Quarterly report pursuant to Section 13 or 15(d)

Parent, Guarantor, Non-Guarantor Unaudited Consolidating Condensed Financial Statements

v2.3.0.15
Parent, Guarantor, Non-Guarantor Unaudited Consolidating Condensed Financial Statements
 9 Months Ended
Sep. 30, 2011
Parent, Guarantor, Non-Guarantor Unaudited Consolidating Condensed Financial Statements [Abstract]  
Parent, Guarantor, Non-Guarantor Unaudited Consolidating Condensed Financial Statements
11.   Parent, Guarantor, Non-Guarantor Unaudited Consolidating Condensed Financial Statements
 
    Set forth on the following pages are the consolidating condensed financial statements of Parker Drilling. The Company’s 9.125% Notes are guaranteed by substantially all of the restricted subsidiaries of Parker Drilling. There are currently no restrictions on the ability of the restricted subsidiaries to transfer funds to Parker Drilling in the form of cash dividends, loans or advances. Parker Drilling is a holding company with no operations, other than through its subsidiaries. Separate financial statements for each guarantor company are not provided as the company complies with the exception to Rule 3-10(a)(1) of Regulation S-X, set forth in sub-paragraph (f) of such rule. All guarantor subsidiaries are owned 100 percent by the parent company, all guarantees are full and unconditional and all guarantees are joint and several.
 
    We are providing consolidating condensed financial information of the parent, Parker Drilling, the guarantor subsidiaries, and the non-guarantor subsidiaries as of September 30, 2011 and December 31, 2010 and for the three and nine months ended September 30, 2011 and 2010. The consolidating condensed financial statements present investments in both consolidated and unconsolidated subsidiaries using the equity method of accounting.
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATING CONDENSED BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
                                         
    September 30, 2011  
    Parent     Guarantor     Non-Guarantor     Eliminations     Consolidated  
ASSETS
                                       
Current assets:
                                       
Cash and cash equivalents
  $ 60,728     $ 17,599     $ 24,756     $ —     $ 103,083  
Accounts and notes receivable, net
    3,770       86,944       284,419       (198,569 )     176,564  
Rig materials and supplies
    —       314       28,207       —       28,521  
Deferred costs
    —       —       4,377       —       4,377  
Deferred income taxes
    —       4,587       3,793       (31 )     8,349  
Other tax assets
    56,855       (19,795 )     4,961       —       42,021  
Assets held for sale
    —       —       5,287       —       5,287  
Other current assets
    788       5,985       7,674       (2,228 )     12,219  
 
                             
Total current assets
    122,141       95,634       363,474       (200,828 )     380,421  
Property, plant and equipment, net
    79       619,775       252,511       1       872,366  
Investment in subsidiaries and intercompany advances
    1,104,058       (226,735 )     1,345,295       (2,222,618 )     —  
Deferred income tax
    25,728       (15,680 )     22,548       154       32,750  
Other noncurrent assets
    7,655       2,980       12,196       —       22,831  
 
                             
Total assets
  $ 1,259,661     $ 475,974     $ 1,996,024     $ (2,423,291 )   $ 1,308,368  
 
                             
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                 
Current liabilities:
                                       
Current portion of long-term debt
  $ 144,224     $ —     $ —     $ —     $ 144,224  
Accounts payable and accrued liabilities
    65,314       91,909       185,703       (200,594 )     142,332  
Accrued income taxes
    (62 )     (34 )     5,413       —       5,317  
 
                             
Total current liabilities
    209,476       91,875       191,116       (200,594 )     291,873  
 
                             
Long-term debt
    343,000       —       —       —       343,000  
Other long-term liabilities
    8,098       8,583       15,564       —       32,245  
Long-term deferred tax liability
    3,295       —       5,310       —       8,605  
Intercompany payables
    62,583       43,657       111,659       (217,899 )     —  
Contingencies
    —       —       —       —       —  
Stockholders’ equity:
                                       
