Patterson UTI Energy : Fourth Quarter 2024 Non-GAAP

About this update from Patterson-uti Energy, Inc.

PATTERSON-UTI ENERGY, INC. Condensed Consolidated Balance Sheets (unaudited, in thousands) December 31, December 31, 2024 2023 ASSETS Current assets: Cash, cash equivalents and restricted cash $ 241,293 $ 192,680 Accounts receivable, net 763,806 971,091 Inventory 167,023 180,805 Other current assets 123,193 141,122 Total current assets 1,295,315 1,485,698 Property and equipment, net 3,010,342 3,340,412 Goodwill 487,388 1,379,741 Intangible assets, net 929,610 1,051,697 Deferred tax assets, net - 3,927 Other assets 110,811 158,556 Total assets $ 5,833,466 $ 7,420,031 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued liabilities Other current liabilities Total current liabilities Long-term debt, net Deferred tax liabilities, net Other liabilities Total liabilities Stockholders' equity: $ 421,318 $ 534,420 385,751 446,268 34,924 69,747 841,993 1,050,435 1,219,770 1,224,941 238,097 248,107 57,762 75,867 2,357,622 2,599,350 Stockholders' equity attributable to controlling interests Noncontrolling interest Total equity Total liabilities and stockholders' equity 3,465,823 4,812,292 10,021 8,389 3,475,844 4,820,681 $ 5,833,466 $ 7,420,031 PATTERSON-UTI ENERGY, INC. Condensed Consolidated Statements of Operations (unaudited, in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, 2024 2024 2023 2024 2023 REVENUES $ 1,162,135 $ 1,357,222 $ 1,584,317 $ 5,377,911 $ 4,146,456 COSTS AND EXPENSES: Direct operating costs 859,659 1,011,907 1,119,117 3,919,869 2,811,319 Depreciation, depletion, amortization and impairment 254,599 374,680 278,787 1,171,873 731,416 Impairment of goodwill - 885,240 - 885,240 - Selling, general and administrative 73,079 65,696 61,037 268,337 169,962 Merger and integration expense 3,460 6,699 19,949 33,037 98,077 Other operating expense (income), net 2,673 3,629 (6,278) (10,708) (16,272) Total operating costs and expenses 1,193,470 2,347,851 1,472,612 6,267,648 3,794,502 OPERATING INCOME (LOSS) (31,335) (990,629) 111,705 (889,737) 351,954 OTHER INCOME (EXPENSE): Interest income 928 745 1,539 5,729 6,122 Interest expense, net of amount capitalized (17,725) (17,990) (18,681) (71,963) (52,870) Other income (expense) (1,333) (716) (1,293) (975) 1,898 Total other expense (18,130) (17,961) (18,435) (67,209) (44,850) INCOME (LOSS) BEFORE INCOME TAXES (49,465) (1,008,590) 93,270 (956,946) 307,104 INCOME TAX EXPENSE (BENEFIT) 1,927 (30,256) 31,332 9,453 61,152 NET INCOME (LOSS) (51,392) (978,334) 61,938 (966,399) 245,952 NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST 190 427 (12) 1,632 (340) NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (51,582) $ (978,761) $ 61,950 $ (968,031) $ 246,292 NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS PER COMMON SHARE: Basic $ (0.13) $ (2.50) $ 0.15 $ (2.44) $ 0.88 Diluted $ (0.13) $ (2.50) $ 0.15 $ (2.44) $ 0.88 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic 389,450 391,732 415,656 397,196 279,501 Diluted 389,450 391,732 418,751 397,196 280,061 CASH DIVIDENDS PER COMMON SHARE $ 0.08 $ 0.08 $ 0.08 $ 0.32 $ 0.32 PATTERSON-UTI ENERGY, INC. Condensed Consolidated Statements of Cash Flows (unaudited, in thousands) Twelve Months Ended December 31, 2024 2023 Cash flows from operating activities: Net income (loss) $ (966,399) $ 245,952 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion, amortization and impairment 1,171,873 731,416 Impairment of goodwill 885,240 - Deferred income tax expense (benefit) (1,765) 51,866 Stock-based compensation 46,352 