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Parent, Guarantor, Non-Guarantor Unaudited Consolidating Condensed Financial Statements
 3 Months Ended
Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Parent, Guarantor, Non-Guarantor Unaudited Consolidating Condensed Financial Statements
Parent, Guarantor, Non-Guarantor Unaudited Consolidating Condensed Financial Statements
Set forth on the following pages are the consolidating condensed financial statements of Parker Drilling. The 2015 Secured Credit Agreement and Senior Notes are fully and unconditionally guaranteed by substantially all of our direct and indirect domestic subsidiaries, other than immaterial subsidiaries and subsidiaries generating revenues primarily outside the United States, subject to the following customary release provisions:
•
in connection with any sale or other disposition of all or substantially all of the assets of that guarantor (including by way of merger or consolidation) to a person that is not (either before or after giving effect to such transaction) a subsidiary of the Company;
•
in connection with any sale of such amount of capital stock as would result in such guarantor no longer being a subsidiary to a person that is not (either before or after giving effect to such transaction) a subsidiary of the Company;
•
if the Company designates any restricted subsidiary that is a guarantor as an unrestricted subsidiary;
•
if the guarantee by a guarantor of all other indebtedness of the Company or any other guarantor is released, terminated or discharged, except by, or as a result of, payment under such guarantee; or
•
upon legal defeasance or covenant defeasance (satisfaction and discharge of the indenture).
There are currently no restrictions on the ability of the restricted subsidiaries to transfer funds to Parker Drilling in the form of cash dividends, loans or advances. Parker Drilling is a holding company with no operations, other than through its subsidiaries. Separate financial statements for each guarantor company are not provided as the Company complies with Rule 3-10(f) of Regulation S-X. All guarantor subsidiaries are owned 100 percent by the parent company.
We are providing unaudited consolidating condensed financial information of the parent, Parker Drilling, the guarantor subsidiaries, and the non-guarantor subsidiaries as of March 31, 2016 and December 31, 2015 and for the three months ended March 31, 2016 and 2015, respectively. The consolidating condensed financial statements present investments in both consolidated and unconsolidated subsidiaries using the equity method of accounting.
Upon the closing of our 2015 Secured Credit Agreement, one of our subsidiaries was released as a guarantor subsidiary and is now classified as a non-guarantor subsidiary. In accordance with the guidance Topic No. 810, Consolidation (ASC 810), we have retrospectively updated the unaudited consolidating condensed financial information as of December 31, 2015 and for the three months ended March 31, 2015.
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATING CONDENSED BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
 
 
March 31, 2016
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
ASSETS
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
45,822

 
$
13,242

 
$
49,363

 
$
—

 
$
108,427

Accounts and notes receivable, net
—

 
48,785

 
126,597

 
—

 
175,382

Rig materials and supplies
—

 
(3,788
)
 
40,296

 
—

 
36,508

Other current assets
—

 
5,124

 
19,314

 
—

 
24,438

Total current assets
45,822

 
63,363

 
235,570

 
—

 
344,755

Property, plant and equipment, net
(19
)
 
521,959

 
254,972

 
—

 
776,912

Goodwill
—

 
6,708

 
—

 
—

 
6,708

Intangible assets, net
—

 
11,164

 
1,056

 
—

 
12,220

Investment in subsidiaries and intercompany advances
3,049,008

 
2,810,676

 
3,439,433

 
(9,299,117
)
 
—

Other noncurrent assets
(225,185
)
 
277,015

 
543,011

 
(480,787
)
 
114,054

Total assets
$
2,869,626

 
$
3,690,885

 
$
4,474,042

 
$
(9,779,904
)
 
$
1,254,649

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
104,789

 
$
55,216

 
$
572,465

 
$
(617,477
)
 
$
114,993

Accrued income taxes
20,216

 
(6,430
)
 
(7,806
)
 
—

 
5,980

Total current liabilities
125,005

 
48,786

 
564,659

 
(617,477
)
 
120,973

Long-term debt, net
575,171

 
—

 
—

 
—

 
575,171

Other long-term liabilities
2,868

 
5,867

 
5,020

 
—

 
13,755

Long-term deferred tax liability
(29
)
 
72,948

 
(1,021
)
 
—

 
71,898

Intercompany payables
1,693,797

 
1,412,285

 
1,962,772

 
(5,068,854
)
 
—

Total liabilities
2,396,812

 
1,539,886

 
2,531,430

 
(5,686,331
)
 
781,797

Total equity
472,814

 
2,150,999

 
1,942,612

 
(4,093,573
)
 