Common stock
    19,488       18,049       43,003       (61,052 )     19,488  
Capital in excess of par value
    635,487       733,120       1,436,369       (2,169,489 )     635,487  
Retained earnings (accumulated deficit)
    (21,766 )     (419,310 )     193,567       225,743       (21,766 )
 
                             
Total controlling interest stockholders’ equity
    633,209       331,859       1,672,939       (2,004,798 )     633,209  
 
                             
Noncontrolling interest
    —       —       (564 )     —       (564 )
 
                             
Total Equity
    633,209       331,859       1,672,375       (2,004,798 )     632,645  
 
                             
Total liabilities and stockholders’ equity
  $ 1,259,661     $ 475,974     $ 1,996,024     $ (2,423,291 )   $ 1,308,368  
 
                             
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATING CONDENSED BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
                                         
    December 31, 2010  
    Parent     Guarantor     Non-Guarantor     Eliminations     Consolidated  
ASSETS
                                       
Current assets:
                                       
Cash and cash equivalents
  $ 13,835     $ 2,317     $ 35,279     $ —     $ 51,431  
Accounts and notes receivable, net
    1,179       99,734       215,650       (147,687 )     168,876  
Rig materials and supplies
    —       (1,655 )     27,182       —       25,527  
Deferred costs
    —       —       2,229       —       2,229  
Deferred income taxes
    8,981       297       —       —       9,278  
Other tax assets
    97,896       (62,678 )      11,211       —       46,429  
Assets held for sale
    —       —       5,287       —       5,287  
Other current assets
    557       41,564       30,129       (13,183 )     59,067  
 
                             
Total current assets
    122,448       79,579       326,967       (160,870 )     368,124  
 
                             
Property, plant and equipment, net
    79       538,005       278,063       —       816,147  
Investment in subsidiaries and intercompany advances
    996,018       499,987       1,310,792       (2,806,797 )     —  
Deferred income tax
    60,664       10,776       (10,424 )      —       61,016  
Other noncurrent assets
    11,538       3,766       17,077       (3,113 )     29,268  
 
                             
Total assets
  $ 1,190,747     $ 1,132,113     $ 1,922,475     $ (2,970,780 )   $ 1,274,555  
 
                             
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                 
Current portion of long-term debt
  $ 12,000     $ —     $ —     $ —     $ 12,000  
Accounts payable and accrued liabilities
    55,257       338,626       160,316       (395,428 )     158,771  
Accrued income taxes
    609       93       3,790       —       4,492  
 
                             
Total current liabilities
    67,866       338,719       164,106       (395,428 )     175,263  
 
                             
Long-term debt
    460,862       —       —       —       460,862  
Other long-term liabilities
    7,762       7,610       12,131       2,690       30,193  
Long-term deferred tax liability
    3,361       21,958       (5,148 )     —       20,171  
Intercompany payables
    62,583       473,144       103,667       (639,394 )     —  
Contingencies
    —       —       —       —       —  
Stockholders’ equity:
                                       
Common stock
    19,397       18,050       43,003       (61,053 )     19,397  
Capital in excess of par value
    630,409       733,120       1,436,338       (2,169,458 )     630,409  
Retained earnings (accumulated deficit)
    (61,493 )     (460,488 )     168,625       291,863       (61,493 )
 
                             
Total controlling interest stockholders’ equity
    588,313       290,682       1,647,966       (1,938,648 )     588,313  
 
                             
Noncontrolling interest
    —       —       (247 )     —       (247 )
 
                             
Total Equity
    588,313       290,682       1,647,719       (1,938,648 )     588,066  
 
                             
Total liabilities and stockholders’ equity
  $ 1,190,747     $ 1,132,113     $ 1,922,475     $ (2,970,780 )   $ 1,274,555  
 
                             
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
(Dollars in Thousands)
(Unaudited)
                                         
