Pioneer Drilling Reports Fourth Quarter 2009 Results
SAN ANTONIO, Feb. 16 /PRNewswire-FirstCall/ -- Pioneer Drilling Company, Inc. (NYSE Amex: PDC) today reported financial and operating results for the three and twelve months ended December 31, 2009.
Some of the highlights during the fourth quarter include:
- Drilling rig utilization increased to 41% from 35% in the prior quarter
- Three more drilling rigs were contracted to work in Colombia, bringing the total to eight rigs
- Expanded presence in shale plays in both the Drilling Services and Production Services divisions
- Capital expenditures budget of $80 million approved for 2010
Fourth Quarter 2009 Results
Net loss for the fourth quarter was $8.4 million, or $0.16 per diluted share, compared with a net loss for the third quarter of 2009 ("the prior quarter") of $9.2 million, or $0.18 per diluted share. The net loss for the fourth quarter of 2009 included the positive earnings impact of a $3.5 million tax benefit from the reversal of a valuation allowance on deferred tax assets associated with foreign net operating losses that we expect to apply against future taxable income. Net loss adjusted to exclude that tax benefit was $11.9 million, or $0.23 per diluted share for the fourth quarter of 2009(1).
Net loss for the fourth quarter of 2008 ("the year-earlier quarter") was $117.9 million, or $2.37 per diluted share. The fourth quarter 2008 net loss included a $118.6 million goodwill impairment charge and a $52.8 million intangible asset impairment charge.
Revenues for the latest quarter were $81.2 million, compared with $74.4 million for the prior quarter and $170.7 million for the year-earlier quarter. The increase in fourth quarter revenue compared to the prior quarter was primarily due to an increase in Drilling Services revenues as a result of higher rig utilization. EBITDA(2) for the fourth quarter was $14.1 million, compared to $15.2 million for the prior quarter and $60.4 million for the year-earlier quarter.
Full Year 2009 Results
Net loss for the twelve months ended December 31, 2009, was $23.2 million, or $0.46 per share, compared with a net loss of $62.7 million, or $1.26 per diluted share for the twelve months ended December 31, 2008. The net loss for 2008 included a $118.6 million goodwill impairment charge and a $52.8 million intangible asset impairment charge. Revenues for 2009 were $325.5 million, compared with $610.9 million for the same period last year. EBITDA(2) for 2009 was $74.9 million, compared to $214.8 million for 2008.
Operating Results
Revenues for the Drilling Services Division were $54.6 million for the fourth quarter, a 14% increase from the prior quarter. During the fourth quarter, the utilization rate for our drilling rig fleet averaged 41%, up from 35% in the prior quarter, but down from 87% utilization in the year-earlier quarter. Average drilling revenues per day decreased 4% during the fourth quarter primarily due to the expiration of two long-term contracts that were earning relatively high daywork rates when compared to current rates. Average operating costs were $14,692 per day for the fourth quarter, a 6% decrease when compared to the prior quarter. Drilling Services margin(3) was flat at $5,629 per day in the fourth quarter, versus $5,623 per day in the prior quarter.
Revenues for the Production Services Division increased modestly to $26.6 million in the fourth quarter from $26.3 million in the prior quarter. Production Services margin(3) as a percentage of revenue decreased to 33% in the fourth quarter from 37% in the prior quarter. Currently, 68 of Pioneer's 74 workover rigs have crews assigned and are operating or being actively marketed, while the remaining six workover rigs are idle with no crews assigned.
"As 2010 gets under way, we are continuing to see an increase in demand for our equipment, driven by the growing activity in the U.S. shale plays and in Colombia," said Wm. Stacy Locke, President and CEO of Pioneer Drilling. "Our Drilling Services Division now has five rigs working in the Marcellus Shale, five operating in the Bakken Shale and five additional rigs operating in various other shale plays. While we averaged 41% utilization in the fourth quarter, demand has improved, and the utilization rate in our Drilling Services Division is currently 56%.
"We currently have seven rigs operating under drilling contracts in Colombia, of which, five rigs are drilling and two rigs have moved to their initial well site locations and are expected to begin drilling in late February. An eighth drilling rig is expected to begin drilling operations in Colombia in April. Six of these drilling rigs assigned to Colombia have term contracts that expire in December 2012, and the remaining two rigs have term contracts that expire in September 2010. As a result of the new contracts in Colombia as well as new contracts in the U.S., we have increased the number of rigs operating under term contracts from four rigs at the end of the 2009 to 15 rigs, or 21% of our fleet, currently.
