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

6 Months Ended

Jun. 30, 2017

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, 2016
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	65,000		$	14,365		$	40,326		$	—		$	119,691
Accounts and notes receivable, net	—			15,749			97,482			—			113,231
Rig materials and supplies	—			(5,369		)	37,723			—			32,354
Other current assets	(50,296		)	41,304			30,034			—			21,042
Total current assets	14,704			66,049			205,565			—			286,318
Property, plant and equipment, net	(19		)	469,927			223,531			—			693,439
Goodwill	—			6,708			—			—			6,708
Intangible assets, net	—			9,434			494			—			9,928
Investment in subsidiaries and intercompany advances	2,979,413			2,932,375			3,676,402			(9,588,190		)	—
Other noncurrent assets	(253,679		)	301,771			539,877			(480,811		)	107,158
Total assets	$	2,740,419		$	3,786,264		$	4,645,869		$	(10,069,001	)	$	1,103,551
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	(10,080	)	$	149,210		$	577,188		$	(617,477	)	$	98,841
Accrued income taxes	—			1,576			2,504			—			4,080
Total current liabilities	(10,080		)	150,786			579,692			(617,477		)	102,921
Long-term debt, net	576,326			—			—			—			576,326
Other long-term liabilities	2,867			9,338			3,631			—			15,836
Deferred tax liability	(28		)	73,039			(3,678		)	—			69,333
Intercompany payables	1,828,317			1,437,417			2,161,864			(5,427,598		)	—
Total liabilities	2,397,402			1,670,580			2,741,509			(6,045,075		)	764,416
Total equity	343,017			2,115,684			1,904,360			(4,023,926		)	339,135
Total liabilities and stockholders’ equity	$	2,740,419		$	3,786,264		$	4,645,869		$	(10,069,001	)	$	1,103,551

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED BALANCE SHEET

(Dollars in Thousands)

(Unaudited)

	June 30, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	89,006		$	16,558		$	40,670		$	—		$	146,234
Accounts and notes receivable, net	—			29,544			90,526			—			120,070
Rig materials and supplies	—			(4,813		)	40,083			—			35,270
Other current assets	—			8,723			16,985			—			25,708
Total current assets	89,006			50,012			188,264			—			327,282
Property, plant and equipment, net	(19		)	454,594			212,467			—			667,042
Goodwill	—			6,708			—			—			6,708
Intangible assets, net	—			8,281			189			—			8,470
Investment in subsidiaries and intercompany advances	2,950,669			2,947,916			3,804,358			(9,702,943		)	—
Other noncurrent assets	(168,681		)	222,237			539,876			(480,828		)	112,604
Total assets	$	2,870,975		$	3,689,748		$	4,745,154		$	(10,183,771	)	$	1,122,106
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	(47,834	)	$	190,474		$	581,140		$	(617,477	)	$	106,303
Accrued income taxes	69,506			(49,988		)	(14,382		)	—			5,136
Total current liabilities	21,672			140,486			566,758			(617,477		)	111,439
Long-term debt, net	577,133			—			—			—			577,133
Other long-term liabilities	2,867			5,779			3,872			—			12,518
Deferred tax liability	77,221			—			—			—			77,221
Intercompany payables	1,846,121			1,452,085			2,281,438			(5,579,644		)	—
Total liabilities	2,525,014			1,598,350			2,852,068			(6,197,121		)	778,311
Total equity	345,961			2,091,398			1,893,086			(3,986,650		)	343,795
Total liabilities and stockholders’ equity	$	2,870,975		$	3,689,748		$	4,745,154		$	(10,183,771	)	$	1,122,106

Consolidating Condensed Statement of Operations

	Three Months Ended June 30, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—		$	41,490		$	85,028		$	(16,911	)	$	109,607
Operating expenses	—			25,327			81,225			(16,911		)	89,641
Depreciation and amortization	—			20,270			10,712			—			30,982
Total operating gross margin (loss)	—			(4,107		)	(6,909		)	—			(11,016		)
General and administrative expense (1)	(69		)	(6,303		)	(131		)	—			(6,503		)
Gain (loss) on disposition of assets, net	—			(26		)	(87		)	—			(113		)
Total operating income (loss)	(69		)	(10,436		)	(7,127		)	—			(17,632		)
Other income (expense):
Interest expense	(11,809		)	(41		)	(2,070		)	2,825			(11,095		)
Interest income	184			179			2,484			(2,825		)	22
Other	—			15			545			—			560
Equity in net earnings of subsidiaries	(15,823		)	—			—			15,823			—
Total other income (expense)	(27,448		)	153			959			15,823			(10,513		)
Income (loss) before income taxes	(27,517		)	(10,283		)	(6,168		)	15,823			(28,145		)
Total income tax expense (benefit)	2,371			(1,585		)	957			—			1,743
Net income (loss)	$	(29,888	)	$	(8,698	)	$	(7,125	)	$	15,823		$	(29,888	)
Less: Mandatory convertible preferred stock dividend	$	1,239		$	—		$	—		$	—		$	1,239
Net income (loss) available to common stockholders	$	(31,127	)	$	(8,698	)	$	(7,125	)	$	15,823		$	(31,127	)