46,750 Net (gain) loss on asset disposals (3,688) (1,798) Other 7,936 (1,053) Changes in operating assets and liabilities 35,987 (67,219) Net cash provided by operating activities 1,175,536 1,005,914 Cash flows from investing activities: Acquisitions, net of cash acquired - NexTier - (65,185) Acquisitions, net of cash acquired - Ulterra 2,983 (357,314) Purchases of property and equipment (678,386) (615,690) Proceeds from disposal of assets 25,832 26,473 Other (5,173) (5,874) Net cash used in investing activities (654,744) (1,017,590) Cash flows from financing activities: Purchases of treasury stock (290,427) (200,710) Dividends paid (126,791) (100,034) Proceeds from revolving credit facility 50,000 420,000 Repayment of revolving credit facility (50,000) (420,000) Proceeds from issuance of senior notes - 396,412 Payment on finance leases (45,484) (15,915) Repayment of senior notes - (7,837) Other (12,290) (6,349) Net cash (used in) provided by financing activities (474,992) 65,567 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash 2,813 1,236 Net increase in cash, cash equivalents and restricted cash 48,613 55,127 Cash, cash equivalents and restricted cash at beginning of period 192,680 137,553 Cash, cash equivalents and restricted cash at end of period $ 241,293 $ 192,680 PATTERSON-UTI ENERGY, INC. Additional Financial and Operating Data (unaudited, dollars in thousands) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, 2024 2024 2023 2024 2023 Drilling Services Revenues $ 408,385 $ 421,563 $ 463,598 $ 1,727,810 $ 1,919,759 Direct operating costs $ 245,480 $ 250,877 $ 276,439 $ 1,029,591 $ 1,119,200 Adjusted gross profit (1) $ 162,905 $ 170,686 $ 187,159 $ 698,219 $ 800,559 Depreciation, amortization and impairment $ 85,174 $ 201,272 $ 91,951 $ 477,398 $ 364,312 Selling, general and administrative $ 4,741 $ 3,809 $ 3,204 $ 16,502 $ 15,014 Other operating income, net $ - $ - $ (676) $ - $ (769) Operating income (loss) $ 72,990 $ (34,395) $ 92,680 $ 204,319 $ 422,002 Capital expenditures $ 54,321 $ 69,127 $ 73,625 $ 264,667 $ 334,780 Completion Services Revenues $ 650,848 $ 831,567 $ 1,014,357 $ 3,232,785 $ 2,017,440 Direct operating costs $ 555,527 $ 703,809 $ 782,482 $ 2,658,170 $ 1,567,940 Adjusted gross profit (1) $ 95,321 $ 127,758 $ 231,875 $ 574,615 $ 449,500 Depreciation, amortization and impairment $ 135,852 $ 140,930 $ 147,891 $ 564,155 $ 283,230 Impairment of goodwill $ - $ 885,240 $ - $ 885,240 $ - Selling, general and administrative $ 9,703 $ 10,253 $ 13,662 $ 41,557 $ 26,050 Other operating income, net $ - $ - $ - $ (17,792) $ - Operating income (loss) $ (50,234) $ (908,665) $ 70,322 $ (898,545) $ 140,220 Capital expenditures $ 61,469 $ 86,755 $ 107,217 $ 320,329 $ 214,746 Drilling Products Revenues $ 86,522 $ 89,102 $ 88,109 $ 351,651 $ 134,679 Direct operating costs $ 49,186 $ 47,144 $ 49,484 $ 191,107 $ 81,555 Adjusted gross profit (1) $ 37,336 $ 41,958 $ 38,625 $ 160,544 $ 53,124 Depreciation, amortization and impairment $ 27,328 $ 22,924 $ 31,392 $ 100,610 $ 48,467 Selling, general and administrative $ 10,209 $ 9,898 $ 7,494 $ 35,860 $ 11,158 Operating income (loss) $ (201) $ 9,136 $ (261) $ 24,074 $ (6,501) Capital expenditures $ 15,834 $ 16,309 $ 16,632 $ 61,687 $ 24,572 Other Revenues $ 16,380 $ 14,990 $ 18,253 $ 65,665 $ 74,578 Direct operating costs $ 9,466 $ 10,077 $ 10,712 $ 41,001 $ 42,624 Adjusted gross profit (1) $ 6,914 $ 4,913 $ 7,541 $ 24,664 $ 31,954 Depreciation, depletion, amortization and impairment $ 4,790 $ 8,330 $ 6,291 $ 24,043 $ 28,237 Selling, general and administrative $ 59 $ 