The following table reconciles net income/loss from continuing operations by segment, which is the directly
comparable financial measure determined in accordance with GAAP, to adjusted income/loss from continuing operations and adjusted EBITDA by segment (non-GAAP financial measures). These financial measures are
provided to enhance investors overall understanding of the Companys current financial performance.
Reconciliation of
Adjusted Income (Loss) from Operations and Adjusted EBITDA by Segment
(in thousands)
(unaudited)
Table 2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2019
|
|
|
|
Drilling
Products and
Services
|
|
|
Onshore
Completion
and
Workover
Services
|
|
|
Production
Services
|
|
|
Technical
Solutions
|
|
|
Corporate and
Other
|
|
|
Consolidated
|
|
Reported net income (loss) from continuing operations
|
|
$
|
27,618
|
|
|
$
|
3,187
|
|
|
$
|
(10,068
|
)
|
|
$
|
8,612
|
|
|
$
|
(35,511
|
)
|
|
$
|
(6,162
|
)
|
Restructuring costs
|
|
|
13
|
|
|
|
1,076
|
|
|
|
1,304
|
|
|
|
503
|
|
|
|
|
|
|
|
2,896
|
|
Merger-related costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,095
|
|
|
|
3,095
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,068
|
)
|
|
|
25,106
|
|
|
|
24,038
|
|
Other expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,993
|
)
|
|
|
(1,993
|
)
|
Income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,333
|
)
|
|
|
(12,333
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income (loss) from continuing operations
|
|
$
|
27,631
|
|
|
$
|
4,263
|
|
|
$
|
(8,764
|
)
|
|
$
|
8,047
|
|
|
$
|
(21,636
|
)
|
|
$
|
9,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion
|
|
|
19,315
|
|
|
|
5,760
|
|
|
|
12,052
|
|
|
|
5,467
|
|
|
|
1,147
|
|
|
|
43,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
46,946
|
|
|
$
|
10,023
|
|
|
$
|
3,288
|
|
|
$
|
13,514
|
|
|
$
|
(20,489
|
)
|
|
$
|
53,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2019
|
|
|
|
Drilling
Products and
Services
|
|
|
Onshore
Completion
and
Workover
Services
|
|
|
Production
Services
|
|
|
Technical
Solutions
|
|
|
Corporate and
Other
|
|
|
Consolidated
|
|
Reported net income (loss) from continuing operations
|
|
$
|
37,991
|
|
|
$
|
(927
|
)
|
|
$
|
(734
|
)
|
|
$
|
(4,531
|
)
|
|
$
|
(52,306
|
)
|
|
$
|
(20,507
|
)
|
Reduction in value of assets
|
|
|
|
|
|
|
566
|
|
|
|
1,997
|
|
|
|
7,008
|
|
|
|
|
|
|
|
9,571
|
|
Restructuring costs
|
|
|
|
|
|
|
1,343
|
|
|
|
377
|
|
|
|
157
|
|
|
|
|
|
|
|
1,877
|
|
Legal settlement
|
|
|
|
|
|
|
|
|
|
|
(5,776
|
)
|
|
|
|
|
|
|
|
|
|
|
(5,776
|
)
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,051
|
)
|
|
|
25,556
|
|
|
|
24,505
|
|
Other expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,353
|
|
|
|
3,353
|
|
Income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,708
|
|
|
|
1,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income (loss) from continuing operations
|
|
$
|
37,991
|
|
|
$
|
982
|
|
|
$
|
(4,136
|
)
|
|
$
|
1,583
|
|
|
$
|
(21,689
|
)
|
|
$
|
14,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion
|
|
|
20,168
|
|
|
|
6,853
|
|
|
|
12,063
|
|
|
|
4,909
|
|
|
|
1,169
|
|
|
|
45,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
58,159
|
|
|
$
|
7,835
|
|
|
$
|
7,927
|
|
|
$
|
6,492
|
|
|
$
|
(20,520
|
)
|
|
$
|
59,893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2018
|
|
|
|
Drilling
Products and
Services
|
|
|
Onshore
Completion
and Workover
Services
|
|
|
Production
Services
|
|
|
Technical
Solutions
|
|
|
Corporate and
Other
|
|
|
Consolidated
|
|
Reported net income (loss) from continuing operations
|
|
$
|
26,678
|
|
|
$
|
(224,877
|
)
|
|
$
|
(97,425
|
)
|
|
$
|
7,280
|
|
|
$
|
(28,670
|
)
|
|
$
|
(317,014
|
)
|
Reduction in value of assets
|
|
|
|
|
|
|
227,801
|
|
|
|
92,252
|
|
|
|
|
|
|
|
2,660
|
|
|
|
322,713
|
|
Restructuring costs
|
|
|
465
|
|
|
|
1,611
|
|
|
|
1,280
|
|
|
|
78
|
|
|
|
500
|
|
|
|
3,934
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,002
|
)
|
|
|
25,747
|
|
|
|
24,745
|
|
Other expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,717
|
)
|
|
|
(2,717
|
)
|
Income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(24,574
|
)
|
|
|
(24,574
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income (loss) from continuing operations
|
|
$
|
27,143
|
|
|
$
|
4,535
|
|
|
$
|
(3,893
|
)
|
|
$
|
6,356
|
|
|
$
|
(27,054
|
)
|
|
$
|
7,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion
|
|
|
26,050
|
|
|
|
16,429
|
|
|
|
16,325
|
|
|
|
5,321
|
|
|
|
1,353
|
|
|
|
65,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
53,193
|
|
|
$
|
20,964
|
|
|
$
|
12,432
|
|
|
$
|
11,677
|
|
|
$
|
(25,701
|
)
|
|
$
|
72,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward-Looking Statements
All statements in this communication (and oral statements made regarding the subjects of this communication) other than historical facts are forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many
of which are outside the control of Superior Energy, Forbes and Spieth Newco, Inc. (Newco), which could cause actual results to differ materially from such statements. Forward-looking information includes, but is not limited to:
statements regarding the expected benefits of the proposed transaction; the anticipated completion of the proposed transaction and the timing thereof; the expected future results of operations and growth of Superior Energy and Newco; and plans and
objectives of management for future operations of Superior Energy and Newco.
