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

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidating Condensed Statement of Operations

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

(Dollars in Thousands)

(Unaudited)

	Year ended December 31, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—		$	168,490		$	355,044		$	(81,014	)	$	442,520
Operating expenses	—			94,546			341,955			(81,014		)	355,487
Depreciation and amortization	—			81,260			41,113			—			122,373
Total operating gross margin (loss)	—			(7,316		)	(28,024		)	—			(35,340		)
General and administration expense (1)	(323		)	(24,887		)	(466		)	—			(25,676		)
Provision for reduction in carrying value of certain assets	—			—			(1,938		)	—			(1,938		)
Gain (loss) on disposition of assets, net	—			(247		)	(2,604		)	—			(2,851		)
Total operating income (loss)	(323		)	(32,450		)	(33,032		)	—			(65,805		)
Other income (expense):
Interest expense	(47,135		)	(220		)	(7,906		)	11,035			(44,226		)
Interest income	831			744			9,704			(11,035		)	244
Other	—			71			55			—			126
Equity in net earnings of subsidiaries	(40,752		)	—			—			40,752			—
Total other income (expense)	(87,056		)	595			1,853			40,752			(43,856		)
Income (loss) before income taxes	(87,379		)	(31,855		)	(31,179		)	40,752			(109,661		)
Income tax expense (benefit):
Current tax expense (benefit)	26,537			(22,494		)	5,221			—			9,264
Deferred tax expense (benefit)	4,785			(7,750		)	2,741			—			(224		)
Total income tax expense (benefit)	31,322			(30,244		)	7,962			—			9,040
Net income (loss)	(118,701		)	(1,611		)	(39,141		)	40,752			(118,701		)
Less: Net income attributable to noncontrolling interest	—			—			—			—			—
Net income (loss) attributable to controlling interest	$	(118,701	)	$	(1,611	)	$	(39,141	)	$	40,752		$	(118,701	)
Less: Mandatory convertible preferred stock dividend	$	3,051		$	—		$	—		$	—		$	3,051
Net income (loss) available to common stockholders	$	(121,752	)	$	(1,611	)	$	(39,141	)	$	40,752		$	(121,752	)

(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)

	Year ended December 31, 2016
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—		$	152,263		$	380,931		$	(106,190	)	$	427,004
Operating expenses	—			103,013			365,698			(106,190		)	362,521
Depreciation and amortization	—			90,218			49,577			—			139,795
Total operating gross margin (loss)	—			(40,968		)	(34,344		)	—			(75,312		)
General and administration expense (1)	(410		)	(29,355		)	(4,567		)	—			(34,332		)
Provision for reduction in carrying value of certain assets	—			—			—			—			—
Gain (loss) on disposition of assets, net	—			(565		)	(1,048		)	—			(1,613		)
Total operating income (loss)	(410		)	(70,888		)	(39,959		)	—			(111,257		)
Other income (expense):
Interest expense	(48,160		)	(642		)	(6,434		)	9,424			(45,812		)
Interest income	758			695			8,029			(9,424		)	58
Other	—			484			(117		)	—			367
Equity in net earnings of subsidiaries	(94,469		)	—			—			94,469			—
Total other income (expense)	(141,871		)	537			1,478			94,469			(45,387		)
Income (loss) before income taxes	(142,281		)	(70,351		)	(38,481		)	94,469			(156,644		)
Income tax expense (benefit):
Current tax expense (benefit)	40,562			(35,572		)	118			—			5,108
Deferred tax expense (benefit)	47,971			14,846			6,245			—			69,062
Total income tax expense (benefit)	88,533			(20,726		)	6,363			—			74,170
Net income (loss)	(230,814		)	(49,625		)	(44,844		)	94,469			(230,814		)
Less: Net income attributable to noncontrolling interest	—			—			—			—			—
Net income (loss) attributable to controlling interest	$	(230,814	)	$	(49,625	)	$	(44,844	)	$	94,469		$	(230,814	)
Less: Mandatory convertible preferred stock dividend	$	—		$	—		$	—		$	—		$	—
Net income (loss) available to common stockholders	$	(230,814	)	$	(49,625	)	$	(44,844	)	$	94,469		$	(230,814	)

(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)

	Year ended December 31, 2015
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—		$	254,182		$	584,204		$	(126,203	)	$	712,183
Operating expenses	—			143,563			508,930			(126,203		)	526,290
Depreciation and amortization	—			95,071			61,123			—			156,194
Total operating gross margin (loss)	—			15,548			14,151			—			29,699
General and administration expense (1)	(1,279		)	(38,643		)	3,732			—			(36,190		)
Provision for reduction in carrying value of certain assets	—			(2,088		)	(10,402		)	—			(12,490		)
Gain (loss) on disposition of assets, net	—			439			1,204			—			1,643
Total operating income (loss)	(1,279		)	(24,744		)	8,685			—			(17,338		)
Other income (expense):
Interest expense	(47,659		)	(1,035		)	(11,579		)	15,118			(45,155		)
Interest income	1,424			852			13,111			(15,118		)	269
Loss on extinguishment of debt	—			—			—			—			—
Other	—			(200		)	(9,547		)	—			(9,747		)
Equity in net earnings of subsidiaries	(36,631		)	—			—			36,631			—
Total other income (expense)	(82,866		)	(383		)	(8,015		)	36,631			(54,633		)
Income (loss) before income taxes	(84,145		)	(25,127		)	670			36,631			(71,971		)
Income tax expense (benefit):
Current tax expense (benefit)	29,643			(22,970		)	12,931			—			19,604
Deferred tax expense (benefit)	(18,715		)	11,718			9,706			—			2,709
Total income tax expense (benefit)	10,928			(11,252		)	22,637			—			22,313
Net income (loss)	(95,073		)	(13,875		)	(21,967		)	36,631			(94,284		)
Less: Net income attributable to noncontrolling interest	—			—			789			—			789
Net income (loss) attributable to controlling interest	$	(95,073	)	$	(13,875	)	$	(22,756	)	$	36,631		$	(95,073	)
Less: Mandatory convertible preferred stock dividend	$	—		$	—		$	—		$	—		$	—
Net income (loss) available to common stockholders	$	(95,073	)	$	(13,875	)	$	(22,756	)	$	36,631		$	(95,073	)

(1) General and administration expenses for field operations are included in operating expenses.

Consolidating Condensed Statement of Comprehensive Income (Loss)

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Year Ended December 31, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Comprehensive income (loss):
Net income (loss)	$	(118,701	)	$	(1,611	)	$	(39,141	)	$	40,752	$	(118,701	)
Other comprehensive gain (loss), net of tax:
Currency translation difference on related borrowings	—			—			643			—		$	643
Currency translation difference on foreign currency net investments	—			—			2,689			—		$	2,689
Total other comprehensive gain (loss), net of tax:	—			—			3,332			—		3,332
Comprehensive income (loss) attributable to controlling interest	$	(118,701	)	$	(1,611	)	$	(35,809	)	$	40,752	$	(115,369	)

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Year Ended December 31, 2016
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Comprehensive income (loss):
Net income (loss)	$	(230,814	)	$	(49,625	)	$	(44,844	)	$	94,469	$	(230,814	)
Other comprehensive gain (loss), net of tax:
Currency translation difference on related borrowings	—			—			(691		)	—		(691		)
Currency translation difference on foreign currency net investments	—			—			(4,265		)	—		(4,265		)
Total other comprehensive gain (loss), net of tax:	—			—			(4,956		)	—		(4,956		)
Comprehensive income (loss) attributable to controlling interest	$	(230,814	)	$	(49,625	)	$	(49,800	)	$	94,469	$	(235,770	)

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Year ended December 31, 2015
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Comprehensive income:
Net income (loss)	$	(95,073	)	$	(13,875	)	$	(21,967	)	$	36,631	$	(94,284	)
Other comprehensive gain (loss), net of tax:
Currency translation difference on related borrowings	—			—			(2,012		)	—		(2,012		)
Currency translation difference on foreign currency net investments	—			—			405			—		405
Total other comprehensive gain (loss), net of tax:	—			—			(1,607		)	—		(1,607		)
Comprehensive income (loss)	(95,073		)	(13,875		)	(23,574		)	36,631		(95,891		)
Comprehensive (income) loss attributable to noncontrolling interest	—			—			4,606			—		4,606
Comprehensive income (loss) attributable to controlling interest	$	(95,073	)	$	(13,875	)	$	(18,968	)	$	36,631	$	(91,285	)

Consolidating Condensed Balance Sheet

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED BALANCE SHEET

(Dollars in Thousands)

(Unaudited)

