10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 _____________________________________________

Form 10-Q

 _____________________________________________ 

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2014

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-08038

  _____________________________________________

KEY ENERGY SERVICES, INC.

(Exact name of registrant as specified in its charter)

  _____________________________________________

Maryland	04-2648081
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1301 McKinney Street, Suite 1800, Houston, Texas	77010
(Address of principal executive offices)	(Zip Code)

(713) 651-4300

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

  ____________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

As of April 28, 2014, the number of outstanding shares of common stock of the registrant was 153,392,051.

KEY ENERGY SERVICES, INC.

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended March 31, 2014

Part I — Financial Information
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32
Part II — Other Information
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	34

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to statements of historical fact, this report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature or that relate to future events and conditions are, or may be deemed to be, forward-looking statements. These “forward-looking statements” are based on our current expectations, estimates and projections about Key Energy Services, Inc. and its wholly owned and controlled subsidiaries, our industry and management’s beliefs and assumptions concerning future events and financial trends affecting our financial condition and results of operations. In some cases, you can identify these statements by terminology such as “may,” “will,” “should,” “predicts,” “expects,” “believes,” “anticipates,” “projects,” “potential” or “continue” or the negative of such terms and other comparable terminology. These statements are only predictions and are subject to substantial risks and uncertainties and not guarantees of performance. Future actions, events and conditions and future results of operations may differ materially from those expressed in these statements. In evaluating those statements, you should carefully consider the information above as well as the risks outlined in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013.

We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date of this report except as required by law. All of our written and oral forward-looking statements are expressly qualified by these cautionary statements and any other cautionary statements that may accompany such forward-looking statements.

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PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Key Energy Services, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

	March 31, 2014			December 31, 2013
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	40,949		$	28,306
Accounts receivable, net of allowance for doubtful accounts of $1,212 and $766, respectively	320,722			348,966
Inventories	38,879			32,335
Other current assets	98,527			96,546
Total current assets	499,077			506,153
Property and equipment	2,625,702			2,606,738
Accumulated depreciation	(1,282,249		)	(1,241,092		)
Property and equipment, net	1,343,453			1,365,646
Goodwill	623,233			624,875
Other intangible assets, net	37,845			41,146
Deferred financing costs, net	13,198			13,897
Other assets	34,821			35,753
TOTAL ASSETS	$	2,551,627		$	2,587,470
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	64,671		$	58,826
Other current liabilities	151,299			169,945
Current portion of long-term debt	—			3,573
Total current liabilities	215,970			232,344
Long-term debt	763,843			763,981
Workers' compensation, vehicular and health insurance liabilities	30,112			29,944
Deferred tax liabilities	282,324			284,453
Other non-current liabilities	25,709			25,655
Commitments and contingencies
Equity:
Common stock, $0.10 par value; 200,000,000 shares authorized, 153,403,019 and 152,331,006 shares issued and outstanding	15,340			15,233
Additional paid-in capital	952,939			953,306
Accumulated other comprehensive loss	(20,679		)	(15,414		)
Retained earnings	286,069			297,968
Total equity	1,233,669			1,251,093
TOTAL LIABILITIES AND EQUITY	$	2,551,627		$	2,587,470

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

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Key Energy Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

	Three Months Ended
	March 31,
	2014			2013
REVENUES	$	356,141		$	428,449
COSTS AND EXPENSES:
Direct operating expenses	258,302			299,182
Depreciation and amortization expense	51,095			54,193
General and administrative expenses	52,866			63,245
Operating income (loss)	(6,122		)	11,829
Interest expense, net of amounts capitalized	13,554			13,804
Other income, net	(69		)	(1,223		)
Loss before income taxes	(19,607		)	(752		)
Income tax benefit	7,708			566
Net loss	(11,899		)	(186		)
Income attributable to noncontrolling interest	—			88
LOSS ATTRIBUTABLE TO KEY	$	(11,899	)	$	(274	)
Loss per share attributable to Key:
Basic and diluted	$	(0.08	)	$	—
Weighted average shares outstanding:
Basic and diluted	152,927			151,967

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

4

Key Energy Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

	Three Months Ended
	March 31,
	2014			2013
NET LOSS	$	(11,899	)	$	(186	)
Other comprehensive loss, net of tax:
Foreign currency translation loss	(5,265		)	(1,518		)
COMPREHENSIVE INCOME LOSS	(17,164		)	(1,704		)
Comprehensive loss attributable to noncontrolling interest	—			590
COMPREHENSIVE LOSS ATTRIBUTABLE TO KEY	$	(17,164	)	$	(1,114	)

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

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Key Energy Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Three Months Ended
	March 31,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(11,899	)	$	(186	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense	51,095			54,193
Bad debt expense	332			1,203
Accretion of asset retirement obligations	145			159
Loss from equity method investments	70			128
Amortization of deferred financing costs and premium	560			659
Deferred income tax benefit	(6,541		)	(377		)
Capitalized interest	—			(137		)
Gain on disposal of assets, net	(319		)	—
Share-based compensation	3,101			4,947
Excess tax benefit from share-based compensation	1,210			1,402
Changes in working capital:
Accounts receivable	27,519			(2,959		)
Other current assets	(5,292		)	(5,308		)
Accounts payable, accrued interest and accrued expenses	(15,046		)	(39,926		)
Share-based compensation liability awards	1,563			1,017
Other assets and liabilities	(804		)	4,747
Net cash provided by operating activities	45,694			19,562
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(28,525		)	(37,144		)
Proceeds from sale of fixed assets	1,174			374
Proceeds from sale of assets held for sale	600			—
Restricted funds held in escrow	—			(14,615		)
Net cash used in investing activities	(26,751		)	(51,385		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt	(3,573		)	—
Repayments of capital lease obligations	—			(264		)
Proceeds from borrowings on revolving credit facility	70,000			95,000
Repayments on revolving credit facility	(70,000		)	(65,000		)
Payment of deferred financing costs	—			(46		)
Repurchases of common stock	(2,151		)	(2,462		)
Excess tax expense from share-based compensation	(1,210		)	(1,402		)
Net cash provided by (used in) financing activities	(6,934		)	25,826
Effect of changes in exchange rates on cash	634			(52		)
Net increase (decrease) in cash and cash equivalents	12,643			(6,049		)
Cash and cash equivalents, beginning of period	28,306			45,949
Cash and cash equivalents, end of period	$	40,949		$	39,900

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

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Key Energy Services, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

NOTE 1. GENERAL

Key Energy Services, Inc., and its wholly owned subsidiaries (collectively, “Key,” the “Company,” “we,” “us,” “its,” and “our”) provide a full range of well services to major oil companies, foreign national oil companies and independent oil and natural gas production companies. Our services include rig-based and coiled tubing-based well maintenance and workover services, well completion and recompletion services, fluid management services, fishing and rental services, and other ancillary oilfield services. Additionally, certain rigs are capable of specialty drilling applications. We operate in most major oil and natural gas producing regions of the continental United States and have operations in Mexico, Colombia, Ecuador, the Middle East and Russia. In addition, we have a technology development and control systems business based in Canada.

The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The condensed December 31, 2013 balance sheet was prepared from audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 (the “2013 Form 10-K”). Certain information relating to our organization and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in this Quarterly Report on Form 10-Q. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2013 Form 10-K.

The unaudited condensed consolidated financial statements contained in this report include all normal and recurring material adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented herein. The results of operations for the three months endedMarch 31, 2014 are not necessarily indicative of the results expected for the full year or any other interim period, due to fluctuations in demand for our services, timing of maintenance and other expenditures, and other factors.

We have evaluated events occurring after the balance sheet date included in this Quarterly Report on Form 10-Q and through the date on which the unaudited condensed consolidated financial statements were issued, for possible disclosure of a subsequent event.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

The preparation of these unaudited condensed consolidated financial statements requires us to develop estimates and to make assumptions that affect our financial position, results of operations and cash flows. These estimates may also impact the nature and extent of our disclosure, if any, of our contingent liabilities. Among other things, we use estimates to (i) analyze assets for possible impairment, (ii) determine depreciable lives for our assets, (iii) assess future tax exposure and realization of deferred tax assets, (iv) determine amounts to accrue for contingencies, (v) value tangible and intangible assets, (vi) assess workers’ compensation, vehicular liability, self-insured risk accruals and other insurance reserves, (vii) provide allowances for our uncollectible accounts receivable, (viii) value our asset retirement obligations, and (ix) value our equity-based compensation. We review all significant estimates on a recurring basis and record the effect of any necessary adjustments prior to publication of our financial statements. Adjustments made with respect to the use of estimates relate to improved information not previously available. Because of the limitations inherent in this process, our actual results may differ materially from these estimates. We believe that the estimates used in the preparation of these interim financial statements are reasonable.

There have been no material changes or developments in our evaluation of accounting estimates and underlying assumptions or methodologies that we believe to be a “Critical Accounting Policy or Estimate” as disclosed in our 2013 Form 10-K.

Accounting Standards Adopted or Not Yet Adopted in this Report

There are no new accounting standards that have been adopted or not yet adopted in this report.

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NOTE 3. ACQUISITION OF NONCONTROLLING INTERESTS

Geostream. On October 31, 2008, we acquired a 26% interest in OOO Geostream Services Group (“Geostream”), a limited liability company incorporated in the Russian Federation that provides a wide range of drilling, workover and reservoir engineering services for $17.4 million. On September 1, 2009, we acquired an additional 24% interest for $16.4 million, which brought our total investment in Geostream to 50% and provided us a controlling interest with representation on Geostream's board of directors. We accounted for the second investment as a business combination achieved in stages. The results of Geostream have been included in our consolidated financial statements since the initial acquisition date, with the portion outside of our control forming a noncontrolling interest. On April 9, 2013, we completed the acquisition of the 50% noncontrolling interest in Geostream for $14.6 million. Geostream is now our wholly owned subsidiary. This acquisition of the 50% noncontrolling interest in Geostream was accounted for as an equity transaction. Therefore, our acquisition of the non-controlling interest in Geostream in the second quarter of 2013 did not result in a gain or loss.

AlMansoori Key Energy Services, LLC. On March 7, 2010, we entered into an agreement with AlMansoori Petroleum Services, LLC (“AlMansoori”) to form the joint venture AlMansoori Key Energy Services, LLC, a joint venture under the laws of Abu Dhabi, UAE. The purpose of the joint venture was to engage in conventional workover and drilling services, coiled tubing services, fishing and rental services, rig monitoring services, pipe handling services and fluids, waste treatment and handling services. Although AlMansoori held a 51% interest in the joint venture and we held a 49% interest, we held three of the five board of directors seats and a controlling financial interest. In addition, profits and losses of the joint venture were shared on equal terms and in equal amounts with AlMansoori. Because the joint venture did not have sufficient resources to carry on its activities without our financial support, we determined it to be a variable interest entity of which we were the primary beneficiary. We consolidated the entity in our financial statements. On August 5, 2013, we agreed to the dissolution of AlMansoori Key Energy Services, LLC and the acquisition of the underlying business for $5.1 million. The $5.1 million is expected to be paid in 2014 and is recorded in "Other current liabilities" in our consolidated balance sheet. The acquisition of the 51% noncontrolling interest in AlMansoori Key Energy Services, LLC was accounted for as an equity transaction therefore did not result in a gain or loss.

NOTE 4. EQUITY

A reconciliation of the total carrying amount of our equity accounts for the three months endedMarch 31, 2014 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interest		Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2013	152,331		$	15,233		$	953,306		$	(15,414	)	$	297,968		$	—	$	1,251,093
Foreign currency translation	—		—			—			(5,265		)	—			—		(5,265		)
Common stock purchases	(276	)	(28		)	(2,123		)	—			—			—		(2,151		)
Share-based compensation	1,348		135			2,966			—			—			—		3,101
Tax benefits from share-based compensation	—		—			(1,210		)	—			—			—		(1,210		)
Net loss	—		—			—			—			(11,899		)	—		(11,899		)
BALANCE AT MARCH 31, 2014	153,403		$	15,340		$	952,939		$	(20,679	)	$	286,069		$	—	$	1,233,669

A reconciliation of the total carrying amount of our equity accounts for the three months endedMarch 31, 2013 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interest			Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2012	151,070		$	15,108		$	925,132		$	(6,148	)	$	319,736		$	33,504		$	1,287,332
Foreign currency translation	—		—			—			(840		)	—			(678		)	(1,518		)
Common stock purchases	(299	)	(31		)	(2,431		)	—			—			—			(2,462		)
Share-based compensation	1,580		158			3,415			—			—			—			3,573
Tax benefits from share-based compensation	—		—			(1,402		)	—			—			—			(1,402		)
Net income (loss)	—		—			—			—			(274		)	88			(186		)
BALANCE AT MARCH 31, 2013	152,351		$	15,235		$	924,714		$	(6,988	)	$	319,462		$	32,914		$	1,285,337

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NOTE 5. OTHER BALANCE SHEET INFORMATION

The table below presents comparative detailed information about other current assets at March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
	(in thousands)
Other current assets:
Deferred tax assets	$	15,755	$	11,707
Prepaid current assets	26,695		28,435
Reinsurance receivable	9,389		9,113
VAT asset	21,279		21,683
Other	25,409		25,608
Total	$	98,527	$	96,546

The table below presents comparative detailed information about other non-current assets at March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
	(in thousands)
Other non-current assets:
Deferred tax assets	$	22,292	$	22,313
Reinsurance receivable	9,788		9,397
Deposits	1,355		1,533
Equity method investments	965		962
Other	421		1,548
Total	$	34,821	$	35,753

The table below presents comparative detailed information about other current liabilities at March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
	(in thousands)
Other current liabilities:
Accrued payroll, taxes and employee benefits	$	34,273	$	34,956
Accrued operating expenditures	38,255		36,573
Income, sales, use and other taxes	30,613		37,064
Self-insurance reserve	31,964		32,129
Accrued interest	3,861		15,285
Accrued insurance premiums	4,801		8,049
Share-based compensation and other liabilities	7,532		5,889
Total	$	151,299	$	169,945

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The table below presents comparative detailed information about other non-current liabilities at March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
	(in thousands)
Other non-current liabilities:
Asset retirement obligations	$	12,144	$	11,999
Environmental liabilities	6,119		6,176
Accrued rent	707		853
Accrued sales, use and other taxes	5,394		5,552
Other	1,345		1,075
Total	$	25,709	$	25,655

NOTE 6. GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the three months endedMarch 31, 2014 are as follows:

	U.S.		International			Total
	(in thousands)
December 31, 2013	$	597,456	$	27,419		$	624,875
Impact of foreign currency translation	—		(1,642		)	(1,642		)
March 31, 2014	$	597,456	$	25,777		$	623,233

The components of our other intangible assets as of March 31, 2014 and December 31, 2013 are as follows:

	March 31, 2014			December 31, 2013
	(in thousands)
Noncompete agreements:
Gross carrying value	$	9,332		$	9,332
Accumulated amortization	(7,624		)	(7,104		)
Net carrying value	1,708			2,228
Patents, trademarks and tradename:
Gross carrying value	13,385			14,039
Accumulated amortization	(234		)	(223		)
Net carrying value	13,151			13,816
Customer relationships and contracts:
Gross carrying value	100,023			100,271
Accumulated amortization	(80,739		)	(78,926		)
Net carrying value	19,284			21,345
Developed technology:
Gross carrying value	7,583			7,583
Accumulated amortization	(3,881		)	(3,826		)
Net carrying value	3,702			3,757
Customer Backlog:
Gross carrying value	779			779
Accumulated amortization	(779		)	(779		)
Net carrying value	—			—
Total:
Gross carrying value	131,102			132,004
Accumulated amortization	(93,257		)	(90,858		)
Net carrying value	$	37,845		$	41,146

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Of our intangible assets at March 31, 2014, $13.0 million is an indefinite-lived tradename and not subject to amortization. The weighted average remaining amortization periods and expected amortization expense for the next five years for our definite lived intangible assets are as follows:

	Weighted average remaining amortization period (years)	Expected Amortization Expense
		Remainder of 2014		2015		2016		2017		2018		2019
		(in thousands)
Noncompete agreements	0.5	$	1,145	$	308	$	255	$	—	$	—	$	—
Patents and trademarks	4.2	30		40		40		40		17		—
Customer relationships and contracts	5.7	5,905		5,038		3,414		2,418		1,120		820
Developed technology	16.8	166		221		221		221		221		221
Total expected intangible asset amortization expense		$	7,246	$	5,607	$	3,930	$	2,679	$	1,358	$	1,041

Certain of our goodwill and other intangible assets are denominated in Russian Rubles and, as such, the values of these assets are subject to fluctuations associated with changes in exchange rates. Amortization expense for our intangible assets was $2.6 million and $4.8 millionfor the three months endedMarch 31, 2014 and 2013, respectively.

NOTE 7. LONG-TERM DEBT

As of March 31, 2014 and December 31, 2013, the components of our long-term debt were as follows:

	March 31, 2014		December 31, 2013
	(in thousands)
6.75% Senior Notes due 2021	$	675,000	$	675,000
8.375% Senior Notes due 2014	—		3,573
Senior Secured Credit Facility revolving loans due 2016	85,000		85,000
Net unamortized premium on debt	3,843		3,981
Total debt	763,843		767,554
Less current portion	—		(3,573		)
Long-term debt	$	763,843	$	763,981

8.375% Senior Notes due 2014

On February 25, 2014, we redeemed the $3.6 million aggregate principal amount and paid $0.1 million accrued interest of 8.375% Senior Notes due 2014 (the “2014 Notes”) pursuant to the indenture dated as of November 29, 2007 (as supplemented, the “Indenture”). The 2014 Notes were general unsecured senior obligations and were subordinate to all of our existing and future secured indebtedness. The 2014 Notes were jointly and severally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries. Interest on the 2014 Notes was payable on June 1 and December 1 of each year.

6.75% Senior Notes due 2021

We issued $475.0 million aggregate principal amount of 6.75% Senior Notes due 2021 (the “Initial 2021 Notes”) on March 4, 2011 and issued an additional $200.0 million aggregate principal amount of the 2021 Notes (the “Additional 2021 Notes” and together with the Initial 2021 Notes, the “2021 Notes”) in a private placement on March 8, 2012 under an indenture dated March 4, 2011 (the “Base Indenture”), as supplemented by a first supplemental indenture dated March 4, 2011 and amended by a further supplemental indenture dated March 8, 2012 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). We used the net proceeds to repay senior secured indebtedness under our revolving bank credit facility. We capitalized $4.6 million of financing costs associated with the issuance of the 2021 Notes that will be amortized over the term of the notes.

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On March 5, 2013, we completed an offer to exchange the $200.0 million in aggregate principal amount of unregistered Additional 2021 Notes for an equal principal amount of such notes registered under the Securities Act of 1933. All of the 2021 Notes are treated as a single class under the Indenture and as of the closing of the exchange offers bear the same CUSIP and ISIN numbers.

The 2021 Notes are general unsecured senior obligations and are effectively subordinated to all of our existing and future secured indebtedness. The 2021 Notes are or will be jointly and severally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries. Interest on the 2021 Notes is payable on March 1 and September 1 of each year. The 2021 Notes mature on March 1, 2021.

On or after March 1, 2016, the 2021 Notes will be subject to redemption at any time and from time to time at our option, in whole or in part, at the redemption prices below (expressed as percentages of the principal amount redeemed), plus accrued and unpaid interest to the applicable redemption date, if redeemed during the twelve-month period beginning on March 1 of the years indicated below:

Year	Percentage
2016	103.375	%
2017	102.250	%
2018	101.125	%
2019 and thereafter	100.000	%

At any time and from time to time prior to March 1, 2016, we may, at our option, redeem all or a portion of the 2021 Notes at a redemption price equal to 100% of the principal amount plus a premium with respect to the 2021 Notes plus accrued and unpaid interest to the redemption date. The premium is the excess of (i) the present value of the redemption price of 103.375% of the principal amount, plus all remaining scheduled interest payments due through March 1, 2016 discounted at the treasury rate plus 0.5% over (ii) the principal amount of the note. If we experience a change of control, subject to certain exceptions, we must give holders of the 2021 Notes the opportunity to sell to us their 2021 Notes, in whole or in part, at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest to the date of purchase.

We are subject to certain negative covenants under the Indenture. The Indenture limits our ability to, among other things:

• incur additional indebtedness and issue preferred equity interests;

• pay dividends or make other distributions or repurchase or redeem equity interests;

• make loans and investments;

• enter into sale and leaseback transactions;

• sell, transfer or otherwise convey assets;

• create liens;

• enter into transactions with affiliates;

• enter into agreements restricting subsidiaries’ ability to pay dividends;

• designate future subsidiaries as unrestricted subsidiaries; and

• consolidate, merge or sell all or substantially all of the applicable entities’ assets.

These covenants are subject to certain exceptions and qualifications, and contain cross-default provisions relating to the covenants of our 2011 Credit Facility discussed below. Substantially all of the covenants will terminate before the 2021 Notes mature if one of two specified ratings agencies assigns the 2021 Notes an investment grade rating in the future and no events of default exist under the Indenture. As of March 31, 2014, the 2021 Notes were rated below investment grade. Any covenants that cease to apply to us as a result of achieving an investment grade rating will not be restored, even if the investment rating assigned to the 2021 Notes later falls below investment grade. We were in compliance with these covenants as of March 31, 2014.

Senior Secured Credit Facility

We are party to a $550.0 million senior secured revolving bank credit facility with JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Capital One, N.A., Wells Fargo Bank, N.A., Credit Agricole Corporate and Investment Bank and DnB NOR Bank ASA, as Co-Documentation Agent (as amended, the “2011 Credit Facility”), which is an important source of liquidity for us. The 2011 Credit Facility consists of a revolving credit facility, letter of credit sub-facility and swing line facility, all of which will mature no later than March 31, 2016.

The maximum amount that we may borrow under the facility may be subject to limitation due to the operation of the covenants contained in the facility. The 2011 Credit Facility allows us to request increases in the total commitments under the

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facility by up to $100.0 million in the aggregate in part or in full anytime during the term of the 2011 Credit Facility, with any such increases being subject to compliance with the restrictive covenants in the 2011 Credit Facility and in the Indenture governing our 2021 Senior Notes, as well as lender approval.

We capitalized $4.9 million of financing costs in connection with the execution of the 2011 Credit Facility and an additional $1.4 million related to a subsequent amendment that will be amortized over the term of the debt.

The interest rate per annum applicable to the 2011 Credit Facility is, at our option, (i) adjusted LIBOR plus the applicable margin or (ii) the higher of (x) JPMorgan’s prime rate, (y) the Federal Funds rate plus 0.5% and (z) one-month adjusted LIBOR plus 1.0%, plus in each case the applicable margin for all other loans. The applicable margin for LIBOR loans ranges from 225 to 300 basis points, and the applicable margin for all other loans ranges from 125 to 200 basis points, depending upon our consolidated total leverage ratio as defined in the 2011 Credit Facility. Unused commitment fees on the facility equal 0.50%.

The 2011 Credit Facility contains certain financial covenants, which, among other things, limit our annual capital expenditures, restrict our ability to repurchase shares and require us to maintain certain financial ratios. The financial ratios require that:

• our ratio of consolidated funded indebtedness to total capitalization be no greater than 45%;

• our senior secured leverage ratio of senior secured funded debt to trailing four quarters of earnings before interest, taxes, depreciation and amortization (as calculated pursuant to the terms of the 2011 Credit Facility, “EBITDA”) be no greater than 2.00 to 1.00;

• we maintain a collateral coverage ratio, the ratio of the aggregate book value of the collateral to the amount of the total commitments, as of the last day of any fiscal quarter of at least 2:00 to 1:00;

• we maintain a consolidated interest coverage ratio of trailing four quarters EBITDA to interest expense of at least 3.00 to 1.00; and

• we limit our capital expenditures and investments in foreign subsidiaries to $250.0 million per fiscal year, if the consolidated total leverage ratio exceeds 3.00 to 1.00.