    Three months ended September 30, 2011  
    Parent     Guarantor     Non-Guarantor     Eliminations     Consolidated  
Total revenues
  $ —     $ 98,687     $ 105,807     $ (27,905 )   $ 176,589  
Operating expenses
    —       41,720       85,097       (27,905 )     98,912  
Depreciation and amortization
    —       16,124       11,457       —       27,581  
 
                             
Total operating gross margin
    —       40,843       9,253       —       50,096  
 
                             
General and administration expense (1)
    (45 )     (8,557 )     (158 )     —       (8,760 )
Gain on disposition of assets, net
    —       233       390       —       623  
 
                             
Total operating income (loss)
    (45 )     32,519       9,485       —       41,959  
 
                             
Other income and (expense):
                                       
Interest expense
    (6,709 )     (35 )     (3,051 )     4,204       (5,591 )
Interest income
    124       188       3,921       (4,204 )     29  
Loss on fair value of derivative contracts
    (49 )     —       —       —       (49 )
Other
    —       (657 )     —       —       (657 )
Equity in net earnings of subsidiaries
    25,361       —       —       (25,361 )     —  
 
                             
Total other income and (expense)
    18,727       (504 )     870       (25,361 )     (6,268 )
 
                             
Income (benefit) before income taxes
    18,682       32,015       10,355       (25,361 )     35,691  
 
                                       
Income tax expense (benefit):
                                       
Current
    (14,091 )     10,840       5,751       —       2,500  
Deferred
    12,048       1,650       (1,156 )     —       12,542  
 
                             
Total income tax expense (benefit)
    (2,043 )     12,490       4,595       —       15,042  
 
                             
Net income (loss)
    20,725       19,525       5,760       (25,361 )     20,649  
 
                             
Less: Net income (loss) attributable to noncontrolling interest
    —       —       (76 )     —       (76 )
 
                             
Net (loss) attributable to controlling interest
    20,725       19,525       5,836       (25,361 )     20,725  
 
                             
 
(1)   All field operations general and administration expenses are included in operating expenses.
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
(Dollars in Thousands)
(Unaudited)
                                         
    Three months ended September 30, 2010  
    Parent     Guarantor     Non-Guarantor     Eliminations     Consolidated  
Total revenues
  $ —     $ 99,731     $ 114,981     $ (42,683 )   $ 172,029  
Operating expenses
    —       64,561       107,804       (42,683 )     129,682  
Depreciation and amortization
    —       16,049       12,855       —       28,904  
 
                             
Total operating gross margin
    —       19,121       (5,678 )     —       13,443  
 
                             
General and administration expense (1)
    (37 )     (6,957 )     (70 )     —       (7,064 )
Gain on disposition of assets, net
    —       56       1,120       —       1,176  
 
                             
Total operating income (loss)
    (37 )     12,220       (4,628 )     —       7,555  
 
                             
Other income and (expense):
                                       
Interest expense
    (7,403 )     (8,911 )     (4,358 )     14,281       (6,391 )
Interest income
    10,492       149       3,685       (14,280 )     46  
Loss on extinguishment of debt
    —       —       —       —       —  
Other
    —       (11 )     79       —       68  
Equity in net earnings of subsidiaries
    (149 )     —       —       149       —  
 
                             
Total other income and (expense)
    2,940       (8,773 )     (594 )     150       (6,277 )
 
                             
Income (benefit) before income taxes
    2,903       3,447       (5,222 )     150       1,278  
 
                                       
Income tax expense (benefit):
                                       
Current
    224       165       (3,493 )     —       (3,104 )
Deferred
    2,187       1       1,702       —       3,890  
 
                             
Total income tax expense (benefit)
    2,411       166       (1,791 )     —       786  
 
                             
Net income (loss)
  $ 492     $ 3,281     $ (3,431 )   $ 150     $ 492  
 
                             
 
(1)   All field operations general and administration expenses are included in operating expenses.
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
(Dollars in Thousands)
(Unaudited)
                                         
