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

6 Months Ended

Jun. 30, 2014

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)

	June 30, 2014
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	26,366		$	7,438		$	52,642		$	—		$	86,446
Accounts and notes receivable, net	—			110,739			147,839			—			258,578
Rig materials and supplies	—			713			44,788			—			45,501
Deferred costs	—			—			9,621			—			9,621
Deferred income taxes	—			7,221			1,655			—			8,876
Other tax assets	55,366			(48,490		)	16,995			—			23,871
Other current assets	—			11,386			15,322			—			26,708
Total current assets	81,732			89,007			288,862			—			459,601
Property, plant and equipment, net	(19		)	595,418			310,700			—			906,099
Investment in subsidiaries and intercompany advances	2,259,176			152,307			2,113,594			(4,525,077		)	—
Other noncurrent assets	(478,308		)	516,754			238,376			(118,546		)	158,276
Total assets	$	1,862,581		$	1,353,486		$	2,951,532		$	(4,643,623	)	$	1,523,976
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	10,000		$	—		$	—		$	—		$	10,000
Accounts payable and accrued liabilities	56,856			113,169			265,992			(255,315		)	180,702
Accrued income taxes	(5,231		)	9,043			6,755			—			10,567
Total current liabilities	61,625			122,212			272,747			(255,315		)	201,269
Long-term debt	610,000			—			—			—			610,000
Other long-term liabilities	5,036			7,006			8,315			—			20,357
Long-term deferred tax liability	(28		)	55,361			(7,418		)	—			47,915
Intercompany payables	546,788			801,925			849,564			(2,198,277		)	—
Contingencies	—			—			—			—			—
Total liabilities	1,223,421			986,504			1,123,208			(2,453,592		)	879,541
Total equity	639,160			366,982			1,828,324			(2,190,031		)	644,435
Total liabilities and stockholders’ equity	$	1,862,581		$	1,353,486		$	2,951,532		$	(4,643,623	)	$	1,523,976

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED BALANCE SHEET

(Dollars in Thousands)

(Unaudited)

	December 31, 2013
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	88,697		$	8,310		$	51,682		$	—		$	148,689
Accounts and notes receivable, net	—			101,299			156,590			—			257,889
Rig materials and supplies	—			3,002			38,779			—			41,781
Deferred costs	—			—			13,682			—			13,682
Deferred income taxes	(57		)	8,435			1,562			—			9,940
Other tax assets	54,524			(46,770		)	16,325			—			24,079
Other current assets	—			9,089			14,134			—			23,223
Total current assets	143,164			83,365			292,754			—			519,283
Property, plant and equipment, net	60			562,148			309,148			—			871,356
Investment in subsidiaries and intercompany advances	1,906,128			(336,570		)	1,667,937			(3,237,495		)	—
Other noncurrent assets	(457,954		)	468,864			250,983			(117,776		)	144,117
Total assets	$	1,591,398		$	777,807		$	2,520,822		$	(3,355,271	)	$	1,534,756
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	25,000		$	—		$	—		$	—		$	25,000
Accounts payable and accrued liabilities	75,268			92,546			261,436			(254,364		)	174,886
Accrued income taxes	—			725			6,541			—			7,266
Total current liabilities	100,268			93,271			267,977			(254,364		)	207,152
Long-term debt	628,781			—			—			—			628,781
Other long-term liabilities	5,037			6,743			15,134			—			26,914
Long-term deferred tax liability	—			51,747			(12,980		)	—			38,767
Intercompany payables	227,504			291,783			422,645			(941,932		)	—
Contingencies	—			—			—			—			—
Total liabilities	961,590			443,544			692,776			(1,196,296		)	901,614
Total equity	629,808			334,263			1,828,046			(2,158,975		)	633,142
Total liabilities and stockholders’ equity	$	1,591,398		$	777,807		$	2,520,822		$	(3,355,271	)	$	1,534,756

