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

9 Months Ended

Sep. 30, 2015

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)

	December 31, 2014
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	36,728		$	13,546		$	58,182		$	—		$	108,456
Accounts and notes receivable, net	(33		)	96,100			174,885			—			270,952
Rig materials and supplies	—			(1,473		)	49,416			—			47,943
Deferred costs	—			—			5,673			—			5,673
Deferred income taxes	—			6,131			1,345			—			7,476
Other tax assets	19,885			(18,273		)	9,111			—			10,723
Other current assets	—			7,998			10,558			—			18,556
Total current assets	56,580			104,029			309,170			—			469,779
Property, plant and equipment, net	(19		)	589,055			306,904			—			895,940
Intangible assets, net	—			—			4,286			—			4,286
Investment in subsidiaries and intercompany advances	3,060,867			2,441,523			2,464,506			(7,966,896		)	—
Other noncurrent assets	(440,918		)	490,597			268,537			(167,562		)	150,654
Total assets	$	2,676,510		$	3,625,204		$	3,353,403		$	(8,134,458	)	$	1,520,659
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	10,000		$	—		$	—		$	—		$	10,000
Accounts payable and accrued liabilities	77,603			71,645			309,344			(304,113		)	154,479
Accrued income taxes	(4,061		)	10,109			8,138			—			14,186
Total current liabilities	83,542			81,754			317,482			(304,113		)	178,665
Long-term debt	605,000			—			—			—			605,000
Other long-term liabilities	2,867			7,135			8,663			—			18,665
Long-term deferred tax liability	—			56,105			(3,990		)	—			52,115
Intercompany payables	1,322,172			1,311,404			1,204,769			(3,838,345		)	—
Total liabilities	2,013,581			1,456,398			1,526,924			(4,142,458		)	854,445
Total equity	662,929			2,168,806			1,826,479			(3,992,000		)	666,214
Total liabilities and stockholders’ equity	$	2,676,510		$	3,625,204		$	3,353,403		$	(8,134,458	)	$	1,520,659

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED BALANCE SHEET

(Dollars in Thousands)

(Unaudited)

	September 30, 2015
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	46,528		$	8,000		$	50,123		$	—		$	104,651
Accounts and notes receivable, net	—			66,413			158,583			—			224,996
Rig materials and supplies	—			(4,279		)	42,795			—			38,516
Deferred costs	—			—			2,961			—			2,961
Deferred income taxes	—			4,172			1,276			—			5,448
Other tax assets	—			463			7,369			—			7,832
Other current assets	—			6,717			10,484			—			17,201
Total current assets	46,528			81,486			273,591			—			401,605
Property, plant and equipment, net	(19		)	560,618			281,324			—			841,923
Goodwill	—			6,708			—			—			6,708
Intangible assets, net	—			12,317			2,424			—			14,741
Investment in subsidiaries and intercompany advances	3,074,849			2,700,571			3,147,601			(8,923,021		)	—
Other noncurrent assets	(276,366		)	374,987			246,033			(167,448		)	177,206
Total assets	$	2,844,992		$	3,736,687		$	3,950,973		$	(9,090,469	)	$	1,442,183
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	—		$	—		$	—		$	—		$	—
Accounts payable and accrued liabilities	67,123			77,565			303,001			(304,113		)	143,576
Accrued income taxes	1,013			9,434			(3,853		)	—			6,594
Total current liabilities	68,136			86,999			299,148			(304,113		)	150,170
Long-term debt	585,000			—			—			—			585,000
Other long-term liabilities	2,867			8,004			9,270			—			20,141
Long-term deferred tax liability	—			75,545			(348		)	—			75,197
Intercompany payables	1,581,364			1,395,937			1,711,311			(4,688,612		)	—
Total liabilities	2,237,367			1,566,485			2,019,381			(4,992,725		)	830,508
Total equity	607,625			2,170,202			1,931,592			(4,097,744		)	611,675
Total liabilities and stockholders’ equity	$	2,844,992		$	3,736,687		$	3,950,973		$	(9,090,469	)	$	1,442,183