    Nine months ended September 30, 2011  
    Parent     Guarantor     Non-Guarantor     Eliminations     Consolidated  
Total revenues
  $ —     $ 281,527     $ 314,221     $ (90,168 )   $ 505,580  
Operating expenses
    —       133,118       267,792       (90,168 )     310,742  
Depreciation and amortization
    —       46,721       35,790       —       82,511  
 
                             
Total operating gross margin
    —       101,688       10,639       —       112,327  
 
                             
General and administration expense (1)
    (173 )     (23,282 )     (287 )     —       (23,742 )
Gain on disposition of assets, net
    —       1,137       856       —       1,993  
 
                             
Total operating income (loss)
    (173 )     79,543       11,208       —       90,578  
 
                             
Other income and (expense):
                                       
Interest expense
    (20,307 )     (17,854 )     (6,939 )     27,892       (17,208 )
Interest income
    18,065       568       9,467       (27,892 )     208  
Loss on fair value of derivative contracts
    (186 )     —       —       —       (186 )
Other
    —       (536 )     14       —       (522 )
Equity in net earnings of subsidiaries
    66,120       —       —       (66,120 )     —  
 
                             
Total other income and (expense)
    63,692       (17,822 )     2,542       (66,120 )     (17,708 )
 
                             
Income (benefit) before income taxes
    63,519       61,721       13,750       (66,120 )     72,870  
 
                                       
Income tax expense (benefit):
                                       
Current
    (21,973 )     20,608       14,974       —       13,609  
Deferred
    45,765       (65 )     (25,964 )     —       19,736  
 
                             
Total income tax expense (benefit)
    23,792       20,543       (10,990 )     —       33,345  
 
                             
Net income (loss)
    39,727       41,178       24,740       (66,120 )     39,525  
 
                             
Less: Net income (loss) attributable to noncontrolling interest
    —       —       (202 )     —       (202 )
 
                             
Net (loss) attributable to controlling interest
  $ 39,727     $ 41,178     $ 24,942     $ (66,120 )   $ 39,727  
 
                             
 
(1)   All field operations general and administration expenses are included in operating expenses.
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
(Dollars in Thousands)
(Unaudited)
                                         
    Nine months ended September 30, 2010  
    Parent     Guarantor     Non-Guarantor     Eliminations     Consolidated  
Total revenues
  $ —     $ 266,116     $ 311,865     $ (91,822 )   $ 486,159  
Operating expenses
    —       176,188       267,822       (91,822 )     352,188  
Depreciation and amortization
    —       47,812       38,692       —       86,504  
 
                             
Total operating gross margin
    —       42,116       5,351       —       47,467  
 
                             
General and administration expense (1)
    (168 )     (23,623 )     (242 )     —       (24,033 )
Gain on disposition of assets, net
    —       1,634       1,926       —       3,560  
 
                             
Total operating income (loss)
    (168 )     20,127       7,035       —       26,994  
 
                             
Other income and (expense):
                                       
Interest expense
    (23,667 )     (26,730 )     (12,609 )     42,497       (20,509 )
Interest income
    31,507       547       20,641       (52,497 )     198  
Loss on extinguishment of debt
    (7,209 )     —       —       —       (7,209 )
Other
    1       57       267       —       325  
Equity in net earnings of subsidiaries
    (6,111 )     —       —       6,111       —  
 
                             
Total other income and (expense)
    (5,479 )     (26,126 )     8,299       (3,889 )     (27,195 )
 
                             
Income (benefit) before income taxes
    (5,647 )     (5,999 )     15,334       (3,889 )     (201 )
 
                                       
Income tax expense (benefit):
                                       
Current
    662       (91 )     4,965       —       5,536  
Deferred
    (5,257 )     (23 )     595       —       (4,685 )
 
                             
Total income tax expense (benefit)
    (4,595 )     (114 )     5,560       —       851  
 
                             
Net income (loss)
  $ (1,052 )   $ (5,885 )   $ 9,774     $ (3,889 )   $ (1,052 )
 
                             
 