While Superior Energy believes that the assumptions concerning future events
are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its and Newcos business. Among the factors that could cause results to differ
materially from those indicated by such forward-looking statements are: the failure to realize the anticipated costs savings, synergies and other benefits of the transaction; the possible diversion of management time on transaction-related issues;
the risk that the requisite approvals to complete the transaction are not obtained or other closing conditions are not satisfied; local, regional and national economic conditions and the impact they may have on Superior Energy, Forbes, Newco and
their customers; conditions in the oil and gas industry, especially oil and natural gas prices and capital expenditures by oil and gas companies; the debt obligations of Superior Energy and Newco following the transaction and the potential effect of
limiting Superior Energys and/or Newcos ability to fund future growth and operations and increasing their respective exposure to risk during adverse economic conditions; the financial condition of Superior Energys and Newcos
customers; any non-performance by customers of their contractual obligations; changes in customer, employee or supplier relationships resulting from the transaction; changes in safety, health, environmental and other regulations; the results of any
reviews, investigations or other proceedings by government authorities; and the potential additional costs relating to any reviews, investigations or other proceedings by government authorities or shareholder actions.
These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in Superior
Energys Annual Report on Form 10-K for the year ended December 31, 2018, and those set forth from time to time in Superior Energys filings with the Securities and Exchange Commission (the SEC), which are available at
www.superiorenergy.com. Except as required by law, Superior Energy expressly disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.
No Offer or Solicitation
This communication is not
intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction pursuant to the proposed
transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. Subject to certain exceptions to be approved by the relevant regulators or certain facts to be
ascertained, the public offer will not be made directly or indirectly, in or into any jurisdiction where to do so would constitute a violation of the laws of such jurisdiction, or by use of the mails or by any means or instrumentality (including
without limitation, facsimile transmission, telephone and the internet) of interstate or foreign commerce, or any facility of a national securities exchange, of any such jurisdiction.
Important Additional Information Regarding the Transaction Will Be Filed With the SEC
In connection with the proposed transaction, Newco has filed a registration statement on Form S-4, which included a preliminary joint proxy
statement/prospectus of Newco and Forbes, with the SEC. A definitive joint proxy statement/prospectus will be filed with the SEC once the registration statement becomes effective. While the registration statement and joint proxy statement/prospectus
have not yet become effective and the information therein is subject to change, they provide important information about the transaction. INVESTORS AND SECURITY HOLDERS OF SUPERIOR ENERGY AND FORBES ARE ADVISED TO CAREFULLY READ THE PRELIMINARY
JOINT PROXY STATEMENT/PROSPECTUS, AND TO READ THE REGISTRATION STATEMENT AND DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE TRANSACTION, THE PARTIES TO THE TRANSACTION AND THE RISKS ASSOCIATED WITH THE TRANSACTION. A definitive joint proxy statement/prospectus will be sent to security holders of Forbes in connection with the Forbes shareholder meeting.
Investors and security holders may obtain a free copy of the joint proxy statement/prospectus (when available) and other relevant documents filed by Superior Energy, Forbes and Newco with the SEC from the SECs website at www.sec.gov. Security
holders and other interested parties will also be able to obtain, without charge, a copy of the joint proxy statement/prospectus and other relevant documents (when available) from www.superiorenergy.com under the tab Investors and then
under the heading SEC Filings. Security holders may also read and copy any reports, statements and other information filed with the SEC at the SEC public reference room at 100 F Street N.E., Room 1580, Washington D.C. 20549. Please call
the SEC at (800) 732-0330 or visit the SECs website for further information on its public reference room.
Participants in the Solicitation
Superior Energy, Forbes and their respective directors, executive officers and certain other members of management may be deemed to be participants in
the solicitation of proxies from their respective security holders with respect to the transaction. Information about these persons is set forth in Superior Energys proxy statement relating to its 2019 Annual Meeting of Stockholders, which was
filed with the SEC on April 26, 2019, and Forbes proxy statement relating to its 2019 Annual Meeting of Stockholders, which was filed with the SEC on April 25, 2019, and subsequent statements of changes in beneficial ownership on file with the
SEC. Security holders and investors may obtain additional information regarding the interests of such persons, which may be different than those of the respective companies security holders generally, by reading the joint proxy
statement/prospectus and other relevant documents regarding the transaction, which will be filed with the SEC.
9