472,852

Total liabilities and stockholders’ equity
$
2,869,626

 
$
3,690,885

 
$
4,474,042

 
$
(9,779,904
)
 
$
1,254,649



PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATING CONDENSED BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
 
 
December 31, 2015
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
ASSETS
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
73,985

 
$
13,854

 
$
46,455

 
$
—

 
$
134,294

Accounts and notes receivable, net
—

 
42,261

 
132,844

 
—

 
175,105

Rig materials and supplies
—

 
(4,744
)
 
39,681

 
—

 
34,937

Other current assets
—

 
5,982

 
16,423

 
—

 
22,405

Total current assets
73,985

 
57,353

 
235,403

 
—

 
366,741

Property, plant and equipment, net
(19
)
 
543,346

 
262,514

 
—

 
805,841

Goodwill
—

 
6,708

 
—

 
—

 
6,708

Intangible assets, net
—

 
11,740

 
1,637

 
—

 
13,377

Investment in subsidiaries and intercompany advances
3,057,220

 
2,770,501

 
3,319,702

 
(9,147,423
)
 
—

Other noncurrent assets
(234,786
)
 
312,790

 
265,995

 
(169,964
)
 
174,035

Total assets
$
2,896,400

 
$
3,702,438

 
$
4,085,251

 
$
(9,317,387
)
 
$
1,366,702

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
 
 
 
 
 
 
 
 
 
Current portion of long-term debt
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Accounts payable and accrued liabilities
84,456

 
56,382

 
295,439

 
(306,574
)
 
129,703

Accrued income taxes
9,900

 
2,111

 
(5,593
)
 
—

 
6,418

Total current liabilities
94,356

 
58,493

 
289,846

 
(306,574
)
 
136,121

Long-term debt, net
574,798

 
—

 
—

 
—

 
574,798

Other long-term liabilities
2,868

 
7,446

 
8,303

 
—

 
18,617

Long-term deferred tax liability
(29
)
 
69,679

 
(996
)
 
—

 
68,654

Intercompany payables
1,656,968

 
1,401,510

 
1,864,671

 
(4,923,149
)
 
—

Total liabilities
2,328,961

 
1,537,128

 
2,161,824

 
(5,229,723
)
 
798,190

Total equity
567,439

 
2,165,310

 
1,923,427

 
(4,087,664
)
 
568,512

Total liabilities and stockholders’ equity
$
2,896,400

 
$
3,702,438

 
$
4,085,251

 
$
(9,317,387
)
 
$
1,366,702

PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
(Dollars in Thousands)
(Unaudited)

 
Three Months Ended March 31, 2016
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
Total revenues
$
—

 
$
47,382

 
$
106,477

 
$
(23,356
)
 
$
130,503

Operating expenses
—

 
32,835

 
98,638

 
(23,356
)
 
108,117

Depreciation and amortization
—

 
23,125

 
12,689

 
—

 
35,814

Total operating gross margin
—

 
(8,578
)
 
(4,850
)
 
—

 
(13,428
)
General and administration expense (1)
(87
)
 
(9,613
)
 
(81
)
 
—

 
(9,781
)
(Loss) on disposition of assets, net
—

 
(56
)
 
(4
)
 
—

 
(60
)
Total operating income (loss)
(87
)
 
(18,247
)
 
(4,935
)
 
—

 
(23,269
)
Other income and (expense):
 
 
 
 
 
 
 
 
 
Interest expense
(11,857
)
 
(437
)
 
(2,859
)
 
3,591

 
(11,562
)
Interest income
204

 
179

 
3,215

 
(3,591
)
 
7

Other
—

 
485

 
2,000

 
—

 
2,485

Equity in net earnings of subsidiaries
(16,225
)
 
—

 
—

 
16,225

 
—

Total other income (expense)
(27,878
)
 
227

 
2,356

 
16,225

 
(9,070
)
Income (loss) before income taxes
(27,965
)
 
(18,020
)
 
(2,579
)
 
16,225

 
(32,339
)
Total income tax expense (benefit)
67,870

 
(3,707
)
 
(667
)
 
—

 
63,496

Net income (loss)
(95,835
)
 
(14,313
)
 
(1,912
)
 
16,225

 
(95,835
)
Less: Net income attributable to noncontrolling interest
—

 
—

 
—

 
—

 
—

Net income (loss) attributable to controlling interest
$
(95,835
)
 
$
(14,313
)
 
$
(1,912
)
 
$
16,225

 
$
(95,835
)

(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 March 31, 2015
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
Total revenues
$
—