156 $ 232 $ 708 $ 888 Operating income (loss) $ 2,065 $ (3,573) $ 1,018 $ (87) $ 2,829 Capital expenditures $ 2,894 $ 5,909 $ 6,258 $ 21,813 $ 24,645 Corporate Depreciation $ 1,455 $ 1,224 $ 1,262 $ 5,667 $ 7,170 Selling, general and administrative $ 48,367 $ 41,580 $ 36,445 $ 173,710 $ 116,852 Merger and integration expense $ 3,460 $ 6,699 $ 19,949 $ 33,037 $ 98,077 Other operating (income) expense, net $ 2,673 $ 3,629 $ (5,602) $ 7,084 $ (15,503) Capital expenditures $ 5,832 $ 2,487 $ 1,541 $ 9,890 $ 16,947 Total Capital Expenditures $ 140,350 $ 180,587 $ 205,273 $ 678,386 $ 615,690 Adjusted gross profit is defined as revenues less direct operating costs (excluding depreciation, depletion, amortization and impairment expense, which does not include impairment of goodwill). See Non-GAAP Financial Measures below for a reconciliation of GAAP gross profit to adjusted gross profit by segment. PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures Adjusted EBITDA (unaudited, dollars in thousands) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, 2024 2024 2023 2024 2023 Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) (1) : Net income (loss) $ (51,392) $ (978,334) $ 61,938 $ (966,399) $ 245,952 Income tax expense (benefit) 1,927 (30,256) 31,332 9,453 61,152 Net interest expense 16,797 17,245 17,142 66,234 46,748 Depreciation, depletion, amortization and impairment 254,599 374,680 278,787 1,171,873 731,416 Impairment of goodwill - 885,240 - 885,240 - Merger and integration expense 3,460 6,699 19,949 33,037 98,077 Adjusted EBITDA $ 225,391 $ 275,274 $ 409,148 $ 1,199,438 $ 1,183,345 Total revenues $ 1,162,135 $ 1,357,222 $ 1,584,317 $ 5,377,911 $ 4,146,456 Adjusted EBITDA by Operating Segment: Drilling Services $ 158,164 $ 166,877 $ 184,631 $ 681,717 $ 786,314 Completion Services 85,618 117,505 218,213 550,850 423,450 Drilling Products 27,127 32,060 31,131 124,684 41,966 Other 6,855 4,757 7,309 23,956 31,066 Corporate (52,373) (45,925) (32,136) (181,769) (99,451) Adjusted EBITDA $ 225,391 $ 275,274 $ 409,148 $ 1,199,438 $ 1,183,345 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 (loss) plus income tax expense (benefit), net interest expense, depreciation, depletion, amortization and impairment expense (including impairment of goodwill) 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 (loss) 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 (loss). Our computations of Adjusted EBITDA may not be the same as similarly titled measures of other companies. PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures Adjusted Free Cash Flow (unaudited, dollars in thousands) Twelve Months Ended December 31, 2024 2023 Adjusted Free Cash Flow (1) : Net cash provided by operating activities $ 1,175,536 $ 1,005,914 Less capital expenditures (678,386) (615,690) Plus proceeds from disposal of assets 25,832 26,473 Free cash flow $ 522,982 $ 416,697 We define adjusted free cash flow as net cash provided by operating activities less capital expenditures, plus proceeds from disposal of assets. We present adjusted 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 adjusted free cash flow may not be the same as similarly titled measures of other companies. Adjusted free cash flow is not intended to represent our residual cash flow available for discretionary expenditures. Adjusted 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. PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures Adjusted Gross Profit (unaudited, dollars in thousands) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, 2024 2024 2023 2024 2023 