"In our Production Services Division, we are continuing to expand well servicing operations in the shale plays. Today, we have well services rigs operating in the Bakken Shale, Fayetteville Shale, Haynesville Shale, and we have secured a yard to service the Eagle Ford Shale. Other regions such as South Louisiana and the Black Warrior Basin in Mississippi are also showing signs of strength. Like our Drilling Services Division, demand was soft at the beginning of 2010, but has gradually improved over the last several weeks. Utilization for workover rigs has grown from an average of 53% in the fourth quarter to about 60% today. Likewise, our wireline business is improving and we are now positioned for work in the Marcellus Shale, Haynesville Shale and South Louisiana where we will provide both onshore and offshore wireline services," Locke said.
"In November, we raised $24 million in net proceeds from an equity offering in order to provide additional financial flexibility and position us to market our equipment to maximize our revenue. In 2010, we intend to continue to expand our operations in the most active basins and make selective upgrades to our equipment as needed by our customer base."
Pioneer's working capital was $90.3 million at December 31, 2009, up from $64.4 million at December 31, 2008. Income taxes receivable increased $36.1 million as of December 31, 2009 when compared to December 31, 2008 primarily due to net operating loss carry-backs that we expect will result in income tax refunds in the second quarter of 2010. Our cash and cash equivalents were $40.4 million at the end of the fourth quarter, up from $26.8 million at December 31, 2008. The year-over-year increase in cash and cash equivalents was primarily due to $123.3 million of cash provided by operating activities and $24.0 million in net proceeds from our equity offering in November 2009. The increase in cash and cash equivalents was partially offset by our use of $114.7 million for property and equipment expenditures, debt payments of $17.3 million and debt costs of $2.6 million incurred to amend our senior secured revolving credit facility.
Currently, $257.5 million is outstanding under our senior secured revolving credit facility, of which, $1.9 million is due in the first quarter of 2010 and the remaining $255.6 million is due at maturity on August 31, 2012. There are no limitations on our ability to borrow funds under our senior secured revolving credit facility other than maintaining compliance with the applicable covenants.
Conference Call
Pioneer's management team will hold a conference call today at 11:00 a.m. Eastern Time (10:00 a.m. Central Time), to discuss these results. To participate in the call, dial 480-629-9819 at least 10 minutes early and ask for the Pioneer Drilling conference call. A replay will be available approximately two hours after the call ends and will be accessible until February 23rd. To access the replay, dial (303) 590-3030 and enter the pass code 4206132#.
The conference call will also be available on the Internet at Pioneer's Web site at www.pioneerdrlg.com. To listen to the live call, visit Pioneer's Web site at least 10 minutes early to register and download any necessary audio software. An archive will be available shortly after the call. For more information, please contact Donna Washburn at DRG&E at (713) 529-6600 or e-mail [email protected].
About Pioneer
Pioneer Drilling Company provides contract land drilling services to independent and major oil and gas operators in Texas, Louisiana, Oklahoma, Kansas, the Rocky Mountain and Appalachian regions and internationally in Colombia through its Pioneer Drilling Services Division. The Company also provides workover rig, wireline and fishing and rental services to producers in the U.S. Gulf Coast, Mid-Continent, Rocky Mountain and Appalachian regions through its Pioneer Production Services Division. Its fleet consists of 71 land drilling rigs that drill at depths ranging from 6,000 to 25,000 feet, 74 workover rigs (69 550-horsepower rigs, 4 600-horsepower rigs and 1 400-horsepower rig), 65 wireline units, and fishing and rental tools.