In addition, the 2011 Credit Facility contains certain affirmative and negative covenants, including, without limitation, restrictions on (i) liens; (ii) debt, guarantees and other contingent obligations; (iii) mergers and consolidations; (iv) sales, transfers and other dispositions of property or assets; (v) loans, acquisitions, joint ventures and other investments (with acquisitions permitted so long as, after giving pro forma effect thereto, no default or event of default exists under the 2011 Credit Facility, the pro forma consolidated total leverage ratio does not exceed 4.00 to 1.00, we are in compliance with other financial covenants and we have at least $25.0 million of availability under the 2011 Credit Facility); (vi) dividends and other distributions to, and redemptions and repurchases from, equity holders; (vii) making investments, loans or advances; (viii) selling properties; (ix) prepaying, redeeming or repurchasing subordinated (contractually or structurally) debt; (x) engaging in transactions with affiliates; (xi) entering into hedging arrangements; (xii) entering into sale and leaseback transactions; (xiii) granting negative pledges other than to the lenders; (xiv) changes in the nature of business; (xv) amending organizational documents; and (xvi) changes in accounting policies or reporting practices; in each of the foregoing cases, with certain exceptions.

We were in compliance with these covenants as of March 31, 2014. We may prepay the 2011 Credit Facility in whole or in part at any time without premium or penalty, subject to certain reimbursements to the lenders for breakage and redeployment costs. As of March 31, 2014, we had borrowings of $85.0 million outstanding under the revolving credit facility, $51.1 million of letters of credit outstanding with borrowing capacity of $170.0 million available considering covenant constraints under our 2011 Credit Facility. The weighted average interest rates on the outstanding borrowings under the 2011 Credit Facility were 2.88% and 2.68% for the three-month periods ended March 31, 2014 and March 31, 2013, respectively.

Letter of Credit Facility

On November 7, 2013, we entered into an uncommitted, unsecured $15.0 million letter of credit facility to be used solely for the issuances of performance letters of credit. As of March 31, 2014, $2.0 million of letters of credit were outstanding under the facility.

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NOTE 8. OTHER INCOME

The table below presents comparative detailed information about our other income and expense, shown on the condensed consolidated statements of operations as “Other income, net” for the periods indicated:

	Three Months Ended March 31,
	2014			2013
	(in thousands)
Interest income	$	(18	)	$	(11	)
Foreign exchange (gain) loss	1,366			(925		)
Other, net	(1,417		)	(287		)
Total	$	(69	)	$	(1,223	)

NOTE 9. INCOME TAXES

We are subject to U.S. federal income tax as well as income taxes in multiple state and foreign jurisdictions. Our effective tax rates on continuing operations for the three months endedMarch 31, 2014 and 2013 were 39.3% and 75.3%, respectively. Our effective tax rate varies due to the mix of pre-tax profit between the U.S. and international taxing jurisdictions with varying statutory rates, the impact of permanent differences, and discrete tax adjustments, such as tax expense or benefit recognized for uncertain tax positions. The variance between our effective rate and the U.S. statutory rate reflects international profits and losses subject to varying statutory rates, the impact of permanent items, mainly non-deductible expenses such as fines and penalties, and expenses subject to statutorily imposed limitations such as meals and entertainment expenses, plus the impact of state income taxes.

As of March 31, 2014 and December 31, 2013, we had $0.9 million of unrecognized tax benefits, net of federal tax benefit, which, if recognized, would impact our effective tax rate. We recognized tax expense of less than $0.1 million for the three-month periods ended March 31, 2014 and 2013 related to these items. We have substantially concluded all U.S. federal and state tax matters through the year ended December 31, 2009.

We record interest and penalties related to unrecognized tax benefits as income tax expense. We have accrued a liability of $0.1 million and $0.4 million for the payment of interest and penalties as of March 31, 2014 and December 31, 2013, respectively. We believe that it is reasonably possible that $0.5 million of our currently remaining unrecognized tax positions, each of which is individually insignificant, may be recognized in the next twelve months as a result of a lapse of statute of limitations and settlement of ongoing audits. No release of our deferred tax asset valuation allowance was made during the three months ended March 31, 2014 and 2013.

NOTE 10. COMMITMENTS AND CONTINGENCIES

Litigation

Various suits and claims arising in the ordinary course of business are pending against us. We conduct business throughout the continental United States and may be subject to jury verdicts or arbitrations that result in outcomes in favor of the plaintiffs. We are also exposed to various claims abroad. We continually assess our contingent liabilities, including potential litigation liabilities, as well as the adequacy of our accruals and our need for the disclosure of these items, if any. We establish a provision for a contingent liability when it is probable that a liability has been incurred and the amount is reasonably approximated. We have $0.7 million of other liabilities related to litigation that is deemed probable and reasonably estimated as of March 31, 2014. We do not believe that the disposition of any of these matters will result in an additional loss materially in excess of amounts that have been recorded.

During the second and third quarter of 2013, three lawsuits with similar allegations of violations of California's wage and hour laws were filed in California. The lawsuits allege failure to pay overtime, failure to pay minimum wages, improper payroll deductions, failure to pay final wages in a timely manner, and violations of the California meal and break period laws, among other claims. We intend to vigorously investigate and defend these actions; however, because these cases are in the early stages, we cannot predict the outcome of these lawsuits at this time and, accordingly, cannot estimate any possible loss or range of loss.

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Self-Insurance Reserves

We maintain reserves for workers’ compensation and vehicle liability on our balance sheet based on our judgment and estimates using an actuarial method based on claims incurred. We estimate general liability claims on a case-by-case basis. We maintain insurance policies for workers’ compensation, vehicle liability and general liability claims. These insurance policies carry self-insured retention limits or deductibles on a per occurrence basis. The retention limits or deductibles are accounted for in our accrual process for all workers’ compensation, vehicular liability and general liability claims. As of March 31, 2014 and December 31, 2013, we have recorded $62.1 million of self-insurance reserves related to workers’ compensation, vehicular liabilities and general liability claims. Partially offsetting these liabilities, we had $19.2 million and $18.5 million of insurance receivables as of March 31, 2014 and December 31, 2013, respectively. We believe that the liabilities we have recorded are appropriate based on the known facts and circumstances and do not expect further losses materially in excess of the amounts already accrued for existing claims.

Environmental Remediation Liabilities

For environmental reserve matters, including remediation efforts for current locations and those relating to previously disposed properties, we record liabilities when our remediation efforts are probable and the costs to conduct such remediation efforts can be reasonably estimated. As of March 31, 2014 and December 31, 2013, we have recorded $6.1 million and $6.2 million, respectively, for our environmental remediation liabilities. We believe that the liabilities we have recorded are appropriate based on the known facts and circumstances and do not expect further losses materially in excess of the amounts already accrued.

NOTE 11. LOSS PER SHARE

Basic loss per share is determined by dividing net loss attributable to Key by the weighted average number of common shares actually outstanding during the period. Diluted loss per common share is based on the increased number of shares that would be outstanding assuming conversion of potentially dilutive outstanding securities using the treasury stock and “as if converted” methods.

The components of our loss per share are as follows:

	Three Months Ended March 31,
	2014			2013
	(in thousands, except per share amounts)
Basic and Diluted EPS Calculation:
Numerator
Loss attributable to Key	$	(11,899	)	$	(274	)
Denominator
Weighted average shares outstanding	152,927			151,967
Basic and diluted loss per share attributable to Key	$	(0.08	)	$	—

Stock options, warrants and stock appreciation rights (“SARs”) are included in the computation of diluted loss per share using the treasury stock method. Restricted stock awards are legally considered issued and outstanding when granted and are included in basic weighted average shares outstanding. The diluted loss per share calculations for the three months ended March 31, 2014 and March 31, 2013 exclude the potential exercise of 1.4 million and 1.8 million stock options, respectively, and 0.3 million and 0.4 million SARs, respectively, due to the loss attributable to Key. No events occurred after March 31, 2014 that would materially affect the number of weighted average shares outstanding.

NOTE 12. SHARE-BASED COMPENSATION

We recognized employee share-based compensation expense of $3.1 million and $6.0 million during the three months endedMarch 31, 2014 and 2013, respectively, and the related income tax benefit recognized was $1.2 million and $2.2 million for the same periods. We did not capitalize any share-based compensation during the three months ended March 31, 2014 and 2013.

The unrecognized compensation cost related to our unvested restricted stock as of March 31, 2014 is estimated to be $16.1 million and is expected to be recognized over a weighted-average period of 1.6 years. We do not have unrecognized cost related to our unvested stock options as of March 31, 2014. No phantom stock was outstanding as of March 31, 2014.

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On January 30, 2014, the Compensation Committee of the Board of Directors adopted the 2014 Performance Unit Plan (the “2014 PU Plan”) and granted performance units pursuant to the Performance Award Agreement (“2012 PU Award Agreement”) under the Key Energy Services, Inc. 2012 Equity and Cash Incentive Plan (the “2012 Plan”). We believe that the 2014 PU Plan and 2012 PU Award Agreement will enable us to obtain and retain employees who will contribute to our long term success by aligning the interests of our executives with the interests of our stockholders by providing compensation that is linked directly to increases in share value.

In January 2014, we issued 0.5 million performance units to our executive officers under the 2012 Plan with such material terms as set forth in the 2012 PU Award Agreement. In February 2014, we issued 0.1 million performance units to certain other employees under the 2014 PU Plan. The performance units are measured based on two performance periods from January 1, 2014 to December 31, 2014 and from January 1, 2015 to December 31, 2015. One half of the performance units are measured based on the first performance period, and the other half are measured based on the second performance period. The number of performance units that may be earned by a participant is determined at the end of each performance period based on the relative placement of Key’s total stockholder return for that period within the peer group, as follows:

Company Placement for the Performance Period	Percentile Ranking in Peer Group		Performance Units Earned as a Percentage of Target
First	100	%	200	%
Second	91	%	180	%
Third	82	%	160	%
Fourth	73	%	140	%
Fifth	64	%	120	%
Sixth	55	%	100	%
Seventh	45	%	75	%
Eighth	36	%	50	%
Ninth	27	%	25	%
Tenth	18	%	0	%
Eleventh	9	%	0	%
Twelfth	0	%	0	%

If any performance units vest for a given performance period, the award holder will be paid a cash amount equal to the vested percentage of the performance units multiplied by the closing stock price of our common stock on the last trading day of the performance period. We account for the performance units as a liability-type award as they are settled in cash. As of March 31, 2014, the fair value of outstanding performance units was $8.2 million, and is being accreted to compensation expense over the vesting terms of the awards. As of March 31, 2014, the unrecognized compensation cost related to our unvested performance units is estimated to be $5.5 million and is expected to be recognized over a weighted-average period of 1.4 years.

NOTE 13. TRANSACTIONS WITH RELATED PARTIES

Board of Director Relationships

A member of our board of directors is the Executive Vice President, General Counsel and Chief Administrative Officer of Anadarko Petroleum Corporation (“Anadarko”), which is one of our customers. Sales to Anadarko were approximately $8.8 million and $6.6 million for the three-month periods endedMarch 31, 2014 and2013, respectively. Receivables outstanding from Anadarko were approximately $3.4 million and $4.9 million as of March 31, 2014 and December 31, 2013, respectively. Transactions with Anadarko for our services are made on terms consistent with other customers.

NOTE 14. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The following is a summary of the carrying amounts and estimated fair values of our financial instruments as of March 31, 2014 and December 31, 2013.

Cash, cash equivalents, accounts receivable, accounts payable and accrued liabilities. These carrying amounts approximate fair value because of the short maturity of the instruments or because the carrying value is equal to the fair value of those instruments on the balance sheet date.

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	March 31, 2014				December 31, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Financial assets:
Notes receivable - Argentina operations sale	$	11,755	$	11,755	$	12,355	$	12,355
Financial liabilities:
6.75% Senior Notes	$	675,000	$	705,375	$	675,000	$	690,390
8.375% Senior Notes	—		—		3,573		3,627
Credit Facility revolving loans	85,000		85,000		85,000		85,000

Notes receivable — Argentina operations sale. The fair value of these notes receivable are based upon the quoted market Treasury rates as of the dates indicated. The carrying values of these items approximate their fair values due to the maturity dates rapidly approaching, thus giving way to discount rates that are similar.

6.75% Senior Notes due 2021. The fair value of these notes are based upon the quoted market prices for those securities as of the dates indicated. The carrying value of these notes as of March 31, 2014 was $675.0 million, and the fair value was $705.4 million (104.5% of carrying value).

8.375% Senior Notes due 2014. At December 31, 2013 the fair value of our 2014 Notes was based upon the quoted market prices for those securities as of the dates indicated. These notes were redeemed in February 2014.

Credit Facility Revolving Loans. Because of their variable interest rates, the fair values of the revolving loans borrowed under our 2013 Credit Facility approximate their carrying values. The carrying and fair values of these loans as of March 31, 2014 were $85.0 million.

NOTE 15. SEGMENT INFORMATION

Our operating segments are U.S. and International. We also have a “Functional Support” segment associated with managing each of our reportable operating segments. Our domestic rig services, fluid management services, fishing and rental services, and coiled tubing services are aggregated within our U.S. reportable segment. Our international rig services business and our Canadian technology development group are aggregated within our International reportable segment. We evaluate the performance of our operating segments based on revenue and income measures. All inter-segment sales pricing is based on current market conditions. The following is a description of the segments:

U.S. Segment

Rig-Based Services

Our rig-based services include the completion of newly drilled wells, workover and recompletion of existing oil and natural gas wells, well maintenance, and the plugging and abandonment of wells at the end of their useful lives. We also provide specialty drilling services to oil and natural gas producers with certain of our larger rigs that are capable of providing conventional and horizontal drilling services. Our rigs encompass various sizes and capabilities, allowing us to service all types of wells with depths up to 20,000 feet. Many of our rigs are outfitted with our proprietary KeyView® technology, which captures and reports well site operating data and provides safety control systems. We believe that this technology allows our customers and our crews to better monitor well site operations, improves efficiency and safety, and adds value to the services that we offer.

The completion and recompletion services provided by our rigs prepare wells for production, whether newly drilled, or recently extended through a workover operation. The completion process may involve selectively perforating the well casing to access production zones, stimulating and testing these zones, and installing tubular and downhole equipment. We typically provide a well service rig and may also provide other equipment to assist in the completion process. Completion services vary by well and our work may take a few days to several weeks to perform, depending on the nature of the completion.

The workover services that we provide are designed to enhance the production of existing wells and generally are more complex and time consuming than normal maintenance services. Workover services can include deepening or extending wellbores into new formations by drilling horizontal or lateral wellbores, sealing off depleted production zones and accessing previously bypassed production zones, converting former production wells into injection wells for enhanced recovery operations and conducting major subsurface repairs due to equipment failures. Workover services may last from a few days to several weeks, depending on the complexity of the workover.

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Maintenance services provided with our rig fleet are generally required throughout the life cycle of an oil or natural gas well. Examples of these maintenance services include routine mechanical repairs to the pumps, tubing and other equipment, removing debris and formation material from wellbores, and pulling rods and other downhole equipment from wellbores to identify and resolve production problems. Maintenance services are generally less complicated than completion and workover related services and require less time to perform.

Our rig fleet is also used in the process of permanently shutting-in oil or natural gas wells that are at the end of their productive lives. These plugging and abandonment services generally require auxiliary equipment in addition to a well servicing rig. The demand for plugging and abandonment services is not significantly impacted by the demand for oil and natural gas because well operators are required by state regulations to plug wells that are no longer productive.

Fluid Management Services

We provide transportation and well-site storage services for various fluids utilized in connection with drilling, completions, workover and maintenance activities. We also provide disposal services for fluids produced subsequent to well completion.  These fluids are removed from the well site and transported for disposal in saltwater disposal wells owned by us or a third party. In addition, we operate a fleet of hot oilers capable of pumping heated fluids used to clear soluble restrictions in a wellbore. Demand and pricing for these services generally correspond to demand for our well service rigs.

Coiled Tubing Services

Coiled tubing services involve the use of a continuous metal pipe spooled onto a large reel which is then deployed into oil and natural gas wells to perform various applications, such as wellbore clean-outs, nitrogen jet lifts, through-tubing fishing, and formation stimulations utilizing acid and chemical treatments. Coiled tubing is also used for a number of horizontal well applications such as milling temporary isolation plugs that separate frac zones, and various other pre- and post-hydraulic fracturing well preparation services.

Fishing and Rental Services

We offer a full line of services and rental equipment designed for use in providing both onshore and offshore drilling and workover services. Fishing services involve recovering lost or stuck equipment in the wellbore utilizing a broad array of “fishing tools.” Our rental tool inventory consists of drill pipe, tubulars, handling tools (including our patented Hydra-Walk^® pipe-handling units and services), pressure-control equipment, pumps, power swivels, reversing units, foam air units, frac stack equipment used to support hydraulic fracturing operations and the associated flowback of frac fluids, proppants, oil and natural gas. We also provide well testing services.

Demand for our fishing and rental services is closely related to capital spending by oil and natural gas producers, which is generally a function of oil and natural gas prices.

International Segment

Our International segment includes operations in Mexico, Colombia, Ecuador, the Middle East and Russia. In addition, we have a technology development and control systems business based in Canada. Also, we operated in Argentina prior to the sale of that business in the third quarter of 2012. We are reporting the results of our former Argentina business as discontinued operations for all periods presented. We provide rig-based services such as the maintenance, workover, recompletion of existing oil wells, completion of newly-drilled wells and plugging and abandonment of wells at the end of their useful lives in each of our international markets.

In addition, in Mexico we provide drilling, coiled tubing, wireline, project management and consulting services. Our work in Mexico also requires us to provide third party services that vary in scope by project.

In the Middle East, we operate in the Kingdom of Bahrain and Oman. On August 5, 2013, we agreed to the dissolution of AlMansoori Key Energy Services, LLC, a joint venture formed under the laws of Abu Dhabi, UAE, and the acquisition of the underlying business for $5.1 million. See “Note 3. Acquisition of Noncontrolling Interests” for further discussion.

Our Russian operations provide drilling, workover, and reservoir engineering services. On April 9, 2013, we completed the acquisition of the 50% noncontrolling interest in Geostream, a limited liability company incorporated in the Russian Federation, for $14.6 million. We now own 100% of Geostream. See “Note 3. Acquisition of Noncontrolling Interests” for further discussion.

Our technology development and control systems business based in Canada is focused on the development of hardware and software related to oilfield service equipment controls, data acquisition and digital information flow.

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Functional Support Segment

Our Functional Support segment includes unallocated overhead costs associated with administrative support for our U.S. and International reporting segments.

Financial Summary

The following tables set forth our unaudited segment information as of and for the three months ended March 31, 2014 and 2013 (in thousands):

As of and for the three months ended March 31, 2014
	U.S.		International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	324,044	$	32,097		$	—		$	—		$	356,141
Intersegment revenues	235		2,221			542			(2,998		)	—
Depreciation and amortization	40,703		7,904			2,488			—			51,095
Other operating expenses	247,684		34,684			28,800			—			311,168
Operating income (loss)	35,657		(10,491		)	(31,288		)	—			(6,122		)
Interest expense, net of amounts capitalized	—		2			13,552			—			13,554
Income (loss) before income taxes	36,422		(11,948		)	(44,081		)	—			(19,607		)
Long-lived assets(1)	1,635,709		311,286			282,931			(177,376		)	2,052,550
Total assets	2,841,405		474,533			(258,378		)	(505,933		)	2,551,627
Capital expenditures, excluding acquisitions	23,960		1,874			2,691			—			28,525

As of and for the three months ended March 31, 2013
	U.S.		International		Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	346,072	$	82,377	$	—		$	—		$	428,449
Intersegment revenues	8,601		1,519		124			(10,244		)	—
Depreciation and amortization	44,790		6,500		2,903			—			54,193
Other operating expenses	263,007		64,003		35,417			—			362,427
Operating income (loss)	38,275		11,874		(38,320		)	—			11,829
Interest expense, net of amounts capitalized	1		49		13,754			—			13,804
Income (loss) before income taxes	38,209		13,056		(52,017		)	—			(752		)
Long-lived assets(1)	1,701,593		339,485		272,990			(168,885		)	2,145,183
Total assets	2,593,050		544,236		85,141			(461,126		)	2,761,301
Capital expenditures, excluding acquisitions	23,310		10,967		2,867			—			37,144

(1) Long lived assets include fixed assets, goodwill, intangibles and other assets.

(2) Functional Support is geographically located in the United States.

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NOTE 16. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Our 2021 Notes are guaranteed by virtually all our domestic subsidiaries, all of which are wholly owned. The guarantees are joint and several, full, complete and unconditional. There are no restrictions on the ability of subsidiary guarantors to transfer funds to the parent company.

As a result of these guarantee arrangements, we are required to present the following condensed consolidating financial information pursuant to SEC Regulation S-X Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.”

CONDENSED CONSOLIDATING UNAUDITED BALANCE SHEETS
	March 31, 2014
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands) (unaudited)
Assets:
Current assets	$	62,058	$	376,446	$	60,573		$	—		$	499,077
Property and equipment, net	—		1,223,635		111,255			8,563			1,343,453
Goodwill	—		597,457		25,776			—			623,233
Deferred financing costs, net	13,198		—		—			—			13,198
Intercompany notes and accounts receivable and investment in subsidiaries	3,378,038		1,399,382		33,077			(4,810,497		)	—
Other assets	—		33,654		39,012			—			72,666
TOTAL ASSETS	$	3,453,294	$	3,630,574	$	269,693		$	(4,801,934	)	$	2,551,627
Liabilities and equity:
Current liabilities	$	12,303	$	174,864	$	28,803		$	—		$	215,970
Long-term debt and capital leases, less current portion	763,843		—		—			—			763,843
Intercompany notes and accounts payable	1,162,648		2,675,274		108,602			(3,946,524		)	—
Deferred tax liabilities	279,647		4,643		(1,966		)	—			282,324
Other long-term liabilities	1,200		54,657		(36		)	—			55,821
Equity	1,233,653		721,136		134,290			(855,410		)	1,233,669
TOTAL LIABILITIES AND EQUITY	$	3,453,294	$	3,630,574	$	269,693		$	(4,801,934	)	$	2,551,627

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CONDENSED CONSOLIDATING BALANCE SHEETS
	December 31, 2013
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Assets:
Current assets	$	50,321	$	398,188	$	57,644		$	—		$	506,153
Property and equipment, net	—		1,244,216		121,430			—			1,365,646
Goodwill	—		597,457		27,418			—			624,875
Deferred financing costs, net	13,897		—		—			—			13,897
Intercompany notes and accounts receivable and investment in subsidiaries	3,421,607		1,364,174		12,939			(4,798,720		)	—
Other assets	—		34,278		42,621			—			76,899
TOTAL ASSETS	$	3,485,825	$	3,638,313	$	262,052		$	(4,798,720	)	$	2,587,470
Liabilities and equity:
Current liabilities	$	26,097	$	182,497	$	23,750		$	—		$	232,344
Long-term debt and capital leases, less current portion	763,981		—		—			—			763,981
Intercompany notes and accounts payable	1,162,648		2,667,943		97,050			(3,927,641		)	—
Deferred tax liabilities	280,828		4,643		(1,819		)	801			284,453
Other long-term liabilities	1,195		54,486		(82		)	—			55,599
Equity	1,251,076		728,744		143,153			(871,880		)	1,251,093
TOTAL LIABILITIES AND EQUITY	$	3,485,825	$	3,638,313	$	262,052		$	(4,798,720	)	$	2,587,470

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended March 31, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	330,475		$	32,511		$	(6,845	)	$	356,141
Direct operating expense	—			236,658			24,471			(2,827		)	258,302
Depreciation and amortization expense	—			47,763			3,109			223			51,095
General and administrative expense	236			49,548			6,902			(3,820		)	52,866
Operating loss	(236		)	(3,494		)	(1,971		)	(421		)	(6,122		)
Interest expense, net of amounts capitalized	13,552			—			2			—			13,554
Other (income) loss, net	(671		)	(724		)	1,309			17			(69		)
Loss before income taxes	(13,117		)	(2,770		)	(3,282		)	(438		)	(19,607		)
Income tax (expense) benefit	—			5,971			(479		)	2,216			7,708
Net loss	(13,117		)	3,201			(3,761		)	1,778			(11,899		)
Income attributable to noncontrolling interest	—			—			—			—			—
LOSS ATTRIBUTABLE TO KEY	$	(13,117	)	$	3,201		$	(3,761	)	$	1,778		$	(11,899	)

