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

9 Months Ended

Sep. 30, 2016

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, 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 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

Consolidating Condensed Statement of Operations

	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.

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, 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	)

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, 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

	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