Cautionary Statement Regarding Forward-Looking Statements, Non-GAAP Financial Measures and Reconciliations
Statements we make in this news release that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements that are subject to risks, uncertainties and assumptions. Our actual results, performance or achievements, or industry results, could differ materially from those we express in this news release as a result of a variety of factors, including general economic and business conditions and industry trends; levels and volatility of oil and gas prices; decisions about onshore exploration and development projects to be made by oil and gas producing companies; risks associated with economic cycles and their impact on capital markets and liquidity; the continued demand for the drilling services or production services in the geographic areas where we operate; the highly competitive nature of our business; our future financial performance, including availability, terms and deployment of capital; the supply of marketable drilling rigs, workover rigs and wireline units within the industry; the continued availability of drilling rig, workover rig and wireline unit components; the continued availability of qualified personnel; the success or failure of our acquisition strategy, including our ability to finance acquisitions and manage growth; changes in, or our failure or inability to comply with, governmental regulations, including those relating to the environment. We have discussed many of these factors in more detail in our annual report on Form 10-K for the year ended December 31, 2009. These factors are not necessarily all the important factors that could affect us. Unpredictable or unknown factors we have not discussed in this news release, or in our annual report on Form 10-K could also have material adverse effects on actual results of matters that are the subject of our forward-looking statements. All forward-looking statements speak only as the date on which they are made and we undertake no obligation to publicly update or revise any forward-looking statements whether, as a result of new information, future events or otherwise. We advise our shareholders that they should (1) be aware that important factors not referred to above could affect the accuracy of our forward-looking statements and (2) use caution and common sense when considering our forward-looking statements.
This news release contains non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each such measure to its most directly comparable GAAP financial measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided in the following tables.
(1) A reconciliation of net loss adjusted to exclude the tax benefit of
the release of the valuation allowance for deferred tax assets to net
loss as reported is included in the table to this press release. We
believe that net loss adjusted to exclude the tax benefit of the
release of the valuation allowance for deferred tax assets is a useful
measure for evaluating financial performance, although it is not a
measure of financial performance under GAAP. Net loss adjusted to
exclude the tax benefit of the release of the valuation allowance for
deferred tax assets as presented may not be comparable to other
similarly titled measures reported by other companies.
(2) We define EBITDA as earnings (loss) before interest income (expense),
taxes, depreciation, amortization and impairments. Although not
prescribed under GAAP, we believe the presentation of EBITDA is
relevant and useful because it helps our investors understand our
operating performance and makes it easier to compare our results with
those of other companies that have different financing, capital or tax
structures. EBITDA should not be considered in isolation from or as a
substitute for net income, as an indication of operating performance
or cash flows from operating activities or as a measure of liquidity.
A reconciliation of net earnings (loss) to EBITDA is included in the
tables to this press release. EBITDA, as we calculate it, may not be
comparable to EBITDA measures reported by other companies. In
addition, EBITDA does not represent funds available for discretionary
use.
(3) Drilling Services margin represents contract drilling revenues less
contract drilling operating costs. Production Services margin
represents production services revenues less production services
operating costs. We believe that Drilling Services margin and
Production Services margin are useful measures for evaluating
financial performance, although they are not measures of financial
performance under GAAP. However, Drilling Services margin and
Production Services margin are common measures of operating
performance used by investors, financial analysts, rating agencies and