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CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended March 31, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in thousands)
Revenues	$	124		$	405,384		$	43,490	$	(20,549	)	$	428,449
Direct operating expense	—			286,042			30,483		(17,343		)	299,182
Depreciation and amortization expense	—			52,057			2,136		—			54,193
General and administrative expense	254			57,821			8,852		(3,682		)	63,245
Operating income (loss)	(130		)	9,464			2,019		476			11,829
Interest expense, net of amounts capitalized	13,891			(136		)	49		—			13,804
Other (income) loss, net	(898		)	(1,169		)	37		807			(1,223		)
Income (loss) before income taxes	(13,123		)	10,769			1,933		(331		)	(752		)
Income tax (expense) benefit	1,248			(883		)	201		—			566
Net income (loss)	(11,875		)	9,886			2,134		(331		)	(186		)
Income attributable to noncontrolling interest	—			—			88		—			88
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(11,875	)	$	9,886		$	2,046	$	(331	)	$	(274	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Three Months Ended March 31, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by operating activities	$	—		$	44,278		$	1,416		$	—		$	45,694
Cash flows from investing activities:
Capital expenditures	—			(26,912		)	(1,613		)	—			(28,525		)
Intercompany notes and accounts	—			(19,651		)	—			19,651			—
Other investing activities, net				1,774			—			—			1,774
Net cash used in investing activities	—			(44,789		)	(1,613		)	19,651			(26,751		)
Cash flows from financing activities:
Repayments of long-term debt	(3,573		)	—			—			—			(3,573		)
Proceeds from borrowings on revolving credit facility	70,000			—			—			—			70,000
Repayments on revolving credit facility	(70,000		)	—			—			—			(70,000		)
Repurchases of common stock	(2,151		)	—			—			—			(2,151		)
Intercompany notes and accounts	19,651			—			—			(19,651		)	—
Other financing activities, net	(1,210		)	—			—			—			(1,210		)
Net cash provided by (used in) financing activities	12,717			—			—			(19,651		)	(6,934		)
Effect of changes in exchange rates on cash	—			—			634			—			634
Net increase (decrease) in cash and cash equivalents	12,717			(511		)	437			—			12,643
Cash and cash equivalents at beginning of period	23,115			788			4,403			—			28,306
Cash and cash equivalents at end of period	$	35,832		$	277		$	4,840		$	—		$	40,949

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CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Three Months Ended March 31, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by operating activities	$	—		$	17,509		$	2,053		$	—		$	19,562
Cash flows from investing activities:
Capital expenditures	—			(33,410		)	(3,734		)	—			(37,144		)
Intercompany notes and accounts	—			29,505			—			(29,505		)	—
Other investing activities, net	—			(14,241		)	—			—			(14,241		)
Net cash used in investing activities	—			(18,146		)	(3,734		)	(29,505		)	(51,385		)
Cash flows from financing activities:
Repayment of capital lease obligations	—			(264		)	—			—			(264		)
Proceeds from borrowings on revolving credit facility	95,000			—			—			—			95,000
Repayments on revolving credit facility	(65,000		)	—			—			—			(65,000		)
Payment of deferred financing costs	(46		)	—			—			—			(46		)
Repurchases of common stock	(2,462		)	—			—			—			(2,462		)
Intercompany notes and accounts	(29,505		)	—			—			29,505			—
Other financing activities, net	(1,402		)	—			—			—			(1,402		)
Net cash provided by (used in) financing activities	(3,415		)	(264		)	—			29,505			25,826
Effect of changes in exchange rates on cash	—			—			(52		)	—			(52		)
Net decrease in cash and cash equivalents	(3,415		)	(901		)	(1,733		)	—			(6,049		)
Cash and cash equivalents at beginning of period	39,617			1,601			4,731			—			45,949
Cash and cash equivalents at end of period	$	36,202		$	700		$	2,998		$	—		$	39,900

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Key Energy Services, Inc., and its wholly owned subsidiaries (collectively, “Key,” the “Company,” “we,” “us,” “its,” and “our”) provide a full range of well services to major oil companies, foreign national oil companies and independent oil and natural gas production companies. Our services include rig-based and coiled tubing-based well maintenance and workover services, well completion and recompletion services, fluid management services, fishing and rental services, and other ancillary oilfield services. Additionally, certain rigs are capable of specialty drilling applications. We operate in most major oil and natural gas producing regions of the continental United States and have operations in Mexico, Colombia, Ecuador, the Middle East and Russia. In addition, we have a technology development and control systems business based in Canada.

The following discussion and analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes as of and for the three months ended March 31, 2014 and 2013, included elsewhere herein, and the audited consolidated financial statements and notes thereto included in our 2013 Form 10-K.

We operate in two business segments; U.S. and International. We also have a “Functional Support” segment associated with managing our U.S. and International business segments. See “Note 15. Segment Information” in “Item 1. Financial Statements” of Part I of this report for a summary of our business segments.

PERFORMANCE MEASURES

The Baker Hughes U.S. rig count data, which is publicly available on a weekly basis, is often used as an indicator of overall Exploration and Production (“E&P”) company spending and broader oilfield activity. In assessing overall activity in the U.S. onshore oilfield service industry in which we operate, we believe that the Baker Hughes U.S. land drilling rig count is the best available barometer of E&P companies' capital spending and resulting activity levels. Historically, our activity levels have been highly correlated to U.S. onshore capital spending by our E&P company customers as a group.

	WTI Cushing Oil(1)		NYMEX Henry Hub Natural Gas(1)		Average Baker Hughes U.S. Land Drilling Rigs(2)
2014:
First Quarter	$	98.68	$	5.18	1,779
2013:
First Quarter	$	94.33	$	3.49	1,706
Second Quarter	$	94.05	$	4.02	1,710
Third Quarter	$	105.83	$	3.55	1,709
Fourth Quarter	$	97.50	$	3.84	1,697

(1) Represents the average of the monthly average prices for each of the periods presented. Source: EIA and Bloomberg

(2) Source: www.bakerhughes.com

Internally, we measure activity levels for our well servicing operations primarily through our rig and trucking hours. Generally, as capital spending by E&P companies increases, demand for our services also rises, resulting in increased rig and trucking services and more hours worked. Conversely, when activity levels decline due to lower spending by E&P companies, we generally provide fewer rig and trucking services, which results in lower hours worked.

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In the U.S., our rig activity occurs primarily on weekdays during daylight hours. Accordingly, we track U.S. rig activity on a “per U.S. working day” basis. Key's U.S. working days per quarter, which exclude national holidays, are indicated in the table below. Our international rig activity and domestic trucking activity tend to occur on a 24/7 basis. Accordingly, we track our international rig activity and our domestic trucking activity on a “per calendar day” basis. The following table presents our quarterly rig and trucking hours from 2013 through the first quarter of 2014:

	Rig Hours			Trucking Hours	Key’s U.S.  Working Days(1)
2014:	U.S.	International	Total
First Quarter	347,047	46,090	393,137	481,353	63
Total 2014	347,047	46,090	393,137	481,353	63
2013:
First Quarter	337,714	114,103	451,817	580,862	62
Second Quarter	365,956	65,280	431,236	559,584	64
Third Quarter	360,112	55,105	415,217	524,513	64
Fourth Quarter	343,626	46,553	390,179	507,636	62
Total 2013	1,407,408	281,041	1,688,449	2,172,595	252

(1) Key's U.S. working days are the number of weekdays during the quarter minus national holidays.

MARKET CONDITIONS AND OUTLOOK

Market Conditions — Quarter Ended March 31, 2014

Our core businesses depend on our customers' willingness to make expenditures to produce, develop and explore for oil and natural gas. Industry conditions are influenced by numerous factors, such as the supply of and demand for oil and natural gas, domestic and worldwide economic conditions, and political instability in oil producing countries.

First quarter 2014 U.S. revenues were comparable to the fourth quarter of 2013. First quarter 2014 results were impacted primarily by seasonal effects and multiple severe weather events across all lines of businesses. Operating income margins were impacted by seasonal factors and costs associated with rig mobilization, primarily from Mexico to the U.S.

Internationally, revenues were down 15.7% compared to fourth quarter 2013. Our International results were impacted by the continued activity slowdown in the North Region of Mexico, our principal operating region. Operating income margins were impacted by lower activity and severance.

Market Outlook

We continue to position Key to benefit from improving activity in many of our core markets through balanced service offerings across the wells’ life, giving Key exposure to unconventional horizontal well and legacy vertical well activities. We believe that the high value service we provide across the well life cycle yields many opportunities for Key.

                We expect our completions-driven businesses will see a meaningful improvement and benefit from the unconventional horizontal completion activity in many of our principal operating regions for the remainder of 2014. We have seen an increase in large-scale production-oriented tenders which, after evaluation by large operators, should result in the execution of new large-scale projects. We believe underlying demand for our production-driven services will remain strong and should improve as we move through the year as operators execute on large-scale projects.

                Internationally, we are taking necessary actions to insulate ourselves from further losses and allow us to operate profitably as we await the benefits of Mexican energy reform. We successfully relocated twelve rigs from Mexico to the U.S. during the first quarter and will likely redeploy a similar number in order to take advantage of actionable opportunities in the U.S. and reduce our fixed cost structure internationally. We expect activity in Mexico, especially in the North Region where we primarily operate, to remain limited as Petróleos Mexicanos (“Pemex”) waits for a response from Mexico's National Hydrocarbons Commission to determine which assets Pemex will operate post “Round Zero”.

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RESULTS OF OPERATIONS

The following table shows our consolidated results of operations for the three months endedMarch 31, 2014 and 2013, respectively (in thousands):

	Three Months Ended March 31,
	2014			2013
REVENUES	$	356,141		$	428,449
COSTS AND EXPENSES:
Direct operating expenses	258,302			299,182
Depreciation and amortization expense	51,095			54,193
General and administrative expenses	52,866			63,245
Operating income (loss)	(6,122		)	11,829
Interest expense, net of amounts capitalized	13,554			13,804
Other income, net	(69		)	(1,223		)
Loss before income taxes	(19,607		)	(752		)
Income tax benefit	7,708			566
Net loss	(11,899		)	(186		)
Income attributable to noncontrolling interest	—			88
LOSS ATTRIBUTABLE TO KEY	$	(11,899	)	$	(274	)

Consolidated Results of Operations — Three Months Ended March 31, 2014 and 2013

Revenues

Our revenues for the three months ended March 31, 2014 decreased $72.3 million, or 16.9%, to $356.1 million from $428.4 million for the three months ended March 31, 2013, mostly due to lower demand for our rig-based services in the U.S. and reduced customer activity in Mexico. See “Segment Operating Results — Three Months Ended March 31, 2014 and 2013” below for a more detailed discussion of the change in our revenues.

Direct Operating Expenses

Our direct operating expenses decreased $40.9 million, to $258.3 million (72.5% of revenues), for the three months ended March 31, 2014, compared to $299.2 million (69.8% of revenues) for the three months ended March 31, 2013. The decrease was a direct result of lower activity in Rig-Based Services primarily in California, the Permian Basin and Mexico.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased $3.1 million, or 5.7%, to $51.1 million during the three months ended March 31, 2014, compared to $54.2 million for the three months ended March 31, 2013. The decrease is primarily attributable to decreases in capital expenditures.

General and Administrative Expenses

General and administrative expenses decreased $10.4 million, to $52.9 million (14.8% of revenues), for the three months ended March 31, 2014, compared to $63.2 million (14.8% of revenues) for the three months ended March 31, 2013. The decrease is primarily due to cost cutting initiatives in all of our businesses, with the Fluid Management Services area leading the way.

Interest Expense, Net of Amounts Capitalized

Interest expense decreased $0.3 million, or 1.8%, to $13.6 million for the three months ended March 31, 2014, compared to $13.8 million for the same period in 2013. The decrease is primarily related to reduced borrowings under the revolving credit facility for the three months ended March 31, 2014 compared to the same period in 2013.

Other Income, Net

During the quarter ended March 31, 2014, we recognized other income, net, of $0.1 million, compared to other income, net, of $1.2 million for the quarter ended March 31, 2013. Our foreign exchange loss relates to U.S. dollar-denominated transactions in our foreign businesses and fluctuations in exchange rates between local currencies and the U.S. dollar.

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The following table summarizes the components of other income, net for the periods indicated:

	Three Months Ended March 31,
	2014			2013
	(in thousands)
Interest income	$	(18	)	$	(11	)
Foreign exchange (gain) loss	1,366			(925		)
Other, net	(1,417		)	(287		)
Total	$	(69	)	$	(1,223	)

Income Tax Benefit

We recorded income tax benefit of $7.7 million on pre-tax loss of $19.6 million in the three months ended March 31, 2014, compared to income tax benefit of $0.6 million on pre-tax loss of $0.8 million in the three months ended March 31, 2013. Our effective tax rate was 39.3% for the three months ended March 31, 2014, compared to 75.3% for the three months ended March 31, 2013. Our effective tax rates for such periods differ from the U.S. statutory rate of 35% due to a number of factors, including the mix of profit and loss between domestic and international taxing jurisdictions and the impact of permanent items that affect book income but do not affect taxable income.

Noncontrolling Interests

We have no noncontrolling interest holders in 2014. For the three months ended March 31, 2013, we allocated $0.1 million associated with the income incurred by our joint ventures to the noncontrolling interests holders of these ventures.

Segment Operating Results — Three Months Ended March 31, 2014 and 2013

The following table shows operating results for each of our segments for the three months ended March 31, 2014 and 2013 (in thousands):

For the three months ended March 31, 2014
	U.S.		International			Functional Support			Total
Revenues from external customers	$	324,044	$	32,097		$	—		$	356,141
Operating expenses	288,387		42,588			31,288			362,263
Operating income (loss)	35,657		(10,491		)	(31,288		)	(6,122		)

For the three months ended March 31, 2013
	U.S.		International		Functional Support			Total
Revenues from external customers	$	346,072	$	82,377	$	—		$	428,449
Operating expenses	307,797		70,503		38,320			416,620
Operating income (loss)	38,275		11,874		(38,320		)	11,829

U.S.

Revenues for our U.S. segment decreased $22.0 million, or 6.4%, to $324.0 million for the three months ended March 31, 2014, compared to $346.1 million for the three months ended March 31, 2013. The decrease for this segment was due to reduced customer spending, primarily in California and the Permian Basin.

Operating expenses for our U.S. segment were $288.4 million during the three months ended March 31, 2014, which represented a decrease of $19.4 million, or 6.3%, compared to $307.8 million for the same period in 2013. The decrease was directly attributable to lower activity and improved cost control initiatives.

International

Revenues for our International segment decreased $50.3 million, or 61.0%, to $32.1 million for the three months ended March 31, 2014, compared to $82.4 million for the three months ended March 31, 2013. The decrease was primarily attributable to lower customer activity in Mexico.

Operating expenses for our International segment decreased $27.9 million, or 39.6%, to $42.6 million for the three months ended March 31, 2014, compared to $70.5 million for the three months ended March 31, 2013. These expenses decreased as a direct result of lower customer activity in Mexico.

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Functional Support

Operating expenses for Functional Support, which represent expenses associated with managing our U.S. and International reporting segments, decreased $7.0 million, or 18.4%, to $31.3 million (8.8% of consolidated revenues) for the three months ended March 31, 2014 compared to $38.3 million (8.9% of consolidated revenues) for the same period in 2013.

LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition and Liquidity

As of March 31, 2014, we had cash and cash equivalents of $40.9 million. Our adjusted working capital (working capital excluding the current portion of capital lease obligations) was $283.1 million as of March 31, 2014, compared to $277.4 million as of December 31, 2013. Our adjusted working capital increased from the prior year end primarily as a result of an increase in cash and cash equivalents, inventory and decrease in accrued interest, partially offset by reduced accounts receivable. Our total outstanding debt was $763.8 million, and we have no significant debt maturities until 2016. As of March 31, 2014, we have $85.0 million in borrowings, $51.1 million in committed letters of credit outstanding with borrowing capacity of $170.0 million available considering covenant constraints under our 2011 Credit Facility (defined below).

Cash Flows

The following table summarizes our cash flows for the three-month periods ended March 31, 2014 and 2013:

	Three Months Ended March 31,
	2014			2013
	(in thousands)
Net cash provided by operating activities	$	45,694		$	19,562
Cash paid for capital expenditures	(28,525		)	(37,144		)
Proceeds received from sale of fixed assets	1,174			374
Proceeds received from sale of assets held for sale	600			—
Restricted funds held in escrow	—			(14,615		)
Repayments of capital lease obligations	—			(264		)
Repayments of long-term debt	(3,573		)	—
Proceeds from borrowings on revolving credit facility	70,000			95,000
Repayments on revolving credit facility	(70,000		)	(65,000		)
Repurchases of common stock	(2,151		)	(2,462		)
Other financing activities, net	(1,210		)	(1,448		)
Effect of exchange rates on cash	634			(52		)
Net increase (decrease) in cash and cash equivalents	$	12,643		$	(6,049	)

Cash provided by operating activities was $45.7 million and $19.6 million for the three months ended March 31, 2014 and 2013, respectively.

Cash used in investing activities was $26.8 million and $51.4 million for three months endedMarch 31, 2014 and 2013, respectively. Investing cash outflows during these periods consisted primarily of capital expenditures. Our capital expenditures through March 31, 2014 primarily relate to replacement assets for our existing fleet and equipment. Additionally, during the first quarter of 2013, as previously disclosed, we funded into escrow $14.6 million for the acquisition of the 50% noncontrolling interest in Geostream, our joint venture in Russia.

Cash used in financing activities was $6.9 million during the three months endedMarch 31, 2014, compared to cash provided by financing activities of $25.8 million during the three months ended March 31, 2013. Overall financing cash outflows for 2014 primarily related to repayments of long-term debt. Overall financing cash inflows for 2013 primarily relate to net proceeds on the 2011 Credit Facility.

Sources of Liquidity and Capital Resources

Our sources of liquidity include our current cash and cash equivalents, availability under our 2011 Credit Facility and internally generated cash flows from operations.

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Debt Service

We do not have any maturities of debt until 2016. Interest on our 2011 Credit Facility is due each quarter. Interest to be paid for the remainder of 2014 is approximately $23.0 million related to our 2021 Notes (defined below). We expect to fund interest payments from cash generated by operations. At March 31, 2014, our annual debt maturities for our 2021 Notes and borrowings under our 2011 Credit Facility were as follows:

Year	Principal Payments
	(in thousands)
2014	$	—
2015	—
2016	85,000
2017	—
2018 and thereafter	675,000
Total principal payments	$	760,000

At March 31, 2014, we were in compliance with all the covenants under the 2011 Credit Facility and the indentures governing the 2021 Notes.

8.375% Senior Notes due 2014

On February 25, 2014, we redeemed the $3.6 million aggregate principal amount and paid $0.1 million accrued interest of 8.375% Senior Notes that were due on March 27, 2014 (the “2014 Notes”) pursuant to the indenture dated as of November 29, 2007 (as supplemented, the “Indenture”). The 2014 Notes were general unsecured senior obligations were subordinate to all of our existing and future secured indebtedness. The 2014 Notes were jointly and severally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries. Interest on the 2014 Notes was payable on June 1 and December 1 of each year.

6.75% Senior Notes due 2021

We issued $475.0 million aggregate principal amount of 6.75% Senior Notes due 2021 (the “Initial 2021 Notes”) on March 4, 2011 and issued an additional $200.0 million aggregate principal amount of the 2021 Notes (the “Additional 2021 Notes” and, together with the Initial 2021 Notes, the “2021 Notes”) in a private placement on March 8, 2012 under an indenture dated March 4, 2011 (the “Base Indenture”), as supplemented by a first supplemental indenture dated March 4, 2011 and amended by a further supplemental indenture dated March 8, 2012 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). We used the net proceeds to repay senior secured indebtedness under our revolving bank credit facility. We capitalized $4.6 million of financing costs associated with the issuance of the 2021 Notes that will be amortized over the term of the notes.

On March 5, 2013, we completed an offer to exchange the $200.0 million in aggregate principal amount of unregistered Additional 2021 Notes for an equal principal amount of such notes registered under the Securities Act of 1933. All of the 2021 Notes are treated as a single class under the Indenture and as of the closing of the exchange offer, bear the same CUSIP and ISIN numbers.

The 2021 Notes are general unsecured senior obligations and are effectively subordinated to all of our existing and future secured indebtedness. The 2021 Notes are or will be jointly and severally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries. Interest on the 2021 Notes is payable on March 1 and September 1 of each year. The 2021 Notes mature on March 1, 2021.

On or after March 1, 2016, the 2021 Notes will be subject to redemption at any time and from time to time at our option, in whole or in part, at the redemption prices below (expressed as percentages of the principal amount redeemed), plus accrued and unpaid interest to the applicable redemption date, if redeemed during the twelve-month period beginning on March 1 of the years indicated below:

Year	Percentage
2016	103.375	%
2017	102.250	%
2018	101.125	%
2019 and thereafter	100.000	%

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At any time and from time to time prior to March 1, 2016, we may, at our option, redeem all or a portion of the 2021 Notes at a redemption price equal to 100% of the principal amount plus a premium with respect to the 2021 Notes plus accrued and unpaid interest to the redemption date. The premium is the excess of (i) the present value of the redemption price of 103.375 of the principal amount, plus all remaining scheduled interest payments due through March 1, 2016 discounted at the treasury rate plus 0.50% over (ii) the principal amount of the note. If we experience a change of control, subject to certain exceptions, we must give holders of the 2021 Notes the opportunity to sell to us their 2021 Notes, in whole or in part, at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest to the date of purchase.

We are subject to certain negative covenants under the Indenture. The Indenture limits our ability to, among other things:

• incur additional indebtedness and issue preferred equity interests;

• pay dividends or make other distributions or repurchase or redeem equity interests;

• make loans and investments;

• enter into sale and leaseback transactions;

• sell, transfer or otherwise convey assets;

• create liens;

• enter into transactions with affiliates;

• enter into agreements restricting subsidiaries’ ability to pay dividends;

• designate future subsidiaries as unrestricted subsidiaries; and

• consolidate, merge or sell all or substantially all of the applicable entities’ assets.

These covenants are subject to certain exceptions and qualifications, and contain cross-default provisions relating to the covenants of our 2011 Credit Facility discussed below. Substantially all of the covenants will terminate before the 2021 Notes mature if one of two specified ratings agencies assigns the 2021 Notes an investment grade rating in the future and no events of default exist under the Indenture. As of March 31, 2014, the 2021 Notes were rated below investment grade. Any covenants that cease to apply to us as a result of achieving an investment grade rating will not be restored, even if the investment rating assigned to the 2021 Notes later falls below investment grade. We were in compliance with these covenants at March 31, 2014.

Senior Secured Credit Facility

We are party to a $550.0 million senior secured revolving bank credit facility with JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Capital One, N.A., Wells Fargo Bank, N.A., Credit Agricole Corporate and Investment Bank and DnB NOR Bank ASA, as Co-Documentation Agent (as amended, the “2011 Credit Facility”), which is an important source of liquidity for us. The 2011 Credit Facility consists of a revolving credit facility, letter of credit sub-facility and swing line facility, all of which will mature no later than March 31, 2016.

The maximum amount that we may borrow under the facility may be subject to limitation due to the operation of the covenants contained in the facility. The 2011 Credit Facility allows us to request increases in the total commitments under the facility by up to $100.0 million in the aggregate in part or in full anytime during the term of the 2011 Credit Facility, with any such increases being subject to compliance with the restrictive covenants in the 2011 Credit Facility and in the Indenture governing our 2021 Senior Notes, as well as lender approval.

We capitalized $4.9 million of financing costs in connection with the execution of the 2011 Credit Facility and an additional $1.4 million related to a subsequent amendment that will be amortized over the term of the debt.

The interest rate per annum applicable to the 2011 Credit Facility is, at our option, (i) adjusted LIBOR plus the applicable margin or (ii) the higher of (x) JPMorgan’s prime rate, (y) the Federal Funds rate plus 0.5% and (z) one-month adjusted LIBOR plus 1.0%, plus in each case the applicable margin for all other loans. The applicable margin for LIBOR loans ranges from 225 to 300 basis points, and the applicable margin for all other loans ranges from 125 to 200 basis points, depending upon our consolidated total leverage ratio as defined in the 2011 Credit Facility. Unused commitment fees on the facility equal 0.50%.