	December 31, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	75,342		$	20,655		$	45,552		$	—		$	141,549
Accounts and notes receivable, net	—			32,338			90,173			—			122,511
Rig materials and supplies	—			(3,025		)	34,440			—			31,415
Deferred costs	—			17			3,128			—			3,145
Other tax assets	—			—			4,889			—			4,889
Other current assets	—			6,345			7,982			—			14,327
Total current assets	75,342			56,330			186,164			—			317,836
Property, plant and equipment, net	(19		)	428,556			197,234			—			625,771
Goodwill	—			6,708			—			—			6,708
Intangible assets, net	—			7,128			—			—			7,128
Investment in subsidiaries and intercompany advances	2,955,050			2,971,456			3,955,553			(9,882,059		)	—
Other noncurrent assets	(261,232		)	237,755			537,124			(480,811		)	32,836
Total assets	$	2,769,141		$	3,707,933		$	4,876,075		$	(10,362,870	)	$	990,279
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	(51,060		)	179,247			588,536			(617,477		)	99,246
Accrued income taxes	76,883			(56,870		)	(15,583		)	—			4,430
Total current liabilities	25,823			122,377			572,953			(617,477		)	103,676
Long-term debt, net	577,971			—			—			—			577,971
Other long-term liabilities	2,867			5,741			3,825			—			12,433
Deferred tax liability	(1		)	—			79			—			78
Intercompany payable	1,865,810			1,465,744			2,430,340			(5,761,894		)	—
Total liabilities	2,472,470			1,593,862			3,007,197			(6,379,371		)	694,158
Total equity	296,671			2,114,071			1,868,878			(3,983,499		)	296,121
Total liabilities and stockholders’ equity	$	2,769,141		$	3,707,933		$	4,876,075		$	(10,362,870	)	$	990,279

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
Deferred costs	—			16			1,420			—			1,436
Other tax assets	(50,296		)	35,733			21,038			—			6,475
Other current assets	—			5,555			7,576			—			13,131
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

Consolidated Condensed Statements of Cash Flows

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Year Ended December 31, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(118,701	)	$	(1,611	)	$	(39,141	)	$	40,752		(118,701		)
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			81,260			41,113			—			122,373
(Gain) loss on disposition of assets	—			247			2,604			—			2,851
Deferred tax expense (benefit)	4,785			(7,750		)	2,741			—			(224		)
Provision for reduction in carrying value of certain assets	—			—			1,938			—			1,938
Expenses not requiring cash	5,651			(218		)	9,880			(11,062		)	4,251
Change in assets and liabilities:
Accounts and notes receivable	—			(16,540		)	13,483			(6,571		)	(9,628		)
Rig materials and supplies	—			(760		)	5,470			—			4,710
Other current assets	(50,296		)	34,941			14,036			—			(1,319		)
Accounts payable and accrued liabilities	(4,393		)	56,354			262,884			(323,559		)	(8,714		)
Accrued income taxes	79,319			(60,882		)	(17,899		)	—			538
Other assets	24,722			(35,829		)	(280,675		)	300,440			8,658
Net cash provided by (used in) operating activities	(58,913		)	49,212			16,434			—			6,733
Cash flows from investing activities:
Capital expenditures	—			(42,990		)	(11,543		)	—			(54,533		)
Proceeds from the sale of assets	—			68			335			—			403
Net cash provided by (used in) investing activities	—			(42,922		)	(11,208		)	—			(54,130		)
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	(2,145		)	—			—			—			(2,145		)
Shares surrendered in lieu of tax	(936		)	—			—			—			(936		)
Net cash provided by (used in) financing activities	69,255			—			—			—			69,255
Net increase (decrease) in cash and cash equivalents	10,342			6,290			5,226			—			21,858
Cash and cash equivalents at beginning of year	65,000			14,365			40,326			—			119,691
Cash and cash equivalents at end of year	$	75,342		$	20,655		$	45,552		$	—		$	141,549

