XML 21 R11.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Business Combinations | 3 Months Ended
--- | ---
Dec. 31, 2017
Business Combinations |
BUSINESS COMBINATIONS | 2.Business Combinations On December 8, 2017, we completed an acquisition (“MagVAR Acquisition”) of an unaffiliated company, Magnetic Variation Services, LLC (“MagVAR”), which is now a wholly owned subsidiary of the Company. The operations for MagVAR are included with all other non-reportable business segments. At the effective time of the MagVAR Acquisition, MagVAR shareholders received aggregate cash consideration of $47.8 million, net of customary closing adjustments, and certain management members received restricted stock awards covering 213,904 shares of Helmerich & Payne, Inc. common stock. The grant date fair value of the restricted stock will be amortized to expense over the three year vesting period. At closing, $6.0 million of the cash consideration was placed in escrow, to be released to the seller twelve months after the acquisition closing date. The amount placed in escrow is classified as restricted cash and is included in prepaid expenses and other in the Consolidated Condensed Balance Sheet at December 31, 2017. Transaction costs related to the MagVAR Acquisition incurred during the three months ended December 31, 2017 were approximately $0.5 million and are recorded in the Consolidated Condensed Statements of Operations within general and administrative expense. We recorded revenue of $0.6 million and a net loss of $0.1 million related to MagVAR during the three months ended December 31, 2017. Through comprehensive 3D geomagnetic reference modeling, MagVAR provides measurement while drilling (“MWD”) survey corrections by identifying and quantifying MWD tool measurement errors in real-time, greatly improving directional drilling performance and wellbore placement. MagVAR technology has been successfully deployed in both onshore and offshore fields in North America, South America, Europe, Africa, Australia and Asia. The MagVAR Acquisition has been accounted for as a business combination in accordance with ASC 805, Business Combinations, which requires the assets acquired and liabilities assumed to be recorded at their acquisition date fair values. The following table summarizes the purchase price and the preliminary allocation of the fair values of assets acquired and liabilities assumed and separately identifiable intangible assets at the acquisition date (in thousands):
Purchase Price |  |  |
Consideration given |  |  |
Cash consideration |  | $ | 48,485
Allocation of Purchase Price |  |  |
Fair value of assets acquired |  |  |
Current assets |  | $ | 2,304
Property, plant and equipment |  |  | 13
Intangible assets |  |  | 28,700
Goodwill |  |  | 17,642
Total assets acquired |  | $ | 48,659
Fair value of liabilities assumed |  |  |
Current liabilities |  | $ | 174
Fair value of total assets and liabilities acquired |  | $ | 48,485
Intangible assets acquired consist of developed technology, a trade name and customer relationships. The intangible assets will be amortized under a straight-line method over their estimated useful lives ranging from 5 to 20 years. The methodologies used in valuing the intangible assets include the multi-period excess earnings method for developed technology, the with and without method for customer relationships and the relief-from-royalty method for the trade name. The values assigned to the assets acquired and liabilities assumed are based on preliminary calculations and valuations of fair value and may be adjusted during the measurement period as we obtain additional information for those estimates. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. As of December 31, 2017, the primary area that is not yet finalized includes the fair values of intangible assets and their estimated useful lives. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill. Factors comprising goodwill includes the synergies expected from the expanded service capabilities as well as the value of the assembled workforce. The goodwill is reported in the Other segment and will not be allocated to any other reporting unit. The goodwill is not subject to amortization, but will be evaluated at least annually for impairment, or more frequently if impairment indicators are present. The intangible assets and goodwill will be amortized straight line over 15 years for income tax purposes. The following unaudited pro forma combined financial information is provided for the three months ended December 31, 2017 and 2016, as though the MagVAR Acquisition had been completed as of October 1, 2016. These pro forma combined results of operations have been prepared by adjusting our historical results to include the historical results of MagVAR and reflect pro forma adjustments based on available information and certain assumptions that we believe are reasonable, including application of an appropriate income tax to MagVAR pre-tax loss. Additionally, pro forma earnings for the three months ended December 31, 2017 were adjusted to exclude $0.4 million of after-tax transaction costs. The unaudited pro forma combined financial information is provided for illustrative purposes only and is not necessarily indicative of the actual results that would have been achieved by the combined company for the periods presented or that may be achieved by the combined company in the future. Future results may vary significantly from the results reflected in this pro forma financial information.
|  | Pro Forma (unaudited)
|  | Three Months Ended December 31,
|  | 2017 |  | 2016
|  | (in thousands)
Revenues |  | $ | 567,775 |  | $ | 370,699
Net income (loss) |  | $ | 499,906 |  | $ | (34,889)

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration