0000889900
false
0000889900
2024-05-01
2024-05-01
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):
May 1, 2024
_______________________________________________
Patterson-UTI Energy, Inc.
(Exact name of Registrant as Specified in Its Charter)
_______________________________________________
Delaware 1-39270 75-2504748
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
10713 W. Sam Houston Pkwy N 77064
,
Suite 800
Houston
,
Texas
(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 (see General Instructions A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, $0.01 Par Value PTEN The Nasdaq Global Select Marke
t
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s) 230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 ((s) 240.12b-2
of this chapter).
Emerging growth company
o
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.
o
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Item 2.02 Results of Operations and Financial Condition.
On May 1, 2024, Patterson-UTI Energy, Inc. (the "Company" or "Patterson-UTI")
announced financial results for the three ended March 31, 2024. The press
release, dated May 1, 2024, 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 8.01 Other Events.
To the extent required, the information included in Item 2.02 of this Current
Report on Form 8-K is incorporated by reference into this Item 8.01.
Item 9.01 Financial Statements and Exhibits.
(d) The following exhibit is furnished herewith:
99.1 Press Release dated
May 1
, 2024 announcing financial results for the three
months ended
March
31, 202
4
.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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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.
May 1, 2024 By: /s/ C. Andrew Smith
Name: C. Andrew Smith
Title: Executive Vice President and Chief Financial Officer
Exhibit 99.1
Contact: Michael Sabella
Vice President, Investor Relations
(281) 885-7589
Patterson-UTI Energy Reports Financial Results for the Quarter Ended March 31,
2024
HOUSTON, Texas - May 1, 2024 - PATTERSON-UTI ENERGY, INC.
(NASDAQ: PTEN) today reported financial results for the quarter ended March
31, 2024.
First Quarter 2024 Financial Results and Other Key Items
.
Total revenue of $1.5 billion
.
Net income attributable to common stockholders of $51 million, or $0.13 per
share
Includes $12 million in merger and integration expenses
.
Adjusted net income attributable to common stockholders of $61 million, or
$0.15 per share
Excludes merger and integration expenses
.
Adjusted EBITDA of $375 million
Excludes merger and integration expenses
.
Cash from Operations of $366 million, Free Cash Flow of $139 million
.
Achieved annualized synergy target of $200 million from the NexTier merger
.
Returned $130
million to shareholders in the first quarter; confirm expectation to return at
least $400 million to shareholders in 2024
Used $98 million to repurchase 9 million shares in the first quarter; since
the close of the NexTier merger and Ulterra acquisition, we have repurchased
4% of the post-transaction shares outstanding
$945 million in remaining share repurchase authorization
Declared a quarterly dividend on its common stock of $0.08 per share, payable
on June 17, 2024 to holders of record as of June 3, 2024
Management Commentary
"The first quarter was another strong quarter for Patterson-UTI, and we met
our adjusted gross profit guidance at each of our operating segments," said
Andy Hendricks, Chief Executive Officer. "We are pleased with the way our team
navigated a challenging market to start the year. Activity in both our U.S.
drilling and completion businesses again outperformed, and our customers are
recognizing the value that is being created by our top-tier service offerings.
Our customers place a high value on differentiated services and technologies,
which will benefit Patterson-UTI over the long-term as we look to create value
for our shareholders.
"The near-term outlook for U.S. shale activity continues to be cautious and
reflects slightly lower activity than we saw to start the year," continued Mr.
Hendricks. "Activity in oil basins remains steady, although natural gas prices
and customer consolidation remain a headwind to near-term activity. Based on
current commodity prices, we think activity in our U.S. drilling and
completion businesses is likely to improve slightly in oil basins, starting in
the third quarter, with early indication that the impact of these headwinds
may begin to ease later this year."
