Current report filing

Reportable Segments

v2.4.1.9
Reportable Segments
 12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]  
Reportable Segments
Reportable Segments
Our business is comprised of two business lines: (1) Drilling Services and (2) Rental Tools Services. We have completed a business review and as a result have aligned our reportable segments with our two core business lines and our current internal organizational structure. We continue to report our Rental Tools Services business as one reportable segment (Rental Tools); however, effective with the first quarter of 2015, the Company is reporting its Drilling Services business as two segments: (1) U.S. (Lower 48) Drilling and (2) International & Alaska Drilling. We eliminate inter-segment revenue and expenses.
The following table represents the results of operations by reportable segment:
 
Year Ended December 31,
Dollars in thousands
2014
 
2013
 
2012
Revenues:
 
 
 
 
 
U.S. (Lower 48) Drilling(1)
$
158,405

 
$
153,624

 
$
123,672

International & Alaska Drilling(1)
462,513

 
410,507

 
307,189

Rental Tools(1)
347,766

 
310,041

 
246,900

Total revenues
968,684

 
874,172

 
677,761

Operating income:
 
 
 
 
 
U.S. (Lower 48) Drilling(2)
46,831

 
54,203

 
37,717

International & Alaska Drilling(2)
34,405

 
23,080

 
(60
)
Rental Tools(2)
72,946

 
91,164

 
113,899

Total operating gross margin
154,182

 
168,447

 
151,556

General and administrative expense
(35,016
)
 
(68,025
)
 
(46,257
)
Provision for reduction in carrying value of certain assets
—

 
(2,544
)
 
—

Gain on disposition of assets, net
1,054

 
3,994

 
1,974

Total operating income
120,220

 
101,872

 
107,273

Interest expense
(44,265
)
 
(47,820
)
 
(33,542
)
Interest income
195

 
2,450

 
153

Loss on extinguishment of debt
(30,152
)
 
(5,218
)
 
(2,130
)
Changes in fair value of derivative positions
—

 
53

 
55

Other income (loss)
2,539

 
1,450

 
(832
)
Income from continuing operations before income taxes
$
48,537

 
$
52,787

 
$
70,977

1)
In 2014, our largest customer, Exxon Neftegas Limited (ENL), constituted approximately 18.7 percent of our total consolidated revenues and approximately 39.2 percent of our International & Alaska Drilling segment. In 2013, our largest customer, ENL, constituted approximately 15.6 percent of our total consolidated revenues and approximately 33.3 percent of our International & Alaska Drilling segment. In 2012, our two largest customers, ENL and Schlumberger, constituted approximately 12.0 percent and 10.0 percent, respectively, of our total consolidated revenues and approximately 26.0 percent and 23.0 percent of our International & Alaska Drilling segment, respectively.
2)
Operating income is calculated as revenues less direct operating expenses, including depreciation and amortization expense.

The following table represents capital expenditures and depreciation and amortization by reportable segment:
 
Year Ended December 31,
Dollars in thousands
2014
 
2013
 
2012
Capital expenditures:
 
 
 
 
 
U.S. (Lower 48) Drilling
$
43,120

 
$
23,796

 
$
8,808

International & Alaska Drilling
26,761

 
40,822

 
102,026

Rental Tools
95,340

 
76,928

 
61,958

Corporate
14,292

 
14,099

 
18,751

Total capital expenditures
$
179,513

 
$
155,645

 
$
191,543

Depreciation and amortization (1):
 
 
 
 
 
U.S. (Lower 48) Drilling
$
21,260

 
$
15,212

 
$
16,363

International & Alaska Drilling
59,684

 
62,988

 
52,537

Rental Tools
64,177

 
55,853

 
44,117

Total depreciation and amortization
$
145,121

 
$
134,053

 
$
113,017

1)
For presentation purposes, depreciation for corporate assets of $5.0 million, $3.5 million, and $3.2 million for the years ended December 31, 2014, 2013, and 2012, respectively, has been allocated to the above reportable segments.
The following table represents identifiable assets by reportable segment:
 
Year Ended December 31,
  Dollars in Thousands
2014
 
2013
Identifiable assets:
 
 
 
U.S. (Lower 48) Drilling
$
124,701

 
$
111,586

International & Alaska Drilling
764,794

 
802,870

Rental Tools
444,195

 
350,429

Total identifiable assets
1,333,690

 
1,264,885

Corporate and other assets(1)
186,969

 
269,871

Total assets
$
1,520,659

 
$
1,534,756

1)
This category includes corporate assets and previously included minimal assets for our historical technical services segment primarily related to office furniture and fixtures. The assets related to technical services have been reclassified into the segment benefiting from the support service activities.


The following table represents selected geographic information:
 
Year Ended December 31,
Operations by Geographic Area:
2014
 
2013
 
2012
Dollars in Thousands
 
Revenues:
 
 
 
 
 
Africa and Middle East
$
128,214

 
$
58,416

 
$
26,528

Asia Pacific
187,799

 
170,165

 
117,392

CIS
61,849

 
55,165

 
44,312

Europe
20,296

 
16,788

 
—

Latin America
86,651

 
120,261

 
103,540

United States
483,875

 
453,377

 
385,989

Total revenues
968,684

 
874,172

 
677,761

Operating gross margin:
 
 
 
 
 
Africa and Middle East(1)
(16,973
)
 
(383
)
 
(2,027
)
Asia Pacific(1)
29,769

 
21,995

 
16,550

CIS(1)
19,534

 
11,888

 
(9,580
)
Europe(1)
11,534

 
274

 
—

Latin America(1)
(9,914
)
 
1,140

 
9,581

United States(1)
120,232

 
133,533

 
137,032

Total operating gross margin
154,182

 
168,447

 
151,556

 
 
 
 
 
 
Long-lived assets:(2)
 
 
 
 
 
Africa and Middle East
$
115,713

 
$
110,336

 
 
Asia Pacific
43,252

 
44,606

 
 
CIS
49,951

 
55,722

 
 
Europe
20,140

 
82,473

 
 
Latin America
77,136

 
15,198

 
 
United States
589,748

 
563,021

 
 
Total long-lived assets
$
895,940

 
$
871,356

 
 
1)
Operating gross margin is calculated as revenues less direct operating expenses, including depreciation and amortization expense.
2)
Long-lived assets consist of property, plant and equipment, net.