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

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED BALANCE SHEET

(Dollars in Thousands)

(Unaudited)



	September 30, 2018
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	30,825		$	7,939		$	42,964		$	—		$	81,728
Accounts and notes receivable, net	—			53,515			84,386			—			137,901
Rig materials and supplies	—			(1,792		)	35,971			319			34,498
Other current assets	—			8,733			18,940			—			27,673
Total current assets	30,825			68,395			182,261			319			281,800
Property, plant and equipment, net	(19		)	380,029			170,163			296			550,469
Goodwill	—			6,708			—			—			6,708
Intangible assets, net	—			5,398			—			—			5,398
Deferred income taxes	21,272			(33,125		)	13,664			—			1,811
Other noncurrent assets	2,596,927			3,273,124			4,727,353			(10,574,409		)	22,995
Total assets	$	2,649,005		$	3,700,529		$	5,093,441		$	(10,573,794	)	$	869,181

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	(103,158	)	$	219,483		$	604,393		$	(617,477	)	$	103,241
Accrued income taxes	84,361			(62,926		)	(17,223		)	—			4,212
Total current liabilities	(18,797		)	156,557			587,170			(617,477		)	107,453
Long-term debt, net	579,289			—			—			—			579,289
Other long-term liabilities	2,867			4,588			4,753			—			12,208
Long-term deferred tax liability	—			—			60			—			60
Intercompany payables	1,912,224			1,473,535			2,670,598			(6,056,357		)	—
Total liabilities	2,475,583			1,634,680			3,262,581			(6,673,834		)	699,010
Total stockholders’ equity	173,422			2,065,849			1,830,860			(3,899,960		)	170,171
Total liabilities and stockholders’ equity	$	2,649,005		$	3,700,529		$	5,093,441		$	(10,573,794	)	$	869,181

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
Other current assets	—			6,362			15,999			—			22,361
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
Deferred income taxes	15,144			(26,623		)	12,763			—			1,284
Other noncurrent assets	2,678,674			3,235,834			4,479,914			(10,362,870		)	31,552
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
Long-term deferred tax liability	(1		)	—			79			—			78
Intercompany payables	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 stockholders’ 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

Consolidating Condensed Statement of Operations

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

(Dollars in Thousands)

(Unaudited)



	Three months ended September 30, 2018
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Revenues	$	—		$	63,178		$	76,316		$	(16,099	)	$	123,395
Expenses:
Operating expenses	—			31,039			79,003			(16,099		)	93,943
Depreciation and amortization	—			19,680			7,840			—			27,520
	—			50,719			86,843			(16,099		)	121,463
Total operating gross margin (loss)	—			12,459			(10,527		)	—			1,932
General and administrative expense ⁽¹⁾	(96		)	(14,421		)	22			—			(14,495		)
Loss on impairment	—			(34,209		)	(9,781		)	—			(43,990		)
Gain (loss) on disposition of assets, net	—			54			(45		)	—			9
Total operating income (loss)	(96		)	(36,117		)	(20,331		)	—			(56,544		)
Other income (expense):
Interest expense	(12,072		)	(44		)	(2,866		)	3,632			(11,350		)
Interest income	127			183			3,345			(3,632		)	23
Other	—			(2		)	(707		)	—			(709		)
Equity in net earnings of subsidiaries	(57,588		)	—			—			57,588			—
Total other income (expense)	(69,533		)	137			(228		)	57,588			(12,036		)
Income (loss) before income taxes	(69,629		)	(35,980		)	(20,559		)	57,588			(68,580		)
Income tax expense (benefit)	1,322			59			990			—			2,371
Net income (loss)	(70,951		)	(36,039		)	(21,549		)	57,588			(70,951		)
Less: Convertible preferred stock dividend	906			—			—			—			906
Net income (loss) available to common stockholders	$	(71,857	)	$	(36,039	)	$	(21,549	)	$	57,588		$	(71,857	)


(1)	General and administrative 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, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Revenues	$	—		$	46,820		$	89,027		$	(17,539	)	$	118,308
Expenses:
Operating expenses	—			24,085			81,574			(17,539		)	88,120
Depreciation and amortization	—			20,025			10,042			—			30,067
	—			44,110			91,616			(17,539		)	118,187
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		)
Income tax expense (benefit)	560			12			1,347			—			1,919
Net income (loss)	(20,311		)	(3,996		)	(4,176		)	8,172			(20,311		)
Less: 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.

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

(Dollars in Thousands)

(Unaudited)



	Nine Months Ended September 30, 2018
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Revenues	$	—		$	156,766		$	240,579		$	(45,672	)	$	351,673
Expenses:
Operating expenses	—			83,231			239,552			(45,672		)	277,111
Depreciation and amortization	—			59,163			24,042			—			83,205
	—			142,394			263,594			(45,672		)	360,316
Total operating gross margin (loss)	—			14,372			(23,015		)	—			(8,643		)
General and administrative expense ⁽¹⁾	(340		)	(28,408		)	(236		)	—			(28,984		)
Loss on impairment	—			(34,209		)	(9,781		)	—			(43,990		)
Gain (loss) on disposition of assets, net	—			2			(128		)	—			(126		)
Total operating income (loss)	(340		)	(48,243		)	(33,160		)	—			(81,743		)
Other income (expense):
Interest expense	(36,214		)	129			(7,022		)	9,320			(33,787		)
Interest income	447			544			8,405			(9,320		)	76
Other	—			14			(1,623		)	—			(1,609		)
Equity in net earnings of subsidiaries	(85,039		)	—			—			85,039			—
Total other income (expense)	(120,806		)	687			(240		)	85,039			(35,320		)
Income (loss) before income taxes	(121,146		)	(47,556		)	(33,400		)	85,039			(117,063		)
Income tax expense (benefit)	1,478			665			3,418			—			5,561
Net income (loss)	(122,624		)	(48,221		)	(36,818		)	85,039			(122,624		)
Less: Convertible preferred stock dividend	2,719			—			—			—			2,719
Net income (loss) available to common stockholders	$	(125,343	)	$	(48,221	)	$	(36,818	)	$	85,039		$	(125,343	)