"The first quarter results demonstrate the significant free cash flow
generation capability of Patterson-UTI following our combination with NexTier
and the acquisition of Ulterra. We continue to invest in our business to
maintain our position as a long-term winner in U.S. drilling and completions,
while at the same time generating strong free cash flow," said Andy Smith,
Chief Financial Officer. "We are significantly ahead of pace on our
expectation to return at least $400 million to shareholders this year, and our
strong free cash flow in the first quarter allowed us to opportunistically
accelerate our share repurchases. In just two full quarters since we closed
the NexTier merger and the Ulterra acquisition, we have already retired 4% of
our post-transaction outstanding shares in addition to maintaining our
dividend. Since the start of 2022, we have returned more than 80% of our free
cash flow to shareholders, while at the same time improving our free cash flow
conversion. We continue to expect to convert at least 40% of our adjusted
EBITDA to free cash flow in 2024."
Drilling Services
During the first quarter, Drilling Services revenue totaled $458 million.
Drilling Services adjusted gross profit was $186 million during the quarter
compared to $187 million during the prior quarter, which was in line with our
prior guidance. The segment delivered relatively steady sequential results,
reflecting a steady U.S. land rig count compared to the fourth quarter.
-------------------------------------------------------------------------------
Within the Drilling Services segment for the first quarter, U.S. Contract
Drilling revenue was $393 million, and adjusted gross profit was $178 million,
which was slightly higher than in the fourth quarter as a higher rig count
more than offset slightly lower revenue per day. U.S. operating days totaled
11,024, with activity slightly outperforming our expectation. The average rig
revenue per operating day in U.S. Contract Drilling was $35,680 in the
quarter, and the adjusted gross profit per operating day in U.S. Contract
Drilling was $16,170, a $160 decrease from the previous quarter.
As of March 31, 2024, the Company had term contracts for drilling rigs in the
United States providing for future dayrate drilling revenue of approximately
$527 million. Based on contracts currently in place, the Company expects an
average of 70 rigs operating under term contracts during the second quarter of
2024 and an average of 41 rigs operating under term contracts over the four
quarters ending March 31, 2025.
For the first quarter, other Drilling Services revenue, which primarily
includes International Contract Drilling and Directional Drilling, was $64
million, with adjusted gross profit of $8 million.
Completion Services
First quarter Completion Services revenue totaled $945 million, with adjusted
gross profit of $199 million. Revenue was in line with expectations, with the
sequential decline primarily driven by lower activity compared to the fourth
quarter, particularly in natural gas basins. Segment adjusted gross profit was
at the high-end of our guidance, as we continue to see the benefit of focused
cost controls and additional synergy capture associated with the NexTier
merger.
Financial performance in our Completion Services segment has been relatively
steady compared to the pre-merger entities, even as market activity has
slowed. This reflects our progress in capturing synergy value that we expected
to unlock from the NexTier merger.
Activity in Appalachia remained relatively steady. As expected, activity in
the Haynesville was the biggest driver of the decline in completion activity.
Utilization remains high for equipment that can be powered by natural gas, and
we are continuing to see strong returns from our natural gas-powered assets
that are working for large, long-term dedicated customers.
Drilling Products
First quarter Drilling Products revenue totaled $90 million, with adjusted
gross profit of $41 million. First quarter revenue in the Drilling Products
business was up 2% sequentially, with higher sequential results mostly driven
by Ulterra's International operations. Adjusted gross profit improved with
strong market penetration, with a sequential increase in revenue per industry
rig for Ulterra's U.S. operations.
As a result of the purchase price accounting for Ulterra, direct operating
costs and depreciation expenses are temporarily higher than normal, as the
drill bits acquired were allocated a value higher than the manufactured cost.
During the first quarter, the step-up in value increased reported segment
direct operating costs by $2 million and increased reported segment
depreciation and amortization by $6 million, all of which was non-cash in
nature. We expect this impact will reduce as we move through 2024 and is
likely to be negligible thereafter.
The Drilling Products segment continues to perform well, with long-term
International growth opportunities.