(1) General and administrative 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, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Comprehensive income (loss):
Net income (loss)	$	(29,888	)	$	(8,698	)	$	(7,125	)	$	15,823	$	(29,888	)
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—			—			185			—		185
Currency translation difference on foreign currency net investments	—			—			686			—		686
Total other comprehensive income (loss), net of tax:	—			—			871			—		871
Comprehensive income (loss)	$	(29,888	)	$	(8,698	)	$	(6,254	)	$	15,823	$	(29,017	)

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Three Months Ended June 30, 2016
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Comprehensive income (loss):
Net income (loss)	$	(39,824	)	$	(16,502	)	$	(8,064	)	$	24,568	$	(39,822	)
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—			—			(307		)	—		(307		)
Currency translation difference on foreign currency net investments	—			—			(2,228		)	—		(2,228		)
Total other comprehensive income (loss), net of tax:	—			—			(2,535		)	—		(2,535		)
Comprehensive income (loss)	(39,824		)	(16,502		)	(10,599		)	24,568		(42,357		)

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Six Months Ended June 30, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Comprehensive income (loss):
Net income (loss)	$	(69,696	)	$	(24,287	)	$	(13,316	)	$	37,602	$	(69,697	)
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—			—			268			—		268
Currency translation difference on foreign currency net investments	—			—			1,449			—		1,449
Total other comprehensive income (loss), net of tax:	—			—			1,717			—		1,717
Comprehensive income (loss)	$	(69,696	)	$	(24,287	)	$	(11,599	)	$	37,602	$	(67,980	)

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Six Months Ended June 30, 2016
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Comprehensive income (loss):
Net income (loss)	$	(135,657	)	$	(30,816	)	$	(9,977	)	$	40,793	$	(135,657	)
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—			—			195			—		195
Currency translation difference on foreign currency net investments	—			—			(3,766		)	—		(3,766		)
Total other comprehensive income (loss), net of tax:	—			—			(3,571		)	—		(3,571		)
Comprehensive income (loss)	(135,657		)	(30,816		)	(13,548		)	40,793		(139,228		)

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, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(69,696	)	$	(24,287	)	$	(13,316	)	$	37,602		$	(69,697	)
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			41,458			21,726			—			63,184
(Gain) loss on disposition of assets	—			242			223			—			465
Deferred income tax expense (benefit)	(10,359		)	8,943			482			—			(934		)
Expenses not requiring cash	3,154			120			1,674			—			4,948
Equity in net earnings of subsidiaries	37,602			—			—			(37,602		)	—
Change in assets and liabilities:
Accounts and notes receivable	—			(13,787		)	6,934			—			(6,853		)
Other assets	(50,315		)	32,013			16,580			—			(1,722		)
Accounts payable and accrued liabilities	(37,753		)	29,831			(313		)	—			(8,235		)
Accrued income taxes	71,942			(54,000		)	(16,666		)	—			1,276
Net cash provided by (used in) operating activities	(55,425		)	20,533			17,324			—			(17,568		)
Cash flows from investing activities:
Capital expenditures	—			(18,726		)	(7,833		)	—			(26,559		)
Proceeds from the sale of assets	—			25			160			—			185
Net cash provided by (used in) investing activities	—			(18,701		)	(7,673		)	—			(26,374		)
Cash flows from financing activities:
Proceeds from the issuance of common stock	25,200			—			—			—			25,200
Proceeds from the issuance of mandatory convertible preferred stock	50,000			—			—			—			50,000
Payment of equity issuance costs	(2,864		)	—			—			—			(2,864		)
Mandatory convertible preferred stock dividend	(1,239		)	—			—			—			(1,239		)
Shares surrendered in lieu of tax	(612		)	—			—			—			(612		)
Intercompany advances, net	8,946			361			(9,307		)	—			—
Net cash provided by (used in) financing activities	79,431			361			(9,307		)	—			70,485
Net increase (decrease) in cash and cash equivalents	24,006			2,193			344			—			26,543
Cash and cash equivalents, beginning of year	65,000			14,365			40,326			—			119,691
Cash and cash equivalents, end of period	$	89,006		$	16,558		$	40,670		$	—		$	146,234

