Superior Energy Services, Inc. Announces Fourth Quarter 2013 Results

     Superior Energy Services, Inc. Announces Fourth Quarter 2013 Results

PR Newswire

HOUSTON, Feb. 25, 2014

HOUSTON, Feb. 25, 2014 /PRNewswire/ --Superior Energy Services, Inc. (NYSE:
SPN) today announced that non-GAAP adjusted net income for the fourth quarter
of 2013 – which excludes from net income the specific charges described below
– was $48.3 million, or $0.30 per diluted share.Including all of these
specific after-tax charges totaling $361.8 million, or $2.27 per diluted
share, the Company recorded a net loss of $313.5 million, or $1.97 per share,
on revenue of $1,128.0 million. This compares with net income of $76.3
million, or $0.48 per diluted share, on revenue of $1,178.2 million for the
fourth quarter of 2012.

The specific charges incurred during the fourth quarter of 2013 that are
excluded from adjusted net income were as follows:

  oA non-cash, pre-tax charge of $419.4 million ($342.4 million after-tax)
    primarily attributable to a reduction in the value of assets and goodwill
    impairment in the Subsea and Technical Solutions segment and the
    diminished value of assets in Latin America, including the write down of
    assets in Venezuela due to the Company's exit from this non-core market.
  oA pre-tax charge of $23.6 million ($15.6 million after-tax) due to
    increases to the estimated total cost of an ongoing specialized platform
    decommissioning project in the Gulf of Mexico accounted for using the
    percentage-of-completion method.
  oA pre-tax restructuring charge of $5.6 million ($3.7 million after-tax)
    primarily related to cost savings initiatives in certain U.S. land markets
    from which the Company anticipates annualized savings of approximately $20
    million to $30 million.

The Company estimates that weather-related disruptions in the U.S. land market
further adversely impacted adjusted earnings per diluted share by $0.02 for
the fourth quarter of 2013. The charges and adverse impacts during the fourth
quarter of 2013 were partially offset by an income tax benefit of
approximately $4.0 million, excluding the impact of the reduction in value of
assets, resulting from a lower-than-anticipated effective income tax rate.

During the fourth quarter of 2013, the Company repurchased and retired 427,000
shares of its common stock for a total purchase price of $10.6 million
(average price of $24.82) pursuant to the Company's $400 million share
repurchase program.

The Company intends to pursue strategic alternatives for its Asia
Pacific-based subsea construction business. In addition, at the conclusion of
the ongoing specialized platform decommissioning project, the Company intends
to no longer participate in the Gulf of Mexico structural decommissioning
market. A significant portion of the specific charges were related to these
businesses. These strategic changes will not impact the Company's Gulf of
Mexico plug and abandonment business, a core service since the Company's
founding.

David Dunlap, President and CEO of the Company, commented, "From an
operational standpoint, our adjusted earnings were about what we expected
despite U.S. weather disruptions, which impacted several of our completion and
production-related services. Partially offsetting the weather-related
disruptions was better-than-anticipated sequential growth in the Gulf of
Mexico in our Drilling Products and Services segment, in certain international
market areas in our Production Services segment, and in our Onshore
Completions and Workover Services segment's fluids management U.S. land
business.

"Product-line portfolio optimization and critical evaluation of expansion
strategies are ongoing efforts. We believe that this approach will produce
more predictable results, enhanced returns and improved resource allocation
and focus.

"We've pursued a subsea well intervention strategy for several years, which
has included participation in the subsea construction business. To date, we
have not advanced the strategy as expected and have decided to seek strategic
alternatives with our subsea construction business.

"The Gulf of Mexico structural decommissioning business, which produced very
good results for most of the ten years that the Company has offered the
service, is now saturated with competitors and has not produced positive
results in recent years. In addition, the international market has not
developed as anticipated. The Company retains the specialized expertise to
manage a large downed structure project, but will discontinue participating in
the routine end-of-life decommissioning business.

"We believe that these two strategic decisions will not adversely impact our
income from continuing operations in 2014.

"2013 certainly has been challenging. While 2013 earnings did not meet our
expectations, we did achieve several notable financial goals that we outlined
at the beginning of the year, including strong free cash flow generation,
repayment of debt, share repurchases and announcement of a dividend. In
addition, we are confident that our core strategies for growth are
demonstrating good progress as we are positioned to take advantage of
anticipated U.S. activity growth."