Pioneer management. A reconciliation of Drilling Services margin and
Production Services margin to net earnings (loss) is included in the
tables to this press release. Drilling Services margin and Production
Services margin as presented may not be comparable to other similarly
titled measures reported by other companies.
Contacts: |
Lorne E. Phillips, CFO |
|
Pioneer Drilling Company |
||
210-828-7689 |
||
Lisa Elliott / [email protected] |
||
Anne Pearson / [email protected] |
||
DRG&E / 713-529-6600 |
||
- Financial Statements and Operating Information Follow - |
||
PIONEER DRILLING COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three months ended Years ended
December 31, September 30, December 31,
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
Revenues:
Drilling
services $54,581 $123,303 $48,084 $219,751 456,890
Production
services 26,630 47,392 26,282 105,786 153,994
------ ------ ------ ------- -------
Total revenue 81,211 170,695 74,366 325,537 610,884
------ ------- ------ ------- -------
Costs and Expenses:
Drilling
services 39,463 71,731 35,315 147,343 269,846
Production
services 17,752 26,226 16,638 68,012 80,097
Depreciation
and
amortization 27,719 26,221 26,952 106,186 88,145
Selling,
general and
administrative 9,608 12,123 8,892 37,478 44,834
Bad debt
(recovery)
expense 71 639 (1,409) (1,642) 423
Impairment of
goodwill - 118,646 - - 118,646
Impairment of
intangible
assets - 52,847 - - 52,847
--- ------ --- --- ------
Total costs
and expenses 94,613 308,433 86,388 357,377 654,838
------ ------- ------ ------- -------
Income (loss)
from operations (13,402) (137,738) (12,022) (31,840) (43,954)
------- -------- ------- ------- -------
Other (expense)
income:
Interest
expense (3,590) (3,460) (1,839) (9,145) (13,072)
Interest income 35 261 43 217 1,256
Other (251) 471 222 596 (918)
---- --- --- --- ----
Total other
expense (3,806) (2,728) (1,574) (8,332) (12,734)
------ ------ ------ ------ -------
Income (loss)
before income
taxes (17,208) (140,466) (13,596) (40,172) (56,688)
Income tax
benefit
(expense) 8,824 22,562 4,406 16,957 (6,057)
----- ------ ----- ------ ------
Net earnings
(loss) $(8,384) $(117,904) $(9,190) $(23,215) $(62,745)
======= ========= ======= ======== ========
Earnings (loss)
per common share:
Basic $(0.16) $(2.37) $(0.18) $(0.46) $(1.26)
====== ====== ====== ====== ======
Diluted $(0.16) $(2.37) $(0.18) $(0.46) $(1.26)
====== ====== ====== ====== ======
Weighted average
number of shares
outstanding:
Basic 51,742 49,818 49,845 50,313 49,789
Diluted 51,742 49,818 49,845 50,313 49,789
PIONEER DRILLING COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
December 31, 2009 December 31, 2008
----------------- -----------------
ASSETS (unaudited) (audited)
------
Current assets:
Cash and cash equivalents $40,379 $26,821
Receivables, net of allowance for
doubtful accounts 81,467 99,423
Deferred income taxes 5,560 6,270
Inventory 5,535 3,874
Prepaid expenses and other
current assets 6,199 8,902
----- -----
Total current assets 139,140 145,290
Net property and equipment 637,022 627,562
Intangible assets, net of
amortization 25,393 29,969
Other long-term assets 21,061 21,658
------ ------
Total assets $822,616 $824,479
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $15,324 $21,830
Current portion of long-term debt 4,041 17,298
Prepaid drilling contracts 408 1,171
Accrued expenses 29,031 40,619
------ ------
Total current liabilities 48,804 80,918
Long-term debt, less current portion 258,073 262,115
Other long term liabilities 6,457 6,413
Deferred income taxes 87,834 60,915
------ ------
Total liabilities 401,168 410,361
Total shareholders' equity 421,448 414,118
------- -------
Total liabilities and shareholders'
equity $822,616 $824,479
======== ========
PIONEER DRILLING COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Years ended
December 31,
2009 2008
---- ----
Cash flows from operating activities:
Net earnings (loss) $(23,215) $(62,745)
Adjustments to reconcile net earnings (loss) to net
cash provided by operating activities:
Depreciation and amortization 106,186 88,145
Allowance for doubtful accounts (1,170) 1,591
Gain on dispositions of property and equipment 56 (805)
Stock-based compensation expense 7,216 4,597
Impairment of goodwill and intangible assets - 171,493
Deferred income taxes 28,400 (2,310)
Change in other assets 1,616 265
Change in non-current liabilities (1,312) (621)
Changes in current assets and liabilities 5,536 (13,219)
----- -------
Net cash provided by operating activities 123,313 186,391
------- -------
Cash flows from investing activities:
Acquisition of WEDGE - (313,621)
Acquisition of Competition Wireline - (26,772)
Acquisition of other production services
businesses - (9,301)
Purchases of property and equipment (114,712) (147,455)
Purchase of auction rate securities - (15,900)