Consolidating Condensed Statement of Operations

	Six Months Ended June 30, 2014
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—		$	266,602		$	304,964		$	(88,107	)	$	483,459
Operating expenses	—			157,477			271,224			(88,107		)	340,594
Depreciation and amortization	—			41,175			29,342			—			70,517
Total operating gross margin	—			67,950			4,398			—			72,348
General and administration expense (1)	(304		)	(14,819		)	(848		)	—			(15,971		)
Gain on disposition of assets, net	(80		)	432			538			—			890
Total operating income (loss)	(384		)	53,563			4,088			—			57,267
Other income and (expense):
Interest expense	(24,014		)	(85		)	(4,412		)	5,873			(22,638		)
Interest income	535			378			5,080			(5,873		)	120
Extinguishment of debt	(30,152		)	—			—			—			(30,152		)
Other	—			184			1,743			—			1,927
Equity in net earnings of subsidiaries	31,149			—			—			(31,149		)	—
Total other income (expense)	(22,482		)	477			2,411			(31,149		)	(50,743		)
Income (loss) before income taxes	(22,866		)	54,040			6,499			(31,149		)	6,524
Total Income tax expense (benefit)	(25,998		)	19,849			9,228			—			3,079
Net income (loss)	3,132			34,191			(2,729		)	(31,149		)	3,445
Less: Net income (loss) attributable to noncontrolling interest	—			—			313			—			313
Net income (loss) attributable to controlling interest	$	3,132		$	34,191		$	(3,042	)	$	(31,149	)	$	3,132

(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)

	Six Months Ended June 30, 2013
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—		$	226,144		$	218,308		$	(51,362	)	$	393,090
Operating expenses	—			122,408			189,101			(51,362		)	260,147
Depreciation and amortization	—			37,380			24,412			—			61,792
Total operating gross margin	—			66,356			4,795			—			71,151
General and administration expense (1)	(90		)	(34,769		)	(190		)	—			(35,049		)
Gain on disposition of assets, net	—			1,952			(287		)	—			1,665
Total operating income (loss)	(90		)	33,539			4,318			—			37,767
Other income and (expense):
Interest expense	(22,699		)	(58		)	(5,625		)	7,635			(20,747		)
Interest income	3,006			1,333			5,558			(7,635		)	2,262
Changes in fair value of derivative positions	54			—			—			—			54
Loss on extinguishment of debt	—			—			—			—			—
Other	—			(250		)	(411		)	—			(661		)
Equity in net earnings of subsidiaries	14,007			—			—			(14,007		)	—
Total other income (expense)	(5,632		)	1,025			(478		)	(14,007		)	(19,092		)
Income (loss) before income taxes	(5,722		)	34,564			3,840			(14,007		)	18,675
Income tax expense (benefit)	(14,595		)	17,770			6,554			—			9,729
Net income (loss)	8,873			16,794			(2,714		)	(14,007		)	8,946
Less: Net income (loss) attributable to noncontrolling interest	—			—			73			—			73
Net income (loss) attributable to controlling interest	$	8,873		$	16,794		$	(2,787	)	$	(14,007	)	$	8,873

(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 June 30, 2014
	Parent		Guarantor		Non-Guarantor			Eliminations			Consolidated
Comprehensive income:
Net income (loss)	$	15,681	$	22,148	$	(1,333	)	$	(20,659	)	$	15,837
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—		—		336			—			336
Currency translation difference on foreign currency net investments					(188		)				(188		)
Total other comprehensive income (loss), net of tax:	—		—		148			—			148
Comprehensive income (loss)	15,681		22,148		(1,185		)	(20,659		)	15,985
Comprehensive (income) attributable to noncontrolling interest	—		—		(80		)	—			(80		)
Comprehensive income (loss) attributable to controlling interest	$	15,681	$	22,148	$	(1,265	)	$	(20,659	)	$	15,905

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Three Months Ended June 30, 2013
	Parent		Guarantor		Non-Guarantor			Eliminations			Consolidated
Comprehensive income:
Net income (loss)	$	8,281	$	6,809	$	7,112		$	(13,828	)	$	8,374
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—		—		(965		)	—			(965		)
Currency translation difference on foreign currency net investments					401						401
Total other comprehensive income (loss), net of tax:	—		—		(564		)	—			(564		)
Comprehensive income (loss)	8,281		6,809		6,548			(13,828		)	7,810
Comprehensive (income) attributable to noncontrolling interest	—		—		(30		)	—			(30		)
Comprehensive income (loss) attributable to controlling interest	$	8,281	$	6,809	$	6,518		$	(13,828	)	$	7,780