Other
During the first quarter, Other revenue totaled $18 million, with adjusted
gross profit totaling $7 million during the quarter.
Outlook
We see steady drilling and completion activity in oil basins, with the
expectation that a few operators may add drilling rigs later this year based
on current oil prices. Our activity in natural gas basins has so far been more
resilient than we previously anticipated, although we have continued to see
some activity decline in the second quarter. We currently expect our activity
in natural gas basins will remain steady with second quarter levels through
year-end.
Within the Drilling Services segment, we expect U.S. Contract Drilling to
operate an average of 114 U.S. rigs in the second quarter, with adjusted gross
profit per operating day down roughly $300 from the prior quarter. Aside from
U.S. Contract Drilling, we expect other Drilling Services adjusted gross
profit will be down slightly in the second quarter compared to the prior
quarter.
-------------------------------------------------------------------------------
Completion Services activity has declined slightly to start the second
quarter, mostly in the natural gas basins where our customers continue to slow
activity in response to current natural gas prices. We also expect to see a
few dedicated fleets operate in the second quarter with planned gaps in the
schedule. Completion Services revenue for the second quarter is expected to be
approximately $860 million, with approximately $690 million in direct
operating costs and an adjusted gross profit of around $170 million. We expect
an improvement in activity in the third quarter as our dedicated and long-term
customers resume completion activity after new pads are drilled.
Second quarter results in our Drilling Products segment are expected to be
relatively in line with the first quarter, as continued growth in our
International operations is expected to largely offset seasonal activity
declines from Canadian spring breakup.
For the second quarter, Other revenue and adjusted gross profit is expected to
be roughly flat with the first quarter.
For the second quarter, we expect selling, general and administrative expense
of approximately $65 million, and depreciation, depletion, amortization, and
impairment expense of approximately $265 million.
"We are excited by our position as a leader in U.S. shale, and our results are
starting to demonstrate the value creation that we envisioned from the NexTier
merger and Ulterra acquisition," concluded Mr. Hendricks. "The discipline we
see from our customers is continuing to reduce the cyclicality of the industry
relative to prior business cycles, and the relative stability is giving our
company the opportunity to use our differentiated products and services to add
value to the drilling and completion process. Most importantly for our
investors, the differentiation is creating an environment where we can focus
on making investments that grow our own returns and free cash flow conversion.
Our objective is to continue to return a significant portion of our free cash
flow to shareholders and create significant value for all Patterson-UTI
shareholders over the long-term."
For purposes of the shareholder return target, the Company defines free cash
flow as net cash provided by operating activities less capital expenditures.
The shareholder return target, including the amount and timing of any dividend
payments and/or share repurchases are subject to the discretion of the
Company's Board of Directors and will depend upon business conditions, results
of operations, financial condition, terms of the Company's debt agreements and
other factors.
All references to "per share" in this press release are diluted earnings per
common share as defined within Accounting Standards Codification Topic 260.
First Quarter Earnings Conference Call
The Company's quarterly conference call to discuss the operating results for
the quarter ended March 31, 2024, is scheduled for May 2, 2024, at 9:00 a.m.
Central Time. The dial-in information for participants is (888) 550-5422
(Domestic) and (646) 960-0676 (International).
The conference ID for both numbers is 3822955. The call is also being webcast
and can be accessed through the Investor Relations section of the Company's
website at
investor.patenergy.com
. A replay of the conference call will be on the Company's website for two
weeks.
