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Parent, Guarantor, Non-Guarantor Unaudited Consolidating Condensed Financial Statements
 9 Months Ended
Sep. 30, 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 September 30, 2016 and December 31, 2015 and for the three and nine months ended September 30, 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 of FASB Accounting Standards Codification Topic No. 810, Consolidation (ASC 810), we have retrospectively updated the unaudited consolidating condensed financial information as of December 31, 2015 and September 30, 2015.
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATING CONDENSED BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
 
 
September 30, 2016
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
ASSETS
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
54,042

 
$
13,684

 
$
35,887

 
$
—

 
$
103,613

Accounts and notes receivable, net
—

 
15,637

 
114,979

 
—

 
130,616

Rig materials and supplies
—

 
(6,210
)
 
38,891

 
—

 
32,681

Other current assets
—

 
7,142

 
15,372

 
—

 
22,514

Total current assets
54,042

 
30,253

 
205,129

 
—

 
289,424

Property, plant and equipment, net
(19
)
 
483,513

 
234,760

 
—

 
718,254

Goodwill
—

 
6,708

 
—

 
—

 
6,708

Intangible assets, net
—

 
10,010

 
650

 
—

 
10,660

Investment in subsidiaries and intercompany advances
3,016,378

 
2,917,336

 
3,605,766

 
(9,539,480
)
 
—

Other noncurrent assets
(137,690
)
 
191,518

 
551,820

 
(480,812
)
 
124,836

Total assets
$
2,932,711

 
$
3,639,338

 
$
4,598,125

 
$
(10,020,292
)
 
$
1,149,882

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
103,855

 
$
33,848

 
$
565,881

 
$
(617,477
)
 
$
86,107

Accrued income taxes
43,043

 
(24,909
)
 
(10,948
)
 
—

 
7,186

Total current liabilities
146,898

 
8,939

 
554,933

 
(617,477
)
 
93,293

Long-term debt, net
575,935

 
—

 
—

 
—

 
575,935

Other long-term liabilities
2,867

 
8,418

 
4,876

 
—

 
16,161

Deferred tax liability
(29
)
 
80,545

 
(1,623
)
 
—

 
78,893

Intercompany payables
1,818,320

 
1,425,349

 
2,112,278

 
(5,355,947
)
 
—

Total liabilities
2,543,991

 
1,523,251

 
2,670,464

 
(5,973,424
)
 
764,282

Total equity
388,720

 
2,116,087

 
1,927,661

 
(4,046,868
)
 
385,600

Total liabilities and stockholders’ equity
$
2,932,711

 
$
3,639,338

 
$
4,598,125

 
$
(10,020,292
)
 
$
1,149,882



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:
 
 
 
 
 
 
 
 
 
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

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 September 30, 2016
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
Total revenues
$
—

 
$
25,399

 
$
96,663

 
$
(24,873
)
 
$
97,189

Operating expenses
—

 
25,505

 
84,048

 
(24,873
)
 
84,680

Depreciation and amortization
—

 
22,300

 
12,174

 
—

 
34,474

Total operating gross margin (loss)
—

 
(22,406
)
 
441

 
—

 
(21,965
)
General and administration expense (1)
(92
)
 
(2,759
)
 
(4,573
)
 
—

 
(7,424
)
Provision for reduction in carrying value of certain assets
—

 
—

 
—

 
—

 
—

Gain (loss) on disposition of assets, net
—

 
(12
)
 
(175
)
 
—

 
(187
)
Total operating income (loss)
(92
)
 
(25,177
)
 
(4,307
)
 
—

 
(29,576
)
Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense
(11,700
)
 
(56
)
 
504

 
237

 
(11,015
)
Interest income
189

 
157

 
(100
)
 
(237
)
 
9

Other
—

 
15

 
(366
)
 
—

 
(351
)
Equity in net earnings of subsidiaries
(24,887
)
 
—

 
—

 
24,887

 
—

Total other income (expense)
(36,398
)
 
116

 
38

 
24,887

 
(11,357
)
Income (loss) before income taxes
(36,490
)
 
(25,061
)
 
(4,269
)
 
24,887

 
(40,933
)
Total income tax expense (benefit)
9,738

 
(6,652
)
 
2,209

 
—

 
5,295

Net income (loss) attributable to controlling interest
$
(46,228
)
 
$
(18,409
)
 
$
(6,478
)
 
$
24,887

 
$
(46,228
)

(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, 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 (loss)
—

 
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 (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
)
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 (loss) 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.

























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

 
Nine Months Ended September 30, 2016
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
Total revenues
$
—

 
$
107,368

 
$
292,034

 
$
(66,423
)
 
$
332,979

Operating expenses
—

 
83,917

 
264,498

 
(66,423
)
 
281,992

Depreciation and amortization
—

 
68,739

 
37,866

 
—

 
106,605

Total operating gross margin (loss)
—

 
(45,288
)
 
(10,330
)
 
—

 
(55,618
)
General and administration expense (1)
(291
)
 
(20,199
)
 
(4,710
)
 
—

 
(25,200
)
Gain (loss) on disposition of assets, net
—

 
141

 
(390
)
 
—

 
(249
)
Total operating income (loss)
(291
)
 
(65,346
)
 
(15,430
)
 
—

 
(81,067
)
Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense
(36,452
)
 
(537
)
 
(4,646
)
 
6,871

 
(34,764
)
Interest income
584

 
515

 
5,820

 
(6,871
)
 
48

Other
—

 
488

 
1,288

 
—

 
1,776

Equity in net earnings of subsidiaries
(65,679
)
 
—

 
—

 
65,679

 
—

Total other income (expense)
(101,547
)
 
466

 
2,462

 
65,679

 
(32,940
)
Income (loss) before income taxes
(101,838
)
 
(64,880
)
 
(12,968
)
 
65,679

 
(114,007
)
Total income tax expense (benefit)
80,047

 
(15,656
)
 
3,487

 
—

 
67,878

Net income (loss) attributable to controlling interest
$
(181,885
)
 
$
(49,224
)
 
$
(16,455
)
 
$
65,679

 
$
(181,885
)

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

 
$
201,924

 
$
452,197

 
$
(90,686
)
 
$
563,435

Operating expenses
—

 
112,229

 
390,259

 
(90,686
)
 
411,802

Depreciation and amortization
—

 
71,270

 
47,204

 
—

 
118,474

Total operating gross margin (loss)
—

 
18,425

 
14,734

 
—

 
33,159

General and administration expense (1)
(1,152
)
 
(31,896
)
 
3,805

 
—

 
(29,243
)
Provision for reduction in carrying value of certain assets
—

 
(920
)
 
(2,302
)
 
—

 
(3,222
)
Gain on disposition of assets, net
—

 
452

 
2,234

 
—

 
2,686

Total operating income (loss)
(1,152
)
 
(13,939
)
 
18,471

 
—

 
3,380

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense
(33,145
)
 
(608
)
 
(5,956
)
 
5,942

 
(33,767
)
Interest income
756

 
(12
)
 
5,407

 
(5,942
)
 
209

Other
—

 
(81
)
 
(3,547
)
 
—

 
(3,628
)
Equity in net earnings of subsidiaries
(29,316
)
 
—

 
—

 
29,316

 
—

Total other income (expense)
(61,705
)
 
(701
)
 
(4,096
)
 
29,316

 
(37,186
)
Income (loss) before income taxes
(62,857
)
 
(14,640
)
 
14,375

 
29,316

 
(33,806
)
Total income tax expense (benefit)
(3,430
)
 
(5,656
)
 
33,918

 
—

 
24,832

Net income (loss)
(59,427
)
 
(8,984
)
 
(19,543
)
 
29,316

 
(58,638
)
Less: Net income (loss) attributable to noncontrolling interest
—

 
—

 
789

 
—

 
789

Net income (loss) attributable to controlling interest
$
(59,427
)
 
$
(8,984
)
 
$
(20,332
)
 
$
29,316

 
$
(59,427
)

(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 September 30, 2016
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
Comprehensive income (loss):
 
 
 
 
 
 
 
 
 
Net income (loss)
$
(46,228
)
 
$
(18,409
)
 
$
(6,478
)
 
$
24,887

 
$
(46,228
)
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
Currency translation difference on related borrowings
—

 
—

 
116

 
—

 
116

Currency translation difference on foreign currency net investments
—

 
—

 
(740
)
 
—

 
(740
)
Total other comprehensive income (loss), net of tax:
—

 
—

 
(624
)
 
—

 
(624
)
Comprehensive income (loss) attributable to controlling interest
$
(46,228
)
 
$
(18,409
)
 
$
(7,102
)
 
$
24,887

 
$
(46,852
)



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 (loss):
 
 
 
 
 
 
 
 
 
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 income (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)

 
Nine Months Ended September 30, 2016
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
Comprehensive income (loss):
 
 
 
 
 
 
 
 
 
Net income (loss)
$
(181,885
)
 
$
(49,224
)
 
$
(16,455
)
 
$
65,679

 
$
(181,885
)
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
Currency translation difference on related borrowings
—

 
—

 
311

 
—

 
311

Currency translation difference on foreign currency net investments
—

 
—

 
(4,506
)
 
—

 
(4,506
)
Total other comprehensive income (loss), net of tax:
—

 
—

 
(4,195
)
 
—

 
(4,195
)
Comprehensive income (loss) attributable to controlling interest
$
(181,885
)
 
$
(49,224
)
 
$
(20,650
)
 
$
65,679

 
$
(186,080
)



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 (loss):
 
 
 
 
 
 
 
 
 
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 income (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
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
 
 
Nine Months Ended September 30, 2016
 
Parent
 
Guarantor
 
Non-Guarantor
 
Eliminations
 
Consolidated
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
Net income (loss)
$
(181,885
)
 
$
(49,224
)
 
$
(16,455
)
 
$
65,679

 
$
(181,885
)
Adjustments to reconcile net income (loss):
 
 
 
 
 
 
 
 
 
Depreciation and amortization
—

 
68,739

 
37,866

 
—

 
106,605

Accretion of contingent consideration
—

 
419

 
—

 
—

 
419

(Gain) loss on debt modification
1,088

 
—

 
—

 
—

 
1,088

(Gain) loss on disposition of assets
—

 
(141
)
 
390

 
—

 
249

Deferred income tax expense (benefit)
46,773

 
12,693

 
1,733

 
—

 
61,199

Expenses not requiring cash
4,155

 
(505
)
 
(7,681
)
 
—

 
(4,031
)
Equity in net earnings of subsidiaries
65,679

 
—

 
—

 
(65,679
)
 
—

Change in assets and liabilities:
 
 
 
 
 
 
 
 
 
Accounts and notes receivable
—

 
26,956

 
17,843

 
—

 
44,799

Other assets
(113,372
)
 
119,703

 
(3,049
)
 
—

 
3,282

Accounts payable and accrued liabilities
(7,079
)
 
(16,486
)
 
(7,025
)
 
—

 
(30,590
)
Accrued income taxes
33,313

 
(27,191
)
 
(8,114
)
 
—

 
(1,992
)
Net cash provided by (used in) operating activities
(151,328
)
 
134,963

 
15,508

 
—

 
(857
)
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
(10,121
)
 
(10,873
)
 
—

 
(20,994
)
Proceeds from the sale of assets
—

 
435

 
1,861

 
—

 
2,296

Net cash provided by (used in) investing activities
—

 
(9,686
)
 
(9,012
)
 
—

 
(18,698
)
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Payment for noncontrolling interest
(3,375
)
 
—

 
—

 
—

 
(3,375
)
Payment of contingent consideration
—

 
(6,000
)
 
—

 
—

 
(6,000
)
Excess tax benefit from stock-based compensation
(1,751
)
 
—

 
—

 
—

 
(1,751
)
Intercompany advances, net
136,511

 
(119,447
)
 
(17,064
)
 
—

 
—

Net cash provided by (used in) financing activities
131,385

 
(125,447
)
 
(17,064
)
 
—

 
(11,126
)
 
 
 
 
 
 
 
 
 
 
Net change in cash and cash equivalents
(19,943
)
 
(170
)
 
(10,568
)
 
—

 
(30,681
)
Cash and cash equivalents at beginning of year
73,985

 
13,854

 
46,455

 
—

 
134,294

Cash and cash equivalents at end of year
$
54,042

 
$
13,684

 
$
35,887

 
$
—

 
$
103,613





PARKER 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) loss on disposition of assets
—

 
(452
)
 
(2,234
)
 
—

 
(2,686
)
Deferred income tax expense (benefit)
(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

Acquisitions, net of cash acquired
—

 
(10,431
)
 
—

 
—

 
(10,431
)
Net cash provided by (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