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Six Months Ended June 30, 2014
	Parent		Guarantor		Non-Guarantor			Eliminations			Consolidated
Comprehensive income:
Net income	$	3,132	$	34,191	$	(2,729	)	$	(31,149	)	$	3,445
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—		—		(468		)	—			(468		)
Currency translation difference on foreign currency net investments	—		—		511			—			511
Total other comprehensive income (loss), net of tax:	—		—		43			—			43
Comprehensive income	3,132		34,191		(2,686		)	(31,149		)	3,488
Comprehensive (income) attributable to noncontrolling interest	—		—		(234		)	—			(234		)
Comprehensive income attributable to controlling interest	$	3,132	$	34,191	$	(2,920	)	$	(31,149	)	$	3,254

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Six Months Ended June 30, 2013
	Parent		Guarantor		Non-Guarantor			Eliminations			Consolidated
Comprehensive income:
Net income	$	8,873	$	16,794	$	(2,714	)	$	(14,007	)	$	8,946
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—		—		(965		)	—			(965		)
Currency translation difference on foreign currency net investments	—		—		401			—			401
Total other comprehensive income (loss), net of tax:	—		—		(564		)	—			(564		)
Comprehensive income	8,873		16,794		(3,278		)	(14,007		)	8,382
Comprehensive (income) attributable to noncontrolling interest	—		—		(30		)	—			(30		)
Comprehensive income attributable to controlling interest	$	8,873	$	16,794	$	(3,308	)	$	(14,007	)	$	8,352

Consolidated Condensed Statements of Cash Flows

ARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Six Months Ended June 30, 2014
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	3,132		$	34,191		$	(2,729	)	$	(31,149	)	$	3,445
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			41,175			29,342			—			70,517
Loss on extinguishment of debt	30,152			—			—			—			30,152
Gain on disposition of assets	80			(432		)	(538		)	—			(890		)
Deferred income tax expense	(19,621		)	8,917			2,346			—			(8,358		)
Expenses not requiring cash	7,939			(997		)	1,806			—			8,748
Equity in net earnings of subsidiaries	(31,149		)	—			—			31,149			—
Change in accounts receivable	—			(6,132		)	5,066			—			(1,066		)
Change in accrued income taxes	(5,231		)	9,481			(8,237		)	—			(3,987		)
Change in other assets	37,589			(51,431		)	13,065			—			(777		)
Change in liabilities	(19,629		)	20,886			4,532			—			5,789
Net cash provided by (used in) operating activities	3,262			55,658			44,653			—			103,573
Cash flows from investing activities:
Capital expenditures	—			(79,374		)	(26,814		)	—			(106,188		)
Proceeds from the sale of assets	—			1,008			2,338			—			3,346
Net cash (used in) investing activities	—			(78,366		)	(24,476		)	—			(102,842		)
Cash flows from financing activities:
Proceeds from debt issuance	400,000			—			—			—			400,000
Repayments of long term debt	(425,000		)	—			—			—			(425,000		)
Paydown on term note	(5,000		)	—			—			—			(5,000		)
Payment of debt issuance costs	(7,425		)	—			—			—			(7,425		)
Payment of debt extinguishment costs	(26,214		)	—			—			—			(26,214		)
Excess tax benefit from stock-based compensation	665			—			—			—			665
Intercompany advances, net	(2,619		)	21,836			(19,217		)	—			—
Net cash provided by (used in) financing activities	(65,593		)	21,836			(19,217		)	—			(62,974		)
Net change in cash and cash equivalents	(62,331		)	(872		)	960			—			(62,243		)
Cash and cash equivalents at beginning of year	88,697			8,310			51,682			—			148,689
Cash and cash equivalents at end of year	$	26,366		$	7,438		$	52,642		$	—		$	86,446

