Parent, Guarantor, Non-Guarantor Unaudited Consolidating Condensed Financial Statements (Tables)

9 Months Ended

Sep. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidating Condensed Balance Sheet

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED BALANCE SHEET

(Dollars in Thousands)

(Unaudited)

	September 30, 2013
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	89,516		$	21,273		$	51,668		$	—		$	162,457
Accounts and notes receivable, net	290,856			113,873			386,521			(541,627		)	249,623
Rig materials and supplies	—			2,364			37,838			—			40,202
Deferred costs	—			32			13,551			—			13,583
Deferred income taxes	—			12,363			1,110			—			13,473
Other tax assets	43,171			(46,939		)	22,201			—			18,433
Assets held for sale	—			1,183			6,302			—			7,485
Other current assets	—			14,238			6,668			—			20,906
Total current assets	423,543			118,387			525,859			(541,627		)	526,162
Property, plant and equipment, net	60			559,885			298,727			—			858,672
Investment in subsidiaries and intercompany advances	944,584			(220,110		)	1,593,743			(2,318,217		)	—
Other noncurrent assets	52,147			60,002			38,397			—			150,546
Total assets	$	1,420,334		$	518,164		$	2,456,726		$	(2,859,844	)	$	1,535,380
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	—		$	—		$	—		$	—		$	—
Accounts payable and accrued liabilities	81,524			101,207			263,709			(255,211		)	191,229
Accrued income taxes	—			529			6,732			—			7,261
Total current liabilities	81,524			101,736			270,441			(255,211		)	198,490
Long-term debt	653,968			—			—			—			653,968
Other long-term liabilities	4,289			5,806			13,953			—			24,048
Long-term deferred tax liability	—			47,684			(8,600		)	—			39,084
Intercompany payables	62,584			43,669			359,106			(465,359		)	—
Contingencies	—			—			—			—			—
Stockholders’ equity:
Common stock	20,050			18,049			43,003			(61,052		)	20,050
Capital in excess of par value	654,750			733,899			1,579,458			(2,313,357		)	654,750
Accumulated other comprehensive income	—			—			957			—			957
Retained earnings (accumulated deficit)	(56,831		)	(432,679		)	196,587			235,135			(57,788		)
Total controlling interest stockholders’ equity	617,969			319,269			1,820,005			(2,139,274		)	617,969
Noncontrolling interest	—			—			1,821			—			1,821
Total equity	617,969			319,269			1,821,826			(2,139,274		)	619,790
Total liabilities and stockholders’ equity	$	1,420,334		$	518,164		$	2,456,726		$	(2,859,844	)	$	1,535,380

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED BALANCE SHEET

(Dollars in Thousands)

(Unaudited)

	December 31, 2012
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	42,251		$	11,023		$	34,612		$	—		$	87,886
Accounts and notes receivable, net	289,957			98,747			292,644			(512,786		)	168,562
Rig materials and supplies	—			2,834			26,026			—			28,860
Deferred costs	—			—			1,089			—			1,089
Deferred income taxes	—			7,615			1,127			—			8,742
Other tax assets	46,249			(31,136		)	18,411			—			33,524
Assets held for sale	—			—			6,800			—			6,800
Other current assets	—			8,675			4,146			—			12,821
Total current assets	378,457			97,758			384,855			(512,786		)	348,284
Property, plant and equipment, net	60			548,794			240,269			—			789,123
Investment in subsidiaries and intercompany advances	780,878			(233,388		)	1,467,429			(2,014,919		)	—
Other noncurrent assets	43,569			59,541			15,216			—			118,326
Total assets	$	1,202,964		$	472,705		$	2,107,769		$	(2,527,705	)	$	1,255,733
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	10,000		$	—		$	—		$	—		$	10,000
Accounts payable and accrued liabilities	65,839			93,243			205,864			(227,200		)	137,746
Accrued income taxes	—			612			3,508			—			4,120
Total current liabilities	75,839			93,855			209,372			(227,200		)	151,866
Long-term debt	469,205			—			—			—			469,205
Other long-term liabilities	3,933			6,129			13,120			—			23,182
Long-term deferred tax liability	—			36,894			(16,047		)	—			20,847
Intercompany payables	62,583			43,657			216,320			(322,560		)	—
Contingencies	—			—			—			—			—
Stockholders’ equity:
Common stock	19,818			18,049			43,003			(61,052		)	19,818
Capital in excess of par value	646,217			733,112			1,455,246			(2,188,358		)	646,217
Accumulated other comprehensive income	—			—			—			—			—
Retained earnings (accumulated deficit)	(74,631		)	(458,991		)	187,526			271,465			(74,631		)
Total controlling interest stockholders’ equity	591,404			292,170			1,685,775			(1,977,945		)	591,404
Noncontrolling interest	—			—			(771		)	—			(771		)
Total Equity	591,404			292,170			1,685,004			(1,977,945		)	590,633
Total liabilities and stockholders’ equity	$	1,202,964		$	472,705		$	2,107,769		$	(2,527,705	)	$	1,255,733