For the year ended December 31, 2013, the Company's loss from continuing
operations was $111.4 million, or $0.70 per diluted share, on revenue of
$4,611.8 million as compared with income from continuing operations of $383.1
million, or $2.54 per diluted share, on revenue of $4,568.1 million for the
year ended December 31, 2012.

Excluding the specific charges described above, the Company had non-GAAP
adjusted net income from continuing operations of $250.4 million, or $1.57 per
diluted share, for the year ended December 31, 2013.

Fourth Quarter 2013 Geographic Breakdown
U.S. land revenue was approximately $673.1 million in the fourth quarter of
2013, as compared with $730.2 million in the fourth quarter of 2012 and $718.2
million in the third quarter of 2013. Gulf of Mexico revenue was approximately
$237.9 million, as compared with $212.7 million in the fourth quarter of 2012
and $241.8 million in the third quarter of 2013. International revenue was
approximately $217.0 million, as compared with $235.2 million in the fourth
quarter of 2012 and $228.6 million in the third quarter of 2013

Drilling Products and Services Segment
Drilling Products and Services segment revenue in the fourth quarter of 2013
was $223.6 million, a 16% increase from fourth quarter 2012 revenue of $192.7
million and a 4% increase from third quarter 2013 revenue of $215.5 million.

The primary factor driving the higher sequential revenue in this segment was
an 18% increase in Gulf of Mexico revenue to $91.4 million due to increased
rentals of premium drill pipe and specialty rentals. International revenue was
flat sequentially at $64.9 million while U.S. land revenue in this segment
declined 8% sequentially to $67.3 million due to a decrease in rentals of
premium drill pipe and bottom hole assemblies. International revenue in the
fourth quarter of 2013 was approximately 34% higher than the fourth quarter of
2012 driven primarily by geographic expansion and growth in demand for premium
drill pipe and bottom hole assemblies.

Onshore Completion and Workover Services Segment
Onshore Completion and Workover Services segment revenue in the fourth quarter
of 2013 was $374.5 million, a 10% decrease from fourth quarter 2012 revenue of
$417.7 million, and a 6% decrease from third quarter 2013 revenue of $398.0
million. All of the revenue in this segment is generated in U.S. land market
areas.

On a sequential basis, lower pressure pumping and well services rig revenue in
this segment was partially offset by higher revenue in fluid management due to
increased volumes hauled and increased water heating-related activity.
Pressure pumping revenue was lower due to weather and job mix.

Production Services Segment
Production Services segment revenue in the fourth quarter of 2013 was $349.3
million, a 5% decrease from fourth quarter 2012 revenue of $369.3 million and
a 3% decrease from third quarter 2013 revenue of $359.7 million.

U.S. land revenue in this segment decreased 5% sequentially to $214.2 million,
primarily due to decreased demand for coiled tubing, hydraulic snubbing and
pressure pumping. International revenue in this segment increased 6%
sequentially to $87.3 million primarily due to increased snubbing, cased hole
wireline and well testing in Argentina, and remedial pumping in Brazil. Gulf
of Mexico revenue in this segment was 9% lower sequentially at $47.8 million
primarily due to seasonal and weather-related factors which resulted in lower
activity for wireline and pressure control tools.

Subsea and Technical Solutions Segment
Subsea and Technical Solutions segment revenue in the fourth quarter of 2013
was $180.6 million, a 9% decrease from fourth quarter 2012 revenue of $198.5
million and a 16% decrease from third quarter 2013 revenue of $215.4 million.

International revenue in this segment decreased 21% sequentially to $64.9
million due to activity declines in subsea construction. Gulf of Mexico
revenue in this segment decreased 12% sequentially to $98.7 million primarily
due to fewer well control projects and lower completion tools demand. U.S.
land revenue in this segment decreased 23% sequentially to $17.0 million
primarily related to decreases in well control services and completion tools.

Conference Call Information
The Company will host a conference call at 9 a.m. Eastern Time on Wednesday,
February 26, 2014. The call can be accessed from the Company's website at
www.superiorenergy.com, or by telephone at 480-629-9645. For those who cannot
listen to the live call, a telephonic replay will be available through March
12, 2014 and may be accessed by calling 303-590-3030 and using the access code
4665286#. An archive of the webcast will be available after the call for a
period of 60 days on the Company's website at www.superiorenergy.com.