Drilling Services Revenues $ 408,385 $ 421,563 $ 463,598 $ 1,727,810 $ 1,919,759 Less direct operating costs (245,480) (250,877) (276,439) (1,029,591) (1,119,200) Less depreciation, amortization and impairment (85,174) (201,272) (91,951) (477,398) (364,312) GAAP gross profit 77,731 (30,586) 95,208 220,821 436,247 Depreciation, amortization and impairment 85,174 201,272 91,951 477,398 364,312 Adjusted gross profit (1) $ 162,905 $ 170,686 $ 187,159 $ 698,219 $ 800,559 Completion Services Revenues $ 650,848 $ 831,567 $ 1,014,357 $ 3,232,785 $ 2,017,440 Less direct operating costs (555,527) (703,809) (782,482) (2,658,170) (1,567,940) Less depreciation, amortization and impairment (135,852) (140,930) (147,891) (564,155) (283,230) GAAP gross profit (40,531) (13,172) 83,984 10,460 166,270 Depreciation, amortization and impairment 135,852 140,930 147,891 564,155 283,230 Adjusted gross profit (1) $ 95,321 $ 127,758 $ 231,875 $ 574,615 $ 449,500 Drilling Products Revenues $ 86,522 $ 89,102 $ 88,109 $ 351,651 $ 134,679 Less direct operating costs (49,186) (47,144) (49,484) (191,107) (81,555) Less depreciation, amortization and impairment (27,328) (22,924) (31,392) (100,610) (48,467) GAAP gross profit 10,008 19,034 7,233 59,934 4,657 Depreciation, amortization and impairment 27,328 22,924 31,392 100,610 48,467 Adjusted gross profit (1) $ 37,336 $ 41,958 $ 38,625 $ 160,544 $ 53,124 Other Revenues $ 16,380 $ 14,990 $ 18,253 $ 65,665 $ 74,578 Less direct operating costs (9,466) (10,077) (10,712) (41,001) (42,624) Less depreciation, depletion, amortization and impairment (4,790) (8,330) (6,291) (24,043) (28,237) GAAP gross profit 2,124 (3,417) 1,250 621 3,717 Depreciation, depletion, amortization and impairment 4,790 8,330 6,291 24,043 28,237 Adjusted gross profit (1) $ 6,914 $ 4,913 $ 7,541 $ 24,664 $ 31,954 We define "Adjusted gross profit" as revenues less direct operating costs (excluding depreciation, depletion, amortization and impairment expense, which does not include impairment of goodwill). Adjusted gross profit is included as a supplemental disclosure because it is a useful indicator of our operating performance. PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures Drilling Services Adjusted Gross Profit (unaudited, dollars in thousands) Three Months Ended December 31, September 30, 2024 2024 U.S. Contract Drilling Revenues $ 339,355 $ 355,688 Less direct operating costs (188,208) (196,430) Less depreciation, amortization and impairment (77,182) (194,509) GAAP gross profit 73,965 (35,251) Depreciation, amortization and impairment 77,182 194,509 Adjusted gross profit (1) $ 151,147 $ 159,258 Operating days - U.S. (2) 9,617 9,870 Average revenue per operating day - U.S. (2) $ 35.29 $ 36.04 Average direct operating costs per operating day - U.S. (2) $ 19.57 $ 19.90 Average adjusted gross profit per operating day - U.S. (2) $ 15.72 $ 16.14 Other Drilling Services Revenues $ 69,030 $ 65,875 Less direct operating costs (57,272) (54,447) Less depreciation, amortization and impairment (7,992) (6,763) GAAP gross profit 3,766 4,665 Depreciation, amortization and impairment 7,992 6,763 Adjusted gross profit (1) $ 11,758 $ 11,428 We define "Adjusted gross profit" as revenues less direct operating costs (excluding depreciation, amortization and impairment expense, which does not include impairment of goodwill). Adjusted gross profit is included as a supplemental disclosure because it is a useful indicator of our operating performance. 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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