Consolidating Condensed Statement of Operations

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

(Dollars in Thousands)

(Unaudited)

	Three months ended September 30, 2013
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—		$	119,223		$	170,609		$	(52,070	)	$	237,762
Operating expenses	—			64,297			141,514			(52,070		)	153,741
Depreciation and amortization	—			19,956			15,926			—			35,882
Total operating gross margin	—			34,970			13,169			—			48,139
General and administration expense (1)	(47		)	(14,028		)	(113		)	—			(14,188		)
Gain on disposition of assets, net	—			(34		)	1,128			—			1,094
Total operating income (loss)	(47		)	20,908			14,184			—			35,045
Other income and (expense):
Interest expense	(14,035		)	(107		)	(2,198		)	3,213			(13,127		)
Interest income	360			250			2,733			(3,213		)	130
Extinguishment of debt	(5,218		)	—			—			—			(5,218		)
Changes in fair value of derivative positions	—			—			—			—			—
Other	(1		)	(11		)	412			—			400
Equity in net earnings of subsidiaries	22,322			—			—			(22,322		)	—
Total other income (expense)	3,428			132			947			(22,322		)	(17,815		)
Income (benefit) before income taxes	3,381			21,040			15,131			(22,322		)	17,230
Total income tax expense (benefit)	(4,589		)	10,223			3,478			—			9,112
Net income (loss)	7,970			10,817			11,653			(22,322		)	8,118
Less: Net income (loss) attributable to noncontrolling interest	—			—			148			—			148
Net income (loss) attributable to controlling interest	$	7,970		$	10,817		$	11,505		$	(22,322	)	$	7,970

(1) General and administration expenses for field operations are included in operating expenses.

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

(Dollars in Thousands)

(Unaudited)

	Three Months Ended September 30, 2012
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—		$	98,969		$	94,749		$	(28,417	)	$	165,301
Operating expenses	—			45,850			84,051			(28,417		)	101,484
Depreciation and amortization	—			17,866			11,913			—			29,779
Total operating gross margin	—			35,253			(1,215		)	—			34,038
General and administration expense (1)	(47		)	(8,823		)	(35		)	—			(8,905		)
Gain on disposition of assets, net	—			553			53			—			606
Total operating income (loss)	(47		)	26,983			(1,197		)	—			25,739
Other income and (expense):
Interest expense	(9,105		)	(43		)	(1,840		)	2,817			(8,171		)
Interest income	95			179			2,573			(2,817		)	30
Changes in fair value of derivative positions	19			—			—			—			19
Loss on extinguishment of debt	(117		)	—			—			—			(117		)
Other	—			26			—			—			26
Equity in net earnings of subsidiaries	10,596			—			—			(10,596		)	—
Total other income (expense)	1,488			162			733			(10,596		)	(8,213		)
Income (loss) before income taxes	1,441			27,145			(464		)	(10,596		)	17,526
Income tax expense (benefit)	(9,495		)	10,451			5,739			—			6,695
Net income (loss)	10,936			16,694			(6,203		)	(10,596		)	10,831
Less: Net income (loss) attributable to noncontrolling interest	—			—			(105		)	—			(105		)
Net income (loss) attributable to controlling interest	$	10,936		$	16,694		$	(6,098	)	$	(10,596	)	$	10,936

(1) General and administration expenses for field operations are included in operating expenses.

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30, 2013
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—		$	345,434		$	388,912		$	(103,428	)	$	630,918
Operating expenses	—			186,708			331,056			(103,428		)	414,336
Depreciation and amortization	—			57,335			40,339			—			97,674
Total operating gross margin	—			101,391			17,517			—			118,908
General and administration expense (1)	(140		)	(48,942		)	(367		)	—			(49,449		)
Gain on disposition of assets, net	—			1,917			842			—			2,759
Total operating income (loss)	(140		)	54,366			17,992			—			72,218
Other income and (expense):
Interest expense	(36,734		)	(167		)	(9,494		)	12,521			(33,874		)
Interest income	3,366			1,584			9,963			(12,521		)	2,392
Extinguishment of debt	(5,218		)	—			—			—			(5,218		)
Changes in fair value of derivative positions	54			—			—			—			54
Other	—			(178		)	511			—			333
Equity in net earnings of subsidiaries	36,330			—			—			(36,330		)	—
Total other income (expense)	(2,202		)	1,239			980			(36,330		)	(36,313		)
Income (loss) before income taxes	(2,342		)	55,605			18,972			(36,330		)	35,905
Total Income tax expense (benefit)	(19,185		)	27,993			10,033			—			18,841
Net income (loss)	16,843			27,612			8,939			(36,330		)	17,064
Less: Net income (loss) attributable to noncontrolling interest	—			—			221			—			221
Net income (loss) attributable to controlling interest	$	16,843		$	27,612		$	8,718		$	(36,330	)	$	16,843

(1) General and administration expenses for field operations are included in operating expenses.

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30, 2012
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—		$	302,892		$	295,811		$	(77,908	)	$	520,795
Operating expenses	—			136,849			242,001			(77,908		)	300,942
Depreciation and amortization	—			49,127			36,230			—			85,357
Total operating gross margin	—			116,916			17,580			—			134,496
General and administration expense (1)	(137		)	(21,273		)	(412		)	—			(21,822		)
Gain on disposition of assets, net	—			1,168			1,298			—			2,466
Total operating income (loss)	(137		)	96,811			18,466			—			115,140
Other income and (expense):
Interest expense	(27,923		)	(115		)	(5,811		)	8,716			(25,133		)
Interest income	8,695			4,894			39,345			(52,825		)	109
Changes in fair value of derivative positions	8			—			—			—			8
Loss on extinguishment of debt	(1,766		)	—			—			—			(1,766		)
Other	—			64			(2		)	—			62
Equity in net earnings of subsidiaries	61,553			—			—			(61,553		)	—
Total other income (expense)	40,567			4,843			33,532			(105,662		)	(26,720		)
Income (loss) before income taxes	40,430			101,654			51,998			(105,662		)	88,420
Income tax expense (benefit)	(16,981		)	38,149			9,987			—			31,155
Net income (loss)	57,411			63,505			42,011			(105,662		)	57,265
Less: Net income (loss) attributable to noncontrolling interest	—			—			(146		)	—			(146		)
Net income (loss) attributable to controlling interest	$	57,411		$	63,505		$	42,157		$	(105,662	)	$	57,411

(1) General and administration expenses for field operations are included in operating expenses.

Consolidating Condensed Statements of Comprehensive Income (Loss)

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Three Months Ended September 30, 2013
	Parent		Guarantor		Non-Guarantor			Eliminations			Consolidated
Comprehensive income:
Net income	$	7,970	$	10,817	$	11,653		$	(22,322	)	$	8,118
Other comprehensive gain, net of tax:
Currency translation difference on related borrowings	—		—		(577		)	—			(577		)
Currency translation difference on foreign currency net investments					2,098						2,098
Total other comprehensive gain, net of tax:	—		—		1,521			—			1,521
Comprehensive income	7,970		10,817		13,174			(22,322		)	9,639
Comprehensive (income) attributable to noncontrolling interest	—		—		(53		)	—			(53		)
Comprehensive income attributable to controlling interest	$	7,970	$	10,817	$	13,121		$	(22,322	)	$	9,586

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30, 2013
	Parent		Guarantor		Non-Guarantor			Eliminations			Consolidated
Comprehensive income:
Net income	$	16,843	$	27,612	$	8,939		$	(36,330	)	$	17,064
Other comprehensive gain, net of tax:
Currency translation difference on related borrowings	—		—		(1,542		)	—			(1,542		)
Currency translation difference on foreign currency net investments					2,499						2,499
Total other comprehensive gain, net of tax:	—		—		957			—			957
Comprehensive income	16,843		27,612		9,896			(36,330		)	18,021
Comprehensive (income) attributable to noncontrolling interest	—		—		(83		)	—			(83		)
Comprehensive income attributable to controlling interest	$	16,843	$	27,612	$	9,813		$	(36,330	)	$	17,938