Consolidating Condensed Statement of Operations

	Three months ended September 30, 2015
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—		$	59,252		$	138,564		$	(24,398	)	$	173,418
Operating expenses	—			32,457			120,904			(24,398		)	128,963
Depreciation and amortization	—			24,002			15,582			—			39,584
Total operating gross margin	—			2,793			2,078			—			4,871
General and administration expense (1)	(148		)	(8,857		)	110			—			(8,895		)
Provision for reduction in carrying value of certain assets	—			(920		)	14			—			(906		)
Gain (Loss) on disposition of assets, net	—			407			(24		)	—			383
Total operating income (loss)	(148		)	(6,577		)	2,178			—			(4,547		)
Other income and (expense):
Interest expense	(11,020		)	(268		)	(2,618		)	2,613			(11,293		)
Interest income	173			(18		)	2,465			(2,613		)	7
Other	—			(102		)	(617		)	—			(719		)
Equity in net earnings of subsidiaries	(29,913		)	—			—			29,913			—
Total other income (expense)	(40,760		)	(388		)	(770		)	29,913			(12,005		)
Income (loss) before income taxes	(40,908		)	(6,965		)	1,408			29,913			(16,552		)
Total income tax expense (benefit)	7,712			(2,846		)	27,064			—			31,930
Net income (loss)	(48,620		)	(4,119		)	(25,656		)	29,913			(48,482		)
Less: Net income attributable to noncontrolling interest	—			—			138			—			138
Net income (loss) attributable to controlling interest	$	(48,620	)	$	(4,119	)	$	(25,794	)	$	29,913		$	(48,620	)

(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, 2015
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Comprehensive income:
Net income (loss)	$	(48,620	)	$	(4,119	)	$	(25,656	)	$	29,913	$	(48,482	)
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—			—			(1,285		)	—		(1,285		)
Currency translation difference on foreign currency net investments	—			—			588			—		588
Total other comprehensive income (loss), net of tax:	—			—			(697		)	—		(697		)
Comprehensive income (loss)	(48,620		)	(4,119		)	(26,353		)	29,913		(49,179		)
Comprehensive (loss) attributable to noncontrolling interest	—			—			(82		)	—		(82		)
Comprehensive income (loss) attributable to controlling interest	$	(48,620	)	$	(4,119	)	$	(26,435	)	$	29,913	$	(49,261	)

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Three Months Ended September 30, 2014
	Parent		Guarantor		Non-Guarantor			Eliminations			Consolidated
Comprehensive income:
Net income (loss)	$	12,566	$	19,980	$	(227	)	$	(19,442	)	$	12,877
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—		—		(1,780		)	—			(1,780		)
Currency translation difference on foreign currency net investments	—		—		615			—			615
Total other comprehensive income (loss), net of tax:	—		—		(1,165		)	—			(1,165		)
Comprehensive income (loss)	12,566		19,980		(1,392		)	(19,442		)	11,712
Comprehensive (loss) attributable to noncontrolling interest	—		—		(289		)	—			(289		)
Comprehensive income (loss) attributable to controlling interest	$	12,566	$	19,980	$	(1,681	)	$	(19,442	)	$	11,423

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30, 2015
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Comprehensive income:
Net income (loss)	$	(59,427	)	$	(8,984	)	$	(19,543	)	$	29,316	$	(58,638	)
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—			—			(2,308		)	—		(2,308		)
Currency translation difference on foreign currency net investments	—			—			1,462			—		1,462
Total other comprehensive income (loss), net of tax:	—			—			(846		)	—		(846		)
Comprehensive income (loss)	(59,427		)	(8,984		)	(20,389		)	29,316		(59,484		)
Comprehensive (loss) attributable to noncontrolling interest	—			—			(571		)	—		(571		)
Comprehensive income (loss) attributable to controlling interest	$	(59,427	)	$	(8,984	)	$	(20,960	)	$	29,316	$	(60,055	)