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About Patterson-UTI
Patterson-UTI is a leading provider of drilling and completion services to oil
and natural gas exploration and production companies in the United States and
other select countries, including contract drilling services, integrated well
completion services and directional drilling services in the United States,
and specialized bit solutions in the United States, Middle East and many other
regions around the world. 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: the successful integration and expected benefits of the recently
completed NexTier merger and Ulterra acquisition on our financial condition,
results of operations, strategy and plans and our ability to realize those
benefits; synergies, costs and financial and operating impacts of
acquisitions, including the NexTier merger and the Ulterra acquisition; the
successful integration of NexTier and Ulterra operations and the future
financial and operating results of the combined company; the combined
company's plans, objectives, expectations and intentions with respect to
future operations and services; adverse oil and natural gas industry
conditions; global economic conditions, including inflationary pressures and
risks of economic downturns or recessions in the United States and elsewhere;
volatility in customer spending and in oil and natural gas prices that could
adversely affect demand for Patterson-UTI's services and their associated
effect on rates; excess availability of land drilling rigs, completion
services and drilling equipment, including as a result of reactivation,
improvement or construction; competition and demand for Patterson-UTI's
services; the impact of the ongoing Ukraine/Russia and Middle East conflicts
and instability in other international regions; strength and financial
resources of competitors; utilization, margins and planned capital
expenditures; ability to obtain insurance coverage on commercially reasonable
terms and liabilities from operational risks for which Patterson-UTI does not
have and receive full indemnification or insurance; operating hazards
attendant to the oil and natural gas business; failure by customers to pay or
satisfy their contractual obligations (particularly with respect to fixed-term
contracts); the ability to realize backlog; specialization of methods,
equipment and services and new technologies, including the ability to develop
and obtain satisfactory returns from new technology; the ability to retain
management and field personnel; loss of key customers; shortages, delays in
delivery, and interruptions in supply, of equipment and materials;
cybersecurity events; difficulty in building and deploying new equipment;
governmental regulation, including climate legislation, regulation and other
related risks; environmental, social and governance practices, including the
perception thereof; environmental risks and ability to satisfy future
environmental costs; technology-related disputes; legal proceedings and
actions by governmental or other regulatory agencies; the ability to
effectively identify and enter new markets; public health crises, pandemics
and epidemics; weather; operating costs; expansion and development trends of
the oil and natural gas industry; financial flexibility, including
availability of capital and the ability to repay indebtedness when due;
adverse credit and equity market conditions; our return of capital to
stockholders, including timing and amounts of dividends and share repurchases;
stock price volatility; and compliance with covenants under Patterson-UTI's
debt agreements.
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.
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PATTERSON-UTI ENERGY, INC.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
Three Months Ended
March 31, December 31, March 31,
2024 2023 2023
REVENUES $ 1,510,360 $ 1,584,317 $ 791,802
COSTS AND EXPENSES:
Direct operating costs 1,077,139 1,119,117 512,659
Depreciation, depletion, amortization and impairment 274,956 278,787 128,180
Selling, general and administrative 64,984 61,037 30,566
Credit loss expense 5,231 842 -
Merger and integration expense 12,233 19,949 -
Other operating income, net (11,182) (7,120) (5,566)
Total operating costs and expenses 1,423,361 1,472,612 665,839
OPERATING INCOME 86,999 111,705 125,963
OTHER INCOME (EXPENSE):
Interest income 2,189 1,539 1,240
Interest expense, net of amount capitalized (18,335) (18,681) (8,826)
Other 850 (1,293) 1,486
Total other expense (15,296) (18,435) (6,100)
INCOME BEFORE INCOME TAXES 71,703 93,270 119,863
INCOME TAX EXPENSE 19,997 31,332 20,185
NET INCOME 51,706 61,938 99,678
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST 471 (12) -
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 51,235 $ 61,950 $ 99,678
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS PER COMMON SHARE:
Basic $ 0.13 $ 0.15 $ 0.47
Diluted $ 0.13 $ 0.15 $ 0.46
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic 408,182 415,656 212,089
Diluted 409,819 418,751 215,866
CASH DIVIDENDS PER COMMON SHARE $ 0.08 $ 0.08 $ 0.08
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PATTERSON-UTI ENERGY, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
Three Months Ended
March 31, March 31,
2024 2023
Cash flows from operating activities:
Net income $ 51,706 $ 99,678
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and impairment 274,956 128,180
Deferred income tax expense 19,507 18,303
Stock-based compensation 12,051 (758)
Net (gain) loss on asset disposals (2,668) 538
Credit loss expense 5,231 -
Other 613 (648)
Changes in operating assets and liabilities 4,495 (10,944)
Net cash provided by operating activities 365,891 234,349
Cash flows from investing activities:
Purchases of property and equipment (226,941) (117,601)
Proceeds from disposal of assets 2,389 1,263
Other (2,933) (7)
Net cash used in investing activities (227,485) (116,345)
Cash flows from financing activities:
Purchases of treasury stock (97,782) (73,586)
Dividends paid (32,553) (16,916)
Payments of finance leases (27,229) -
Other (4,025) (7,837)
Net cash used in financing activities (161,589) (98,339)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash 750 -
Net (decrease) increase in cash, cash equivalents and restricted cash (22,433) 19,665
Cash, cash equivalents and restricted cash at beginning of period 192,680 137,553
Cash, cash equivalents and restricted cash at end of period $ 170,247 $ 157,218
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PATTERSON-UTI ENERGY, INC.