The 2011 Credit Facility contains certain financial covenants, which, among other things, limit our annual capital expenditures, restrict our ability to repurchase shares and require us to maintain certain financial ratios. The financial ratios require that:

• our ratio of consolidated funded indebtedness to total capitalization be no greater than 45%;

• our senior secured leverage ratio of senior secured funded debt to trailing four quarters of earnings before interest, taxes, depreciation and amortization (as calculated pursuant to the terms of the 2011 Credit Facility, “EBITDA”) be no greater than 2.00 to 1.00;

30

• we maintain a collateral coverage ratio, the ratio of the aggregate book value of the collateral to the amount of the total commitments, as of the last day of any fiscal quarter of at least 2:00 to 1:00;

• we maintain a consolidated interest coverage ratio of trailing four quarters EBITDA to interest expense of at least 3.00 to 1.00; and

• we limit our capital expenditures and investments in foreign subsidiaries to $250.0 million per fiscal year, if the consolidated total leverage ratio exceeds 3.00 to 1.00.

In addition, the 2011 Credit Facility contains certain affirmative and negative covenants, including, without limitation, restrictions on (i) liens; (ii) debt, guarantees and other contingent obligations; (iii) mergers and consolidations; (iv) sales, transfers and other dispositions of property or assets; (v) loans, acquisitions, joint ventures and other investments (with acquisitions permitted so long as, after giving pro forma effect thereto, no default or event of default exists under the 2011 Credit Facility, the pro forma consolidated total leverage ratio does not exceed 4.00 to 1.00, we are in compliance with other financial covenants and we have at least $25.0 million of availability under the 2011 Credit Facility); (vi) dividends and other distributions to, and redemptions and repurchases from, equity holders; (vii) making investments, loans or advances; (viii) selling properties; (ix) prepaying, redeeming or repurchasing subordinated (contractually or structurally) debt; (x) engaging in transactions with affiliates; (xi) entering into hedging arrangements; (xii) entering into sale and leaseback transactions; (xiii) granting negative pledges other than to the lenders; (xiv) changes in the nature of business; (xv) amending organizational documents; and (xvi) changes in accounting policies or reporting practices; in each of the foregoing cases, with certain exceptions. We were in compliance with these covenants at March 31, 2014. We may prepay the 2011 Credit Facility in whole or in part at any time without premium or penalty, subject to certain reimbursements to the lenders for breakage and redeployment costs. As of March 31, 2014, we had borrowings of $85.0 million outstanding under the revolving credit facility, $51.1 million of letters of credit outstanding with borrowing capacity of $170.0 million available considering covenant constraints under our 2011 Credit Facility. The weighted average interest rates on the outstanding borrowings under the 2011 Credit Facility were 2.88% and 2.68% for the three-month periods ended March 31, 2014 and March 31, 2013.

Letter of Credit Facility

On November 7, 2013, we entered into an uncommitted, unsecured $15.0 million letter of credit facility to be used solely for the issuances of performance letters of credit. As of March 31, 2014, $2.0 million of letters of credit were outstanding under the facility.

Off-Balance Sheet Arrangements

At March 31, 2014 we did not, and we currently do not, have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Liquidity Outlook and Future Capital Requirements

As of March 31, 2014, we had cash and cash equivalents of $40.9 million, borrowing capacity of $170.0 million available considering covenant constraints under the 2011 Credit Facility, and no significant debt maturities until 2016. We believe that our internally generated cash flows from operations and current reserves of cash and cash equivalents will be sufficient to finance the majority of our cash requirements for operations, budgeted capital expenditures, and debt service for the next twelve months. Also, as we have historically done, we may, from time to time, access available funds under our 2011 Credit Facility to supplement our liquidity to meet cash requirements for day-to-day operations and times of peak needs throughout the year. Our planned capital expenditures, as well as any acquisitions we choose to pursue, could be financed through a combination of cash on hand, borrowings under our 2011 Credit Facility and, in the case of acquisitions, equity.

Capital Expenditures

During the three months ended March 31, 2014, our capital expenditures totaled $28.5 million, primarily related to the ongoing replacement to our rig service fleet, coiled tubing units, fluid transportation equipment and rental equipment. Our capital expenditure plan for 2014 of $198.0 million is primarily related to equipment replacement needs, including ongoing replacement to our rig services fleet. Our capital expenditure program for 2014 is subject to market conditions, including activity levels, commodity prices, industry capacity and specific customer needs. Our focus for 2014 has been and continues to be the maximization of our current equipment fleet, but we may choose to increase our capital expenditures in 2014 to increase market share or expand our presence into a new market. We may also incur capital expenditures for strategic investments and acquisitions. We currently anticipate funding our 2014 capital expenditures through a combination of cash on hand, operating cash flow, and borrowings under our 2011 Credit Facility. Should our operating cash flows or activity levels prove to be insufficient to fund our currently planned capital spending levels, management expects it will adjust our capital spending plans accordingly. We may also incur capital expenditures for strategic investments and acquisitions.

31

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our quantitative and qualitative disclosures about market risk from those disclosed in our 2013 Form 10-K. More detailed information concerning market risk can be found in “Item 7A. Quantitative and Qualitative Disclosures about Market Risk“ in our 2013 Form 10-K.

ITEM 4.     CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, management performed, with the participation of our Chief Executive Officer and our Chief Financial Officer, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on this evaluation, management concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the first quarter of 2014 that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are subject to various suits and claims that have arisen in the ordinary course of business. We do not believe that the disposition of any of our ordinary course litigation will result in a material adverse effect on our consolidated financial position, results of operations or cash flows. For additional information on legal proceedings, see “Note 10. Commitments and Contingencies” in “Item 1. Financial Statements” of Part I of this report, which is incorporated herein by reference.

Government Investigation

The U.S. Securities and Exchange Commission has advised us that it is investigating possible violations of the U.S. Foreign Corrupt Practices Act involving business activities of Key’s operations in Russia. We take any such allegations very seriously and are conducting an investigation into the allegations. We are fully cooperating with and sharing the results of our investigation with the Commission. While the outcome of our investigation is currently not determinable, we do not expect that it will have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

ITEM 1A. RISK FACTORS

Reference is made to Part I, Item 1A. Risk Factors of the 2013 Form 10-K for information concerning risk factors. We are updating these risk factors to add the first risk factor set forth below and to amend the second risk factor set forth below. The following risk factors should be read in conjunction with the other risk factors set forth in the 2013 Form 10-K. You should carefully consider such risk factors, which could materially affect our business, financial condition or future results. The risks described in this Quarterly Report on Form 10-Q and in the 2013 Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our financial condition and results of operations.

Compliance with new regulations regarding the use of “conflict minerals” could limit the supply and increase the cost of certain metals used in manufacturing our products.

Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) requires the SEC to promulgate new disclosure requirements for manufacturers of products containing certain minerals which are mined from the Democratic Republic of Congo and adjoining countries. These “conflict minerals” are commonly found in metals used in the manufacture of semiconductors. Manufacturers are also required to disclose their efforts to prevent the sourcing of such minerals and metals produced from them. The new disclosure rules will take effect in May 2014. The implementation of these new regulations may limit the sourcing and availability of some of the metals used in the manufacture of our products. The regulations may also reduce the number of suppliers who provide conflict-free metals, and may affect our ability to obtain products in sufficient quantities or at competitive prices. Finally, some of our customers may elect to disqualify us as a supplier if we are unable to verify that the metals used in our products are free of conflict minerals.

We are subject to the economic, political and social instability risks of doing business in certain foreign countries.

We currently have operations based in Mexico, Colombia, Ecuador, the Middle East and Russia and we own a technology development and control systems business based in Canada. In the future, we may expand our operations into other foreign countries. As a result, we are exposed to risks of international operations, including:

• increased governmental ownership and regulation of the economy in the markets in which we operate;

• inflation and adverse economic conditions stemming from governmental attempts to reduce inflation, such as imposition of higher interest rates and wage and price controls;

• economic and financial instability of national oil companies;

• increased trade barriers, such as higher tariffs and taxes on imports of commodity products;

• exposure to foreign currency exchange rates;

• exchange controls or other currency restrictions;

• war, civil unrest or significant political instability;

• restrictions on repatriation of income or capital;

• expropriation, confiscatory taxation, nationalization or other government actions with respect to our assets located in the markets where we operate;

• governmental policies limiting investments by and returns to foreign investors;

• labor unrest and strikes;

• deprivation of contract rights; and

• restrictive governmental regulation and bureaucratic delays.

33

The occurrence of one or more of these risks may:

• negatively impact our results of operations;

• restrict the movement of funds and equipment to and from affected countries; and

• inhibit our ability to collect receivables.

Our wholly owned subsidiary, Geostream, provides drilling, workover and reservoir engineering services in Russia.  Russia has in recent months and is presently increasing its political influence in Ukraine, as evidenced by recently annexing the Crimean peninsula and amassing troops on the border with Ukraine, threatening an invasion of Ukraine. Continued political instability, deteriorating macroeconomic conditions and actual or threatened military action in the region could have a material adverse effect on our subsidiary’s operations in the region and on the result of operations of our International segment.

ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

During the three months ended March 31, 2014, we repurchased the shares shown in the table below to satisfy tax withholding obligations upon the vesting of restricted stock awarded to certain of our employees:

Period	Number of Shares Purchased	Average Price Paid per Share(1)
January 1, 2014 to January 31, 2014	116,367	$	7.78
February 1, 2014 to February 28, 2014	148,650	7.26
March 1, 2014 to March 31, 2014	11,265	8.70
Total	276,282	$	7.54

(1) The price paid per share with respect to the tax withholding repurchases was determined using the closing prices on the applicable vesting date, as quoted on the NYSE.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The Exhibit Index, which follows the signature pages to this report and is incorporated by reference herein, sets forth a list of exhibits to this report.

34

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		KEY ENERGY SERVICES, INC. (Registrant)
Date:	May 6, 2014	By:	/s/ J. MARSHALL DODSON
			J. Marshall Dodson
			Senior Vice President and Chief Financial Officer (As duly authorized officer and Principal Financial Officer)

35

EXHIBIT INDEX

Exhibit No.	Description
3.1	Articles of Restatement of Key Energy Services, Inc. (Incorporated by reference to Exhibit 3.1 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, File No. 001-08038.)
3.2	Unanimous consent of the Board of Directors of Key Energy Services, Inc. dated January 11, 2000, limiting the designation of the additional authorized shares to common stock. (Incorporated by reference to Exhibit 3.2 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, File No. 001-08038.)
3.3	Seventh Amended and Restated By-laws of Key Energy Services, Inc. as amended through February 26, 2014. (Incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on February 26, 2014, File No. 001-08038.)
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	Interactive Data File.

* Filed herewith

36

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, Richard J. Alario, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Key Energy Services, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:	May 6, 2014	/s/ RICHARD J. ALARIO
		Richard J. Alario
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT

I, J. Marshall Dodson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Key Energy Services;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:	May 6, 2014	/s/ J. MARSHALL DODSON
		J. Marshall Dodson
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned officers of Key Energy Services, Inc. (the "Company") hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002, to such officer's knowledge that:

(1) the accompanying Quarterly Report on Form 10-Q for the period ended March 31, 2014 as filed with the U.S. Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods expressed in the Report.

Dated:	May 6, 2014	/s/ RICHARD J. ALARIO
		Richard J. Alario
		President and Chief Executive Officer
		(Principal Executive Officer)

Dated:	May 6, 2014	/s/ J. MARSHALL DODSON
		J. Marshall Dodson
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

XML

OTHER BALANCE SHEET INFORMATION Other Noncurrent assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Other Noncurrent Assets [Abstract]
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent	$ 22,292	$ 22,313
Other Receivables	9,788	9,397
Deposits	1,355	1,533
Equity method investments	965	962
Other Assets, Miscellaneous, Noncurrent	421	1,548
Other assets	$ 34,821	$ 35,753

XML

EARNINGS PER SHARE - Additional Information (Details) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Stock Option
Antidilutive Securiites Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	1.4	1.8
Stock Appreciation Rights (SARs)
Antidilutive Securiites Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	0.3	0.4

XML

LONG-TERM DEBT - Senior Secured Credit Facility (Details) (USD $)	3 Months Ended		3 Months Ended				3 Months Ended										3 Months Ended
	Mar. 31, 2014 At End Of Each Fiscal Quarter Thereafter	Mar. 31, 2014 Amendment Of Credit Facility	Mar. 31, 2014 2011 Credit Facility	Mar. 31, 2013 2011 Credit Facility	Mar. 31, 2014 2011 Credit Facility Maximum	Mar. 31, 2014 2011 Credit Facility Minimum	Mar. 31, 2014 2011 Credit Facility Foreign Subsidiaries	Mar. 31, 2014 2011 Credit Facility Foreign Subsidiaries Minimum	Mar. 31, 2014 2011 Credit Facility Acquisition Covenants Maximum	Mar. 31, 2014 2011 Credit Facility Acquisition Covenants Minimum	Mar. 31, 2014 2011 Credit Facility Revolving Credit Facility	Mar. 31, 2014 2011 Credit Facility Letter of Credit [Member]	Mar. 31, 2014 2011 Credit Facility LIBOR Maximum	Mar. 31, 2014 2011 Credit Facility LIBOR Minimum	Mar. 31, 2014 2011 Credit Facility Other Loans Maximum	Mar. 31, 2014 2011 Credit Facility Other Loans Minimum	Mar. 31, 2014 2011 Credit Facility Amendment Of Credit Facility	Jul. 27, 2011 2011 Credit Facility Amendment Of Credit Facility
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity																		$ 550,000,000
Line of credit, expiration date																	Mar. 31, 2016
Increase in total commitments					100,000,000.0
Capitalized finance costs		1,400,000	4,900,000
Line of credit, interest rate basis points													3.00%	2.25%	2.00%	1.25%
Interest coverage ratio						3.00
Additional interest rate above Federal Funds rate			0.50%
Additional interest rate above one-month adjusted LIBOR			1.00%
Commitment fee minimum			0.50%
Consolidated funded indebtedness to total capitalization ratio					0.45
Leverage ratio					2.00				4.00	1.00
Debt instrument covenant annual capital expenditures							250,000,000
Coverage ratio	2.00							3.00
Line of Credit Facility, Remaining Borrowing Capacity			170,000,000							25,000,000
Line of credit, amount outstanding											$ 85,000,000	$ 51,100,000
Line of credit, weighted average interest rate			2.88%	2.68%
Line of credit, covenant terms			the amended 2011 Credit Facility contains certain affirmative and negative covenants, including, without limitation, restrictions on (i) liens; (ii) debt, guarantees and other contingent obligations; (iii) mergers and consolidations; (iv) sales, transfers and other dispositions of property or assets; (v) loans, acquisitions, joint ventures and other investments (with acquisitions permitted so long as, after giving pro forma effect thereto, no default or event of default exists under the 2011 Credit Facility, the pro forma consolidated total leverage ratio does not exceed 4.00 to 1.00, we are in compliance with other financial covenants and we have at least $25.0 million of availability under the 2011 Credit Facility); (vi) dividends and other distributions to, and redemptions and repurchases from, equityholders; (vii) making investments, loans or advances; (viii) selling properties; (ix) prepaying, redeeming or repurchasing subordinated (contractually or structurally) debt; (x) engaging in transactions with affiliates; (xi) entering into hedging arrangements; (xii) entering into sale and leaseback transactions; (xiii) granting negative pledges other than to the lenders; (xiv) changes in the nature of business; (xv) amending organizational documents; and (xvi) changes in accounting policies or reporting practices; in each of the foregoing cases, with certain exceptions.

XML

SHARE-BASED COMPENSATION - Additional Information (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended				1 Months Ended		3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014 Restricted Stock	Mar. 31, 2014 Phantom Stock [Member]	Feb. 28, 2014 Performance Based Units	Jan. 31, 2014 Performance Based Units	Mar. 31, 2014 Performance Based Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense recognized	$ 3.1	$ 6.0
Income tax benefit recognized	1.2	2.2
Compensation expense expected to be recognized			16.1				5.5
Compensation expense expected to be recognized, weighted average remaining vesting period			1 year 7 months 6 days				1 year 5 months
Shares outstanding (shares)				0
Performance units issued					100,000	500,000
Award requisite service period	2 years
Fair value of outstanding performance units issued	$ 8.2

XML

LONG-TERM DEBT - 8.75% Senior Notes due 2014 (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Debt Instrument [Line Items]
Repayments of long-term debt	$ 3,573,000	$ 0
Senior Notes 8.375 Percent Due 2014
Debt Instrument [Line Items]
Interest Paid	$ 100,000
Debt stated percentage	8.375%
Senior Notes | Senior Notes 8.375 Percent Due 2014
Debt Instrument [Line Items]
Debt stated percentage	8.375%
Debt instrument interest rate payment date	Interest on the 2014 Notes was payable on June 1 and December 1 of each year.

XML

SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Information

The following tables set forth our unaudited segment information as of and for the three months ended March 31, 2014 and 2013 (in thousands):

As of and for the three months ended March 31, 2014
	U.S.		International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	324,044	$	32,097		$	—		$	—		$	356,141
Intersegment revenues	235		2,221			542			(2,998		)	—
Depreciation and amortization	40,703		7,904			2,488			—			51,095
Other operating expenses	247,684		34,684			28,800			—			311,168
Operating income (loss)	35,657		(10,491		)	(31,288		)	—			(6,122		)
Interest expense, net of amounts capitalized	—		2			13,552			—			13,554
Income (loss) before income taxes	36,422		(11,948		)	(44,081		)	—			(19,607		)
Long-lived assets(1)	1,635,709		311,286			282,931			(177,376		)	2,052,550
Total assets	2,841,405		474,533			(258,378		)	(505,933		)	2,551,627
Capital expenditures, excluding acquisitions	23,960		1,874			2,691			—			28,525

As of and for the three months ended March 31, 2013
	U.S.		International		Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	346,072	$	82,377	$	—		$	—		$	428,449
Intersegment revenues	8,601		1,519		124			(10,244		)	—
Depreciation and amortization	44,790		6,500		2,903			—			54,193
Other operating expenses	263,007		64,003		35,417			—			362,427
Operating income (loss)	38,275		11,874		(38,320		)	—			11,829
Interest expense, net of amounts capitalized	1		49		13,754			—			13,804
Income (loss) before income taxes	38,209		13,056		(52,017		)	—			(752		)
Long-lived assets(1)	1,701,593		339,485		272,990			(168,885		)	2,145,183
Total assets	2,593,050		544,236		85,141			(461,126		)	2,761,301
Capital expenditures, excluding acquisitions	23,310		10,967		2,867			—			37,144

(1) Long lived assets include fixed assets, goodwill, intangibles and other assets.

(2) Functional Support is geographically located in the United States

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TRANSACTIONS WITH RELATED PARTIES - Additional Information (Details) (Outside directors, Anadarko, USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Outside directors | Anadarko
Related Party Transaction [Line Items]
Transactions with related party, revenue (less than $0.1 million Investee March 31, 2013)	$ 8.8	$ 6.6
Transactions with related party, receivables (less than $0.1 million March 31, 2013)	$ 3.4		$ 4.9

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EQUITY AND NONCONTROLLING INTEREST Equity Table (Tables)

3 Months Ended

Mar. 31, 2014

Schedule of Equity Component [Abstract]

EQUITY

EQUITY

A reconciliation of the total carrying amount of our equity accounts for the three months endedMarch 31, 2014 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interest		Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2013	152,331		$	15,233		$	953,306		$	(15,414	)	$	297,968		$	—	$	1,251,093
Foreign currency translation	—		—			—			(5,265		)	—			—		(5,265		)
Common stock purchases	(276	)	(28		)	(2,123		)	—			—			—		(2,151		)
Share-based compensation	1,348		135			2,966			—			—			—		3,101
Tax benefits from share-based compensation	—		—			(1,210		)	—			—			—		(1,210		)
Net loss	—		—			—			—			(11,899		)	—		(11,899		)
BALANCE AT MARCH 31, 2014	153,403		$	15,340		$	952,939		$	(20,679	)	$	286,069		$	—	$	1,233,669

A reconciliation of the total carrying amount of our equity accounts for the three months endedMarch 31, 2013 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interest			Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2012	151,070		$	15,108		$	925,132		$	(6,148	)	$	319,736		$	33,504		$	1,287,332
Foreign currency translation	—		—			—			(840		)	—			(678		)	(1,518		)
Common stock purchases	(299	)	(31		)	(2,431		)	—			—			—			(2,462		)
Share-based compensation	1,580		158			3,415			—			—			—			3,573
Tax benefits from share-based compensation	—		—			(1,402		)	—			—			—			(1,402		)
Net income (loss)	—		—			—			—			(274		)	88			(186		)
BALANCE AT MARCH 31, 2013	152,351		$	15,235		$	924,714		$	(6,988	)	$	319,462		$	32,914		$	1,285,337

Schedule of Stockholders Equity [Table Text Block]

A reconciliation of the total carrying amount of our equity accounts for the three months endedMarch 31, 2014 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interest		Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2013	152,331		$	15,233		$	953,306		$	(15,414	)	$	297,968		$	—	$	1,251,093
Foreign currency translation	—		—			—			(5,265		)	—			—		(5,265		)
Common stock purchases	(276	)	(28		)	(2,123		)	—			—			—		(2,151		)
Share-based compensation	1,348		135			2,966			—			—			—		3,101
Tax benefits from share-based compensation	—		—			(1,210		)	—			—			—		(1,210		)
Net loss	—		—			—			—			(11,899		)	—		(11,899		)
BALANCE AT MARCH 31, 2014	153,403		$	15,340		$	952,939		$	(20,679	)	$	286,069		$	—	$	1,233,669

A reconciliation of the total carrying amount of our equity accounts for the three months endedMarch 31, 2013 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interest			Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2012	151,070		$	15,108		$	925,132		$	(6,148	)	$	319,736		$	33,504		$	1,287,332
Foreign currency translation	—		—			—			(840		)	—			(678		)	(1,518		)
Common stock purchases	(299	)	(31		)	(2,431		)	—			—			—			(2,462		)
Share-based compensation	1,580		158			3,415			—			—			—			3,573
Tax benefits from share-based compensation	—		—			(1,402		)	—			—			—			(1,402		)
Net income (loss)	—		—			—			—			(274		)	88			(186		)
BALANCE AT MARCH 31, 2013	152,351		$	15,235		$	924,714		$	(6,988	)	$	319,462		$	32,914		$	1,285,337

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OTHER INCOME, NET (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Other Income and Expenses [Abstract]
Interest income	$ (18)	$ (11)
Foreign exchange (gain) loss	1,366	(925)
Other, net	(1,417)	(287)
Total	$ 69	$ 1,223

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GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	$ 131,102	$ 132,004
Accumulated amortization	(93,257)	(90,858)
Net carrying value	37,845	41,146
Noncompete agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	9,332	9,332
Accumulated amortization	(7,624)	(7,104)
Net carrying value	1,708	2,228
Patents, trademarks and tradename
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	13,385	14,039
Accumulated amortization	(234)	(223)
Net carrying value	13,151	13,816
Customer relationships and contracts
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	100,023	100,271
Accumulated amortization	(80,739)	(78,926)
Net carrying value	19,284	21,345
Developed technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	7,583	7,583
Accumulated amortization	(3,881)	(3,826)
Net carrying value	3,702	3,757
Customer Backlog
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	779	779
Accumulated amortization	(779)	(779)
Net carrying value	$ 0	$ 0

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OTHER BALANCE SHEET INFORMATION - Other Current Assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Other current assets:
Deferred tax assets	$ 15,755	$ 11,707
Prepaid current assets	26,695	28,435
Reinsurance receivable	9,389	9,113
VAT asset	21,279	21,683
Other	25,409	25,608
Total	$ 98,527	$ 96,546

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COMMITMENTS AND CONTINGENCIES - Additional Information (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013 lawsuit	Mar. 31, 2014	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Aggregate amount of contingent litigation liabilities		$ 0.7
Number of lawsuits filed	3
Self-insurance liabilities related to workers' compensation, vehicular liabilities, and general liability claims recorded		62.1	62.1
Insurance receivables which partially offset self-insurance liabilities		19.2	18.5
Environmental remediation liabilities recorded		$ 6.1	$ 6.2

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SEGMENT INFORMATION (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013		Dec. 31, 2013
Segment Reporting Information [Line Items]
Revenues from external customers	$ 356,141		$ 428,449
Intersegment revenues	0		0
Depreciation and amortization	51,095		54,193
Other operating expenses	311,168		362,427
Operating income (loss)	(6,122)		11,829
Interest expense, net of amounts capitalized	13,554		13,804
Income (loss) before income taxes	(19,607)		(752)
Long-lived assets	2,052,550	[1]	2,145,183	[1]
Total assets	2,551,627		2,761,301		2,587,470
Capital expenditures, excluding acquisitions	28,525		37,144
U.S.
Segment Reporting Information [Line Items]
Revenues from external customers	324,044		346,072
Intersegment revenues	235		8,601
Depreciation and amortization	40,703		44,790
Other operating expenses	247,684		263,007
Operating income (loss)	35,657		38,275
Interest expense, net of amounts capitalized	0		1
Income (loss) before income taxes	36,422		38,209
Long-lived assets	1,635,709	[1]	1,701,593	[1]
Total assets	2,841,405		2,593,050
Capital expenditures, excluding acquisitions	23,960		23,310
International
Segment Reporting Information [Line Items]
Revenues from external customers	32,097		82,377
Intersegment revenues	2,221		1,519
Depreciation and amortization	7,904		6,500
Other operating expenses	34,684		64,003
Operating income (loss)	(10,491)		11,874
Interest expense, net of amounts capitalized	2		49
Income (loss) before income taxes	(11,948)		13,056
Long-lived assets	311,286	[1]	339,485	[1]
Total assets	474,533		544,236
Capital expenditures, excluding acquisitions	1,874		10,967
Functional Support
Segment Reporting Information [Line Items]
Revenues from external customers	0	[2]	0	[2]
Intersegment revenues	542	[2]	124	[2]
Depreciation and amortization	2,488	[2]	2,903	[2]
Other operating expenses	28,800	[2]	35,417	[2]
Operating income (loss)	(31,288)	[2]	(38,320)	[2]
Interest expense, net of amounts capitalized	13,552	[2]	13,754	[2]
Income (loss) before income taxes	(44,081)	[2]	(52,017)	[2]
Long-lived assets	282,931	[1],[2]	272,990	[1],[2]
Total assets	(258,378)	[2]	85,141	[2]
Capital expenditures, excluding acquisitions	2,691	[2]	2,867	[2]
Reconciling Eliminations
Segment Reporting Information [Line Items]
Revenues from external customers	0		0
Intersegment revenues	(2,998)		(10,244)
Depreciation and amortization	0		0
Other operating expenses	0		0
Operating income (loss)	0		0
Interest expense, net of amounts capitalized	0		0
Income (loss) before income taxes	0		0
Long-lived assets	(177,376)	[1]	(168,885)	[1]
Total assets	(505,933)		(461,126)
Capital expenditures, excluding acquisitions	$ 0		$ 0

[1] Long lived assets include fixed assets, goodwill, intangibles and other assets

[2] Functional Support is geographically located in the United States.