(1)	General and administrative 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, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Revenues	$	—		$	116,203		$	262,293		$	(52,310	)	$	326,186
Expenses:
Operating expenses	—			70,362			245,523			(52,310		)	263,575
Depreciation and amortization	—			61,483			31,768			—			93,251
	—			131,845			277,291			(52,310		)	356,826
Total operating gross margin (loss)	—			(15,642		)	(14,998		)	—			(30,640		)
General and administrative expense ⁽¹⁾	(244		)	(19,996		)	(336		)	—			(20,576		)
Gain (loss) on disposition of assets, net	—			(242		)	(126		)	—			(368		)
Total operating income (loss)	(244		)	(35,880		)	(15,460		)	—			(51,584		)
Other income (expense):
Interest expense	(35,221		)	(175		)	(5,971		)	8,335			(33,032		)
Interest income	592			563			7,340			(8,335		)	160
Other	—			59			393			—			452
Equity in net earnings of subsidiaries	(45,774		)	—			—			45,774			—
Total other income (expense)	(80,403		)	447			1,762			45,774			(32,420		)
Income (loss) before income taxes	(80,647		)	(35,433		)	(13,698		)	45,774			(84,004		)
Income tax expense (benefit)	9,361			(7,150		)	3,793			—			6,004
Net income (loss)	(90,008		)	(28,283		)	(17,491		)	45,774			(90,008		)
Less: Convertible preferred stock dividend	2,145			—			—			—			2,145
Net income (loss) available to common stockholders	$	(92,153	)	$	(28,283	)	$	(17,491	)	$	45,774		$	(92,153	)


(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, 2018
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Comprehensive income (loss):
Net income (loss)	$	(70,951	)	$	(36,039	)	$	(21,549	)	$	57,588	$	(70,951	)
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—			—			(315		)	—		(315		)
Currency translation difference on foreign currency net investments	—			—			162			—		162
Total other comprehensive income (loss), net of tax:	—			—			(153		)	—		(153		)
Comprehensive income (loss)	$	(70,951	)	$	(36,039	)	$	(21,702	)	$	57,588	$	(71,104	)

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)



	Nine Months Ended September 30, 2018
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Comprehensive income (loss):
Net income (loss)	$	(122,624	)	$	(48,221	)	$	(36,818	)	$	85,039	$	(122,624	)
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—			—			(484		)	—		(484		)
Currency translation difference on foreign currency net investments	—			—			(2,216		)	—		(2,216		)
Total other comprehensive income (loss), net of tax:	—			—			(2,700		)	—		(2,700		)
Comprehensive income (loss)	$	(122,624	)	$	(48,221	)	$	(39,518	)	$	85,039	$	(125,324	)

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	)

Consolidated Condensed Statements of Cash Flows

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)



	Nine Months Ended September 30, 2018
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(122,624	)	$	(48,221	)	$	(36,818	)	$	85,039		$	(122,624	)
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			59,163			24,042			—			83,205
(Gain) loss on disposition of assets, net	—			(2		)	128			—			126
Deferred tax expense (benefit)	(6,129		)	6,503			(920		)	—			(546		)
Loss on impairment	—			34,209			9,781			—			43,990
Expenses not requiring cash	3,660			536			(8,872		)	9,167			4,491
Change in assets and liabilities:
Accounts and notes receivable	—			(21,161		)	5,515			—			(15,646		)
Other assets	83,191			(37,686		)	(249,047		)	211,220			7,678
Accounts payable and accrued liabilities	(4,777		)	45,820			260,517			(305,426		)	(3,866		)
Accrued income taxes	7,478			(6,056		)	(1,746		)	—			(324		)
Net cash provided by (used in) operating activities	(39,201		)	33,105			2,580			—			(3,516		)

Cash flows from investing activities:
Capital expenditures	—			(45,888		)	(6,132		)	—			(52,020		)
Proceeds from the sale of assets	—			67			964			—			1,031
Net cash provided by (used in) investing activities	—			(45,821		)	(5,168		)	—			(50,989		)

Cash flows from financing activities:
Convertible preferred stock dividend	(3,625		)	—			—			—			(3,625		)
Payments of debt issuance costs	(1,443		)	—			—			—			(1,443		)
Shares surrendered in lieu of tax	(248		)	—			—			—			(248		)
Net cash provided by (used in) financing activities	(5,316		)	—			—			—			(5,316		)

Net increase (decrease) in cash and cash equivalents	(44,517		)	(12,716		)	(2,588		)	—			(59,821		)
Cash and cash equivalents at beginning of period	75,342			20,655			45,552			—			141,549
Cash and cash equivalents at end of period	$	30,825		$	7,939		$	42,964		$	—		$	81,728

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENT 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, net	—			242			126			—			368
Deferred 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:
Convertible preferred stock dividend	(1,239		)	—			—			—			(1,239		)
Shares surrendered in lieu of tax	(829		)	—			—			—			(829		)
Proceeds from the issuance of common stock	25,200			—			—			—			25,200
Proceeds from the issuance of convertible preferred stock	50,000			—			—			—			50,000
Payment of equity issuance costs	(2,864		)	—			—			—			(2,864		)
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 at beginning of period	65,000			14,365			40,326			—			119,691
Cash and cash equivalents at end of period	$	66,063		$	17,470		$	37,506		$	—		$	121,039