Additional Financial and Operating Data
(unaudited, dollars in thousands)
Three Months Ended
March 31, December 31, March 31,
2024 2023 2023
Drilling Services
Revenues $ 457,573 $ 463,598 $ 477,727
Direct operating costs $ 271,737 $ 276,439 $ 281,261
Adjusted gross profit $ 185,836 $ 187,159 $ 196,466
(1)
Depreciation, amortization and impairment $ 92,345 $ 91,951 $ 91,293
Selling, general and administrative $ 3,879 $ 3,204 $ 3,845
Other operating (income) loss, net $ - $ (676) $ 22
Operating income $ 89,612 $ 92,680 $ 101,306
Capital expenditures $ 82,793 $ 73,625 $ 89,279
Completion Services
Revenues $ 944,997 $ 1,014,357 $ 293,268
Direct operating costs $ 745,594 $ 782,482 $ 220,116
Adjusted gross profit $ 199,403 $ 231,875 $ 73,152
(1)
Depreciation, amortization and impairment $ 148,680 $ 147,891 $ 26,025
Selling, general and administrative $ 10,964 $ 13,662 $ 2,695
Other operating income, net $ (9,870) $ - $ -
Operating income $ 49,629 $ 70,322 $ 44,432
Capital expenditures $ 123,377 $ 107,217 $ 21,425
Drilling Products
Revenues $ 89,973 $ 88,109 $ -
Direct operating costs $ 48,630 $ 49,484 $ -
Adjusted gross profit $ 41,343 $ 38,625 $ -
(1)
Depreciation, amortization and impairment $ 27,182 $ 31,392 $ -
Selling, general and administrative $ 7,661 $ 7,494 $ -
Operating income (loss) $ 6,500 $ (261) $ -
Capital expenditures $ 15,586 $ 16,632 $ -
Other
Revenues $ 17,817 $ 18,253 $ 20,807
Direct operating costs $ 11,178 $ 10,712 $ 11,282
Adjusted gross profit $ 6,639 $ 7,541 $ 9,525
(1)
Depreciation, depletion, amortization and impairment $ 5,411 $ 6,291 $ 7,323
Selling, general and administrative $ 240 $ 232 $ 235
Operating income $ 988 $ 1,018 $ 1,967
Capital expenditures $ 3,797 $ 6,258 $ 5,223
Corporate
Depreciation $ 1,338 $ 1,262 $ 3,539
Selling, general and administrative $ 42,240 $ 36,445 $ 23,791
Merger and integration expense $ 12,233 $ 19,949 $ -
Credit loss expense $ 5,231 $ 842 $ -
Other operating income, net $ (1,312) $ (6,444) $ (5,588)
Capital expenditures $ 1,388 $ 1,541 $ 1,674
Total Capital Expenditures $ 226,941 $ 205,273 $ 117,601
(1)
Adjusted gross profit is defined as revenues less direct operating costs
(excluding depreciation, depletion, amortization and impairment expense). See
Non-GAAP Financial Measures below for a reconciliation of GAAP gross profit to
adjusted gross profit by segment.