	Six Months Ended June 30, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(69,696	)	$	(24,287	)	$	(13,316	)	$	37,602		$	(69,697	)
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			41,458			21,726			—			63,184
(Gain) loss on disposition of assets	—			242			223			—			465
Deferred income tax expense (benefit)	(10,359		)	8,943			482			—			(934		)
Expenses not requiring cash	3,154			120			1,674			—			4,948
Equity in net earnings of subsidiaries	37,602			—			—			(37,602		)	—
Change in assets and liabilities:
Accounts and notes receivable	—			(13,787		)	6,934			—			(6,853		)
Other assets	(50,315		)	32,013			16,580			—			(1,722		)
Accounts payable and accrued liabilities	(37,753		)	29,831			(313		)	—			(8,235		)
Accrued income taxes	71,942			(54,000		)	(16,666		)	—			1,276
Net cash provided by (used in) operating activities	(55,425		)	20,533			17,324			—			(17,568		)
Cash flows from investing activities:
Capital expenditures	—			(18,726		)	(7,833		)	—			(26,559		)
Proceeds from the sale of assets	—			25			160			—			185
Net cash provided by (used in) investing activities	—			(18,701		)	(7,673		)	—			(26,374		)
Cash flows from financing activities:
Proceeds from the issuance of common stock	25,200			—			—			—			25,200
Proceeds from the issuance of mandatory convertible preferred stock	50,000			—			—			—			50,000
Payment of equity issuance costs	(2,864		)	—			—			—			(2,864		)
Mandatory convertible preferred stock dividend	(1,239		)	—			—			—			(1,239		)
Shares surrendered in lieu of tax	(612		)	—			—			—			(612		)
Intercompany advances, net	8,946			361			(9,307		)	—			—
Net cash provided by (used in) financing activities	79,431			361			(9,307		)	—			70,485
Net increase (decrease) in cash and cash equivalents	24,006			2,193			344			—			26,543
Cash and cash equivalents, beginning of year	65,000			14,365			40,326			—			119,691
Cash and cash equivalents, end of period	$	89,006		$	16,558		$	40,670		$	—		$	146,234

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Six Months Ended June 30, 2016
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(135,657	)	$	(30,816	)	$	(9,977	)	$	40,793		$	(135,657	)
Adjustments to reconcile net income (loss)
Depreciation and amortization	—			46,439			25,692			—			72,131
Accretion of contingent consideration	—			419			—			—			419
(Gain) loss on debt modification	1,088			—			—			—			1,088
(Gain) loss on disposition of assets	—			(153		)	215			—			62
Deferred income tax expense (benefit)	49,167			9,569			569			—			59,305
Excess tax benefit (expense) from stock-based compensation	(1,617		)	—			—			—			(1,617		)
Expenses not requiring cash	3,510			(282		)	(7,637		)	—			(4,409		)
Equity in net earnings of subsidiaries	40,793			—			—			(40,793		)	—
Change in assets and liabilities:
Accounts and notes receivable	—			7,755			14,564			—			22,319
Other assets	(103,035		)	102,496			(2,453		)	—			(2,992		)
Accounts payable and accrued liabilities	3,281			(5,737		)	(4,406		)	—			(6,862		)
Accrued income taxes	21,711			(17,830		)	(7,866		)	—			(3,985		)
Net cash provided by (used in) operating activities	(120,759		)	111,860			8,701			—			(198		)
Cash flows from investing activities:
Capital expenditures	—			(7,499		)	(8,758		)	—			(16,257		)
Proceeds from the sale of assets	—			121			1,266			—			1,387
Net cash provided by (used in) investing activities	—			(7,378		)	(7,492		)	—			(14,870		)
Cash flows from financing activities:
Payment for noncontrolling interest	(3,375		)	—			—			—			(3,375		)
Payment of contingent consideration	—			(6,000		)	—			—			(6,000		)
Shares surrendered in lieu of tax	(817		)	—			—			—			(817		)
Intercompany advances, net	106,246			(100,144		)	(6,102		)	—			—
Net cash provided by (used in) financing activities	102,054			(106,144		)	(6,102		)	—			(10,192		)
Net increase (decrease) in cash and cash equivalents	(18,705		)	(1,662		)	(4,893		)	—			(25,260		)
Cash and cash equivalents, beginning of year	73,985			13,854			46,455			—			134,294
Cash and cash equivalents, end of period	$	55,280		$	12,192		$	41,562		$	—		$	109,034