	Six Months Ended June 30, 2014
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	3,132		$	34,191		$	(2,729	)	$	(31,149	)	$	3,445
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			41,175			29,342			—			70,517
Loss on extinguishment of debt	30,152			—			—			—			30,152
Gain on disposition of assets	80			(432		)	(538		)	—			(890		)
Deferred income tax expense	(19,621		)	8,917			2,346			—			(8,358		)
Expenses not requiring cash	7,939			(997		)	1,806			—			8,748
Equity in net earnings of subsidiaries	(31,149		)	—			—			31,149			—
Change in accounts receivable	—			(6,132		)	5,066			—			(1,066		)
Change in accrued income taxes	(5,231		)	9,481			(8,237		)	—			(3,987		)
Change in other assets	37,589			(51,431		)	13,065			—			(777		)
Change in liabilities	(19,629		)	20,886			4,532			—			5,789
Net cash provided by (used in) operating activities	3,262			55,658			44,653			—			103,573
Cash flows from investing activities:
Capital expenditures	—			(79,374		)	(26,814		)	—			(106,188		)
Proceeds from the sale of assets	—			1,008			2,338			—			3,346
Net cash (used in) investing activities	—			(78,366		)	(24,476		)	—			(102,842		)
Cash flows from financing activities:
Proceeds from debt issuance	400,000			—			—			—			400,000
Repayments of long term debt	(425,000		)	—			—			—			(425,000		)
Paydown on term note	(5,000		)	—			—			—			(5,000		)
Payment of debt issuance costs	(7,425		)	—			—			—			(7,425		)
Payment of debt extinguishment costs	(26,214		)	—			—			—			(26,214		)
Excess tax benefit from stock-based compensation	665			—			—			—			665
Intercompany advances, net	(2,619		)	21,836			(19,217		)	—			—
Net cash provided by (used in) financing activities	(65,593		)	21,836			(19,217		)	—			(62,974		)
Net change in cash and cash equivalents	(62,331		)	(872		)	960			—			(62,243		)
Cash and cash equivalents at beginning of year	88,697			8,310			51,682			—			148,689
Cash and cash equivalents at end of year	$	26,366		$	7,438		$	52,642		$	—		$	86,446

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Six Months Ended June 30, 2013
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	8,873		$	16,794		$	(2,714	)	$	(14,007	)	$	8,946
Adjustments to reconcile net income (loss)
Depreciation and amortization	—			37,380			24,412			—			61,792
Loss on extinguishment of debt	—			—			—			—			—
Gain on disposition of assets	—			(1,952		)	287			—			(1,665		)
Deferred income tax expense	(4,560		)	6,261			99			—			1,800
Impairment and other charges	—			—			—			—			—
Expenses not requiring cash	5,218			1,563			1,208			—			7,989
Equity in net earnings of subsidiaries	(14,007		)	—			—			14,007			—
Change in accounts receivable	(125,337		)	(22,895		)	115,947			—			(32,285		)
Change in other assets	45,072			(42,264		)	3,903			—			6,711
Change in accrued income taxes	(35,297		)	41,272			(3,796		)	—			2,179
Change in liabilities	1,780			(14,043		)	2,720			—			(9,543		)
Net cash provided by (used in) operating activities	(118,258		)	22,116			142,066			—			45,924
Cash flows from investing activities:
Capital expenditures	—			(38,430		)	(25,107		)	—			(63,537		)
Proceeds from the sale of assets	—			2,834			67			—			2,901
Acquisition of ITS, net of cash acquired	—			(292		)	(117,699		)	—			(117,991		)
Net cash (used in) investing activities	—			(35,888		)	(142,739		)	—			(178,627		)
Cash flows from financing activities:
Proceeds from debt issuance	125,000			—			—			—			125,000
Paydown on term note	(5,000		)	—			—			—			(5,000		)
Payment of debt issuance costs	(5,386		)	—			—			—			(5,386		)
Excess tax benefit from stock-based compensation	(189		)	—			—			—			(189		)
Intercompany advances, net	(23,712		)	7,792			15,920			—			—
Net cash provided by (used in) financing activities	90,713			7,792			15,920			—			114,425
Net change in cash and cash equivalents	(27,545		)	(5,980		)	15,247			—			(18,278		)
Cash and cash equivalents at beginning of year	42,251			11,023			34,612			—			87,886
Cash and cash equivalents at end of year	$	14,706		$	5,043		$	49,859		$	—		$	69,608