Superior Energy Services, Inc. serves the drilling, completion and
production-related needs of oil and gas companies worldwide through its brand
name drilling products and its integrated completion and well intervention
services and tools, supported by an engineering staff who plan and design
solutions for customers.

Statements in this press release other than statement of historical facts,
including statements regarding our estimates, expectations, beliefs, targets,
goals, plans, intentions, projections or strategies for the future, may be
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. All forward-looking statements involve a number of risks
and uncertainties that could cause actual results to differ materially from
the estimates, expectations, beliefs, targets, goals, plans, intentions,
projections and strategies reflected in or suggested by the forward-looking
statements. Among the factors that could cause actual results to differ
materially are risks inherent in acquiring businesses, including the ability
to successfully integrate acquired businesses into the Company's legacy
operations and the costs incurred in doing so; the effect of regulatory
programs and environmental matters on our performance, including the risk that
future changes in the regulation of hydraulic fracturing could reduce or
eliminate demand for our pressure pumping services; risks associated with
business growth outpacing the capabilities of the Company's infrastructure and
workforce; risks associated with the uncertainty of macroeconomic and business
conditions worldwide; the cyclical nature and volatility of the oil and gas
industry, including the level of exploration, production and development
activity and the volatility of oil and gas prices; changes in competitive
factors affecting our operations; political, economic and other risks and
uncertainties associated with international operations; the lingering impact
on exploration and production activities in the U.S. coastal waters following
the Deepwater Horizon incident; the impact that unfavorable or unusual weather
conditions could have on the Company's operations; the potential shortage of
skilled workers; the Company's dependence on certain customers; the risks
inherent in long-term fixed-price contracts; operating hazards, including the
significant possibility of accidents resulting in personal injury or death,
property damage or environmental damage; and other material factors that are
described in detail in Item 1A of the Company's Annual Report on Form 10-K for
the year ended December 31, 2012, as subsequently updated by the Company's
filings with the Securities and Exchange Commission. Although the Company
believes that the expectations reflected in such forward-looking statements
are reasonable, the Company can give no assurance that such expectations will
prove to be correct. Investors are cautioned that many of the assumptions on
which the Company's forward-looking statements are based are likely to change
after such forward-looking statements are made, including for example the
market prices of oil and natural gas and regulations affecting oil and gas
operations, which the Company cannot control or anticipate. Further, the
Company may make changes to its business plans that could or will affect its
results. The Company undertakes no obligation to update any of its
forward-looking statements and the Company does not intend to update its
forward-looking statements more frequently than quarterly, notwithstanding any
changes in its assumptions, changes in its business plans, its actual
experience, or other changes. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof.

FOR FURTHER INFORMATION CONTACT:
David Dunlap, President and CEO, (713) 654-2200;
Robert Taylor, CFO or Greg Rosenstein, EVP of Corporate Development, (504)
587-7374



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Three and Twelve Months Ended December 31, 2013 and 2012
(in thousands, except earnings per share amounts)
(unaudited)
                          Three Months Ended         Twelve Months Ended
                          December 31,               December 31,
                          2013          2012         2013          2012
Revenues                  $ 1,128,017   $ 1,178,247  $ 4,611,824   $ 4,568,068
Cost of services
(exclusive of items       734,428       722,814      2,901,850     2,689,473
shown separately below)
Depreciation, depletion,
amortization and          163,301       143,009      625,928       509,281
accretion
General and               168,842       165,794      633,877       662,792
administrative expenses
Reduction in value of     419,380       -            419,380       -
assets
Income (loss) from        (357,934)     146,630      30,789        706,522
operations
Other income (expense):
 Interest expense, net   (25,461)      (26,320)     (106,954)     (117,682)
 Interest income         431           758          2,978         3,170
 Other income            424           4            2,486         853
 Loss on early           -             -            (884)         (2,294)
extinguishment of debt
 Losses from
equity-method             -             -            -             (287)
investments, net
 Gain on sale of equity  -             -            -             17,880
method investment
Income (loss) from
continuing operations     (382,540)     121,072      (71,585)      608,162
before income taxes
Income taxes              (69,001)      44,797       39,833        225,020
Net income (loss) from    (313,539)     76,275       (111,418)     383,142
continuing operations
Loss from discontinued
operations, net of        -             -            -             (17,207)
income tax
Net income (loss)         $ (313,539)  $          $ (111,418)  $ 
                                        76,275                    365,935
Basic earnings (loss)
per share:
 Net income (loss) from  $          $        $          $    
continuing operations     (1.97)       0.49        (0.70)       2.57
 Loss from discontinued  -             -            -             (0.12)
operations
 Net income (loss)       $          $        $          $    
                          (1.97)       0.49        (0.70)       2.45
Diluted earnings
(loss)per share:
 Net income (loss) from  $          $        $          $    
continuing operations     (1.97)       0.48        (0.70)       2.54
 Loss from discontinued  -             -            -             (0.12)
operations
 Net income (loss) from  $          $        $          $    
continuing operations     (1.97)       0.48        (0.70)       2.42
Weighted average common
shares usedin computing
earnings (loss) per
share:
Basic                 159,228       157,266      159,206       149,288
Diluted               159,228       158,709      159,206       151,106





SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2013 AND 2012
(in thousands)
                                                  12/31/2013     12/31/2012
                                                  (Unaudited)    (Audited)
ASSETS
Current assets:
 Cash and cash equivalents                       $   196,047  $   91,199
 Accounts receivable, net                        937,195        1,027,218
 Deferred income taxes                           8,785          34,120
 Income taxes receivable                         5,532          -
 Prepaid expenses                                70,421         93,190
 Inventory and other current assets              258,449        214,630
 Total current assets                      1,476,429      1,460,357
Property, plant and equipment, net               3,002,194      3,255,220
Goodwill                                          2,458,109      2,532,065
Notes receivable                                  23,708         44,838
Intangible and other long-term assets, net        450,867        510,406
 Total assets                              $ 7,411,307   $ 7,802,886
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                                $   216,029  $  252,363
 Accrued expenses                                376,049        346,490
 Income taxes payable                           -              153,212
 Current portion of decommissioning liabilities  27,322         -
 Current maturities of long-term debt            20,000         20,000
 Total current liabilities                 639,400        772,065
Deferred income taxes                            736,080        745,144
Decommissioning liabilities                       56,197         93,053
Long-term debt, net                               1,646,535      1,814,500
Other long-term liabilities                       201,651        147,045
Total stockholders' equity                        4,131,444      4,231,079
 Total liabilities and stockholders'       $ 7,411,307   $ 7,802,886
equity



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

SEGMENT HIGHLIGHTS

THREE MONTHS ENDED DECEMBER 31, 2013, SEPTEMBER 30, 2013, AND DECEMBER 31,
2012

(unaudited)

(in thousands)
                         Three months ended,
Revenue                  December 31, 2013  September 30,      December 31,
                                            2013               2012
Drilling Products and    $          $          $       
Services                 223,591            215,522            192,677
Onshore Completion and   374,489            398,016            417,738
Workover Services
Production Services      349,370            359,722            369,341
Subsea and Technical     180,567            215,355            198,491
Solutions
Total Revenues           $            $            $      
                         1,128,017         1,188,615         1,178,247
Gross Profit (1)         December 31, 2013  September 30,      December 31,
                                            2013               2012
Drilling Products and    $          $          $       
Services                 152,963            141,648            127,834
Onshore Completion and   110,467            122,340            144,626
Workover Services
Production Services      94,391             108,147            120,228
Subsea and Technical     35,768             68,428             62,745
Solutions
Total Gross Profit       $          $          $       
                         393,589            440,563            455,433
Income (Loss) from                          September 30,      December 31,
Operations (As           December 31, 2013  2013               2012
Reported)
Drilling Products and    $          $          $       
Services                  66,736            62,242            57,424
Onshore Completion and   (3,071)            33,458             46,904
Workover Services
Production Services      (28,901)           15,707             32,015
Subsea and Technical     (392,698)          13,246             10,287
Solutions
Total Income (Loss)      $           $          $       
from Operations          (357,934)          124,653            146,630
Income from Operations   December 31, 2013  September 30,      December 31,
(as Adjusted)            (2)                2013               2012
Drilling Products and    $          $          $       
Services                  69,028            62,242            57,424
Onshore Completion and   14,391             33,458             46,904
Workover Services
Production Services      4,078              15,707             32,015
Subsea and Technical     3,147              13,246             10,287
Solutions
Total Income from        $          $          $       
Operations                90,644           124,653            146,630

    Gross profit is calculated by subtracting cost of services (exclusive of
(1) depreciation, depletion, amortization and accretion) from revenue for each
    of the Company's segments.
    See "Items Included in Income from Operations by Segment" table in
(2) "Reconciliation of Non-GAAP Information to GAAP Information" section for a
    list of specific charges excluded from Income (Loss) from Operations by
    segment.