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30, 2014
	Parent		Guarantor		Non-Guarantor			Eliminations			Consolidated
Comprehensive income:
Net income (loss)	$	15,698	$	54,169	$	(2,954	)	$	(50,591	)	$	16,322
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—		—		(2,248		)	—			(2,248		)
Currency translation difference on foreign currency net investments	—		—		1,126			—			1,126
Total other comprehensive income (loss), net of tax:	—		—		(1,122		)	—			(1,122		)
Comprehensive income (loss)	15,698		54,169		(4,076		)	(50,591		)	15,200
Comprehensive (loss) attributable to noncontrolling interest	—		—		(523		)	—			(523		)
Comprehensive income (loss) attributable to controlling interest	$	15,698	$	54,169	$	(4,599	)	$	(50,591	)	$	14,677

Consolidated Condensed Statements of Cash Flows

ARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30, 2015
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(59,427	)	$	(8,984	)	$	(19,543	)	$	29,316		$	(58,638	)
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			71,270			47,204			—			118,474
Accretion of contingent consideration	—			—			547			—			547
Provision for reduction in carrying value of certain assets	—			920			2,302			—			3,222
Gain on disposition of assets	—			(452		)	(2,234		)	—			(2,686		)
Deferred income tax expense	(24,184		)	10,032			24,411			—			10,259
Expenses not requiring cash	6,498			2,677			(1,146		)	—			8,029
Equity in net earnings of subsidiaries	29,316			—			—			(29,316		)	—
Change in assets and liabilities:
Accounts and notes receivable	(33		)	36,694			14,593			—			51,254
Other assets	(121,465		)	110,017			12,934			—			1,486
Accounts payable and accrued liabilities	(10,480		)	(168		)	(5,142		)	—			(15,790		)
Accrued income taxes	6,481			(2,081		)	(11,705		)	—			(7,305		)
Net cash provided by (used in) operating activities	(173,294		)	219,925			62,221			—			108,852
Cash flows from investing activities:
Capital expenditures	—			(50,396		)	(22,073		)	—			(72,469		)
Proceeds from the sale of assets	—			489			242			—			731
Proceeds from insurance settlements	—			—			2,500			—			2,500
Acquisition, net of cash acquired	—			(10,431		)	—			—			(10,431		)
Net cash (used in) investing activities	—			(60,338		)	(19,331		)	—			(79,669		)
Cash flows from financing activities:
Repayments of long-term debt	(30,000		)	—			—			—			(30,000		)
Payment of debt issuance costs	(1,996		)	—			—			—			(1,996		)
Excess tax benefit from stock-based compensation	(992		)	—			—			—			(992		)
Intercompany advances, net	216,082			(165,133		)	(50,949		)	—			—
Net cash provided by (used in) financing activities	183,094			(165,133		)	(50,949		)	—			(32,988		)
Net change in cash and cash equivalents	9,800			(5,546		)	(8,059		)	—			(3,805		)
Cash and cash equivalents at beginning of year	36,728			13,546			58,182			—			108,456
Cash and cash equivalents at end of year	$	46,528		$	8,000		$	50,123		$	—		$	104,651