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LONG-TERM DEBT - 6.75% Senior Notes due 2021 (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 05, 2013	Mar. 08, 2012	Mar. 04, 2011
Fiscal Year 2016
Debt Instrument [Line Items]
Debt redemption price percent of principal amount	103.375%
Fiscal Year 2017
Debt Instrument [Line Items]
Debt redemption price percent of principal amount	102.25%
Fiscal Year 2018
Debt Instrument [Line Items]
Debt redemption price percent of principal amount	101.125%
Fiscal Year 2019 And Thereafter
Debt Instrument [Line Items]
Debt redemption price percent of principal amount	100.00%
Senior Notes 6.75 Percent Due 2021 | Prior To March 1, 2016
Debt Instrument [Line Items]
Senior notes, call feature	At any time and from time to time prior to March 1, 2016, we may, at our option, redeem all or a portion of the 2021 Notes at a redemption price equal to 100% of the principal amount plus a premium with respect to the 2021 Notes plus accrued and unpaid interest to the redemption date. The premium is the excess of (i) the present value of the redemption price of 103.375% of the principal amount, plus all remaining scheduled interest payments due through March 1, 2016 discounted at the treasury rate plus 0.5% over (ii) the principal amount of the note. If we experience a change of control, subject to certain exceptions, we must give holders of the 2021 Notes the opportunity to sell to us their 2021 Notes, in whole or in part, at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest to the date of purchase.
Senior notes, latest call date	Mar. 01, 2016
Debt redemption price percent of principal amount	103.375%
Additional interest rate above Federal Funds rate	0.50%
Debt purchase price percent of principal amount	101.00%
Senior Notes | Senior Notes 6.75 Percent Due 2021
Debt Instrument [Line Items]
Senior notes, carrying value		$ 200,000,000.0	$ 200,000,000.0	$ 475,000,000.0
Debt stated percentage				6.75%
Capitalized finance costs	$ 4,600,000
Debt instrument interest rate payment date	Interest on the 2021 Notes is payable on March 1 and September 1 of each year.
Senior notes, maturity date	Mar. 01, 2021

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ACQUISITION OF NONCONTROLLING INTEREST

3 Months Ended

Mar. 31, 2014

Noncontrolling Interest [Abstract]

ACQUISITION OF NONCONTROLLING INTEREST IN GEOSTREAM

ACQUISITION OF NONCONTROLLING INTERESTS

Geostream. On October 31, 2008, we acquired a 26% interest in OOO Geostream Services Group (“Geostream”), a limited liability company incorporated in the Russian Federation that provides a wide range of drilling, workover and reservoir engineering services for $17.4 million. On September 1, 2009, we acquired an additional 24% interest for $16.4 million, which brought our total investment in Geostream to 50% and provided us a controlling interest with representation on Geostream's board of directors. We accounted for the second investment as a business combination achieved in stages. The results of Geostream have been included in our consolidated financial statements since the initial acquisition date, with the portion outside of our control forming a noncontrolling interest. On April 9, 2013, we completed the acquisition of the 50% noncontrolling interest in Geostream for $14.6 million. Geostream is now our wholly owned subsidiary. This acquisition of the 50% noncontrolling interest in Geostream was accounted for as an equity transaction. Therefore, our acquisition of the non-controlling interest in Geostream in the second quarter of 2013 did not result in a gain or loss.

AlMansoori Key Energy Services, LLC. On March 7, 2010, we entered into an agreement with AlMansoori Petroleum Services, LLC (“AlMansoori”) to form the joint venture AlMansoori Key Energy Services, LLC, a joint venture under the laws of Abu Dhabi, UAE. The purpose of the joint venture was to engage in conventional workover and drilling services, coiled tubing services, fishing and rental services, rig monitoring services, pipe handling services and fluids, waste treatment and handling services. Although AlMansoori held a 51% interest in the joint venture and we held a 49% interest, we held three of the five board of directors seats and a controlling financial interest. In addition, profits and losses of the joint venture were shared on equal terms and in equal amounts with AlMansoori. Because the joint venture did not have sufficient resources to carry on its activities without our financial support, we determined it to be a variable interest entity of which we were the primary beneficiary. We consolidated the entity in our financial statements. On August 5, 2013, we agreed to the dissolution of AlMansoori Key Energy Services, LLC and the acquisition of the underlying business for $5.1 million. The $5.1 million is expected to be paid in 2014 and is recorded in "Other current liabilities" in our consolidated balance sheet. The acquisition of the 51% noncontrolling interest in AlMansoori Key Energy Services, LLC was accounted for as an equity transaction therefore did not result in a gain or loss.

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Condensed Consolidating Balance Sheets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Assets:
Current assets	$ 499,077	$ 506,153
Property and equipment, net	1,343,453	1,365,646
Goodwill	623,233	624,875
Deferred financing costs, net	13,198	13,897
Other assets	72,666	76,899
TOTAL ASSETS	2,551,627	2,587,470	2,761,301
LIABILITIES AND EQUITY
Current liabilities	215,970	232,344
Long-term debt and capital leases, less current portion	763,843	763,981
Deferred tax liabilities	282,324	284,453
Other long-term liabilities	55,821	55,599
Equity	1,233,669	1,251,093	1,285,337	1,287,332
TOTAL LIABILITIES AND EQUITY	2,551,627	2,587,470
Intercompany
Assets:
Intercompany notes and accounts receivable and investment in subsidiaries	0	0
LIABILITIES AND EQUITY
Intercompany notes and accounts payable	0	0
Parent Company
Assets:
Current assets	62,058	50,321
Property and equipment, net	0	0
Goodwill	0	0
Deferred financing costs, net	13,198	13,897
Other assets	0	0
TOTAL ASSETS	3,453,294	3,485,825
LIABILITIES AND EQUITY
Current liabilities	12,303	26,097
Long-term debt and capital leases, less current portion	763,843	763,981
Deferred tax liabilities	279,647	280,828
Other long-term liabilities	1,200	1,195
Equity	1,233,653	1,251,076
TOTAL LIABILITIES AND EQUITY	3,453,294	3,485,825
Parent Company | Intercompany
Assets:
Intercompany notes and accounts receivable and investment in subsidiaries	3,378,038	3,421,607
LIABILITIES AND EQUITY
Intercompany notes and accounts payable	1,162,648	1,162,648
Guarantor Subsidiaries
Assets:
Current assets	376,446	398,188
Property and equipment, net	1,223,635	1,244,216
Goodwill	597,457	597,457
Deferred financing costs, net	0	0
Other assets	33,654	34,278
TOTAL ASSETS	3,630,574	3,638,313
LIABILITIES AND EQUITY
Current liabilities	174,864	182,497
Long-term debt and capital leases, less current portion	0	0
Deferred tax liabilities	4,643	4,643
Other long-term liabilities	54,657	54,486
Equity	721,136	728,744
TOTAL LIABILITIES AND EQUITY	3,630,574	3,638,313
Guarantor Subsidiaries | Intercompany
Assets:
Intercompany notes and accounts receivable and investment in subsidiaries	1,399,382	1,364,174
LIABILITIES AND EQUITY
Intercompany notes and accounts payable	2,675,274	2,667,943
Non-Guarantor Subsidiaries
Assets:
Current assets	60,573	57,644
Property and equipment, net	111,255	121,430
Goodwill	25,776	27,418
Deferred financing costs, net	0	0
Other assets	39,012	42,621
TOTAL ASSETS	269,693	262,052
LIABILITIES AND EQUITY
Current liabilities	28,803	23,750
Long-term debt and capital leases, less current portion	0	0
Deferred tax liabilities	(1,966)	(1,819)
Other long-term liabilities	(36)	(82)
Equity	134,290	143,153
TOTAL LIABILITIES AND EQUITY	269,693	262,052
Non-Guarantor Subsidiaries | Intercompany
Assets:
Intercompany notes and accounts receivable and investment in subsidiaries	33,077	12,939
LIABILITIES AND EQUITY
Intercompany notes and accounts payable	108,602	97,050
Eliminations
Assets:
Current assets	0	0
Property and equipment, net	8,563	0
Goodwill	0	0
Deferred financing costs, net	0	0
Other assets	0	0
TOTAL ASSETS	(4,801,934)	(4,798,720)
LIABILITIES AND EQUITY
Current liabilities	0	0
Long-term debt and capital leases, less current portion	0	0
Deferred tax liabilities	0	801
Other long-term liabilities	0	0
Equity	(855,410)	(871,880)
TOTAL LIABILITIES AND EQUITY	(4,801,934)	(4,798,720)
Eliminations | Intercompany
Assets:
Intercompany notes and accounts receivable and investment in subsidiaries	(4,810,497)	(4,798,720)
LIABILITIES AND EQUITY
Intercompany notes and accounts payable	$ (3,946,524)	$ (3,927,641)

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GOODWILL AND OTHER INTANGIBLE ASSETS - Weighted Average Remaining Amortization Periods and Expected Amortization Expense for Next Five Years for Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Remainder of 2014	$ 7,246
Expected Amortization Expense-2014	5,607
Expected Amortization Expense-2015	3,930
Expected Amortization Expense-2016	2,679
Expected Amortization Expense-2017	1,358
Expected Amortization Expense-2018	1,041
Noncompete agreements
Finite-Lived Intangible Assets [Line Items]
Weighted average remaining amortization period (years)	6 months 7 days
Remainder of 2014	1,145
Expected Amortization Expense-2014	308
Expected Amortization Expense-2015	255
Expected Amortization Expense-2016	0
Expected Amortization Expense-2017	0
Expected Amortization Expense-2018	0
Patents, trademarks and tradename
Finite-Lived Intangible Assets [Line Items]
Weighted average remaining amortization period (years)	4 years 2 months
Remainder of 2014	30
Expected Amortization Expense-2014	40
Expected Amortization Expense-2015	40
Expected Amortization Expense-2016	40
Expected Amortization Expense-2017	17
Expected Amortization Expense-2018	0
Customer relationships and contracts
Finite-Lived Intangible Assets [Line Items]
Weighted average remaining amortization period (years)	5 years 8 months 23 days
Remainder of 2014	5,905
Expected Amortization Expense-2014	5,038
Expected Amortization Expense-2015	3,414
Expected Amortization Expense-2016	2,418
Expected Amortization Expense-2017	1,120
Expected Amortization Expense-2018	820
Developed technology
Finite-Lived Intangible Assets [Line Items]
Weighted average remaining amortization period (years)	16 years 9 months
Remainder of 2014	166
Expected Amortization Expense-2014	221
Expected Amortization Expense-2015	221
Expected Amortization Expense-2016	221
Expected Amortization Expense-2017	221
Expected Amortization Expense-2018	$ 221

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OTHER INCOME, NET (Tables)

3 Months Ended

Mar. 31, 2014

Other Income and Expenses [Abstract]

Other Income and Expense

The table below presents comparative detailed information about our other income and expense, shown on the condensed consolidated statements of operations as “Other income, net” for the periods indicated:

	Three Months Ended March 31,
	2014			2013
	(in thousands)
Interest income	$	(18	)	$	(11	)
Foreign exchange (gain) loss	1,366			(925		)
Other, net	(1,417		)	(287		)
Total	$	(69	)	$	(1,223	)

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LONG-TERM DEBT (Tables)

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Long-Term Debt

As of March 31, 2014 and December 31, 2013, the components of our long-term debt were as follows:

	March 31, 2014		December 31, 2013
	(in thousands)
6.75% Senior Notes due 2021	$	675,000	$	675,000
8.375% Senior Notes due 2014	—		3,573
Senior Secured Credit Facility revolving loans due 2016	85,000		85,000
Net unamortized premium on debt	3,843		3,981
Total debt	763,843		767,554
Less current portion	—		(3,573		)
Long-term debt	$	763,843	$	763,981

Schedule of Debt

On or after March 1, 2016, the 2021 Notes will be subject to redemption at any time and from time to time at our option, in whole or in part, at the redemption prices below (expressed as percentages of the principal amount redeemed), plus accrued and unpaid interest to the applicable redemption date, if redeemed during the twelve-month period beginning on March 1 of the years indicated below:

Year	Percentage
2016	103.375	%
2017	102.250	%
2018	101.125	%
2019 and thereafter	100.000	%

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SHARE-BASED COMPENSATION - Number of Performance Units Earned Based on Relative Placement of Total Stockholder Return for Period Within Peer Group (Details)	3 Months Ended
	Mar. 31, 2014
First
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	100.00%
Performance Units Earned as a Percentage of Target	200.00%
Second
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	91.00%
Performance Units Earned as a Percentage of Target	180.00%
Third
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	82.00%
Performance Units Earned as a Percentage of Target	160.00%
Fourth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	73.00%
Performance Units Earned as a Percentage of Target	140.00%
Fifth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	64.00%
Performance Units Earned as a Percentage of Target	120.00%
Sixth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	55.00%
Performance Units Earned as a Percentage of Target	100.00%
Seventh
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	45.00%
Performance Units Earned as a Percentage of Target	75.00%
Eighth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	36.00%
Performance Units Earned as a Percentage of Target	50.00%
Ninth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	27.00%
Performance Units Earned as a Percentage of Target	25.00%
Tenth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	18.00%
Performance Units Earned as a Percentage of Target	0.00%
Eleventh
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	9.00%
Performance Units Earned as a Percentage of Target	0.00%
Twelfth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	0.00%
Performance Units Earned as a Percentage of Target	0.00%

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GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
Indefinite-lived trade names	$ 13.0
Amortization of intangible assets	$ 2.6	$ 4.8

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EARNINGS (LOSS) PER SHARE (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The components of our loss per share are as follows:

	Three Months Ended March 31,
	2014			2013
	(in thousands, except per share amounts)
Basic and Diluted EPS Calculation:
Numerator
Loss attributable to Key	$	(11,899	)	$	(274	)
Denominator
Weighted average shares outstanding	152,927			151,967
Basic and diluted loss per share attributable to Key	$	(0.08	)	$	—

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SHARE-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Number Of Performance Units Earned Based on Relative Placement of Total Stockholder Return for Period Within Peer Group

The number of performance units that may be earned by a participant is determined at the end of each performance period based on the relative placement of Key’s total stockholder return for that period within the peer group, as follows:

Company Placement for the Performance Period	Percentile Ranking in Peer Group		Performance Units Earned as a Percentage of Target
First	100	%	200	%
Second	91	%	180	%
Third	82	%	160	%
Fourth	73	%	140	%
Fifth	64	%	120	%
Sixth	55	%	100	%
Seventh	45	%	75	%
Eighth	36	%	50	%
Ninth	27	%	25	%
Tenth	18	%	0	%
Eleventh	9	%	0	%
Twelfth	0	%	0	%

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SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

The preparation of these unaudited condensed consolidated financial statements requires us to develop estimates and to make assumptions that affect our financial position, results of operations and cash flows. These estimates may also impact the nature and extent of our disclosure, if any, of our contingent liabilities. Among other things, we use estimates to (i) analyze assets for possible impairment, (ii) determine depreciable lives for our assets, (iii) assess future tax exposure and realization of deferred tax assets, (iv) determine amounts to accrue for contingencies, (v) value tangible and intangible assets, (vi) assess workers’ compensation, vehicular liability, self-insured risk accruals and other insurance reserves, (vii) provide allowances for our uncollectible accounts receivable, (viii) value our asset retirement obligations, and (ix) value our equity-based compensation. We review all significant estimates on a recurring basis and record the effect of any necessary adjustments prior to publication of our financial statements. Adjustments made with respect to the use of estimates relate to improved information not previously available. Because of the limitations inherent in this process, our actual results may differ materially from these estimates. We believe that the estimates used in the preparation of these interim financial statements are reasonable.

There have been no material changes or developments in our evaluation of accounting estimates and underlying assumptions or methodologies that we believe to be a “Critical Accounting Policy or Estimate” as disclosed in our 2013 Form 10-K.

Accounting Standards Adopted or Not Yet Adopted in this Report

There are no new accounting standards that have been adopted or not yet adopted in this report.

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ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Carrying Amounts and Estimated Fair Values of Financial Instruments

The following is a summary of the carrying amounts and estimated fair values of our financial instruments as of March 31, 2014 and December 31, 2013.

Cash, cash equivalents, accounts receivable, accounts payable and accrued liabilities. These carrying amounts approximate fair value because of the short maturity of the instruments or because the carrying value is equal to the fair value of those instruments on the balance sheet date.

	March 31, 2014				December 31, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Financial assets:
Notes receivable - Argentina operations sale	$	11,755	$	11,755	$	12,355	$	12,355
Financial liabilities:
6.75% Senior Notes	$	675,000	$	705,375	$	675,000	$	690,390
8.375% Senior Notes	—		—		3,573		3,627
Credit Facility revolving loans	85,000		85,000		85,000		85,000

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OTHER BALANCE SHEET INFORMATION - Other Noncurrent Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Other non-current liabilities:
Asset retirement obligations	$ 12,144	$ 11,999
Environmental liabilities	6,119	6,176
Accrued rent	707	853
Accrued sales, use and other taxes	5,394	5,552
Other	1,345	1,075
Total	$ 25,709	$ 25,655

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EARNINGS PER SHARE (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Numerator
LOSS ATTRIBUTABLE TO KEY	$ (11,899)	$ (274)
Denominator
Weighted Average Number of Shares Outstanding, Basic and Diluted	152,927	151,967
Basic and diluted (in usd per share)	$ (0.08)	$ 0.00

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 40,949	$ 28,306
Accounts receivable, net of allowance for doubtful accounts of $1,212 and $766, respectively	320,722	348,966
Inventories	38,879	32,335
Other current assets	98,527	96,546
Total current assets	499,077	506,153
Property and equipment	2,625,702	2,606,738
Accumulated depreciation	(1,282,249)	(1,241,092)
Property and equipment, net	1,343,453	1,365,646
Goodwill	623,233	624,875
Other intangible assets, net	37,845	41,146
Deferred financing costs, net	13,198	13,897
Other assets	34,821	35,753
TOTAL ASSETS	2,551,627	2,587,470
Current liabilities:
Long-term Debt, Current Maturities	0	3,573
Accounts payable	64,671	58,826
Other current liabilities	151,299	169,945
Total current liabilities	215,970	232,344
Long-term debt	763,843	763,981
Workers' compensation, vehicular and health insurance liabilities	30,112	29,944
Deferred tax liabilities	282,324	284,453
Other non-current liabilities	25,709	25,655
Commitments and contingencies
Equity:
Common stock, $0.10 par value; 200,000,000 shares authorized, 153,403,019 and 152,331,006 shares issued and outstanding	15,340	15,233
Additional paid-in capital	952,939	953,306
Accumulated other comprehensive loss	(20,679)	(15,414)
Retained earnings	286,069	297,968
Total equity	1,233,669	1,251,093
TOTAL LIABILITIES AND EQUITY	$ 2,551,627	$ 2,587,470

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LONG-TERM DEBT - Schedule of Debt (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Senior Secured Credit Facility revolving loans due 2016	$ 85,000	$ 85,000
Net unamortized premium on debt	3,843	3,981
Total debt	763,843	767,554
Less current portion	0	(3,573)
Long-term debt and capital leases	763,843	763,981
Senior Notes 6.75 Percent Due 2021
Debt Instrument [Line Items]
Senior Notes	675,000	675,000
Senior Notes 8.375 Percent Due 2014
Debt Instrument [Line Items]
Senior Notes	$ 0	$ 3,573

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (11,899)	$ (186)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense	51,095	54,193
Bad debt expense	332	1,203
Accretion of asset retirement obligations	145	159
Loss from equity method investments	70	128
Amortization of deferred financing costs and premium	560	659
Deferred income tax benefit	(6,541)	(377)
Capitalized interest	0	(137)
Gain on disposal of assets, net	(319)	0
Share-based compensation	3,101	4,947
Excess tax benefit from share-based compensation	1,210	1,402
Changes in working capital:
Accounts receivable	27,519	(2,959)
Other current assets	(5,292)	(5,308)
Accounts payable, accrued interest and accrued expenses	(15,046)	(39,926)
Share-based compensation liability awards	1,563	1,017
Other assets and liabilities	(804)	4,747
Net cash provided by operating activities	45,694	19,562
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(28,525)	(37,144)
Proceeds from sale of fixed assets	1,174	374
Proceeds from sale of assets held for sale	600	0
Restricted funds held in escrow	0	14,615
Net cash used in investing activities	(26,751)	(51,385)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt	(3,573)	0
Repayments of capital lease obligations	0	(264)
Proceeds from borrowings on revolving credit facility	70,000	95,000
Repayments on revolving credit facility	(70,000)	(65,000)
Payment of deferred financing costs	0	(46)
Repurchases of common stock	(2,151)	(2,462)
Excess tax expense from share-based compensation	(1,210)	(1,402)
Net cash provided by (used in) financing activities	(6,934)	25,826
Effect of changes in exchange rates on cash	634	(52)
Net increase (decrease) in cash and cash equivalents	12,643	(6,049)
Cash and cash equivalents, beginning of period	28,306	45,949
Cash and cash equivalents, end of period	$ 40,949	$ 39,900

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ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS - Additional Information (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Credit Facility revolving loans	$ 85,000,000	$ 85,000,000
Senior Notes 6.75% Issued March 24 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt stated percentage	6.75%
Senior notes, carrying value	675,000,000	675,000,000
Senior Notes, fair value	705,375,000	690,390,000
Percentage of Senior Notes fair value over carrying value	104.50%
Senior Notes 8.375 Percent Due 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt stated percentage	8.375%
Senior notes, carrying value	0	3,573,000
Senior Notes, fair value	$ 0	$ 3,627,000

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ACQUISITION OF NONCONTROLLING INTEREST (Details) (USD $) In Millions, unless otherwise specified		10 Months Ended				0 Months Ended
	Mar. 07, 2010 person	Sep. 01, 2009 Geostream	Apr. 09, 2013 Geostream	Oct. 31, 2008 Geostream	Aug. 05, 2013 Al Mansoori Petroleum Services Limited Liability Company [Member]	Mar. 07, 2013 Key Energy Services Incorporation And Subsidiaries [Member]	Mar. 07, 2010 Key Energy Services Incorporation And Subsidiaries [Member] person	Mar. 31, 2014 Al Mansoori Key Energy Services L L C [Member]	Aug. 05, 2013 Al Mansoori Key Energy Services L L C [Member]
Noncontrolling Interest [Line Items]
Percentage of acquired interest			50.00%	26.00%
Aggregate cost of acquired interest			$ 14.6	$ 17.4
Business combination, percentage of voting interests acquired		24.00%
Business Acquisition, Cost of Acquired Entity, Purchase Price		16.4							5.1
Total controlling interest, percentage		50.00%
Variable interest entities, ownership interest						49.00%
Additional percentage acquired					51.00%
Number Of Board Of Directors Seats	5						3
Business Acquisition, Remaining Payments								$ 5.1

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

3 Months Ended

Mar. 31, 2014

Condensed Consolidating Financial Statements [Abstract]

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Our 2021 Notes are guaranteed by virtually all our domestic subsidiaries, all of which are wholly owned. The guarantees are joint and several, full, complete and unconditional. There are no restrictions on the ability of subsidiary guarantors to transfer funds to the parent company.