Proceeds from sale of property and equipment 767 4,008
Proceeds from insurance recoveries 36 3,426
--- -----
Net cash used in investing activities (113,909) (505,615)
-------- --------
Cash flows from financing activities:
Debt repayments (17,298) (87,767)
Proceeds from issuance of debt - 359,400
Debt issuance costs (2,560) (3,319)
Proceeds from exercise of options - 784
Proceeds from sale of common stock, net of offering
costs of $454 24,043 -
Purchase of treasury stock (31) -
Excess tax benefit effect of stock option
exercises - 244
--- ---
Net cash (used in) provided by financing activities 4,154 269,342
----- -------
Net increase (decrease) in cash and cash equivalents 13,558 (49,882)
Beginning cash and cash equivalents 26,821 76,703
------ ------
Ending cash and cash equivalents $40,379 $26,821
======= =======
PIONEER DRILLING COMPANY AND SUBSIDIARIES
Operating Statistics
(in thousands, except average number of drilling rigs, utilization rate
and revenue day information)
(unaudited)
Three months ended Years ended
December 31, September 30, December 31,
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
Drilling Services
Division:
Revenues $54,581 $123,303 $48,084 $219,751 $456,890
Operating costs 39,463 71,731 35,315 147,343 269,846
------ ------ ------ ------- -------
Drilling services
margin (1) $15,118 $51,572 $12,769 $72,408 $187,044
======= ======= ======= ======= ========
Average number
of drilling rigs 71.0 68.7 71.0 70.7 67.4
Utilization rate 41% 87% 35% 41% 89%
Revenue days 2,686 5,529 2,271 10,491 22,057
Average revenues
per day $20,321 $22,301 $21,173 $20,947 $20,714
Average operating
costs per day 14,692 12,974 15,550 14,045 12,234
------ ------ ------ ------ ------
Drilling services
margin per
day (2) $5,629 $9,327 $5,623 $6,902 $8,480
====== ====== ====== ====== ======
Production Services
Division:
Revenues $26,630 $47,392 $26,282 $105,786 $153,994
Operating costs 17,752 26,226 16,638 68,012 80,097
------ ------ ------ ------ ------
Production
services margin
(1) $8,878 $21,166 $9,644 $37,774 $73,897
====== ======= ====== ======= =======
Combined:
Revenues $81,211 $170,695 $74,366 $325,537 $610,884
Operating Costs 57,215 97,957 51,953 215,355 349,943
------ ------ ------ ------- -------
Combined margin $23,996 $72,738 $22,413 $110,182 $260,941
======= ======= ======= ======== ========
EBITDA (3) $14,066 $60,447 $15,152 $74,942 $214,766
======= ======= ======= ======= ========
(1) Drilling services margin represents contract drilling revenues less
contract drilling operating costs. Production services margin
represents production services revenue less production services
operating costs. Pioneer believes that Drilling services margin and
Production services margin are useful measures for evaluating
financial performance, although they are not measures of financial
performance under generally accepted accounting principles. However,
Drilling services margin and Production services margin are common
measures of operating performance used by investors, financial
analysts, rating agencies and Pioneer's management. A reconciliation
of Drilling services margin and Production services margin to net
earnings (loss) is included in the table below. Drilling services
margin and production services margin as presented may not be
comparable to other similarly titled measures reported by other
companies.
(2) Drilling services margin per revenue day represents the Drilling
Services Division's average revenue per revenue day less average
operating costs per revenue day.
(3) We define EBITDA as earnings (loss) before interest income (expense),
taxes, depreciation, amortization and impairments. Although not
prescribed under GAAP, we believe the presentation of EBITDA is
relevant and useful because it helps our investors understand our
operating performance and makes it easier to compare our results with
those of other companies that have different financing, capital or tax
structures. EBITDA should not be considered in isolation from or as a
substitute for net earnings (loss) as an indication of operating
performance or cash flows from operating activities or as a measure of
liquidity. A reconciliation of net earnings (loss) to EBITDA is
included in the table below. EBITDA, as we calculate it, may not be
comparable to EBITDA measures reported by other companies. In
addition, EBITDA does not represent funds available for discretionary
use.
PIONEER DRILLING COMPANY AND SUBSIDIARIES
Capital Expenditures
(in thousands)
(unaudited)
Budget
------
Year
Three months ended Years ended Ending
December 31, September 30, December 31, December 31,
2009 2008 2009 2009 2008 2010
---- ---- ---- ---- ---- ----
Capital expenditures:
Drilling Services
Division:
Routine rigs $2,911 $5,209 $1,026 $9,621 $16,766 $13,000
Discretionary 36,342 13,105 14,932 62,791 61,034 44,000
Tubulars 1,507 44 92 3,569 1,094 4,000
New-builds and
acquisitions - 16,916 - - 30,281 -
--- ------ --- --- ------ ---
Total Drilling
Services
Division capital
expenditures 40,760 35,274 16,050 75,981 109,175 61,000
------ ------ ------ ------ ------- ------
Production Services
Division:
Routine 1,295 1,337 1,283 5,314 4,740 5,000
Discretionary 354 146 285 810 1,175 4,000
New-builds and
acquisitions 3,583 10,563 729 9,038 33,006 10,000
----- ------ --- ----- ------ ------
Total Production
Services
Division capital
expenditures 5,232 12,046 2,297 15,162 38,921 19,000
----- ------ ----- ------ ------ ------
Actual and
budgeted capital
expenditures 45,992 47,320 18,347 91,143 148,096 80,000
------ ------ ------ ------ ------- ------
Budgeted capital
expenditures
approved in
2009 that
will be incurred
in 2010 - - - - - 17,100
Budgeted capital
expenditures
approved in 2008
that was incurred
in 2009 - - 894 19,310 - -
--- --- --- ------ --- ---
$45,992 $47,320 $19,241 $110,453 $148,096 $97,100
======= ======= ======= ======== ======== =======
PIONEER DRILLING COMPANY AND SUBSIDIARIES
Drilling Rig, Workover Rig and Wireline Unit Information
Rig Type
Mechanical Electric Total Rigs
---------- -------- ----------
Drilling Services Division:
Drilling rig horsepower ratings:
550 to 700 HP 6 - 6
750 to 900 HP 14 2 16
1000 HP 18 12 30
1200 to 2000 HP 3 16 19
--- --- ---
Total 41 30 71
=== === ===
Drilling rig depth ratings:
Less than 10,000 feet 8 2 10
10,000 to 13,900 feet 30 7 37
14,000 to 25,000 feet 3 21 24
--- --- ---
Total 41 30 71
=== === ===
Production Services Division:
Workover rig horsepower ratings:
400 HP 1
550 HP 69
600 HP 4
---
Total 74
===
Wireline units 65
===
PIONEER DRILLING COMPANY AND SUBSIDIARIES
Reconciliation of Combined Drilling Services Margin and Production
Services Margin and EBITDA to Net Earnings (Loss)
(in thousands)
(unaudited)
Three months ended Years ended
December 31, September 30, December 31,
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
Combined
margin $23,996 $72,738 $22,413 $110,182 $260,941
Selling,
general and
administrative (9,608) (12,123) (8,892) (37,478) (44,834)
Bad debt
recovery
(expense) (71) (639) 1,409 1,642 (423)
Other income
(expense) (251) 471 222 596 (918)
---- --- --- --- ----
EBITDA 14,066 60,447 15,152 74,942 214,766
Depreciation
and
amortization (27,719) (26,221) (26,952) (106,186) (88,145)
Impairment
of goodwill - (118,646) - - (118,646)
Impairment of
intangible
assets - (52,847) - - (52,847)
Interest
income
(expense),
net (3,555) (3,199) (1,796) (8,928) (11,816)
Income tax
benefit
(expense) 8,824 22,562 4,406 16,957 (6,057)
----- ------ ----- ------ ------
Net earnings
(loss) $(8,384) $(117,904) $(9,190) $(23,215) $(62,745)
======= ========= ======= ======== ========
PIONEER DRILLING COMPANY AND SUBSIDIARIES
Reconciliation of Net Loss as Reported to Net Loss Adjusted to
Exclude the Tax Benefit of the
Release of the Valuation Allowance on Deferred Tax Assets
(in thousands, except per share data)
Three months ended Year ended
December 31, 2009 December 31, 2009
----------------- -----------------
Net loss as reported $(8,384) $(23,215)
Less: Tax benefit of the
release of the valuation
allowance for deferred tax
assets (3,466) (3,466)
------ ------
Net loss adjusted to
exclude the tax benefit
of the release of the
valuation allowance on
deferred tax assets (4) $(11,850) $(26,681)
======== ========
Basic weighted average number
of shares outstanding, as reported 51,742 50,313
Diluted EPS adjusted to
exclude the tax benefit
of the release of the valuation
allowance for deferred tax
assets (5) $(0.23) $(0.53)
====== ======
Diluted EPS as reported (5) $(0.16) $(0.46)
====== ======
(4) We believe that net loss adjusted to exclude the tax benefit of the
release of the valuation allowance for deferred tax assets is a useful
measure for evaluating financial performance, although it is not a
measure of financial performance under GAAP. A reconciliation of net
loss adjusted to exclude the tax benefit of the release of the
valuation allowance for deferred tax assets to net loss as reported is
included in the table above. This tax benefit is associated with
foreign net operating losses that we expect to apply against future
taxable income. Net loss adjusted to exclude the tax benefit of the
release of the valuation allowance for deferred tax assets as
presented may not be comparable to other similarly titled measures
reported by other companies.
(5) The effect of dilutive securities is not reflected in diluted EPS
because the effect of their inclusion would be antidilutive, or would
decrease the reported loss per share. Therefore, basic EPS is the
same as diluted EPS.
SOURCE Pioneer Drilling Company, Inc.
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