RECONCILIATION OF NON-GAAP INFORMATION TO GAAP INFORMATION
($ in thousands)

We report our financial results in conformity with U.S. generally accepted
accounting principles (GAAP). However, the Company has provided non-GAAP
adjusted net income and non-GAAP adjusted earnings per share because those
items are customarily excluded by analysts in published estimates and
management believes, for purposes of comparability to financial performance in
other periods and to evaluate the Company's trends, that it is appropriate for
these items to be excluded. Management uses adjusted net income and adjusted
diluted earnings per share to evaluate the Company's operational trends and
historical performance on a consistent basis. The adjusted amounts are not
measures of financial performance under GAAP.

A reconciliation of net income, the GAAP measure most directly comparable to
non-GAAP adjusted earnings and non-GAAP adjusted earnings per share, is below.
In making any comparisons to other companies, investors need to be aware that
the non-GAAP financial measures used by the Company may be calculated
differently from, and therefore may not be directly comparable to, similarly
titled measures used by other companies. Investors should pay close attention
to the specific definition being used and to the reconciliation between such
measures and the corresponding GAAP measures provided by each company under
applicable SEC rules. Non-GAAP financial measures should be viewed in addition
to, and not as an alternative for, or superior to, the Company's reported
results prepared in accordance with GAAP.

RECONCILIATION OF AS REPORTED INCOME FROM CONTINUING OPERATIONS TO
ADJUSTED INCOME FROM CONTINUING OPERATIONS
                                      Three Months Ended    Three Months Ended
                                      December 31, 2013     December 31, 2012
                                      Value      Per Share  Value    Per Share
As reported net income (loss) from    ($313,539) ($1.97)    $76,275  $0.48
continuing operations
 Reduction in value of assets        342,444    $2.15      -        $0.00
 Percentage of completion project    15,647     $0.10      -        $0.00
charge
 Restructuring charge                3,711      $0.02      -        $0.00
Adjusted net income from continuing   $48,263    $0.30      $76,275  $0.48
operations
As reported diluted weighted average  159,228               158,709
common shares outstanding
As reported net income (loss) from
continuing operations, per diluted    ($1.97)               $0.48
share
Adjusted net income from continuing   $0.30                 $0.48
operations, per diluted share
                                      Year Ended            Year Ended
                                      December 31, 2013     December 31, 2012
                                      Value      Per Share  Value    Per Share
As reported net income (loss) from    ($111,418) ($0.70)    $383,142 $2.54
continuing operations
 Reduction in value of assets        342,444    $2.15      -        $0.00
 Percentage of completion project    15,647     $0.10      -        $0.00
charge
 Restructuring charge                3,711      $0.02      -        $0.00
Adjusted net income from continuing   $250,384   $1.57      $383,142 $2.54
operations
As reported diluted weighted average  159,206               151,106
common shares outstanding
As reported net income (loss) from
continuing operations, per diluted    ($0.70)               $2.54
share
Adjusted net income from continuing   $1.57                 $2.54
operations, per diluted share



ITEMS INCLUDED IN INCOME FROM OPERATIONS BY SEGMENT
                                  Three Months Ended
                                  December 31, 2013 September 30, December 31,
                                                    2013          2012
Drilling Products and Services
 Reduction in value of assets    (2,292)           -             -
Onshore Completion and Workover
Services
 Reduction in value of assets    (16,975)          -             -
 Restructuring charges           (487)             -             -
Production Services
 Reduction in value of assets    (28,568)          -             -
 Restructuring charges           (4,411)           -             -
Subsea and Technical Services
 Reduction in value of assets    (371,545)         -             -
 Percentage of completion        (23,600)          -             -
project charge
 Restructuring charge            (700)                           -

SOURCE Superior Energy Services, Inc.

Website: http://www.superiorenergy.com
 
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