As a result of these guarantee arrangements, we are required to present the following condensed consolidating financial information pursuant to SEC Regulation S-X Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.”

CONDENSED CONSOLIDATING UNAUDITED BALANCE SHEETS
	March 31, 2014
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands) (unaudited)
Assets:
Current assets	$	62,058	$	376,446	$	60,573		$	—		$	499,077
Property and equipment, net	—		1,223,635		111,255			8,563			1,343,453
Goodwill	—		597,457		25,776			—			623,233
Deferred financing costs, net	13,198		—		—			—			13,198
Intercompany notes and accounts receivable and investment in subsidiaries	3,378,038		1,399,382		33,077			(4,810,497		)	—
Other assets	—		33,654		39,012			—			72,666
TOTAL ASSETS	$	3,453,294	$	3,630,574	$	269,693		$	(4,801,934	)	$	2,551,627
Liabilities and equity:
Current liabilities	$	12,303	$	174,864	$	28,803		$	—		$	215,970
Long-term debt and capital leases, less current portion	763,843		—		—			—			763,843
Intercompany notes and accounts payable	1,162,648		2,675,274		108,602			(3,946,524		)	—
Deferred tax liabilities	279,647		4,643		(1,966		)	—			282,324
Other long-term liabilities	1,200		54,657		(36		)	—			55,821
Equity	1,233,653		721,136		134,290			(855,410		)	1,233,669
TOTAL LIABILITIES AND EQUITY	$	3,453,294	$	3,630,574	$	269,693		$	(4,801,934	)	$	2,551,627

CONDENSED CONSOLIDATING BALANCE SHEETS
	December 31, 2013
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Assets:
Current assets	$	50,321	$	398,188	$	57,644		$	—		$	506,153
Property and equipment, net	—		1,244,216		121,430			—			1,365,646
Goodwill	—		597,457		27,418			—			624,875
Deferred financing costs, net	13,897		—		—			—			13,897
Intercompany notes and accounts receivable and investment in subsidiaries	3,421,607		1,364,174		12,939			(4,798,720		)	—
Other assets	—		34,278		42,621			—			76,899
TOTAL ASSETS	$	3,485,825	$	3,638,313	$	262,052		$	(4,798,720	)	$	2,587,470
Liabilities and equity:
Current liabilities	$	26,097	$	182,497	$	23,750		$	—		$	232,344
Long-term debt and capital leases, less current portion	763,981		—		—			—			763,981
Intercompany notes and accounts payable	1,162,648		2,667,943		97,050			(3,927,641		)	—
Deferred tax liabilities	280,828		4,643		(1,819		)	801			284,453
Other long-term liabilities	1,195		54,486		(82		)	—			55,599
Equity	1,251,076		728,744		143,153			(871,880		)	1,251,093
TOTAL LIABILITIES AND EQUITY	$	3,485,825	$	3,638,313	$	262,052		$	(4,798,720	)	$	2,587,470

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended March 31, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	330,475		$	32,511		$	(6,845	)	$	356,141
Direct operating expense	—			236,658			24,471			(2,827		)	258,302
Depreciation and amortization expense	—			47,763			3,109			223			51,095
General and administrative expense	236			49,548			6,902			(3,820		)	52,866
Operating loss	(236		)	(3,494		)	(1,971		)	(421		)	(6,122		)
Interest expense, net of amounts capitalized	13,552			—			2			—			13,554
Other (income) loss, net	(671		)	(724		)	1,309			17			(69		)
Loss before income taxes	(13,117		)	(2,770		)	(3,282		)	(438		)	(19,607		)
Income tax (expense) benefit	—			5,971			(479		)	2,216			7,708
Net loss	(13,117		)	3,201			(3,761		)	1,778			(11,899		)
Income attributable to noncontrolling interest	—			—			—			—			—
LOSS ATTRIBUTABLE TO KEY	$	(13,117	)	$	3,201		$	(3,761	)	$	1,778		$	(11,899	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended March 31, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in thousands)
Revenues	$	124		$	405,384		$	43,490	$	(20,549	)	$	428,449
Direct operating expense	—			286,042			30,483		(17,343		)	299,182
Depreciation and amortization expense	—			52,057			2,136		—			54,193
General and administrative expense	254			57,821			8,852		(3,682		)	63,245
Operating income (loss)	(130		)	9,464			2,019		476			11,829
Interest expense, net of amounts capitalized	13,891			(136		)	49		—			13,804
Other (income) loss, net	(898		)	(1,169		)	37		807			(1,223		)
Income (loss) before income taxes	(13,123		)	10,769			1,933		(331		)	(752		)
Income tax (expense) benefit	1,248			(883		)	201		—			566
Net income (loss)	(11,875		)	9,886			2,134		(331		)	(186		)
Income attributable to noncontrolling interest	—			—			88		—			88
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(11,875	)	$	9,886		$	2,046	$	(331	)	$	(274	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Three Months Ended March 31, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by operating activities	$	—		$	44,278		$	1,416		$	—		$	45,694
Cash flows from investing activities:
Capital expenditures	—			(26,912		)	(1,613		)	—			(28,525		)
Intercompany notes and accounts	—			(19,651		)	—			19,651			—
Other investing activities, net				1,774			—			—			1,774
Net cash used in investing activities	—			(44,789		)	(1,613		)	19,651			(26,751		)
Cash flows from financing activities:
Repayments of long-term debt	(3,573		)	—			—			—			(3,573		)
Proceeds from borrowings on revolving credit facility	70,000			—			—			—			70,000
Repayments on revolving credit facility	(70,000		)	—			—			—			(70,000		)
Repurchases of common stock	(2,151		)	—			—			—			(2,151		)
Intercompany notes and accounts	19,651			—			—			(19,651		)	—
Other financing activities, net	(1,210		)	—			—			—			(1,210		)
Net cash provided by (used in) financing activities	12,717			—			—			(19,651		)	(6,934		)
Effect of changes in exchange rates on cash	—			—			634			—			634
Net increase (decrease) in cash and cash equivalents	12,717			(511		)	437			—			12,643
Cash and cash equivalents at beginning of period	23,115			788			4,403			—			28,306
Cash and cash equivalents at end of period	$	35,832		$	277		$	4,840		$	—		$	40,949

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Three Months Ended March 31, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by operating activities	$	—		$	17,509		$	2,053		$	—		$	19,562
Cash flows from investing activities:
Capital expenditures	—			(33,410		)	(3,734		)	—			(37,144		)
Intercompany notes and accounts	—			29,505			—			(29,505		)	—
Other investing activities, net	—			(14,241		)	—			—			(14,241		)
Net cash used in investing activities	—			(18,146		)	(3,734		)	(29,505		)	(51,385		)
Cash flows from financing activities:
Repayment of capital lease obligations	—			(264		)	—			—			(264		)
Proceeds from borrowings on revolving credit facility	95,000			—			—			—			95,000
Repayments on revolving credit facility	(65,000		)	—			—			—			(65,000		)
Payment of deferred financing costs	(46		)	—			—			—			(46		)
Repurchases of common stock	(2,462		)	—			—			—			(2,462		)
Intercompany notes and accounts	(29,505		)	—			—			29,505			—
Other financing activities, net	(1,402		)	—			—			—			(1,402		)
Net cash provided by (used in) financing activities	(3,415		)	(264		)	—			29,505			25,826
Effect of changes in exchange rates on cash	—			—			(52		)	—			(52		)
Net decrease in cash and cash equivalents	(3,415		)	(901		)	(1,733		)	—			(6,049		)
Cash and cash equivalents at beginning of period	39,617			1,601			4,731			—			45,949
Cash and cash equivalents at end of period	$	36,202		$	700		$	2,998		$	—		$	39,900

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EQUITY AND NONCONTROLLING INTEREST Equity (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Dec. 31, 2012
Schedule of Equity Component [Line Items]
Common stock, shares outstanding	153,403,019		152,331,006
Equity	$ 1,233,669	$ 1,285,337	$ 1,251,093	$ 1,287,332
Foreign currency translation loss	(5,265)	(1,518)
Stock Repurchased During Period, Value	2,151	2,462
Stock Issued During Period, Value, Share-based Compensation, Gross	3,101	3,573
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation	(1,210)	(1,402)
Net loss	(11,899)	(186)
Common Stock [Member]
Schedule of Equity Component [Line Items]
Common stock, shares outstanding	153,403,000	152,351,000	152,331,000	151,070,000
Equity	15,340	15,235	15,233	15,108
Stock Repurchased During Period, Shares	276,000	299,000
Stock Repurchased During Period, Value	28	31
Stock Issued During Period, Shares, Share-based Compensation, Gross	1,348,000	1,580,000
Stock Issued During Period, Value, Share-based Compensation, Gross	135	158
Additional Paid-in Capital [Member]
Schedule of Equity Component [Line Items]
Equity	952,939	924,714	953,306	925,132
Stock Repurchased During Period, Value	2,123	2,431
Stock Issued During Period, Value, Share-based Compensation, Gross	2,966	3,415
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation	(1,210)	(1,402)
Accumulated Other Comprehensive Income (Loss) [Member]
Schedule of Equity Component [Line Items]
Equity	(20,679)	(6,988)	(15,414)	(6,148)
Foreign currency translation loss	(5,265)	(840)
Retained Earnings [Member]
Schedule of Equity Component [Line Items]
Equity	286,069	319,462	297,968	319,736
Net loss	(11,899)	(274)
Noncontrolling Interest [Member]
Schedule of Equity Component [Line Items]
Equity	0	32,914	0	33,504
Foreign currency translation loss	0	(678)
Net loss	$ 0	$ 88

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ACQUISITION OF NONCONTROLLING INTEREST (Tables)

3 Months Ended

Mar. 31, 2014

Noncontrolling Interest [Abstract]

Effects of Changes in Ownership Interest

AlMansoori Key Energy Services, LLC. On March 7, 2010, we entered into an agreement with AlMansoori Petroleum Services, LLC (“AlMansoori”) to form the joint venture AlMansoori Key Energy Services, LLC, a joint venture under the laws of Abu Dhabi, UAE. The purpose of the joint venture was to engage in conventional workover and drilling services, coiled tubing services, fishing and rental services, rig monitoring services, pipe handling services and fluids, waste treatment and handling services. Although AlMansoori held a 51% interest in the joint venture and we held a 49% interest, we held three of the five board of directors seats and a controlling financial interest. In addition, profits and losses of the joint venture were shared on equal terms and in equal amounts with AlMansoori. Because the joint venture did not have sufficient resources to carry on its activities without our financial support, we determined it to be a variable interest entity of which we were the primary beneficiary. We consolidated the entity in our financial statements. On August 5, 2013, we agreed to the dissolution of AlMansoori Key Energy Services, LLC and the acquisition of the underlying business for $5.1 million. The $5.1 million is expected to be paid in 2014 and is recorded in "Other current liabilities" in our consolidated balance sheet. The acquisition of the 51% noncontrolling interest in AlMansoori Key Energy Services, LLC was accounted for as an equity transaction therefore did not result in a gain or loss.

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GENERAL

3 Months Ended

Mar. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL

GENERAL

Key Energy Services, Inc., and its wholly owned subsidiaries (collectively, “Key,” the “Company,” “we,” “us,” “its,” and “our”) provide a full range of well services to major oil companies, foreign national oil companies and independent oil and natural gas production companies. Our services include rig-based and coiled tubing-based well maintenance and workover services, well completion and recompletion services, fluid management services, fishing and rental services, and other ancillary oilfield services. Additionally, certain rigs are capable of specialty drilling applications. We operate in most major oil and natural gas producing regions of the continental United States and have operations in Mexico, Colombia, Ecuador, the Middle East and Russia. In addition, we have a technology development and control systems business based in Canada.

The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The condensed December 31, 2013 balance sheet was prepared from audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 (the “2013 Form 10-K”). Certain information relating to our organization and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in this Quarterly Report on Form 10-Q. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2013 Form 10-K.

The unaudited condensed consolidated financial statements contained in this report include all normal and recurring material adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented herein. The results of operations for the three months endedMarch 31, 2014 are not necessarily indicative of the results expected for the full year or any other interim period, due to fluctuations in demand for our services, timing of maintenance and other expenditures, and other factors.

We have evaluated events occurring after the balance sheet date included in this Quarterly Report on Form 10-Q and through the date on which the unaudited condensed consolidated financial statements were issued, for possible disclosure of a subsequent event.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 1,212	$ 776
Common stock, shares issued	153,403,019	152,331,006
Common stock, shares outstanding	153,403,019	152,331,006
Common stock, par value (in usd per share)	$ 0.10	$ 0.10
Common stock, shares authorized	200,000,000	200,000,000

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EARNINGS (LOSS) PER SHARE

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

EARNINGS (LOSS) PER SHARE

LOSS PER SHARE

Basic loss per share is determined by dividing net loss attributable to Key by the weighted average number of common shares actually outstanding during the period. Diluted loss per common share is based on the increased number of shares that would be outstanding assuming conversion of potentially dilutive outstanding securities using the treasury stock and “as if converted” methods.

The components of our loss per share are as follows:

	Three Months Ended March 31,
	2014			2013
	(in thousands, except per share amounts)
Basic and Diluted EPS Calculation:
Numerator
Loss attributable to Key	$	(11,899	)	$	(274	)
Denominator
Weighted average shares outstanding	152,927			151,967
Basic and diluted loss per share attributable to Key	$	(0.08	)	$	—

Stock options, warrants and stock appreciation rights (“SARs”) are included in the computation of diluted loss per share using the treasury stock method. Restricted stock awards are legally considered issued and outstanding when granted and are included in basic weighted average shares outstanding. The diluted loss per share calculations for the three months ended March 31, 2014 and March 31, 2013 exclude the potential exercise of 1.4 million and 1.8 million stock options, respectively, and 0.3 million and 0.4 million SARs, respectively, due to the loss attributable to Key. No events occurred after March 31, 2014 that would materially affect the number of weighted average shares outstanding.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 28, 2014
Document Documentand Entity Information [Abstract]
Entity Registrant Name	KEY ENERGY SERVICES INC
Entity Central Index Key	0000318996
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Trading Symbol	KEG
Amendment Flag	false
Entity Common Stock, Shares Outstanding		153,392,051

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SHARE-BASED COMPENSATION

3 Months Ended

Mar. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

We recognized employee share-based compensation expense of $3.1 million and $6.0 million during the three months endedMarch 31, 2014 and 2013, respectively, and the related income tax benefit recognized was $1.2 million and $2.2 million for the same periods. We did not capitalize any share-based compensation during the three months ended March 31, 2014 and 2013.

The unrecognized compensation cost related to our unvested restricted stock as of March 31, 2014 is estimated to be $16.1 million and is expected to be recognized over a weighted-average period of 1.6 years. We do not have unrecognized cost related to our unvested stock options as of March 31, 2014. No phantom stock was outstanding as of March 31, 2014.

On January 30, 2014, the Compensation Committee of the Board of Directors adopted the 2014 Performance Unit Plan (the “2014 PU Plan”) and granted performance units pursuant to the Performance Award Agreement (“2012 PU Award Agreement”) under the Key Energy Services, Inc. 2012 Equity and Cash Incentive Plan (the “2012 Plan”). We believe that the 2014 PU Plan and 2012 PU Award Agreement will enable us to obtain and retain employees who will contribute to our long term success by aligning the interests of our executives with the interests of our stockholders by providing compensation that is linked directly to increases in share value.

In January 2014, we issued 0.5 million performance units to our executive officers under the 2012 Plan with such material terms as set forth in the 2012 PU Award Agreement. In February 2014, we issued 0.1 million performance units to certain other employees under the 2014 PU Plan. The performance units are measured based on two performance periods from January 1, 2014 to December 31, 2014 and from January 1, 2015 to December 31, 2015. One half of the performance units are measured based on the first performance period, and the other half are measured based on the second performance period. The number of performance units that may be earned by a participant is determined at the end of each performance period based on the relative placement of Key’s total stockholder return for that period within the peer group, as follows:

Company Placement for the Performance Period	Percentile Ranking in Peer Group		Performance Units Earned as a Percentage of Target
First	100	%	200	%
Second	91	%	180	%
Third	82	%	160	%
Fourth	73	%	140	%
Fifth	64	%	120	%
Sixth	55	%	100	%
Seventh	45	%	75	%
Eighth	36	%	50	%
Ninth	27	%	25	%
Tenth	18	%	0	%
Eleventh	9	%	0	%
Twelfth	0	%	0	%

If any performance units vest for a given performance period, the award holder will be paid a cash amount equal to the vested percentage of the performance units multiplied by the closing stock price of our common stock on the last trading day of the performance period. We account for the performance units as a liability-type award as they are settled in cash. As of March 31, 2014, the fair value of outstanding performance units was $8.2 million, and is being accreted to compensation expense over the vesting terms of the awards. As of March 31, 2014, the unrecognized compensation cost related to our unvested performance units is estimated to be $5.5 million and is expected to be recognized over a weighted-average period of 1.4 years.

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Income Statement [Abstract]
REVENUES	$ 356,141	$ 428,449
COSTS AND EXPENSES:
Direct operating expenses	258,302	299,182
Depreciation and amortization expense	51,095	54,193
General and administrative expenses	52,866	63,245
Operating income (loss)	(6,122)	11,829
Interest expense, net of amounts capitalized	13,554	13,804
Other income, net	(69)	(1,223)
Income (loss) before income taxes	(19,607)	(752)
Income tax benefit	7,708	566
Net loss	(11,899)	(186)
Income attributable to noncontrolling interest	0	88
LOSS ATTRIBUTABLE TO KEY	$ (11,899)	$ (274)
Earnings (loss) per share attributable to Key:
Basic and diluted (in usd per share)	$ (0.08)	$ 0.00
Weighted average shares outstanding:
Weighted Average Number of Shares Outstanding, Basic and Diluted	152,927	151,967

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GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the three months endedMarch 31, 2014 are as follows:

	U.S.		International			Total
	(in thousands)
December 31, 2013	$	597,456	$	27,419		$	624,875
Impact of foreign currency translation	—		(1,642		)	(1,642		)
March 31, 2014	$	597,456	$	25,777		$	623,233

The components of our other intangible assets as of March 31, 2014 and December 31, 2013 are as follows:

	March 31, 2014			December 31, 2013
	(in thousands)
Noncompete agreements:
Gross carrying value	$	9,332		$	9,332
Accumulated amortization	(7,624		)	(7,104		)
Net carrying value	1,708			2,228
Patents, trademarks and tradename:
Gross carrying value	13,385			14,039
Accumulated amortization	(234		)	(223		)
Net carrying value	13,151			13,816
Customer relationships and contracts:
Gross carrying value	100,023			100,271
Accumulated amortization	(80,739		)	(78,926		)
Net carrying value	19,284			21,345
Developed technology:
Gross carrying value	7,583			7,583
Accumulated amortization	(3,881		)	(3,826		)
Net carrying value	3,702			3,757
Customer Backlog:
Gross carrying value	779			779
Accumulated amortization	(779		)	(779		)
Net carrying value	—			—
Total:
Gross carrying value	131,102			132,004
Accumulated amortization	(93,257		)	(90,858		)
Net carrying value	$	37,845		$	41,146

Of our intangible assets at March 31, 2014, $13.0 million is an indefinite-lived tradename and not subject to amortization. The weighted average remaining amortization periods and expected amortization expense for the next five years for our definite lived intangible assets are as follows:

	Weighted average remaining amortization period (years)	Expected Amortization Expense
		Remainder of 2014		2015		2016		2017		2018		2019
		(in thousands)
Noncompete agreements	0.5	$	1,145	$	308	$	255	$	—	$	—	$	—
Patents and trademarks	4.2	30		40		40		40		17		—
Customer relationships and contracts	5.7	5,905		5,038		3,414		2,418		1,120		820
Developed technology	16.8	166		221		221		221		221		221
Total expected intangible asset amortization expense		$	7,246	$	5,607	$	3,930	$	2,679	$	1,358	$	1,041

Certain of our goodwill and other intangible assets are denominated in Russian Rubles and, as such, the values of these assets are subject to fluctuations associated with changes in exchange rates. Amortization expense for our intangible assets was $2.6 million and $4.8 millionfor the three months endedMarch 31, 2014 and 2013, respectively.

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OTHER BALANCE SHEET INFORMATION

3 Months Ended

Mar. 31, 2014

Supplemental Balance Sheet Disclosures [Abstract]

OTHER BALANCE SHEET INFORMATION

OTHER BALANCE SHEET INFORMATION

The table below presents comparative detailed information about other current assets at March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
	(in thousands)
Other current assets:
Deferred tax assets	$	15,755	$	11,707
Prepaid current assets	26,695		28,435
Reinsurance receivable	9,389		9,113
VAT asset	21,279		21,683
Other	25,409		25,608
Total	$	98,527	$	96,546

The table below presents comparative detailed information about other non-current assets at March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
	(in thousands)
Other non-current assets:
Deferred tax assets	$	22,292	$	22,313
Reinsurance receivable	9,788		9,397
Deposits	1,355		1,533
Equity method investments	965		962
Other	421		1,548
Total	$	34,821	$	35,753

The table below presents comparative detailed information about other current liabilities at March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
	(in thousands)
Other current liabilities:
Accrued payroll, taxes and employee benefits	$	34,273	$	34,956
Accrued operating expenditures	38,255		36,573
Income, sales, use and other taxes	30,613		37,064
Self-insurance reserve	31,964		32,129
Accrued interest	3,861		15,285
Accrued insurance premiums	4,801		8,049
Share-based compensation and other liabilities	7,532		5,889
Total	$	151,299	$	169,945

The table below presents comparative detailed information about other non-current liabilities at March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
	(in thousands)
Other non-current liabilities:
Asset retirement obligations	$	12,144	$	11,999
Environmental liabilities	6,119		6,176
Accrued rent	707		853
Accrued sales, use and other taxes	5,394		5,552
Other	1,345		1,075
Total	$	25,709	$	25,655

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SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES (Policies)

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Accounting Standards Not Yet Adopted in this Report

Accounting Standards Adopted or Not Yet Adopted in this Report

There are no new accounting standards that have been adopted or not yet adopted in this report.

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TRANSACTIONS WITH RELATED PARTIES

3 Months Ended

Mar. 31, 2014

Related Party Transactions [Abstract]

TRANSACTIONS WITH RELATED PARTIES

TRANSACTIONS WITH RELATED PARTIES

Board of Director Relationships

A member of our board of directors is the Executive Vice President, General Counsel and Chief Administrative Officer of Anadarko Petroleum Corporation (“Anadarko”), which is one of our customers. Sales to Anadarko were approximately $8.8 million and $6.6 million for the three-month periods endedMarch 31, 2014 and2013, respectively. Receivables outstanding from Anadarko were approximately $3.4 million and $4.9 million as of March 31, 2014 and December 31, 2013, respectively. Transactions with Anadarko for our services are made on terms consistent with other customers.