Consolidated Condensed Statements of Cash Flows

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30, 2013
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	16,843		$	27,612		$	8,939		$	(36,330	)	$	17,064
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			57,335			40,339			—			97,674
Loss on extinguishment of debt	5,218			—			—			—			5,218
Gain on disposition of assets	—			(1,917		)	(842		)	—			(2,759		)
Deferred income tax expense	(2,860		)	10,479			5,253			—			12,872
Expenses not requiring cash	10,494			591			(1,157		)	—			9,928
Equity in net earnings of subsidiaries	(36,330		)	—			—			36,330			—
Change in accounts receivable	(899		)	(7,951		)	(19,755		)	—			(28,605		)
Change in accrued income taxes	358			(85		)	2,604			—			2,877
Change in other assets	3,045			4,580			(8,971		)	—			(1,346		)
Change in liabilities	14,222			(2,116		)	306			—			12,412
Net cash provided by (used in) operating activities	10,091			88,528			26,716			—			125,335
Cash flows from investing activities:
Capital expenditures	—			(66,956		)	(35,900		)	—			(102,856		)
Proceeds from the sale of assets	—			2,751			2,782			—			5,533
Acquisition of ITS, net of cash acquired	—			(292		)	(117,699		)	—			(117,991		)
Net cash (used in) investing activities	—			(64,497		)	(150,817		)	—			(215,314		)
Cash flows from financing activities:
Proceeds from debt issuance	350,000			—			—			—			350,000
Repayments of long term debt	(125,000		)	—			—			—			(125,000		)
Paydown on term note	(50,000		)	—			—			—			(50,000		)
Payment of debt issuance costs	(10,981		)	—			—			—			(10,981		)
Excess tax benefit from stock-based compensation	531			—			—			—			531
Intercompany advances, net	(127,376		)	(13,781		)	141,157			—			—
Net cash provided by (used in) financing activities	37,174			(13,781		)	141,157			—			164,550
Net change in cash and cash equivalents	47,265			10,250			17,056			—			74,571
Cash and cash equivalents at beginning of year	42,251			11,023			34,612			—			87,886
Cash and cash equivalents at end of year	$	89,516		$	21,273		$	51,668		$	—		$	162,457

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30, 2012
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	57,411		$	63,505		$	42,011		$	(105,662	)	$	57,265
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization	—			49,127			36,230			—			85,357
Loss on extinguishment of debt	1,766			—			—			—			1,766
Gain on disposition of assets	—			(1,168		)	(1,298		)	—			(2,466		)
Deferred income tax expense	5,940			4,868			(2,405		)	—			8,403
Expenses not requiring cash	13,264			689			1,770			1			15,724
Equity in net earnings of subsidiaries	(61,553		)	—			—			61,553			—
Change in accounts receivable	(291		)	766			24,173			—			24,648
Change in other assets	(32,874		)	61,320			(27,882		)	—			564
Change in accrued income taxes	(5,068		)	1,832			187			—			(3,049		)
Change in liabilities	12,917			(21,430		)	(1,672		)	—			(10,185		)
Net cash provided by (used in) operating activities	(8,488		)	159,509			71,114			(44,108		)	178,027
Cash flows from investing activities:
Capital expenditures	—			(139,618		)	(8,040		)	—			(147,658		)
Proceeds from the sale of assets	—			1,667			1,829			—			3,496
Intercompany dividend payment	(8,387		)	(4,357		)	(31,364		)	44,108			—
Net cash (used in) investing activities	(8,387		)	(142,308		)	(37,575		)	44,108			(144,162		)
Cash flows from financing activities:
Proceeds from debt issuance	130,000			—			—			—			130,000
Repayments of senior notes	(125,000		)	—			—			—			(125,000		)
Paydown on term note	(18,000		)	—			—			—			(18,000		)
Payment of debt issuance costs	(3,516		)	—			—			—			(3,516		)
Payment of debt extinguishment costs	(519		)	—			—			—			(519		)
Excess tax benefit from stock-based compensation	(572		)	—			—			—			(572		)
Intercompany advances, net	56,280			(13,507		)	(42,773		)	—			—
Net cash provided by (used in) financing activities	38,673			(13,507		)	(42,773		)	—			(17,607		)
Net change in cash and cash equivalents	21,798			3,694			(9,234		)	—			16,258
Cash and cash equivalents at beginning of year	55,670			4,212			37,987			—			97,869
Cash and cash equivalents at end of year	$	77,468		$	7,906		$	28,753		$	—		$	114,127