessor capital in excess of par value
767,793

 
(35,839
)
(11)
(731,954
)
(23)

Predecessor accumulated other comprehensive income (loss)
(7,256
)
 

 
7,256

(23)

Successor common stock

 
150

(12)

 
150

Successor capital in excess of par value

 
342,650

(13)

 
342,650

Retained earnings (accumulated deficit)
(681,246
)
 
169,870

(14)
511,376

(23)

Total stockholders’ equity
81,189

 
474,933

 
(213,322
)
 
342,800

Total liabilities and stockholders’ equity
$
881,005

 
$
78,927

 
$
(245,551
)
 
$
714,381


Reorganization Adjustments
(1)
Changes in cash and cash equivalents included the following:
Dollars in thousands
 
Proceeds from the rights offering
$
95,000

Transfers from restricted cash for the return of cash collateral (for letters of credit)
10,433

Proceeds from refund of backstop commitment fee
7,600

Transfers from restricted cash for deposit releases
250

Transfers to restricted cash for funding of professional fees
(21,049
)
Payment of debtor in possession financing principal and interest
(10,035
)
Payment of professional fees
(5,154
)
Payment of debt issuance costs for the successor credit facility
(490
)
Payment of fees on letters of credit
(58
)
Payment of term loan agent fees
(50
)
Payment of other reorganization expenses
(375
)
Net change in cash and cash equivalents
$
76,072


(2)
Changes in restricted cash reflects the net transfer of cash between restricted cash and cash and cash equivalents.

(3)
Changes in other current assets include the following:
Dollars in thousands
 
Refund of backstop commitment fee
$
(7,600
)
Elimination of predecessor directors and officers insurance policies
(702
)
Reclass of prepaid costs related to the successor credit facility
(488
)
Payment of other costs related to the successor credit facility
26

Net change in other current assets
$
(8,764
)

(4)
Changes in other non-current assets include the following:
Dollars in thousands
 
Capitalization of debt issuance costs on the successor credit facility
$
765

Reclass of prepaid costs related to the successor credit facility
488

Net change in other non-current assets
$
1,253


(5)
Reflects the payment of debtor in possession financing principal.

(6)
Changes in accrued liabilities include the following:
Dollars in thousands
 
Accrual of professional fees
$
7,100

Payment of professional fees
(2,017
)
Payment of debtor in possession financing interest
(35
)
Payment of letters of credit fees
(58
)
Net change in accrued liabilities
$
4,990


(7)
Changes in long-term debt include the issuance of the $210.0 million Term Loan.

(8)
Liabilities subject to compromise to be settled in accordance with the Plan and the resulting gain was determined as follows:
Dollars in thousands
 
Liabilities subject to compromise
$
(600,996
)
Issuance of term loan
210,000

Issuance of successor common stock to the 7.50% note holders and 6.75% note holders
175,058

Excess fair value ascribed to lenders participating in equity rights offering
24,809

Gain on settlement of liabilities subject to compromise
$
(191,129
)

(9)
Changes in Predecessor Preferred Stock reflects the cancellation of Predecessor Preferred Stock.

(10)
Changes in Predecessor Common Stock reflects the cancellation of Predecessor Common Stock.

(11)
Changes in Predecessor capital in excess of par include the following:
Dollars in thousands
 
Cancellation of predecessor preferred stock
$
500

Cancellation of predecessor common stock
1,398

Issuance of successor warrants to predecessor common stock and predecessor preferred stock holders
(14,687
)
Issuance of successor common stock to predecessor common stock and predecessor preferred stock holders
(4,950
)
Excess fair value ascribed to parties participating in rights offering, excluding lenders
(18,100
)
Net change in predecessor capital in excess of par value
$
(35,839
)

(12)
Changes in Successor Common Stock include the following:
Dollars in thousands
 
Issuance of successor common stock to the 7.50% note holders and 6.75% note holders
$
80

Issuance of successor common stock pursuant to rights offering
68

Issuance of successor common stock to predecessor common stock and predecessor preferred stock holders
2

Net change in successor common stock
$
150


(13)
Change in Successor capital in excess of par value include the following:
Dollars in thousands
 
Issuance of successor common stock to the 7.50% note holders and 6.75% note holders
$
174,978

Issuance of successor common stock pursuant to rights offering
148,874

Issuance of successor warrants to predecessor common stock and predecessor preferred stock holders
14,687

Issuance of successor common stock to predecessor common stock and predecessor preferred stock holders
4,948

Equity issuance costs
(837
)
Net change in successor capital in excess of par value
$
342,650


(14)
Changes in accumulated deficit include the following:
Dollars in thousands
 
Gain on settlement of liabilities subject to compromise
$
191,129

Backstop premium on rights offering
(11,032
)
Accrual of professional fees
(5,988
)
Payment of professional fees
(3,137
)
Elimination of predecessor directors and officers insurance policies
(702
)
Payment of other reorganization items
(400
)
Net change in accumulated deficit
$
169,870

Fresh Start Accounting Adjustments

(15)
Changes in rig materials and supplies reflect the fair value adjustment due to the adoption of fresh start accounting.

(16)
Changes in deferred costs reflect the elimination of capitalized mobilization costs due to the adoption of fresh start accounting.

(17)
Changes in property, plant, and equipment, net reflects the fair value adjustment due to the adoption of fresh start accounting.

(18)
Changes in intangible assets, net reflects the fair value adjustment due to the adoption of fresh start accounting.
Dollars in thousands
Successor Fair Value
 
 
Predecessor Historical Book Value
Customer relationships
$
16,300

 
 
$

Trade names
1,500

 
 
368

Developed technology
200

 
 
3,877

Intangible assets, net
$
18,000

 
 
$
4,245


(19)
Changes in deferred income taxes reflects the adjustment due to the adoption of fresh start accounting.

(20)
Changes in rig materials and supplies and other non-current assets reflect the following:

Dollars in thousands

Fair value adjustment to rig material and supplies
$
(6,845
)
Net change in rig materials and supplies
$
(6,845
)

Dollars in thousands

Fair value adjustment to investment in non-consolidated subsidiaries
$
2,290

Fair value adjustment to long-term notes receivable
(272
)
Elimination of capitalized mobilization costs
(857
)
Elimination of long-term other deferred charges
(617
)
Net change in other non-current assets
$
544


(21)
Changes in accrued liabilities due to the adoption of fresh start accounting include the following:
Dollars in thousands
 
Elimination of deferred rent
$
(1,100
)
Elimination of deferred revenue
(2,768
)
Net change in accrued liabilities
$
(3,868
)

(22)
Changes in other long-term liabilities reflects the elimination of deferred revenue due to the adoption of fresh start accounting.

(23)
Changes reflect the cumulative impact of fresh start accounting adjustments discussed above and the elimination of Predecessor accumulated other comprehensive loss and Predecessor accumulated deficit.