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Year Ended December 31, 2016
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(230,814	)	$	(49,625	)	$	(44,844	)	$	94,469		(230,814		)
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			90,218			49,577			—			139,795
Accretion of contingent consideration	—			419			—			—			419
Loss on extinguishment of debt	1,088			—			—			—			1,088
(Gain) loss on disposition of assets	—			565			1,048			—			1,613
Deferred tax expense (benefit)	47,971			14,846			6,245			—			69,062
Expenses not requiring cash	9,545			(1,624		)	(5,403		)	—			2,518
Equity in net earnings (losses) of subsidiaries	94,469			—			—			(94,469		)	—
Change in assets and liabilities:
Accounts and notes receivable	—			25,923			34,468			—			60,391
Rig materials and supplies	—			(73		)	(1,679		)	—			(1,752		)
Other current assets	50,296			(35,322		)	(12,834		)	—			2,140
Accounts payable and accrued liabilities	(121,016		)	97,315			4,207			—			(19,494		)
Accrued income taxes	(10,381		)	(626		)	4,585			—			(6,422		)
Other assets	(299		)	101			4,095			—			3,897
Net cash provided by (used in) operating activities	(159,141		)	142,117			39,465			—			22,441
Cash flows from investing activities:
Capital expenditures	—			(15,384		)	(13,570		)	—			(28,954		)
Proceeds from the sale of assets	—			437			2,004			—			2,441
Net cash provided by (used in) investing activities	—			(14,947		)	(11,566		)	—			(26,513		)
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	(1,156		)										(1,156		)
Intercompany advances, net	154,687			(120,659		)	(34,028		)	—			—
Net cash provided by (used in) financing activities	150,156			(126,659		)	(34,028		)	—			(10,531		)
Net increase (decrease) in cash and cash equivalents	(8,985		)	511			(6,129		)	—			(14,603		)
Cash and cash equivalents at beginning of year	73,985			13,854			46,455			—			134,294
Cash and cash equivalents at end of year	$	65,000		$	14,365		$	40,326		$	—		$	119,691

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Year Ended December 31, 2015
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(95,073	)	$	(13,875	)	$	(21,967	)	$	36,631		$	(94,284	)
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			95,071			61,123			—			156,194
Accretion of contingent consideration	—			826			—			—			826
Gain (loss) on disposition of assets	—			(439		)	(1,204		)	—			(1,643		)
Deferred tax expense (benefit)	(18,715		)	11,718			9,706			—			2,709
Excess tax benefit (expense) from stock-based compensation	(1,045		)	—			—			—			(1,045		)
Provision for reduction in carrying value of certain assets	—			2,088			10,402			—			12,490
Expenses not requiring cash	7,344			854			(2,062		)	—			6,136
Equity in net earnings of subsidiaries	36,631			—			—			(36,631		)	—
Change in assets and liabilities:
Accounts and notes receivable	(33		)	61,818			42,210			—			103,995
Rig materials and supplies	—			51			2,671			—			2,722
Other current assets	19,885			(16,257		)	8,920			—			12,548
Accounts payable and accrued liabilities	10,228			(21,396		)	(16,257		)	—			(27,425		)
Accrued income taxes	15,368			(9,405		)	(13,920		)	—			(7,957		)
Other assets	(198,955		)	186,591			9,208			—			(3,156		)
Net cash provided by (used in) operating activities	(224,365		)	297,645			88,830			—			162,110
Cash flows from investing activities:
Capital expenditures	—			(58,817		)	(29,380		)	—			(88,197		)
Proceeds from the sale of assets	—			500			330			—			830
Proceeds from insurance settlements	—			—			2,500			—			2,500
Acquisitions, net of cash acquired	(3,375		)	(10,431		)	—			—			(13,806		)
Divestitures, net of cash paid	—			—			(2,570		)	—			(2,570		)
Net cash provided by (used in) investing activities	(3,375		)	(68,748		)	(29,120		)	—			(101,243		)
Cash flows from financing activities:
Proceeds from debt issuance	—			—			—			—			—
Repayments of long term debt	(30,000		)	—			—			—			(30,000		)
Payments of debt issuance costs	(1,996		)	—			—			—			(1,996		)
Payment of contingent consideration	—			(2,000		)	—			—			(2,000		)
Shares surrendered in lieu of tax	(1,033		)										(1,033		)
Intercompany advances, net	298,026			(226,589		)	(71,437		)	—			—
Net cash provided by (used in) financing activities	264,997			(228,589		)	(71,437		)	—			(35,029		)
Net increase (decrease) in cash and cash equivalents	37,257			308			(11,727		)	—			25,838
Cash and cash equivalents at beginning of year	36,728			13,546			58,182			—			108,456
Cash and cash equivalents at end of year	$	73,985		$	13,854		$	46,455		$	—		$	134,294