 
$
79,395

 
$
150,931

 
$
(26,250
)
 
$
204,076

Operating expenses
—

 
44,145

 
121,375

 
(26,250
)
 
139,270

Depreciation and amortization
—

 
23,311

 
17,228

 
—

 
40,539

Total operating gross margin
—

 
11,939

 
12,328

 
—

 
24,267

General and administration expense (1)
(112
)
 
(10,115
)
 
(610
)
 
—

 
(10,837
)
Gain on disposition of assets, net
—

 
52

 
2,389

 
—

 
2,441

Total operating income (loss)
(112
)
 
1,876

 
14,107

 
—

 
15,871

Other income and (expense):
 
 
 
 
 
 
 
 
 
Interest expense
(11,059
)
 
(17
)
 
(328
)
 
326

 
(11,078
)
Interest income
417

 
3

 
89

 
(326
)
 
183

Other
—

 
10

 
(1,390
)
 
—

 
(1,380
)
Equity in net earnings of subsidiaries
8,988

 
—

 
—

 
(8,988
)
 
—

Total other income (expense)
(1,654
)
 
(4
)
 
(1,629
)
 
(8,988
)
 
(12,275
)
Income (loss) before income taxes
(1,766
)
 
1,872

 
12,478

 
(8,988
)
 
3,596

Income tax expense (benefit)
(4,988
)
 
(447
)
 
5,253

 
—

 
(182
)
Net income (loss)
3,222

 
2,319

 
7,225

 
(8,988
)
 
3,778

Less: Net income attributable to noncontrolling interest
—

 
—

 
556

 
—

 
556

Net income (loss) attributable to controlling interest
$
3,222

 
$
2,319

 
$
6,669

 
$
(8,988
)
 
$
3,222


(1) General and administration expenses for field operations are included in operating expenses.
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
(Dollars in Thousands)
(Unaudited)

 
Three Months Ended March 31, 2016
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
Comprehensive income:
 
 
 
 
 
 
 
 
 
Net income (loss)
$
(95,835
)
 
$
(14,313
)
 
$
(1,912
)
 
$
16,225

 
$
(95,835
)
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
Currency translation difference on related borrowings
—

 
—

 
502

 
—

 
502

Currency translation difference on foreign currency net investments
—

 
—

 
(1,538
)
 
—

 
(1,538
)
Total other comprehensive income (loss), net of tax:
—

 
—

 
(1,036
)
 
—

 
(1,036
)
Comprehensive income (loss)
(95,835
)
 
(14,313
)
 
(2,948
)
 
16,225

 
(96,871
)
Comprehensive (loss) attributable to noncontrolling interest
—

 
—

 
—

 
—

 
—

Comprehensive income (loss) attributable to controlling interest
$
(95,835
)
 
$
(14,313
)
 
$
(2,948
)
 
$
16,225

 
$
(96,871
)



PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
(Dollars in Thousands)
(Unaudited)

 
Three Months Ended March 31, 2015
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
Comprehensive income:
 
 
 
 
 
 
 
 
 
Net income (loss)
$
3,222

 
$
2,319

 
$
7,225

 
$
(8,988
)
 
$
3,778

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
Currency translation difference on related borrowings
—

 
—

 
(1,670
)
 
—

 
(1,670
)
Currency translation difference on foreign currency net investments
—

 
—

 
(849
)
 
—

 
(849
)
Total other comprehensive income (loss), net of tax:
—

 
—

 
(2,519
)
 
—

 
(2,519
)
Comprehensive income (loss)
3,222

 
2,319

 
4,706

 
(8,988
)
 
1,259

Comprehensive (loss) attributable to noncontrolling interest
—

 
—

 
(394
)
 
—

 
(394
)
Comprehensive income (loss) attributable to controlling interest
$
3,222

 
$
2,319

 
$
4,312

 
$
(8,988
)
 
$
865

PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
 
 
Three Months Ended March 31, 2016
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
Net income (loss)
$
(95,835
)
 
$
(14,313
)
 
$
(1,912
)
 
$
16,225

 
$
(95,835
)
Adjustments to reconcile net income (loss):
 
 
 
 
 
 
 
 
 
Depreciation and amortization
—

 
23,125

 
12,689

 
—

 
35,814

Accretion of contingent consideration
—

 
419

 
—

 
—

 
419

Gain on disposition of assets
—

 
56

 
4

 
—

 
60

Deferred income tax expense
57,677

 
5,185

 
549

 
—

 
63,411

Expenses not requiring cash
1,740

 
33

 
(2,199
)
 
—

 
(426
)
Equity in net earnings of subsidiaries
16,225

 
—

 
—

 
(16,225
)
 
—

Change in assets and liabilities:
 
 
 
 
 
 
 
 
 
Accounts and notes receivable
—

 
(6,637
)
 
6,256

 
—

 
(381
)
Other assets
(37,191
)
 
33,904

 
2,983

 
—

 
(304
)
Accounts payable and accrued liabilities
(9,521
)
 
(799
)
 
(4,117
)
 
—

 
(14,437
)
Accrued income taxes
10,680

 
(8,905
)
 
(5,375
)
 
—

 
(3,600
)
Net cash provided by (used in) operating activities
(56,225
)
 
32,068

 
8,878

 
—

 
(15,279
)
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
(3,521
)
 
(4,368
)
 
—

 
(7,889
)
Proceeds from the sale of assets
—

 
28

 
26

 
—

 
54

Net cash provided by (used in) investing activities
—

 
(3,493
)
 
(4,342
)
 
—

 
(7,835
)
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Payment of contingent consideration
—

 
(2,000
)
 
—

 
—

 
(2,000
)
Excess tax benefit from stock-based compensation
(753
)
 
—

 
—

 
—

 
(753
)
Intercompany advances, net
28,815

 
(27,187
)
 
(1,628
)
 
—

 
—

Net cash provided by (used in) financing activities
28,062

 
(29,187
)
 
(1,628
)
 
—

 
(2,753
)
 
 
 
 
 
 
 
 
 
 
Net change in cash and cash equivalents
(28,163
)
 
(612
)
 
2,908

 
—

 
(25,867
)
Cash and cash equivalents at beginning of year
73,985

 
13,854

 
46,455

 
—

 
134,294

Cash and cash equivalents at end of year
$
45,822

 
$
13,242

 
$
49,363

 
$
—

 
$
108,427





PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
 
Three Months Ended March 31, 2015
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
Net income (loss)
$
3,222

 
$
2,319

 
$
7,225

 
$
(8,988
)
 
$
3,778

Adjustments to reconcile net income (loss)
 
 
 
 
 
 
 
 
 
Depreciation and amortization
—

 
23,311

 
17,228

 
—

 
40,539

Gain on disposition of assets
—

 
(52
)
 
(2,389
)
 
—

 
(2,441
)
Deferred income tax expense
(7,932
)
 
3,117

 
(1,489
)
 
—

 
(6,304
)
Expenses not requiring cash
2,443

 
436

 
(1,142
)
 
—

 
1,737

Equity in net earnings of subsidiaries
(8,988
)
 
—

 
—

 
8,988

 
—

Change in assets and liabilities:
 
 
 
 
 
 
 
 
 
Accounts and notes receivable
19

 
(12,289
)
 
5,620

 
—

 
(6,650
)
Other assets
25,016

 
(41,216
)
 
(3,887
)
 
—

 
(20,087
)
Accounts payable and accrued liabilities
(10,549
)
 
47,058

 
17,536

 
—

 
54,045

Accrued income taxes
(10,727
)
 
13,922

 
(581
)
 
—

 
2,614

Net cash provided by (used in) operating activities
(7,496
)
 
36,606

 
38,121

 
—

 
67,231

 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
(24,418
)
 
(9,037
)
 
—

 
(33,455
)
Proceeds from the sale of assets
—

 
50

 
196

 
—

 
246

Proceeds from insurance settlements
—

 
—

 
2,500

 
—

 
2,500

Net cash provided by (used in) investing activities
—

 
(24,368
)
 
(6,341
)
 
—

 
(30,709
)
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Repayments of long-term debt
(30,000
)
 
—

 
—

 
—

 
(30,000
)
Payment of debt issuance costs
(1,359
)
 
—

 
—

 
—

 
(1,359
)
Excess tax benefit from stock-based compensation
(420
)
 
—

 
—

 
—

 
(420
)
Intercompany advances, net
34,251

 
(14,840
)
 
(19,411
)
 
—

 
—

Net cash provided by (used in) financing activities
2,472

 
(14,840
)
 
(19,411
)
 
—

 
(31,779
)
 
 
 
 
 
 
 
 
 
 
Net change in cash and cash equivalents
(5,024
)
 
(2,602
)
 
12,369

 
—

 
4,743

Cash and cash equivalents at beginning of year
36,728

 
13,546

 
58,182

 
—

 
108,456

Cash and cash equivalents at end of year
$
31,704

 
$
10,944

 
$
70,551

 
$
—

 
$
113,199