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INCOME TAXES

3 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

We are subject to U.S. federal income tax as well as income taxes in multiple state and foreign jurisdictions. Our effective tax rates on continuing operations for the three months endedMarch 31, 2014 and 2013 were 39.3% and 75.3%, respectively. Our effective tax rate varies due to the mix of pre-tax profit between the U.S. and international taxing jurisdictions with varying statutory rates, the impact of permanent differences, and discrete tax adjustments, such as tax expense or benefit recognized for uncertain tax positions. The variance between our effective rate and the U.S. statutory rate reflects international profits and losses subject to varying statutory rates, the impact of permanent items, mainly non-deductible expenses such as fines and penalties, and expenses subject to statutorily imposed limitations such as meals and entertainment expenses, plus the impact of state income taxes.

As of March 31, 2014 and December 31, 2013, we had $0.9 million of unrecognized tax benefits, net of federal tax benefit, which, if recognized, would impact our effective tax rate. We recognized tax expense of less than $0.1 million for the three-month periods ended March 31, 2014 and 2013 related to these items. We have substantially concluded all U.S. federal and state tax matters through the year ended December 31, 2009.

We record interest and penalties related to unrecognized tax benefits as income tax expense. We have accrued a liability of $0.1 million and $0.4 million for the payment of interest and penalties as of March 31, 2014 and December 31, 2013, respectively. We believe that it is reasonably possible that $0.5 million of our currently remaining unrecognized tax positions, each of which is individually insignificant, may be recognized in the next twelve months as a result of a lapse of statute of limitations and settlement of ongoing audits. No release of our deferred tax asset valuation allowance was made during the three months ended March 31, 2014 and 2013.

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SEGMENT INFORMATION - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				3 Months Ended
	Mar. 31, 2014 ft	Apr. 09, 2013 Geostream	Sep. 01, 2009 Geostream	Oct. 31, 2008 Geostream	Mar. 31, 2014 Geostream International	Apr. 09, 2013 Geostream International	Aug. 05, 2013 Al Mansoori Key Energy Services L L C [Member]
Segment Reporting Information [Line Items]
Percentage of acquired interest		50.00%		26.00%		50.00%
Aggregate cost of acquired interest		$ 14.6		$ 17.4		$ 14.6
Cumulative percentage ownership after all transactions					100.00%
Description of rigs used	Our rigs encompass various sizes and capabilities, allowing us to service all types of wells with depths up to 20,000 feet.
Maximum depth of wells that can be serviced (in feet)	20,000
Business Acquisition, Cost of Acquired Entity, Purchase Price			$ 16.4				$ 5.1

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LONG-TERM DEBT

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

LONG-TERM DEBT

LONG-TERM DEBT

As of March 31, 2014 and December 31, 2013, the components of our long-term debt were as follows:

	March 31, 2014		December 31, 2013
	(in thousands)
6.75% Senior Notes due 2021	$	675,000	$	675,000
8.375% Senior Notes due 2014	—		3,573
Senior Secured Credit Facility revolving loans due 2016	85,000		85,000
Net unamortized premium on debt	3,843		3,981
Total debt	763,843		767,554
Less current portion	—		(3,573		)
Long-term debt	$	763,843	$	763,981

Notes due 2014

On February 25, 2014, we redeemed the $3.6 million aggregate principal amount and paid $0.1 million accrued interest of 8.375% Senior Notes due 2014 (the “2014 Notes”) pursuant to the indenture dated as of November 29, 2007 (as supplemented, the “Indenture”). The 2014 Notes were general unsecured senior obligations and were subordinate to all of our existing and future secured indebtedness. The 2014 Notes were jointly and severally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries. Interest on the 2014 Notes was payable on June 1 and December 1 of each year.

6.75% Senior Notes due 2021

We issued $475.0 million aggregate principal amount of 6.75% Senior Notes due 2021 (the “Initial 2021 Notes”) on March 4, 2011 and issued an additional $200.0 million aggregate principal amount of the 2021 Notes (the “Additional 2021 Notes” and together with the Initial 2021 Notes, the “2021 Notes”) in a private placement on March 8, 2012 under an indenture dated March 4, 2011 (the “Base Indenture”), as supplemented by a first supplemental indenture dated March 4, 2011 and amended by a further supplemental indenture dated March 8, 2012 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). We used the net proceeds to repay senior secured indebtedness under our revolving bank credit facility. We capitalized $4.6 million of financing costs associated with the issuance of the 2021 Notes that will be amortized over the term of the notes.

On March 5, 2013, we completed an offer to exchange the $200.0 million in aggregate principal amount of unregistered Additional 2021 Notes for an equal principal amount of such notes registered under the Securities Act of 1933. All of the 2021 Notes are treated as a single class under the Indenture and as of the closing of the exchange offers bear the same CUSIP and ISIN numbers.

The 2021 Notes are general unsecured senior obligations and are effectively subordinated to all of our existing and future secured indebtedness. The 2021 Notes are or will be jointly and severally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries. Interest on the 2021 Notes is payable on March 1 and September 1 of each year. The 2021 Notes mature on March 1, 2021.

On or after March 1, 2016, the 2021 Notes will be subject to redemption at any time and from time to time at our option, in whole or in part, at the redemption prices below (expressed as percentages of the principal amount redeemed), plus accrued and unpaid interest to the applicable redemption date, if redeemed during the twelve-month period beginning on March 1 of the years indicated below:

Year	Percentage
2016	103.375	%
2017	102.250	%
2018	101.125	%
2019 and thereafter	100.000	%

At any time and from time to time prior to March 1, 2016, we may, at our option, redeem all or a portion of the 2021 Notes at a redemption price equal to 100% of the principal amount plus a premium with respect to the 2021 Notes plus accrued and unpaid interest to the redemption date. The premium is the excess of (i) the present value of the redemption price of 103.375% of the principal amount, plus all remaining scheduled interest payments due through March 1, 2016 discounted at the treasury rate plus 0.5% over (ii) the principal amount of the note. If we experience a change of control, subject to certain exceptions, we must give holders of the 2021 Notes the opportunity to sell to us their 2021 Notes, in whole or in part, at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest to the date of purchase.

We are subject to certain negative covenants under the Indenture. The Indenture limits our ability to, among other things:

• incur additional indebtedness and issue preferred equity interests;

• pay dividends or make other distributions or repurchase or redeem equity interests;

• make loans and investments;

• enter into sale and leaseback transactions;

• sell, transfer or otherwise convey assets;

• create liens;

• enter into transactions with affiliates;

• enter into agreements restricting subsidiaries’ ability to pay dividends;

• designate future subsidiaries as unrestricted subsidiaries; and

• consolidate, merge or sell all or substantially all of the applicable entities’ assets.

These covenants are subject to certain exceptions and qualifications, and contain cross-default provisions relating to the covenants of our 2011 Credit Facility discussed below. Substantially all of the covenants will terminate before the 2021 Notes mature if one of two specified ratings agencies assigns the 2021 Notes an investment grade rating in the future and no events of default exist under the Indenture. As of March 31, 2014, the 2021 Notes were rated below investment grade. Any covenants that cease to apply to us as a result of achieving an investment grade rating will not be restored, even if the investment rating assigned to the 2021 Notes later falls below investment grade. We were in compliance with these covenants as of March 31, 2014.

Senior Secured Credit Facility

We are party to a $550.0 million senior secured revolving bank credit facility with JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Capital One, N.A., Wells Fargo Bank, N.A., Credit Agricole Corporate and Investment Bank and DnB NOR Bank ASA, as Co-Documentation Agent (as amended, the “2011 Credit Facility”), which is an important source of liquidity for us. The 2011 Credit Facility consists of a revolving credit facility, letter of credit sub-facility and swing line facility, all of which will mature no later than March 31, 2016.

The maximum amount that we may borrow under the facility may be subject to limitation due to the operation of the covenants contained in the facility. The 2011 Credit Facility allows us to request increases in the total commitments under the facility by up to $100.0 million in the aggregate in part or in full anytime during the term of the 2011 Credit Facility, with any such increases being subject to compliance with the restrictive covenants in the 2011 Credit Facility and in the Indenture governing our 2021 Senior Notes, as well as lender approval.

We capitalized $4.9 million of financing costs in connection with the execution of the 2011 Credit Facility and an additional $1.4 million related to a subsequent amendment that will be amortized over the term of the debt.

The interest rate per annum applicable to the 2011 Credit Facility is, at our option, (i) adjusted LIBOR plus the applicable margin or (ii) the higher of (x) JPMorgan’s prime rate, (y) the Federal Funds rate plus 0.5% and (z) one-month adjusted LIBOR plus 1.0%, plus in each case the applicable margin for all other loans. The applicable margin for LIBOR loans ranges from 225 to 300 basis points, and the applicable margin for all other loans ranges from 125 to 200 basis points, depending upon our consolidated total leverage ratio as defined in the 2011 Credit Facility. Unused commitment fees on the facility equal 0.50%.

The 2011 Credit Facility contains certain financial covenants, which, among other things, limit our annual capital expenditures, restrict our ability to repurchase shares and require us to maintain certain financial ratios. The financial ratios require that:

• our ratio of consolidated funded indebtedness to total capitalization be no greater than 45%;

• our senior secured leverage ratio of senior secured funded debt to trailing four quarters of earnings before interest, taxes, depreciation and amortization (as calculated pursuant to the terms of the 2011 Credit Facility, “EBITDA”) be no greater than 2.00 to 1.00;

• we maintain a collateral coverage ratio, the ratio of the aggregate book value of the collateral to the amount of the total commitments, as of the last day of any fiscal quarter of at least 2:00 to 1:00;

• we maintain a consolidated interest coverage ratio of trailing four quarters EBITDA to interest expense of at least 3.00 to 1.00; and

• we limit our capital expenditures and investments in foreign subsidiaries to $250.0 million per fiscal year, if the consolidated total leverage ratio exceeds 3.00 to 1.00.

In addition, the 2011 Credit Facility contains certain affirmative and negative covenants, including, without limitation, restrictions on (i) liens; (ii) debt, guarantees and other contingent obligations; (iii) mergers and consolidations; (iv) sales, transfers and other dispositions of property or assets; (v) loans, acquisitions, joint ventures and other investments (with acquisitions permitted so long as, after giving pro forma effect thereto, no default or event of default exists under the 2011 Credit Facility, the pro forma consolidated total leverage ratio does not exceed 4.00 to 1.00, we are in compliance with other financial covenants and we have at least $25.0 million of availability under the 2011 Credit Facility); (vi) dividends and other distributions to, and redemptions and repurchases from, equity holders; (vii) making investments, loans or advances; (viii) selling properties; (ix) prepaying, redeeming or repurchasing subordinated (contractually or structurally) debt; (x) engaging in transactions with affiliates; (xi) entering into hedging arrangements; (xii) entering into sale and leaseback transactions; (xiii) granting negative pledges other than to the lenders; (xiv) changes in the nature of business; (xv) amending organizational documents; and (xvi) changes in accounting policies or reporting practices; in each of the foregoing cases, with certain exceptions.

We were in compliance with these covenants as of March 31, 2014. We may prepay the 2011 Credit Facility in whole or in part at any time without premium or penalty, subject to certain reimbursements to the lenders for breakage and redeployment costs. As of March 31, 2014, we had borrowings of $85.0 million outstanding under the revolving credit facility, $51.1 million of letters of credit outstanding with borrowing capacity of $170.0 million available considering covenant constraints under our 2011 Credit Facility. The weighted average interest rates on the outstanding borrowings under the 2011 Credit Facility were 2.88% and 2.68% for the three-month periods ended March 31, 2014 and March 31, 2013, respectively.

Letter of Credit Facility

On November 7, 2013, we entered into an uncommitted, unsecured $15.0 million letter of credit facility to be used solely for the issuances of performance letters of credit. As of March 31, 2014, $2.0 million of letters of credit were outstanding under the facility.

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OTHER INCOME, NET

3 Months Ended

Mar. 31, 2014

Other Income and Expenses [Abstract]

OTHER INOME, NET

OTHER INCOME

The table below presents comparative detailed information about our other income and expense, shown on the condensed consolidated statements of operations as “Other income, net” for the periods indicated:

	Three Months Ended March 31,
	2014			2013
	(in thousands)
Interest income	$	(18	)	$	(11	)
Foreign exchange (gain) loss	1,366			(925		)
Other, net	(1,417		)	(287		)
Total	$	(69	)	$	(1,223	)

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Litigation

Various suits and claims arising in the ordinary course of business are pending against us. We conduct business throughout the continental United States and may be subject to jury verdicts or arbitrations that result in outcomes in favor of the plaintiffs. We are also exposed to various claims abroad. We continually assess our contingent liabilities, including potential litigation liabilities, as well as the adequacy of our accruals and our need for the disclosure of these items, if any. We establish a provision for a contingent liability when it is probable that a liability has been incurred and the amount is reasonably approximated. We have $0.7 million of other liabilities related to litigation that is deemed probable and reasonably estimated as of March 31, 2014. We do not believe that the disposition of any of these matters will result in an additional loss materially in excess of amounts that have been recorded.

During the second and third quarter of 2013, three lawsuits with similar allegations of violations of California's wage and hour laws were filed in California. The lawsuits allege failure to pay overtime, failure to pay minimum wages, improper payroll deductions, failure to pay final wages in a timely manner, and violations of the California meal and break period laws, among other claims. We intend to vigorously investigate and defend these actions; however, because these cases are in the early stages, we cannot predict the outcome of these lawsuits at this time and, accordingly, cannot estimate any possible loss or range of loss.

Self-Insurance Reserves

We maintain reserves for workers’ compensation and vehicle liability on our balance sheet based on our judgment and estimates using an actuarial method based on claims incurred. We estimate general liability claims on a case-by-case basis. We maintain insurance policies for workers’ compensation, vehicle liability and general liability claims. These insurance policies carry self-insured retention limits or deductibles on a per occurrence basis. The retention limits or deductibles are accounted for in our accrual process for all workers’ compensation, vehicular liability and general liability claims. As of March 31, 2014 and December 31, 2013, we have recorded $62.1 million of self-insurance reserves related to workers’ compensation, vehicular liabilities and general liability claims. Partially offsetting these liabilities, we had $19.2 million and $18.5 million of insurance receivables as of March 31, 2014 and December 31, 2013, respectively. We believe that the liabilities we have recorded are appropriate based on the known facts and circumstances and do not expect further losses materially in excess of the amounts already accrued for existing claims.

Environmental Remediation Liabilities

For environmental reserve matters, including remediation efforts for current locations and those relating to previously disposed properties, we record liabilities when our remediation efforts are probable and the costs to conduct such remediation efforts can be reasonably estimated. As of March 31, 2014 and December 31, 2013, we have recorded $6.1 million and $6.2 million, respectively, for our environmental remediation liabilities. We believe that the liabilities we have recorded are appropriate based on the known facts and circumstances and do not expect further losses materially in excess of the amounts already accrued.

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Condensed Consolidating Unaudited Statements Of Cash Flows (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by operating activities	$ 45,694	$ 19,562
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(28,525)	(37,144)
Intercompany notes and accounts	0	0
Other investing activities, net	1,774	(14,241)
Net cash used in investing activities	(26,751)	(51,385)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Repayments of long-term debt	(3,573)	0
Repayment of capital lease obligations	0	(264)
Proceeds from borrowings on revolving credit facility	70,000	95,000
Repayments on revolving credit facility	(70,000)	(65,000)
Payment of deferred financing costs	0	(46)
Repurchases of common stock	(2,151)	(2,462)
Intercompany notes and accounts	0	0
Other financing activities, net	(1,210)	(1,402)
Net cash provided by (used in) financing activities	(6,934)	25,826
Effect of changes in exchange rates on cash	634	(52)
Net increase (decrease) in cash and cash equivalents	12,643	(6,049)
Cash and cash equivalents, beginning of period	28,306	45,949
Cash and cash equivalents, end of period	40,949	39,900
Parent Company
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by operating activities	0	0
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	0	0
Intercompany notes and accounts	0	0
Other investing activities, net		0
Net cash used in investing activities	0	0
Net Cash Provided by (Used in) Financing Activities [Abstract]
Repayments of long-term debt	(3,573)
Repayment of capital lease obligations		0
Proceeds from borrowings on revolving credit facility	70,000	95,000
Repayments on revolving credit facility	(70,000)	(65,000)
Payment of deferred financing costs		(46)
Repurchases of common stock	(2,151)	(2,462)
Intercompany notes and accounts	19,651	(29,505)
Other financing activities, net	(1,210)	(1,402)
Net cash provided by (used in) financing activities	12,717	(3,415)
Effect of changes in exchange rates on cash	0	0
Net increase (decrease) in cash and cash equivalents	12,717	(3,415)
Cash and cash equivalents, beginning of period	23,115	39,617
Cash and cash equivalents, end of period	35,832	36,202
Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by operating activities	44,278	17,509
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(26,912)	(33,410)
Intercompany notes and accounts	(19,651)	29,505
Other investing activities, net	1,774	(14,241)
Net cash used in investing activities	(44,789)	(18,146)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Repayments of long-term debt	0
Repayment of capital lease obligations		(264)
Proceeds from borrowings on revolving credit facility	0	0
Repayments on revolving credit facility	0	0
Payment of deferred financing costs		0
Repurchases of common stock	0	0
Intercompany notes and accounts	0	0
Other financing activities, net	0	0
Net cash provided by (used in) financing activities	0	(264)
Effect of changes in exchange rates on cash	0	0
Net increase (decrease) in cash and cash equivalents	(511)	(901)
Cash and cash equivalents, beginning of period	788	1,601
Cash and cash equivalents, end of period	277	700
Non-Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by operating activities	1,416	2,053
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(1,613)	(3,734)
Intercompany notes and accounts	0	0
Other investing activities, net	0	0
Net cash used in investing activities	(1,613)	(3,734)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Repayments of long-term debt	0
Repayment of capital lease obligations		0
Proceeds from borrowings on revolving credit facility	0	0
Repayments on revolving credit facility	0	0
Payment of deferred financing costs		0
Repurchases of common stock	0	0
Intercompany notes and accounts	0	0
Other financing activities, net	0	0
Net cash provided by (used in) financing activities	0	0
Effect of changes in exchange rates on cash	634	(52)
Net increase (decrease) in cash and cash equivalents	437	(1,733)
Cash and cash equivalents, beginning of period	4,403	4,731
Cash and cash equivalents, end of period	4,840	2,998
Eliminations
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by operating activities	0	0
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	0	0
Intercompany notes and accounts	19,651	(29,505)
Other investing activities, net	0	0
Net cash used in investing activities	19,651	(29,505)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Repayments of long-term debt	0
Repayment of capital lease obligations		0
Proceeds from borrowings on revolving credit facility	0	0
Repayments on revolving credit facility	0	0
Payment of deferred financing costs		0
Repurchases of common stock	0	0
Intercompany notes and accounts	(19,651)	29,505
Other financing activities, net	0	0
Net cash provided by (used in) financing activities	(19,651)	29,505
Effect of changes in exchange rates on cash	0	0
Net increase (decrease) in cash and cash equivalents	0	0
Cash and cash equivalents, beginning of period	0	0
Cash and cash equivalents, end of period	$ 0	$ 0

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Condensed Consolidating Unaudited Statements of Operations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	$ 356,141	$ 428,449
Direct operating expense	258,302	299,182
Depreciation and amortization expense	51,095	54,193
General and administrative expense	52,866	63,245
Operating income (loss)	(6,122)	11,829
Interest expense, net of amounts capitalized	13,554	13,804
Other income, net	(69)	(1,223)
Income (loss) before income taxes	(19,607)	(752)
Income tax expense (benefit)	7,708	566
Net loss	(11,899)	(186)
Income attributable to noncontrolling interest	0	88
LOSS ATTRIBUTABLE TO KEY	(11,899)	(274)
Parent Company
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	0	124
Direct operating expense	0	0
Depreciation and amortization expense	0	0
General and administrative expense	236	254
Operating income (loss)	(236)	(130)
Interest expense, net of amounts capitalized	13,552	13,891
Other income, net	(671)	(898)
Income (loss) before income taxes	(13,117)	(13,123)
Income tax expense (benefit)	0	1,248
Net loss	(13,117)	(11,875)
Income attributable to noncontrolling interest	0	0
LOSS ATTRIBUTABLE TO KEY	(13,117)	(11,875)
Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	330,475	405,384
Direct operating expense	236,658	286,042
Depreciation and amortization expense	47,763	52,057
General and administrative expense	49,548	57,821
Operating income (loss)	(3,494)	9,464
Interest expense, net of amounts capitalized	0	(136)
Other income, net	(724)	(1,169)
Income (loss) before income taxes	(2,770)	10,769
Income tax expense (benefit)	5,971	(883)
Net loss	3,201	9,886
Income attributable to noncontrolling interest	0	0
LOSS ATTRIBUTABLE TO KEY	3,201	9,886
Non-Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	32,511	43,490
Direct operating expense	24,471	30,483
Depreciation and amortization expense	3,109	2,136
General and administrative expense	6,902	8,852
Operating income (loss)	(1,971)	2,019
Interest expense, net of amounts capitalized	2	49
Other income, net	1,309	37
Income (loss) before income taxes	(3,282)	1,933
Income tax expense (benefit)	(479)	201
Net loss	(3,761)	2,134
Income attributable to noncontrolling interest	0	88
LOSS ATTRIBUTABLE TO KEY	(3,761)	2,046
Eliminations
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	(6,845)	(20,549)
Direct operating expense	(2,827)	(17,343)
Depreciation and amortization expense	223	0
General and administrative expense	(3,820)	(3,682)
Operating income (loss)	(421)	476
Interest expense, net of amounts capitalized	0	0
Other income, net	17	807
Income (loss) before income taxes	(438)	(331)
Income tax expense (benefit)	2,216	0
Net loss	1,778	(331)
Income attributable to noncontrolling interest	0	0
LOSS ATTRIBUTABLE TO KEY	$ 1,778	$ (331)

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Tables)

3 Months Ended

Mar. 31, 2014

Condensed Consolidating Financial Statements [Abstract]

Condensed Consolidating Balance Sheets

CONDENSED CONSOLIDATING UNAUDITED BALANCE SHEETS
	March 31, 2014
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands) (unaudited)
Assets:
Current assets	$	62,058	$	376,446	$	60,573		$	—		$	499,077
Property and equipment, net	—		1,223,635		111,255			8,563			1,343,453
Goodwill	—		597,457		25,776			—			623,233
Deferred financing costs, net	13,198		—		—			—			13,198
Intercompany notes and accounts receivable and investment in subsidiaries	3,378,038		1,399,382		33,077			(4,810,497		)	—
Other assets	—		33,654		39,012			—			72,666
TOTAL ASSETS	$	3,453,294	$	3,630,574	$	269,693		$	(4,801,934	)	$	2,551,627
Liabilities and equity:
Current liabilities	$	12,303	$	174,864	$	28,803		$	—		$	215,970
Long-term debt and capital leases, less current portion	763,843		—		—			—			763,843
Intercompany notes and accounts payable	1,162,648		2,675,274		108,602			(3,946,524		)	—
Deferred tax liabilities	279,647		4,643		(1,966		)	—			282,324
Other long-term liabilities	1,200		54,657		(36		)	—			55,821
Equity	1,233,653		721,136		134,290			(855,410		)	1,233,669
TOTAL LIABILITIES AND EQUITY	$	3,453,294	$	3,630,574	$	269,693		$	(4,801,934	)	$	2,551,627

CONDENSED CONSOLIDATING BALANCE SHEETS
	December 31, 2013
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Assets:
Current assets	$	50,321	$	398,188	$	57,644		$	—		$	506,153
Property and equipment, net	—		1,244,216		121,430			—			1,365,646
Goodwill	—		597,457		27,418			—			624,875
Deferred financing costs, net	13,897		—		—			—			13,897
Intercompany notes and accounts receivable and investment in subsidiaries	3,421,607		1,364,174		12,939			(4,798,720		)	—
Other assets	—		34,278		42,621			—			76,899
TOTAL ASSETS	$	3,485,825	$	3,638,313	$	262,052		$	(4,798,720	)	$	2,587,470
Liabilities and equity:
Current liabilities	$	26,097	$	182,497	$	23,750		$	—		$	232,344
Long-term debt and capital leases, less current portion	763,981		—		—			—			763,981
Intercompany notes and accounts payable	1,162,648		2,667,943		97,050			(3,927,641		)	—
Deferred tax liabilities	280,828		4,643		(1,819		)	801			284,453
Other long-term liabilities	1,195		54,486		(82		)	—			55,599
Equity	1,251,076		728,744		143,153			(871,880		)	1,251,093
TOTAL LIABILITIES AND EQUITY	$	3,485,825	$	3,638,313	$	262,052		$	(4,798,720	)	$	2,587,470