	Nine Months Ended September 30, 2015
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(59,427	)	$	(8,984	)	$	(19,543	)	$	29,316		$	(58,638	)
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			71,270			47,204			—			118,474
Accretion of contingent consideration	—			—			547			—			547
Provision for reduction in carrying value of certain assets	—			920			2,302			—			3,222
Gain on disposition of assets	—			(452		)	(2,234		)	—			(2,686		)
Deferred income tax expense	(24,184		)	10,032			24,411			—			10,259
Expenses not requiring cash	6,498			2,677			(1,146		)	—			8,029
Equity in net earnings of subsidiaries	29,316			—			—			(29,316		)	—
Change in assets and liabilities:
Accounts and notes receivable	(33		)	36,694			14,593			—			51,254
Other assets	(121,465		)	110,017			12,934			—			1,486
Accounts payable and accrued liabilities	(10,480		)	(168		)	(5,142		)	—			(15,790		)
Accrued income taxes	6,481			(2,081		)	(11,705		)	—			(7,305		)
Net cash provided by (used in) operating activities	(173,294		)	219,925			62,221			—			108,852
Cash flows from investing activities:
Capital expenditures	—			(50,396		)	(22,073		)	—			(72,469		)
Proceeds from the sale of assets	—			489			242			—			731
Proceeds from insurance settlements	—			—			2,500			—			2,500
Acquisition, net of cash acquired	—			(10,431		)	—			—			(10,431		)
Net cash (used in) investing activities	—			(60,338		)	(19,331		)	—			(79,669		)
Cash flows from financing activities:
Repayments of long-term debt	(30,000		)	—			—			—			(30,000		)
Payment of debt issuance costs	(1,996		)	—			—			—			(1,996		)
Excess tax benefit from stock-based compensation	(992		)	—			—			—			(992		)
Intercompany advances, net	216,082			(165,133		)	(50,949		)	—			—
Net cash provided by (used in) financing activities	183,094			(165,133		)	(50,949		)	—			(32,988		)
Net change in cash and cash equivalents	9,800			(5,546		)	(8,059		)	—			(3,805		)
Cash and cash equivalents at beginning of year	36,728			13,546			58,182			—			108,456
Cash and cash equivalents at end of year	$	46,528		$	8,000		$	50,123		$	—		$	104,651

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30, 2014
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	15,698		$	54,169		$	(2,954	)	$	(50,591	)	$	16,322
Adjustments to reconcile net income (loss)
Depreciation and amortization	—			63,343			43,323			—			106,666
Loss on extinguishment of debt	30,152			—			—			—			30,152
Gain on disposition of assets	79			(522		)	10			—			(433		)
Deferred income tax expense	(15,774		)	12,525			3,322			—			73
Expenses not requiring cash	9,940			(1,538		)	1,739			—			10,141
Equity in net earnings of subsidiaries	(50,591		)	—			—			50,591			—
Change in assets and liabilities:
Accounts and notes receivable	—			(1,715		)	(3,473		)	—			(5,188		)
Other assets	43,412			(58,441		)	22,583			—			7,554
Accounts payable and accrued liabilities	(8,213		)	(9,395		)	7,069			—			(10,539		)
Accrued income taxes	(13,232		)	11,764			(8,929		)	—			(10,397		)
Net cash provided by (used in) operating activities	11,471			70,190			62,690			—			144,351
Cash flows from investing activities:
Capital expenditures	—			(107,137		)	(43,972		)	—			(151,109		)
Proceeds from the sale of assets	—			1,088			1,206			—			2,294
Net cash (used in) investing activities	—			(106,049		)	(42,766		)	—			(148,815		)
Cash flows from financing activities:
Proceeds from debt issuance	400,000			—			—			—			400,000
Repayments of long-term debt	(432,500		)	—			—			—			(432,500		)
Payment of debt issuance costs	(7,630		)	—			—			—			(7,630		)
Payment of debt extinguishment costs	(26,214		)	—			—			—			(26,214		)
Excess tax benefit from stock-based compensation	430			—			—			—			430
Intercompany advances, net	(10,677		)	40,064			(29,387		)	—			—
Net cash provided by (used in) financing activities	(76,591		)	40,064			(29,387		)	—			(65,914		)
Net change in cash and cash equivalents	(65,120		)	4,205			(9,463		)	—			(70,378		)
Cash and cash equivalents at beginning of year	88,697			8,310			51,682			—			148,689
Cash and cash equivalents at end of year	$	23,577		$	12,515		$	42,219		$	—		$	78,311