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

12 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidating Condensed Balance Sheet

CONSOLIDATING CONDENSED BALANCE SHEET

(Dollars in Thousands)

(Unaudited)

	December 31, 2018
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	5,905		$	9,321		$	33,376		$	—		$	48,602
Restricted cash	10,389			—			—			—			10,389
Accounts and notes receivable, net	—			48,598			87,839			—			136,437
Rig materials and supplies	—			1,650			34,002			593			36,245
Deferred costs	—			975			3,378			—			4,353
Other tax assets	—			—			2,949			—			2,949
Other current assets	8,088			10,241			9,600			—			27,929
Total current assets	24,382			70,785			171,144			593			266,904
Property, plant and equipment, net	(19		)	369,529			164,861			—			534,371
Intangible assets, net	—			4,821			—			—			4,821
Rig materials and supplies	—			7,036			5,935			—			12,971
Deferred income taxes	1,918			(14,806		)	15,031			—			2,143
Investment in subsidiaries and intercompany advances	2,871,807			3,024,736			4,264,747			(10,161,290		)	—
Other non-current assets	(277,183		)	257,204			507,932			(480,749		)	7,204
Total assets	$	2,620,905		$	3,719,305		$	5,129,650		$	(10,641,446	)	$	828,414
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Debtor in possession financing	$	10,000		$	—		$	—		$	—		$	10,000
Accounts payable	(200,977		)	222,903			511,770			(494,018		)	39,678
Accrued liabilities	69,961			11,934			76,947			(123,457		)	35,385
Accrued income taxes	88,494			(67,333		)	(17,776		)	—			3,385
Total current liabilities	(32,522		)	167,504			570,941			(617,475		)	88,448
Other long-term liabilities	2,867			4,128			4,549			—			11,544
Long-term deferred tax liability	—			—			510			—			510
Intercompany payables	1,918,709			1,487,904			2,719,884			(6,126,497		)	—
Total liabilities not subject to compromise	1,889,054			1,659,536			3,295,884			(6,743,972		)	100,502
Liabilities subject to compromise	600,996			—			—			—			600,996
Total stockholder's equity	130,855			2,059,769			1,833,766			(3,897,474		)	126,916
Total liabilities and stockholders’ equity	$	2,620,905		$	3,719,305		$	5,129,650		$	(10,641,446	)	$	828,414

PARKER DRILLING COMPANY AND SUBSIDIARIES (DEBTOR IN POSSESSION)

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		)	429,999			195,791			—			625,771
Goodwill	—			6,708			—			—			6,708
Intangible assets, net	—			7,128			—			—			7,128
Rig and materials and supplies	—			7,256			11,532			—			18,788
Deferred income taxes	15,144			(26,623		)	12,763			—			1,284
Investment in subsidiaries and intercompany advances	2,955,050			2,970,220			3,956,747			(9,882,017		)	—
Other non-current assets	(276,375		)	257,121			512,870			(480,852		)	12,764
Total assets	$	2,769,142		$	3,708,139		$	4,875,867		$	(10,362,869	)	$	990,279
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	(137,047	)	$	162,505		$	510,083		$	(494,018	)	$	41,523
Accrued liabilities	85,987			16,742			78,452			(123,458		)	57,723
Accrued income taxes	76,883			(56,870		)	(15,583		)	—			4,430
Total current liabilities	25,823			122,377			572,952			(617,476		)	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	—			—			78			—			78
Intercompany payables	1,865,810			1,465,745			2,430,339			(5,761,894		)	—
Total stockholders' equity	296,671			2,114,276			1,868,673			(3,983,499		)	296,121
Total liabilities and stockholders’ equity	$	2,769,142		$	3,708,139		$	4,875,867		$	(10,362,869	)	$	990,279

Consolidating Condensed Statement of Operations

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

(Dollars in Thousands)

(Unaudited)

	Year ended December 31, 2018
	Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Revenues	$	—			$	204,319			$	327,266			$	(50,764	)		$	480,821
Expenses:
Operating expenses	—				115,291				313,577				(50,764		)		378,104
Depreciation and amortization	—				76,353				31,192				—				107,545
	—				191,644			—	344,769			—	(50,764		)	—	485,649
Total operating gross margin (loss)	—				12,675				(17,503		)		—				(4,828		)
General and administrative expense (1)	23,568				(47,819		)		(294		)		—				(24,545		)
Loss on impairment	—				(40,917		)		(9,781		)		—				(50,698		)
Gain (loss) on disposition of assets, net	—				(1,347		)		(377		)		—				(1,724		)
Pre-petition restructuring charges	(21,820		)		—				—				—				(21,820		)
Reorganization items	(9,789		)	—	—			—	—			—	—				(9,789		)
Total operating income (loss)	(8,041		)		(77,408		)		(27,955		)		—				(113,404		)
Other income (expense):
Interest expense	(45,696		)		67				(9,214		)		12,278				(42,565		)
Interest income	572				721				11,076				(12,278		)		91
Other	—				6				(2,029		)		—				(2,023		)
Equity in net earnings of subsidiaries	(87,548		)		—				—				87,548				—
Total other income (expense)	(132,672		)		794				(167		)		87,548				(44,497		)
Income (loss) before income taxes	(140,713		)		(76,614		)		(28,122		)		87,548				(157,901		)
Income tax expense (benefit):
Current tax expense	11,758				(10,241		)		6,708				—				8,225
Deferred tax expense (benefit)	13,226				(11,865		)		(1,790		)		—				(429		)
Total income tax expense (benefit)	24,984				(22,106		)		4,918				—				7,796
Net income (loss)	(165,697		)		(54,508		)		(33,040		)		87,548				(165,697		)
Less: Convertible preferred stock dividend	2,719				—				—				—				2,719
Net income (loss) available to common stockholders	$	(168,416	)		$	(54,508	)		$	(33,040	)		$	87,548			$	(168,416	)

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

PARKER DRILLING COMPANY AND SUBSIDIARIES (DEBTOR IN POSSESSION)

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

(Dollars in Thousands)

(Unaudited) 

	Year ended December 31, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Revenues	$	—		$	167,675		$	355,859		$	(81,014	)	$	442,520
Expenses:
Operating expenses	—			93,834			342,667			(81,014		)	355,487
Depreciation and amortization	—			81,248			41,125			—			122,373
	—			175,082			383,792			(81,014		)	477,860
Total operating gross margin (loss)	—			(7,407		)	(27,933		)	—			(35,340		)
General and administrative expense (1)	(323		)	(24,887		)	(466		)	—			(25,676		)
Loss on impairment
Provision for reduction in carrying value of certain assets	—			—			(1,938		)	—			(1,938		)
Gain (loss) on disposition of assets, net	—			(243		)	(2,608		)	—			(2,851		)
Total operating income (loss)	(323		)	(32,537		)	(32,945		)	—			(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		)	(31,942		)	(31,092		)	40,752			(109,661		)
Income tax expense (benefit):
Current tax expense	26,537			(22,524		)	5,251			—			9,264
Deferred tax expense (benefit)	4,785			(7,763		)	2,754			—			(224		)
Total income tax expense (benefit)	31,322			(30,287		)	8,005			—			9,040
Net income (loss)	(118,701		)	(1,655		)	(39,097		)	40,752			(118,701		)
Less: Convertible preferred stock dividend	3,051			—			—			—			3,051
Net income (loss) available to common stockholders	$	(121,752	)	$	(1,655	)	$	(39,097	)	$	40,752		$	(121,752	)

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

PARKER DRILLING COMPANY AND SUBSIDIARIES (DEBTOR IN POSSESSION)

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

(Dollars in Thousands)

(Unaudited)

	Year ended December 31, 2016
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Revenues	$	—		$	151,100		$	382,094		$	(106,190	)	$	427,004
Expenses:
Operating expenses	—			100,751			367,960			(106,190		)	362,521
Depreciation and amortization	—			90,197			49,598			—			139,795
	—			190,948			417,558			(106,190		)	502,316
Total operating gross margin (loss)	—			(39,848		)	(35,464		)	—			(75,312		)
General and administrative expense (1)	(410		)	(29,356		)	(4,566		)	—			(34,332		)
Gain (loss) on disposition of assets, net	—			(565		)	(1,048		)	—			(1,613		)
Total operating income (loss)	(410		)	(69,769		)	(41,078		)	—			(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	—			483			(116		)	—			367
Equity in net earnings of subsidiaries	(94,469		)	—			—			94,469			—
Total other income (expense)	(141,871		)	536			1,479			94,469			(45,387		)
Income (loss) before income taxes	(142,281		)	(69,233		)	(39,599		)	94,469			(156,644		)
Income tax expense (benefit):
Current tax expense	40,562			(35,251		)	(203		)	—			5,108
Deferred tax expense (benefit)	47,971			14,940			6,151			—			69,062
Total income tax expense (benefit)	88,533			(20,311		)	5,948			—			74,170
Net income (loss)	(230,814		)	(48,922		)	(45,547		)	94,469			(230,814		)
Less: Convertible preferred stock dividend	—			—			—			—			—
Net income (loss) available to common stockholders	$	(230,814	)	$	(48,922	)	$	(45,547	)	$	94,469		$	(230,814	)

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

Consolidating Condensed Statement of Comprehensive Income (Loss)

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Year Ended December 31, 2018
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Net income (loss)	$	(165,697	)	$	(54,508	)	$	(33,040	)	$	87,548	$	(165,697	)
Other comprehensive income (loss), net of tax:
Currency translation difference on related borrowings	—			—			(646		)	—		$	(646	)
Currency translation difference on foreign currency net investments	—			—			(2,721		)	—		$	(2,721	)
Total other comprehensive income (loss), net of tax:	—			—			(3,367		)	—		(3,367		)
Comprehensive income (loss)	$	(165,697	)	$	(54,508	)	$	(36,407	)	$	87,548	$	(169,064	)

PARKER DRILLING COMPANY AND SUBSIDIARIES (DEBTOR IN POSSESSION)

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Year Ended December 31, 2017
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Net income (loss)	$	(118,701	)	$	(1,655	)	$	(39,097	)	$	40,752	$	(118,701	)
Other comprehensive income (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 income (loss), net of tax:	—			—			3,332			—		3,332
Comprehensive income (loss)	$	(118,701	)	$	(1,655	)	$	(35,765	)	$	40,752	$	(115,369	)

PARKER DRILLING COMPANY AND SUBSIDIARIES (DEBTOR IN POSSESSION)

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Year ended December 31, 2016
	Parent			Guarantor			Non-Guarantor			Eliminations		Consolidated
Net income (loss)	$	(230,814	)	$	(48,922	)	$	(45,547	)	$	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)	$	(230,814	)	$	(48,922	)	$	(50,503	)	$	94,469	$	(235,770	)

Consolidated Statements of Cash Flows

PARKER DRILLING COMPANY AND SUBSIDIARIES (DEBTOR IN POSSESSION)

CONSOLIDATED STATEMENT OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Year Ended December 31, 2018
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(165,697	)	$	(54,508	)	$	(33,040	)	$	87,548		$	(165,697	)
Adjustments to reconcile net income (loss):										—
Depreciation and amortization	—			76,353			31,192			—			107,545
Gain (loss) on disposition of assets, net	—			1,347			377			—			1,724
Deferred tax expense (benefit)	13,226			(11,865		)	(1,790		)	—			(429		)
Loss on impairment	—			40,917			9,781			—			50,698
Reorganization items	7,538			—			—			—			7,538
Expenses not requiring cash	4,526			(302		)	(8,498		)	9,425			5,151
Equity in net earnings (losses) of subsidiaries	87,548			—			—			(87,548		)	—
Change in assets and liabilities:
Accounts and notes receivable	—			(16,244		)	1,009			—			(15,235		)
Rig materials and supplies	—			(4,454		)	5,296			(593		)	249
Other current assets	(8,088		)	(4,854		)	2,082			—			(10,860		)
Other non-current assets	1,042			3,315			8,763			(101		)	13,019
Accounts payable and accrued liabilities	(63,054		)	57,305			7,207			(10,947		)	(9,489		)
Accrued income taxes	11,611			(10,415		)	(2,460		)	—			(1,264		)
Net cash provided by (used in) operating activities	(111,348		)	76,595			19,919			(2,216		)	(17,050		)
Cash flows from investing activities:
Capital expenditures	—			(56,897		)	(13,670		)	—			(70,567		)
Proceeds from the sale of assets	—			87			1,266			—			1,353
Net cash provided by (used in) investing activities	—			(56,810		)	(12,404		)	—			(69,214		)
Cash flows from financing activities:
Proceeds from borrowing under DIP facility	10,000			—			—			—			10,000
Payment of DIP facility costs	(975		)	—			—			—			(975		)
Convertible preferred stock dividend	(3,625		)	—			—			—			(3,625		)
Payments of debt issuance costs	(1,443		)	—			—			—			(1,443		)
Shares surrendered in lieu of tax	(251		)	—			—			—			(251		)
Intercompany advances, net	48,594			(31,119		)	(19,691		)	2,216			—
Net cash provided by (used in) financing activities	52,300			(31,119		)	(19,691		)	2,216			3,706
Net increase (decrease) in cash, cash equivalents and restricted cash	(59,048		)	(11,334		)	(12,176		)	—			(82,558		)
Cash, cash equivalents and restricted cash at beginning of period	75,342			20,655			45,552			—			141,549
Cash, cash equivalents and restricted cash at end of period	$	16,294		$	9,321		$	33,376		$	—		$	58,991

PARKER DRILLING COMPANY AND SUBSIDIARIES (DEBTOR IN POSSESSION)

CONSOLIDATED STATEMENT 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	)	$	(1,655	)	$	(39,097	)	$	40,752		(118,701		)
Adjustments to reconcile net income (loss):										—
Depreciation and amortization	—			81,248			41,125			—			122,373
Gain (loss) on disposition of assets, net	—			243			2,608			—			2,851
Deferred tax expense (benefit)	4,785			(7,763		)	2,754			—			(224		)
Provision for reduction in carrying value of certain assets	—			—			1,938			—			1,938
Expenses not requiring cash	5,651			4,793			4,869			(11,062		)	4,251
Equity in net earnings (losses) of subsidiaries	40,752			—			—			(40,752		)	—
Change in assets and liabilities:
Accounts and notes receivable	—			(16,552		)	13,495			(6,571		)	(9,628		)
Rig materials and supplies	—			(1,869		)	6,579			—			4,710
Other current assets	(50,296		)	34,096			14,881			—			(1,319		)
Other non-current assets	361			(1,542		)	3,234			6,605			8,658
Accounts payable and accrued liabilities	(41,885		)	30,359			(7,925		)	10,737			(8,714		)
Accrued income taxes	79,319			(61,233		)	(17,548		)	—			538
Net cash provided by (used in) operating activities	(80,014		)	60,125			26,913			(291		)	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 convertible preferred stock	50,000			—			—			—			50,000
Payment of equity issuance costs	(2,864		)	—			—			—			(2,864		)
Convertible preferred stock dividend	(2,145		)	—			—			—			(2,145		)
Shares surrendered in lieu of tax	(936		)	—			—			—			(936		)
Intercompany advances, net	21,101			(10,753		)	(10,639		)	291			—
Net cash provided by (used in) financing activities	90,356			(10,753		)	(10,639		)	291			69,255
Net increase (decrease) in cash, cash equivalents and restricted cash	10,342			6,450			5,066			—			21,858
Cash and cash equivalents at beginning of period	65,000			14,205			40,486			—			119,691
Cash and cash equivalents at end of period	$	75,342		$	20,655		$	45,552		$	—		$	141,549

PARKER DRILLING COMPANY AND SUBSIDIARIES (DEBTOR IN POSSESSION)

CONSOLIDATED STATEMENT 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	)	$	(48,922	)	$	(45,547	)	$	94,469		$	(230,814	)
Adjustments to reconcile net income (loss):
Depreciation and amortization	—			90,197			49,598			—			139,795
(Gain) loss on debt modification	1,088			—			—			—			1,088
Accretion of contingent consideration	—			419			—			—			419
Gain (loss) on disposition of assets, net	—			565			1,048			—			1,613
Deferred tax expense (benefit)	47,971			14,940			6,151			—			69,062
Expenses not requiring cash	9,545			(4,900		)	(2,127		)	—			2,518
Equity in net earnings of subsidiaries	94,469			—			—			(94,469		)	—
Change in assets and liabilities:
Accounts and notes receivable	—			25,848			34,543			—			60,391
Rig materials and supplies	—			(361		)	(1,391		)	—			(1,752		)
Other current assets	50,296			(34,479		)	(13,677		)	—			2,140
Other non-current assets	(299		)	441			3,755			—			3,897
Accounts payable and accrued liabilities	(121,016		)	99,511			2,011			—			(19,494		)
Accrued income taxes	(10,381		)	(1,134		)	5,093			—			(6,422		)
Net cash provided by (used in) operating activities	(159,141		)	142,125			39,457			—			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		)	519			(6,137		)	—			(14,603		)
Cash and cash equivalents at beginning of period	73,985			13,686			46,623			—			134,294
Cash and cash equivalents at end of period	$	65,000		$	14,205		$	40,486		$	—		$	119,691