Condensed Consolidating Unaudited Statements of Operations

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended March 31, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	330,475		$	32,511		$	(6,845	)	$	356,141
Direct operating expense	—			236,658			24,471			(2,827		)	258,302
Depreciation and amortization expense	—			47,763			3,109			223			51,095
General and administrative expense	236			49,548			6,902			(3,820		)	52,866
Operating loss	(236		)	(3,494		)	(1,971		)	(421		)	(6,122		)
Interest expense, net of amounts capitalized	13,552			—			2			—			13,554
Other (income) loss, net	(671		)	(724		)	1,309			17			(69		)
Loss before income taxes	(13,117		)	(2,770		)	(3,282		)	(438		)	(19,607		)
Income tax (expense) benefit	—			5,971			(479		)	2,216			7,708
Net loss	(13,117		)	3,201			(3,761		)	1,778			(11,899		)
Income attributable to noncontrolling interest	—			—			—			—			—
LOSS ATTRIBUTABLE TO KEY	$	(13,117	)	$	3,201		$	(3,761	)	$	1,778		$	(11,899	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended March 31, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in thousands)
Revenues	$	124		$	405,384		$	43,490	$	(20,549	)	$	428,449
Direct operating expense	—			286,042			30,483		(17,343		)	299,182
Depreciation and amortization expense	—			52,057			2,136		—			54,193
General and administrative expense	254			57,821			8,852		(3,682		)	63,245
Operating income (loss)	(130		)	9,464			2,019		476			11,829
Interest expense, net of amounts capitalized	13,891			(136		)	49		—			13,804
Other (income) loss, net	(898		)	(1,169		)	37		807			(1,223		)
Income (loss) before income taxes	(13,123		)	10,769			1,933		(331		)	(752		)
Income tax (expense) benefit	1,248			(883		)	201		—			566
Net income (loss)	(11,875		)	9,886			2,134		(331		)	(186		)
Income attributable to noncontrolling interest	—			—			88		—			88
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(11,875	)	$	9,886		$	2,046	$	(331	)	$	(274	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Three Months Ended March 31, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by operating activities	$	—		$	44,278		$	1,416		$	—		$	45,694
Cash flows from investing activities:
Capital expenditures	—			(26,912		)	(1,613		)	—			(28,525		)
Intercompany notes and accounts	—			(19,651		)	—			19,651			—
Other investing activities, net				1,774			—			—			1,774
Net cash used in investing activities	—			(44,789		)	(1,613		)	19,651			(26,751		)
Cash flows from financing activities:
Repayments of long-term debt	(3,573		)	—			—			—			(3,573		)
Proceeds from borrowings on revolving credit facility	70,000			—			—			—			70,000
Repayments on revolving credit facility	(70,000		)	—			—			—			(70,000		)
Repurchases of common stock	(2,151		)	—			—			—			(2,151		)
Intercompany notes and accounts	19,651			—			—			(19,651		)	—
Other financing activities, net	(1,210		)	—			—			—			(1,210		)
Net cash provided by (used in) financing activities	12,717			—			—			(19,651		)	(6,934		)
Effect of changes in exchange rates on cash	—			—			634			—			634
Net increase (decrease) in cash and cash equivalents	12,717			(511		)	437			—			12,643
Cash and cash equivalents at beginning of period	23,115			788			4,403			—			28,306
Cash and cash equivalents at end of period	$	35,832		$	277		$	4,840		$	—		$	40,949

Condensed Consolidating Unaudited Statements of Cash Flows

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Three Months Ended March 31, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by operating activities	$	—		$	44,278		$	1,416		$	—		$	45,694
Cash flows from investing activities:
Capital expenditures	—			(26,912		)	(1,613		)	—			(28,525		)
Intercompany notes and accounts	—			(19,651		)	—			19,651			—
Other investing activities, net				1,774			—			—			1,774
Net cash used in investing activities	—			(44,789		)	(1,613		)	19,651			(26,751		)
Cash flows from financing activities:
Repayments of long-term debt	(3,573		)	—			—			—			(3,573		)
Proceeds from borrowings on revolving credit facility	70,000			—			—			—			70,000
Repayments on revolving credit facility	(70,000		)	—			—			—			(70,000		)
Repurchases of common stock	(2,151		)	—			—			—			(2,151		)
Intercompany notes and accounts	19,651			—			—			(19,651		)	—
Other financing activities, net	(1,210		)	—			—			—			(1,210		)
Net cash provided by (used in) financing activities	12,717			—			—			(19,651		)	(6,934		)
Effect of changes in exchange rates on cash	—			—			634			—			634
Net increase (decrease) in cash and cash equivalents	12,717			(511		)	437			—			12,643
Cash and cash equivalents at beginning of period	23,115			788			4,403			—			28,306
Cash and cash equivalents at end of period	$	35,832		$	277		$	4,840		$	—		$	40,949

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Three Months Ended March 31, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by operating activities	$	—		$	17,509		$	2,053		$	—		$	19,562
Cash flows from investing activities:
Capital expenditures	—			(33,410		)	(3,734		)	—			(37,144		)
Intercompany notes and accounts	—			29,505			—			(29,505		)	—
Other investing activities, net	—			(14,241		)	—			—			(14,241		)
Net cash used in investing activities	—			(18,146		)	(3,734		)	(29,505		)	(51,385		)
Cash flows from financing activities:
Repayment of capital lease obligations	—			(264		)	—			—			(264		)
Proceeds from borrowings on revolving credit facility	95,000			—			—			—			95,000
Repayments on revolving credit facility	(65,000		)	—			—			—			(65,000		)
Payment of deferred financing costs	(46		)	—			—			—			(46		)
Repurchases of common stock	(2,462		)	—			—			—			(2,462		)
Intercompany notes and accounts	(29,505		)	—			—			29,505			—
Other financing activities, net	(1,402		)	—			—			—			(1,402		)
Net cash provided by (used in) financing activities	(3,415		)	(264		)	—			29,505			25,826
Effect of changes in exchange rates on cash	—			—			(52		)	—			(52		)
Net decrease in cash and cash equivalents	(3,415		)	(901		)	(1,733		)	—			(6,049		)
Cash and cash equivalents at beginning of period	39,617			1,601			4,731			—			45,949
Cash and cash equivalents at end of period	$	36,202		$	700		$	2,998		$	—		$	39,900

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INCOME TAXES - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Continuing operations, effective tax rate	39.30%	75.30%
Unrecognized tax benefits, net of federal tax benefit, if recognized, would impact effective tax rate	$ 0.9		$ 0.9
Tax expense, recognized (less than $0.1 million for periods ended 3/31/13 and 3/31/12)	0.1	0.1
Accrued liability for the payment of interest and penalties	0.1		0.4
Remaining unrecognized tax positions, that may be recognized in the next twelve months	$ 0.5

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SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

Our operating segments are U.S. and International. We also have a “Functional Support” segment associated with managing each of our reportable operating segments. Our domestic rig services, fluid management services, fishing and rental services, and coiled tubing services are aggregated within our U.S. reportable segment. Our international rig services business and our Canadian technology development group are aggregated within our International reportable segment. We evaluate the performance of our operating segments based on revenue and income measures. All inter-segment sales pricing is based on current market conditions. The following is a description of the segments:

U.S. Segment

Rig-Based Services

Our rig-based services include the completion of newly drilled wells, workover and recompletion of existing oil and natural gas wells, well maintenance, and the plugging and abandonment of wells at the end of their useful lives. We also provide specialty drilling services to oil and natural gas producers with certain of our larger rigs that are capable of providing conventional and horizontal drilling services. Our rigs encompass various sizes and capabilities, allowing us to service all types of wells with depths up to 20,000 feet. Many of our rigs are outfitted with our proprietary KeyView® technology, which captures and reports well site operating data and provides safety control systems. We believe that this technology allows our customers and our crews to better monitor well site operations, improves efficiency and safety, and adds value to the services that we offer.

The completion and recompletion services provided by our rigs prepare wells for production, whether newly drilled, or recently extended through a workover operation. The completion process may involve selectively perforating the well casing to access production zones, stimulating and testing these zones, and installing tubular and downhole equipment. We typically provide a well service rig and may also provide other equipment to assist in the completion process. Completion services vary by well and our work may take a few days to several weeks to perform, depending on the nature of the completion.

The workover services that we provide are designed to enhance the production of existing wells and generally are more complex and time consuming than normal maintenance services. Workover services can include deepening or extending wellbores into new formations by drilling horizontal or lateral wellbores, sealing off depleted production zones and accessing previously bypassed production zones, converting former production wells into injection wells for enhanced recovery operations and conducting major subsurface repairs due to equipment failures. Workover services may last from a few days to several weeks, depending on the complexity of the workover.

Maintenance services provided with our rig fleet are generally required throughout the life cycle of an oil or natural gas well. Examples of these maintenance services include routine mechanical repairs to the pumps, tubing and other equipment, removing debris and formation material from wellbores, and pulling rods and other downhole equipment from wellbores to identify and resolve production problems. Maintenance services are generally less complicated than completion and workover related services and require less time to perform.

Our rig fleet is also used in the process of permanently shutting-in oil or natural gas wells that are at the end of their productive lives. These plugging and abandonment services generally require auxiliary equipment in addition to a well servicing rig. The demand for plugging and abandonment services is not significantly impacted by the demand for oil and natural gas because well operators are required by state regulations to plug wells that are no longer productive.

Fluid Management Services

We provide transportation and well-site storage services for various fluids utilized in connection with drilling, completions, workover and maintenance activities. We also provide disposal services for fluids produced subsequent to well completion.  These fluids are removed from the well site and transported for disposal in saltwater disposal wells owned by us or a third party. In addition, we operate a fleet of hot oilers capable of pumping heated fluids used to clear soluble restrictions in a wellbore. Demand and pricing for these services generally correspond to demand for our well service rigs.

Coiled Tubing Services

Coiled tubing services involve the use of a continuous metal pipe spooled onto a large reel which is then deployed into oil and natural gas wells to perform various applications, such as wellbore clean-outs, nitrogen jet lifts, through-tubing fishing, and formation stimulations utilizing acid and chemical treatments. Coiled tubing is also used for a number of horizontal well applications such as milling temporary isolation plugs that separate frac zones, and various other pre- and post-hydraulic fracturing well preparation services.

Fishing and Rental Services

We offer a full line of services and rental equipment designed for use in providing both onshore and offshore drilling and workover services. Fishing services involve recovering lost or stuck equipment in the wellbore utilizing a broad array of “fishing tools.” Our rental tool inventory consists of drill pipe, tubulars, handling tools (including our patented Hydra-Walk^® pipe-handling units and services), pressure-control equipment, pumps, power swivels, reversing units, foam air units, frac stack equipment used to support hydraulic fracturing operations and the associated flowback of frac fluids, proppants, oil and natural gas. We also provide well testing services.

Demand for our fishing and rental services is closely related to capital spending by oil and natural gas producers, which is generally a function of oil and natural gas prices.

International Segment

Our International segment includes operations in Mexico, Colombia, Ecuador, the Middle East and Russia. In addition, we have a technology development and control systems business based in Canada. Also, we operated in Argentina prior to the sale of that business in the third quarter of 2012. We are reporting the results of our former Argentina business as discontinued operations for all periods presented. We provide rig-based services such as the maintenance, workover, recompletion of existing oil wells, completion of newly-drilled wells and plugging and abandonment of wells at the end of their useful lives in each of our international markets.

In addition, in Mexico we provide drilling, coiled tubing, wireline, project management and consulting services. Our work in Mexico also requires us to provide third party services that vary in scope by project.

In the Middle East, we operate in the Kingdom of Bahrain and Oman. On August 5, 2013, we agreed to the dissolution of AlMansoori Key Energy Services, LLC, a joint venture formed under the laws of Abu Dhabi, UAE, and the acquisition of the underlying business for $5.1 million. See “Note 3. Acquisition of Noncontrolling Interests” for further discussion.

Our Russian operations provide drilling, workover, and reservoir engineering services. On April 9, 2013, we completed the acquisition of the 50% noncontrolling interest in Geostream, a limited liability company incorporated in the Russian Federation, for $14.6 million. We now own 100% of Geostream. See “Note 3. Acquisition of Noncontrolling Interests” for further discussion.

Our technology development and control systems business based in Canada is focused on the development of hardware and software related to oilfield service equipment controls, data acquisition and digital information flow.

Functional Support Segment

Our Functional Support segment includes unallocated overhead costs associated with administrative support for our U.S. and International reporting segments.

Financial Summary

The following tables set forth our unaudited segment information as of and for the three months ended March 31, 2014 and 2013 (in thousands):

As of and for the three months ended March 31, 2014
	U.S.		International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	324,044	$	32,097		$	—		$	—		$	356,141
Intersegment revenues	235		2,221			542			(2,998		)	—
Depreciation and amortization	40,703		7,904			2,488			—			51,095
Other operating expenses	247,684		34,684			28,800			—			311,168
Operating income (loss)	35,657		(10,491		)	(31,288		)	—			(6,122		)
Interest expense, net of amounts capitalized	—		2			13,552			—			13,554
Income (loss) before income taxes	36,422		(11,948		)	(44,081		)	—			(19,607		)
Long-lived assets(1)	1,635,709		311,286			282,931			(177,376		)	2,052,550
Total assets	2,841,405		474,533			(258,378		)	(505,933		)	2,551,627
Capital expenditures, excluding acquisitions	23,960		1,874			2,691			—			28,525

As of and for the three months ended March 31, 2013
	U.S.		International		Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	346,072	$	82,377	$	—		$	—		$	428,449
Intersegment revenues	8,601		1,519		124			(10,244		)	—
Depreciation and amortization	44,790		6,500		2,903			—			54,193
Other operating expenses	263,007		64,003		35,417			—			362,427
Operating income (loss)	38,275		11,874		(38,320		)	—			11,829
Interest expense, net of amounts capitalized	1		49		13,754			—			13,804
Income (loss) before income taxes	38,209		13,056		(52,017		)	—			(752		)
Long-lived assets(1)	1,701,593		339,485		272,990			(168,885		)	2,145,183
Total assets	2,593,050		544,236		85,141			(461,126		)	2,761,301
Capital expenditures, excluding acquisitions	23,310		10,967		2,867			—			37,144

(1) Long lived assets include fixed assets, goodwill, intangibles and other assets.

(2) Functional Support is geographically located in the United States.

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OTHER BALANCE SHEET INFORMATION (Tables)

3 Months Ended

Mar. 31, 2014

Supplemental Balance Sheet Disclosures [Abstract]

Other Current Assets

The table below presents comparative detailed information about other current assets at March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
	(in thousands)
Other current assets:
Deferred tax assets	$	15,755	$	11,707
Prepaid current assets	26,695		28,435
Reinsurance receivable	9,389		9,113
VAT asset	21,279		21,683
Other	25,409		25,608
Total	$	98,527	$	96,546

Other Noncurrent Assets

The table below presents comparative detailed information about other non-current assets at March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
	(in thousands)
Other non-current assets:
Deferred tax assets	$	22,292	$	22,313
Reinsurance receivable	9,788		9,397
Deposits	1,355		1,533
Equity method investments	965		962
Other	421		1,548
Total	$	34,821	$	35,753

Other Current Liabilities

The table below presents comparative detailed information about other current liabilities at March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
	(in thousands)
Other current liabilities:
Accrued payroll, taxes and employee benefits	$	34,273	$	34,956
Accrued operating expenditures	38,255		36,573
Income, sales, use and other taxes	30,613		37,064
Self-insurance reserve	31,964		32,129
Accrued interest	3,861		15,285
Accrued insurance premiums	4,801		8,049
Share-based compensation and other liabilities	7,532		5,889
Total	$	151,299	$	169,945

Other Noncurrent Liabilities

The table below presents comparative detailed information about other non-current liabilities at March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
	(in thousands)
Other non-current liabilities:
Asset retirement obligations	$	12,144	$	11,999
Environmental liabilities	6,119		6,176
Accrued rent	707		853
Accrued sales, use and other taxes	5,394		5,552
Other	1,345		1,075
Total	$	25,709	$	25,655

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LONG-TERM DEBT Letter of Credit Facility (Details) (Letter of Credit [Member], USD $)	Mar. 31, 2014
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 15,000,000
Line of credit, amount outstanding	$ 2,000,000

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GOODWILL AND OTHER INTANGIBLE ASSETS - Carrying Amount of Goodwill (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Goodwill [Roll Forward]
December 31, 2012	$ 624,875
Impact of foreign currency translation	(1,642)
March 31, 2014	623,233
U.S.
Goodwill [Roll Forward]
December 31, 2012	597,456
Impact of foreign currency translation	0
March 31, 2014	597,456
International
Goodwill [Roll Forward]
December 31, 2012	27,419
Impact of foreign currency translation	(1,642)
March 31, 2014	$ 25,777

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Statement of Comprehensive Income [Abstract]
NET LOSS	$ (11,899)	$ (186)
Other comprehensive loss, net of tax:
Foreign currency translation loss	(5,265)	(1,518)
COMPREHENSIVE INCOME LOSS	(17,164)	(1,704)
Comprehensive loss attributable to noncontrolling interest	0	590
COMPREHENSIVE LOSS ATTRIBUTABLE TO KEY	$ (17,164)	$ (1,114)

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EQUITY AND NONCONTROLLING INTEREST EQUITY AND NONCONTROLLING INTEREST

3 Months Ended

Mar. 31, 2014

Equity [Abstract]

EQUITY

EQUITY

A reconciliation of the total carrying amount of our equity accounts for the three months endedMarch 31, 2014 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interest		Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2013	152,331		$	15,233		$	953,306		$	(15,414	)	$	297,968		$	—	$	1,251,093
Foreign currency translation	—		—			—			(5,265		)	—			—		(5,265		)
Common stock purchases	(276	)	(28		)	(2,123		)	—			—			—		(2,151		)
Share-based compensation	1,348		135			2,966			—			—			—		3,101
Tax benefits from share-based compensation	—		—			(1,210		)	—			—			—		(1,210		)
Net loss	—		—			—			—			(11,899		)	—		(11,899		)
BALANCE AT MARCH 31, 2014	153,403		$	15,340		$	952,939		$	(20,679	)	$	286,069		$	—	$	1,233,669

A reconciliation of the total carrying amount of our equity accounts for the three months endedMarch 31, 2013 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interest			Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2012	151,070		$	15,108		$	925,132		$	(6,148	)	$	319,736		$	33,504		$	1,287,332
Foreign currency translation	—		—			—			(840		)	—			(678		)	(1,518		)
Common stock purchases	(299	)	(31		)	(2,431		)	—			—			—			(2,462		)
Share-based compensation	1,580		158			3,415			—			—			—			3,573
Tax benefits from share-based compensation	—		—			(1,402		)	—			—			—			(1,402		)
Net income (loss)	—		—			—			—			(274		)	88			(186		)
BALANCE AT MARCH 31, 2013	152,351		$	15,235		$	924,714		$	(6,988	)	$	319,462		$	32,914		$	1,285,337

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ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS - Carrying Amounts and Estimated Fair Values of Financial Instruments (Detail) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Financial liabilities:
Credit Facility revolving loans, carrying value	$ 85,000,000	$ 85,000,000
Financial liabilities:
Credit Facility revolving loans, fair value	85,000,000	85,000,000
Senior Notes 6.75% Issued March 24 2011
Financial liabilities:
Senior notes, carrying value	675,000,000	675,000,000
Financial liabilities:
Senior Notes, fair value	705,375,000	690,390,000
Senior Notes 8.375 Percent Due 2014
Financial liabilities:
Senior notes, carrying value	0	3,573,000
Financial liabilities:
Senior Notes, fair value	0	3,627,000
Argentina Operations
Assets:
Notes and accounts receivable - related parties, carrying amount	11,755,000	12,355,000
Financial assets:
Notes and accounts receivable - related parties, fair value	$ 11,755,000	$ 12,355,000

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the three months endedMarch 31, 2014 are as follows:

	U.S.		International			Total
	(in thousands)
December 31, 2013	$	597,456	$	27,419		$	624,875
Impact of foreign currency translation	—		(1,642		)	(1,642		)
March 31, 2014	$	597,456	$	25,777		$	623,233

Other Intangible Assets

The components of our other intangible assets as of March 31, 2014 and December 31, 2013 are as follows:

	March 31, 2014			December 31, 2013
	(in thousands)
Noncompete agreements:
Gross carrying value	$	9,332		$	9,332
Accumulated amortization	(7,624		)	(7,104		)
Net carrying value	1,708			2,228
Patents, trademarks and tradename:
Gross carrying value	13,385			14,039
Accumulated amortization	(234		)	(223		)
Net carrying value	13,151			13,816
Customer relationships and contracts:
Gross carrying value	100,023			100,271
Accumulated amortization	(80,739		)	(78,926		)
Net carrying value	19,284			21,345
Developed technology:
Gross carrying value	7,583			7,583
Accumulated amortization	(3,881		)	(3,826		)
Net carrying value	3,702			3,757
Customer Backlog:
Gross carrying value	779			779
Accumulated amortization	(779		)	(779		)
Net carrying value	—			—
Total:
Gross carrying value	131,102			132,004
Accumulated amortization	(93,257		)	(90,858		)
Net carrying value	$	37,845		$	41,146

Weighted Average Remaining Amortization Periods and Expected Amortization Expense for the Next Five Years for Intangible

The weighted average remaining amortization periods and expected amortization expense for the next five years for our definite lived intangible assets are as follows:

	Weighted average remaining amortization period (years)	Expected Amortization Expense
		Remainder of 2014		2015		2016		2017		2018		2019
		(in thousands)
Noncompete agreements	0.5	$	1,145	$	308	$	255	$	—	$	—	$	—
Patents and trademarks	4.2	30		40		40		40		17		—
Customer relationships and contracts	5.7	5,905		5,038		3,414		2,418		1,120		820
Developed technology	16.8	166		221		221		221		221		221
Total expected intangible asset amortization expense		$	7,246	$	5,607	$	3,930	$	2,679	$	1,358	$	1,041

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OTHER BALANCE SHEET INFORMATION - Other Current Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Other current liabilities:
Accrued payroll, taxes and employee benefits	$ 34,273	$ 34,956
Accrued operating expenditures	38,255	36,573
Income, sales, use and other taxes	30,613	37,064
Self-insurance reserve	31,964	32,129
Accrued interest	3,861	15,285
Accrued insurance premiums	4,801	8,049
Share-based compensation and other liabilities	7,532	5,889
Total	$ 151,299	$ 169,945

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ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The following is a summary of the carrying amounts and estimated fair values of our financial instruments as of March 31, 2014 and December 31, 2013.

Cash, cash equivalents, accounts receivable, accounts payable and accrued liabilities. These carrying amounts approximate fair value because of the short maturity of the instruments or because the carrying value is equal to the fair value of those instruments on the balance sheet date.

	March 31, 2014				December 31, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Financial assets:
Notes receivable - Argentina operations sale	$	11,755	$	11,755	$	12,355	$	12,355
Financial liabilities:
6.75% Senior Notes	$	675,000	$	705,375	$	675,000	$	690,390
8.375% Senior Notes	—		—		3,573		3,627
Credit Facility revolving loans	85,000		85,000		85,000		85,000

Notes receivable — Argentina operations sale. The fair value of these notes receivable are based upon the quoted market Treasury rates as of the dates indicated. The carrying values of these items approximate their fair values due to the maturity dates rapidly approaching, thus giving way to discount rates that are similar.

6.75% Senior Notes due 2021. The fair value of these notes are based upon the quoted market prices for those securities as of the dates indicated. The carrying value of these notes as of March 31, 2014 was $675.0 million, and the fair value was $705.4 million (104.5% of carrying value).

8.375% Senior Notes due 2014. At December 31, 2013 the fair value of our 2014 Notes was based upon the quoted market prices for those securities as of the dates indicated. These notes were redeemed in February 2014.

Credit Facility Revolving Loans. Because of their variable interest rates, the fair values of the revolving loans borrowed under our 2013 Credit Facility approximate their carrying values. The carrying and fair values of these loans as of March 31, 2014 were $85.0 million.