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

9 Months Ended

Sep. 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)

	September 30, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	66,063		$	17,470		$	37,506		$	—		$	121,039
Accounts and notes receivable, net	—			34,363			93,871			—			128,234
Rig materials and supplies	—			(4,591		)	38,903			—			34,312
Other current assets	—			8,109			18,296			—			26,405
Total current assets	66,063			55,351			188,576			—			309,990
Property, plant and equipment, net	(19		)	441,211			206,001			—			647,193
Goodwill	—			6,708			—			—			6,708
Intangible assets, net	—			7,739			—			—			7,739
Investment in subsidiaries and intercompany advances	2,947,686			2,964,272			3,880,171			(9,792,129		)	—
Other noncurrent assets	(162,197		)	218,964			538,855			(480,822		)	114,800
Total assets	$	2,851,533		$	3,694,245		$	4,813,603		$	(10,272,951	)	$	1,086,430
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	(66,449	)	$	192,563		$	578,392		$	(617,476	)	$	87,030
Accrued income taxes	73,845			(53,249		)	(16,238		)	—			4,358
Total current liabilities	7,396			139,314			562,154			(617,476		)	91,388
Long-term debt, net	577,550			—			—			—			577,550
Other long-term liabilities	2,867			6,249			3,805			—			12,921
Deferred tax liability	80,015			—			—			—			80,015
Intercompany payables	1,858,370			1,461,280			2,357,346			(5,676,996		)	—
Total liabilities	2,526,198			1,606,843			2,923,305			(6,294,472		)	761,874
Total equity	325,335			2,087,402			1,890,298			(3,978,479		)	324,556
Total liabilities and stockholders’ equity	$	2,851,533		$	3,694,245		$	4,813,603		$	(10,272,951	)	$	1,086,430

Consolidating Condensed Statement of Operations

	Three Months Ended September 30, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—		$	46,820		$	89,027		$	(17,539	)	$	118,308
Operating expenses	—			24,085			81,574			(17,539		)	88,120
Depreciation and amortization	—			20,025			10,042			—			30,067
Total operating gross margin (loss)	—			2,710			(2,589		)	—			121
General and administrative expense (1)	(96		)	(6,823		)	(114		)	—			(7,033		)
Gain (loss) on disposition of assets, net	—			—			97			—			97
Total operating income (loss)	(96		)	(4,113		)	(2,606		)	—			(6,815		)
Other income (expense):
Interest expense	(11,742		)	(90		)	(1,959		)	2,724			(11,067		)
Interest income	259			206			2,387			(2,724		)	128
Other	—			13			(651		)	—			(638		)
Equity in net earnings of subsidiaries	(8,172		)	—			—			8,172			—
Total other income (expense)	(19,655		)	129			(223		)	8,172			(11,577		)
Income (loss) before income taxes	(19,751		)	(3,984		)	(2,829		)	8,172			(18,392		)
Total income tax expense (benefit)	560			12			1,347			—			1,919
Net income (loss)	$	(20,311	)	$	(3,996	)	$	(4,176	)	$	8,172		$	(20,311	)
Less: Mandatory convertible preferred stock dividend	$	906		$	—		$	—		$	—		$	906
Net income (loss) available to common stockholders	$	(21,217	)	$	(3,996	)	$	(4,176	)	$	8,172		$	(21,217	)

(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 September 30, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Comprehensive income (loss):
Net income (loss)	$	(20,311	)	$	(3,996	)	$	(4,176	)	$	8,172	$	(20,311	)
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—			—			170			—		170
Currency translation difference on foreign currency net investments	—			—			1,217			—		1,217
Total other comprehensive income (loss), net of tax:	—			—			1,387			—		1,387
Comprehensive income (loss)	$	(20,311	)	$	(3,996	)	$	(2,789	)	$	8,172	$	(18,924	)

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)	(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)

	Nine Months Ended September 30, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Comprehensive income (loss):
Net income (loss)	$	(90,008	)	$	(28,283	)	$	(17,491	)	$	45,774	$	(90,008	)
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—			—			438			—		438
Currency translation difference on foreign currency net investments	—			—			2,666			—		2,666
Total other comprehensive income (loss), net of tax:	—			—			3,104			—		3,104
Comprehensive income (loss)	$	(90,008	)	$	(28,283	)	$	(14,387	)	$	45,774	$	(86,904	)