Selected Balance Sheet Data (unaudited, in thousands): March 31, 2024 December 31, 2023
Cash, cash equivalents and restricted cash $ 170,247 $ 192,680
Current assets $ 1,354,702 $ 1,485,698
Current liabilities $ 916,901 $ 1,050,435
Working capital $ 437,801 $ 435,263
Long-term debt $ 1,221,058 $ 1,224,941
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PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures
Adjusted EBITDA
(unaudited, dollars in thousands)
Three Months Ended
March 31, December 31, March 31,
2024 2023 2023
Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization (Adjusted EBITDA)
(1)
:
Net $ 51,706 $ 61,938 $ 99,678
income
Income tax 19,997 31,332 20,185
expense
Net interest 16,146 17,142 7,586
expense
Depreciation, depletion, 274,956 278,787 128,180
amortization and impairment
Merger and 12,233 19,949 -
integration expense
Adjusted $ 375,038 $ 409,148 $ 255,629
EBITDA
Total $ 1,510,360 $ 1,584,317 $ 791,802
revenues
Adjusted EBITDA by
Operating Segment:
Drilling $ 181,957 $ 184,631 $ 192,599
Services
Completion 198,309 218,213 70,457
Services
Drilling 33,682 31,131 -
Products
Other 6,399 7,309 9,290
Corporate (45,309) (32,136) (16,717)
Adjusted $ 375,038 $ 409,148 $ 255,629
EBITDA
(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 ("GAAP"). We define Adjusted EBITDA as net
income plus income tax expense, net interest expense, depreciation, depletion,
amortization and impairment expense and merger and integration expense. We
present Adjusted EBITDA as a supplemental disclosure 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 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 GAAP measure of net income.
Our computations of Adjusted EBITDA may not be the same as similarly titled
measures of other companies.
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PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures
Free Cash Flow
(unaudited, dollars in thousands)
Three Months Ended
March 31, March 31,
2024 2023
Free Cash Flow
(1)
:
Net cash provided by operating activities 365,891 234,349
Less capital expenditures (226,941) (117,601)
Free cash flow $ 138,950 $ 116,748
(1)
We define free cash flow as net cash provided by operating activities less
capital expenditures. We present free cash flow as a supplemental disclosure
because we believe that it is an important liquidity measure and that it is
useful to investors and management as a measure of the company's ability to
generate cash flow, after reinvesting in the company, that could be available
for financing cash flows, such as dividend payments, share repurchases and/or
repurchases of long-term indebtedness. Our computations of free cash flow may
not be the same as similarly titled measures of other companies. Free cash
flow is not intended to represent our residual cash flow available for
discretionary expenditures. Free cash flow is a non-GAAP financial measure
that should be considered in addition to, not as a substitute for or superior
to, cash flows from operations reported in accordance with GAAP.
