| Results of Operations by Reportable Segment |
Our International Rental Tools segment maintains an inventory of rental tools and provides well construction, well intervention, and surface and tubular services to our customers in the Middle East, Latin America, Europe, and Asia-Pacific regions. The following table represents the results of operations by reportable segment:
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Year Ended December 31, |
Dollars in thousands |
2018 |
|
2017 |
|
2016 |
Revenues: (1)
|
|
|
|
|
|
U.S. (Lower 48) Drilling |
$ |
11,729 |
|
|
$ |
12,389 |
|
|
$ |
5,429 |
|
International & Alaska Drilling |
213,411 |
|
|
247,254 |
|
|
287,332 |
|
Total Drilling Services |
225,140 |
|
|
259,643 |
|
|
292,761 |
|
U.S. Rental Tools |
176,531 |
|
|
121,937 |
|
|
71,613 |
|
International Rental Tools |
79,150 |
|
|
60,940 |
|
|
62,630 |
|
Total Rental Tools Services |
255,681 |
|
|
182,877 |
|
|
134,243 |
|
Total revenues |
$ |
480,821 |
|
|
$ |
442,520 |
|
|
$ |
427,004 |
|
Operating gross margin: (2)
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U.S. (Lower 48) Drilling |
$ |
(15,720 |
) |
|
$ |
(20,656 |
) |
|
$ |
(34,353 |
) |
International & Alaska Drilling |
(21,936 |
) |
|
(6,248 |
) |
|
9,272 |
|
Total Drilling Services |
(37,656 |
) |
|
(26,904 |
) |
|
(25,081 |
) |
U.S. Rental Tools |
44,512 |
|
|
15,651 |
|
|
(22,372 |
) |
International Rental Tools |
(11,684 |
) |
|
(24,087 |
) |
|
(27,859 |
) |
Total Rental Tools Services |
32,828 |
|
|
(8,436 |
) |
|
(50,231 |
) |
Total operating gross margin (loss) |
(4,828 |
) |
|
(35,340 |
) |
|
(75,312 |
) |
General and administrative expense |
(24,545 |
) |
|
(25,676 |
) |
|
(34,332 |
) |
Loss on impairment |
(50,698 |
) |
|
— |
|
|
— |
|
Provision for reduction in carrying value of certain assets |
— |
|
|
(1,938 |
) |
|
— |
|
Gain (loss) on disposition of assets, net |
(1,724 |
) |
|
(2,851 |
) |
|
(1,613 |
) |
Pre-petition restructuring charges |
(21,820 |
) |
|
— |
|
|
— |
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Reorganization items |
(9,789 |
) |
|
— |
|
|
— |
|
Total operating income (loss) |
(113,404 |
) |
|
(65,805 |
) |
|
(111,257 |
) |
Interest expense |
(42,565 |
) |
|
(44,226 |
) |
|
(45,812 |
) |
Interest income |
91 |
|
|
244 |
|
|
58 |
|
Other |
(2,023 |
) |
|
126 |
|
|
367 |
|
Income (loss) before income taxes |
$ |
(157,901 |
) |
|
$ |
(109,661 |
) |
|
$ |
(156,644 |
) |
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(1) |
For the years ended December 31, 2018, 2017, and 2016, our largest customer, ENL, constituted approximately 25.7 percent, 31.3 percent, and 38.7 percent, respectively, of our total consolidated revenues and approximately 58 percent, 55.9 percent, and 57.5 percent, respectively, of our International & Alaska Drilling segment revenues.
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Excluding reimbursable revenues of $47.2 million, $50.8 million, and $67.0 million, ENL constituted approximately 17.9 percent, 22.7 percent, and 27.5 percent, respectively, of our total consolidated revenues and approximately 48.0 percent, 46.1 percent, and 45.0 percent, respectively of our International & Alaska Drilling segment revenues.
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(2) |
Operating gross margin is calculated as revenues less direct operating expenses, including depreciation and amortization expense. |
Other business segment information
The following table represents capital expenditures and depreciation and amortization by reportable segment:
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Year Ended December 31, |
Dollars in thousands |
2018 |
|
2017 |
|
2016 |
Capital expenditures: |
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|
U.S. (Lower 48) Drilling |
$ |
444 |
|
|
$ |
230 |
|
|
$ |
264 |
|
International & Alaska Drilling |
7,444 |
|
|
3,673 |
|
|
5,258 |
|
U.S. Rental Tools |
55,545 |
|
|
39,948 |
|
|
10,848 |
|
International Rental Tools |
6,275 |
|
|
8,584 |
|
|
9,725 |
|
Corporate |
859 |
|
|
2,098 |
|
|
2,859 |
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Total capital expenditures |
$ |
70,567 |
|
|
$ |
54,533 |
|
|
$ |
28,954 |
|
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Depreciation and amortization: (1)
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U.S. (Lower 48) Drilling |
$ |
7,758 |
|
|
$ |
13,521 |
|
|
$ |
20,049 |
|
International & Alaska Drilling |
36,072 |
|
|
46,950 |
|
|
55,236 |
|
U.S. Rental Tools |
48,167 |
|
|
43,489 |
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|
43,769 |
|
International Rental Tools |
15,548 |
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|
18,413 |
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|
20,741 |
|
Total depreciation and amortization |
$ |
107,545 |
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|
$ |
122,373 |
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|
$ |
139,795 |
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(1) |
For presentation purposes, for the years then ended December 31, 2018, 2017 and 2016 depreciation for corporate assets of $8.4 million, $8.7 million, and $8.3 million, respectively, has been allocated to the corresponding reportable segments.
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The following table represents identifiable assets by reportable segment:
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Year Ended December 31, |
Dollars in Thousands |
2018 |
|
2017 |
U.S. (Lower 48) Drilling |
$ |
30,283 |
|
|
$ |
62,980 |
|
International & Alaska Drilling |
366,856 |
|
|
421,753 |
|
U.S. Rental Tools |
216,123 |
|
|
198,664 |
|
International Rental Tools |
146,471 |
|
|
168,511 |
|
Total identifiable assets |
759,733 |
|
|
851,908 |
|
Corporate |
68,681 |
|
|
138,371 |
|
Total assets |
$ |
828,414 |
|
|
$ |
990,279 |
|
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| Operations by Geographical Area |
The following table represents selected geographic information:
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Year Ended December 31, |
Dollars in Thousands |
2018 |
|
2017 |
|
2016 |
Revenues: |
|
|
|
|
|
United States |
$ |
207,612 |
|
|
$ |
177,630 |
|
|
$ |
127,596 |
|
Russia |
123,767 |
|
|
139,144 |
|
|
142,538 |
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EMEA & Asia |
92,568 |
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|
64,572 |
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|
79,870 |
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Latin America |
14,631 |
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|
11,594 |
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|
12,952 |
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Other CIS |
13,703 |
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|
23,768 |
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|
33,659 |
|
Other (1)
|
28,540 |
|
|
25,812 |
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|
30,389 |
|
Total revenues |
$ |
480,821 |
|
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$ |
442,520 |
|
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$ |
427,004 |
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|
Long-lived assets: (1)
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United States |
$ |
369,106 |
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$ |
429,374 |
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EMEA & Asia |
89,696 |
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|
108,621 |
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Latin America |
36,656 |
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|
38,959 |
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Other CIS |
21,949 |
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|
29,402 |
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Russia |
16,964 |
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|
19,415 |
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Total long-lived assets |
$ |
534,371 |
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$ |
625,771 |
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(1) Long-lived assets consist of property, plant and equipment, net.
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