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)	(181,885		)	(49,224		)	(20,650		)	65,679		(186,080		)

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, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(90,008	)	$	(28,283	)	$	(17,491	)	$	45,774		$	(90,008	)
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			61,483			31,768			—			93,251
(Gain) loss on disposition of assets	—			242			126			—			368
Deferred income tax expense (benefit)	(14,138		)	12,217			1,327			—			(594		)
Expenses not requiring cash	4,479			(45		)	1,465			—			5,899
Equity in net earnings of subsidiaries	45,774			—			—			(45,774		)	—
Change in assets and liabilities:
Accounts and notes receivable	—			(18,515		)	3,607			—			(14,908		)
Other assets	(34,318		)	26,426			7,567			—			(325		)
Accounts payable and accrued liabilities	(57,275		)	42,116			(3,361		)	—			(18,520		)
Accrued income taxes	76,281			(57,261		)	(18,589		)	—			431
Net cash provided by (used in) operating activities	(69,205		)	38,380			6,419			—			(24,406		)
Cash flows from investing activities:
Capital expenditures	—			(35,301		)	(9,535		)	—			(44,836		)
Proceeds from the sale of assets	—			26			296			—			322
Net cash provided by (used in) investing activities	—			(35,275		)	(9,239		)	—			(44,514		)
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	(829		)	—			—			—			(829		)
Intercompany advances, net	—			—			—			—			—
Net cash provided by (used in) financing activities	70,268			—			—			—			70,268
Net increase (decrease) in cash and cash equivalents	1,063			3,105			(2,820		)	—			1,348
Cash and cash equivalents, beginning of year	65,000			14,365			40,326			—			119,691
Cash and cash equivalents, end of period	$	66,063		$	17,470		$	37,506		$	—		$	121,039

	Nine Months Ended September 30, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(90,008	)	$	(28,283	)	$	(17,491	)	$	45,774		$	(90,008	)
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			61,483			31,768			—			93,251
(Gain) loss on disposition of assets	—			242			126			—			368
Deferred income tax expense (benefit)	(14,138		)	12,217			1,327			—			(594		)
Expenses not requiring cash	4,479			(45		)	1,465			—			5,899
Equity in net earnings of subsidiaries	45,774			—			—			(45,774		)	—
Change in assets and liabilities:
Accounts and notes receivable	—			(18,515		)	3,607			—			(14,908		)
Other assets	(34,318		)	26,426			7,567			—			(325		)
Accounts payable and accrued liabilities	(57,275		)	42,116			(3,361		)	—			(18,520		)
Accrued income taxes	76,281			(57,261		)	(18,589		)	—			431
Net cash provided by (used in) operating activities	(69,205		)	38,380			6,419			—			(24,406		)
Cash flows from investing activities:
Capital expenditures	—			(35,301		)	(9,535		)	—			(44,836		)
Proceeds from the sale of assets	—			26			296			—			322
Net cash provided by (used in) investing activities	—			(35,275		)	(9,239		)	—			(44,514		)
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	(829		)	—			—			—			(829		)
Intercompany advances, net	—			—			—			—			—
Net cash provided by (used in) financing activities	70,268			—			—			—			70,268
Net increase (decrease) in cash and cash equivalents	1,063			3,105			(2,820		)	—			1,348
Cash and cash equivalents, beginning of year	65,000			14,365			40,326			—			119,691
Cash and cash equivalents, end of period	$	66,063		$	17,470		$	37,506		$	—		$	121,039

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
Excess tax benefit (expense) from stock-based compensation	(1,751		)	—			—			—			(1,751		)
Expenses not requiring cash	5,181			(505		)	(7,681		)	—			(3,005		)
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	(152,053		)	134,963			15,508			—			(1,582		)
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		)
Shares surrendered in lieu of tax	(1,026		)	—			—			—			(1,026		)
Intercompany advances, net	136,511			(119,447		)	(17,064		)	—			—
Net cash provided by (used in) financing activities	132,110			(125,447		)	(17,064		)	—			(10,401		)
Net increase (decrease) in cash and cash equivalents	(19,943		)	(170		)	(10,568		)	—			(30,681		)
Cash and cash equivalents, beginning of year	73,985			13,854			46,455			—			134,294
Cash and cash equivalents, end of period	$	54,042		$	13,684		$	35,887		$	—		$	103,613