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PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures
Adjusted Gross Profit
(unaudited, dollars in thousands)
Three Months Ended
March 31, December 31, March 31,
2024 2023 2023
Drilling Services
Revenues $ 457,573 $ 463,598 $ 477,727
Less direct operating costs (271,737) (276,439) (281,261)
Less depreciation, amortization and impairment (92,345) (91,951) (91,293)
GAAP gross profit 93,491 95,208 105,173
Depreciation, amortization and impairment 92,345 91,951 91,293
Adjusted gross profit $ 185,836 $ 187,159 $ 196,466
(1)
Completion Services
Revenues $ 944,997 $ 1,014,357 $ 293,268
Less direct operating costs (745,594) (782,482) (220,116)
Less depreciation, amortization and impairment (148,680) (147,891) (26,025)
GAAP gross profit 50,723 83,984 47,127
Depreciation, amortization and impairment 148,680 147,891 26,025
Adjusted gross profit $ 199,403 $ 231,875 $ 73,152
(1)
Drilling Products
Revenues $ 89,973 $ 88,109 $ -
Less direct operating costs (48,630) (49,484) -
Less depreciation, amortization and impairment (27,182) (31,392) -
GAAP gross profit 14,161 7,233 -
Depreciation, amortization and impairment 27,182 31,392 -
Adjusted gross profit $ 41,343 $ 38,625 $ -
(1)
Other
Revenues $ 17,817 $ 18,253 $ 20,807
Less direct operating costs (11,178) (10,712) (11,282)
Less depreciation, depletion, amortization and impairment (5,411) (6,291) (7,323)
GAAP gross profit 1,228 1,250 2,202
Depreciation, depletion, amortization and impairment 5,411 6,291 7,323
Adjusted gross profit $ 6,639 $ 7,541 $ 9,525
(1)
(1)
We define "Adjusted gross profit" as revenues less direct operating costs
(excluding depreciation, depletion, amortization and impairment expense).
Adjusted gross profit is included as a supplemental disclosure because it is a
useful indicator of our operating performance.
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PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures
Drilling Services Adjusted Gross Profit
(unaudited, dollars in thousands)
Three Months Ended
March 31, December 31,
2024 2023
U.S. Contract Drilling
Revenues $ 393,339 $ 393,296
Less direct operating costs (215,107) (216,219)
Less depreciation, amortization and impairment (85,926) (85,966)
GAAP gross profit 92,306 91,111
Depreciation, amortization and impairment 85,926 85,966
Adjusted gross profit $ 178,232 $ 177,077
(1)
Operating days - U.S. 11,024 10,841
(2)
Average revenue per operating day - U.S. $ 35.68 $ 36.28
(2)
Average direct operating costs per operating day - U.S. $ 19.51 $ 19.94
(2)
Average adjusted gross profit per operating day - U.S. $ 16.17 $ 16.33
(2)
Other Drilling Services
Revenues $ 64,234 $ 70,302
Less direct operating costs (56,630) (60,220)
Less depreciation, amortization and impairment (6,419) (5,985)
GAAP gross profit 1,185 4,097
Depreciation, amortization and impairment 6,419 5,985
Adjusted gross profit $ 7,604 $ 10,082
(1)
(1)
We define "Adjusted gross profit" as revenues less direct operating costs
(excluding depreciation, amortization and impairment expense). Adjusted gross
profit is included as a supplemental disclosure because it is a useful
indicator of our operating performance.
(2)
Operational data relates to our contract drilling business. A rig is
considered to be operating if it is earning revenue pursuant to a contract on
a given day.
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PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures
Adjusted Net Income and Adjusted Earnings Per Share
(unaudited, in thousands, except per share data)
Three Months Ended March 31, 2024
As Reported Adjusted
Total Per Share Total Per Share
(1)
Net income attributable to $ 51,235 $ 0.13 $ 51,235 $ 0.13
common stockholders as reported
Reverse
certain item:
Merger and 12,233
integration expense
Income tax (2,569)
benefit
Net income attributable $ 51,235 $ 0.13 $ 60,899 $ 0.15
to common stockholders
Weighted average number of common shares outstanding, 408,182 408,182
excluding non-vested shares of restricted stock
Add dilutive effect of 1,637 1,637
potential common shares
Weighted average number of diluted 409,819 409,819
common shares outstanding
Federal statutory 21.0 %
tax rate
(1)
We define adjusted net income as net income attributable to common
stockholders as reported, excluding merger and integration expense, less
income tax benefit. We present adjusted net income and adjusted earnings per
share in order to convey to investors our performance on a basis that, by
excluding merger and integration expense, is more comparable to our net income
and earnings per share information reported in previous periods. Adjusted net
income and adjusted earnings per share should not be construed as an
alternative to GAAP net income and earnings per share.
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