(1)   All field operations general and administration expenses are included in operating expenses.
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
                                         
    Nine months ended September 30, 2011  
    Parent     Guarantor     Non-Guarantor     Eliminations     Consolidated  
Cash flows from operating activities:
                                       
Net income (loss)
  $ 39,727     $ 41,178     $ 24,740     $ (66,120 )   $ 39,525  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
                                       
Depreciation and amortization
    —       46,721       35,790       —       82,511  
Gain on disposition of assets
    —       (1,137 )     (856 )     —       (1,993 )
Deferred income tax expense
    45,765       (65 )     (25,964 )     —       19,736  
Expenses not requiring cash
    12,666       —       (1,592 )     —       11,074  
Equity in net earnings of subsidiaries
    (66,120 )     —       —       66,120       —  
Change in accounts receivable
    (2,591 )     65,716     (67,601 )     —       (4,476 )
Change in other assets
    53,150       2,071       (6,352 )     —       48,869  
Change in liabilities
    (4,887 )     (79,082 )     67,438       —       (16,531 )
 
                             
Net cash provided by (used in) operating activities
    77,710       75,402       25,603       —       178,715  
 
                             
 
                                       
Cash flows from investing activities:
                                       
Capital expenditures
    —       (132,287 )     (9,554 )     —       (141,841 )
Proceeds from the sale of assets
    —       3,073       352       —       3,425  
Proceeds from insurance settlements
    —       250       —       —       250  
 
                             
Net cash used in investing activities
    —       (128,964 )     (9,202 )     —       (138,166 )
 
                             
 
                                       
Cash flows from financing activities:
                                       
Proceeds from issuance of debt
    50,000       —       —       —       50,000  
Repayments of term loan
    (15,000 )     —       —       —       (15,000 )
Repayments on revolver
    (25,000 )     —       —       —       (25,000 )
Payment of debt issuance costs
    (504 )     —       —       —       (504 )
Proceeds from stock options exercised
    183       —       —       —       183  
Excess tax benefit from stock-based compensation
    1,424       —       —       —       1,424  
Intercompany advances, net
    (41,920 )     68,844       (26,924 )     —       —  
 
                             
Net cash provided by (used in) financing activities
    (30,817 )     68,844       (26,924 )     —       11,103  
 
                             
 
                                       
Net change in cash and cash equivalents
    46,893       15,282       (10,523 )     —       51,652  
Cash and cash equivalents at beginning of period
    13,835       2,317       35,279       —       51,431  
 
                             
Cash and cash equivalents at end of period
  $ 60,728     $ 17,599     $ 24,756     $ —     $ 103,083  
 
                             
See accompanying notes to unaudited consolidated condensed financial statements.
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
                                         
    Nine months ended September 30, 2010  
    Parent     Guarantor     Non-Guarantor     Eliminations     Consolidated  
Cash flows from operating activities:
                                       
Net income (loss)
  $ (1,052 )   $ (5,885 )   $ 9,774     $ (3,889 )   $ (1,052 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
                                       
Depreciation and amortization
    —       47,812       38,692       —       86,504  
Loss on extinguishment of debt
    7,209       —       —       —       7,209  
Gain on disposition of assets
    —       (1,634 )     (1,926 )     —       (3,560 )
Deferred income tax expense
    (5,257 )     (23 )     595       —       (4,685 )
Expenses not requiring cash
    10,740       —       —       —       10,740  
Equity in net earnings of subsidiaries
    6,111       —       —       (6,111 )     —  
Change in accounts receivable
    (7,522 )     8,499       2,452       —       3,429  
Change in other assets
    (3,384 )     1,464       (1,755 )     —       (3,675 )
Change in liabilities
    7,838       (17,316 )     299       —       (9,179 )
 
                             
Net cash provided by (used in) operating activities
    14,683       32,917       48,131       (10,000 )     85,731  
 
                             
 
                                       
Cash flows from investing activities:
                                       
Capital expenditures
    —       (145,422 )     (36,134 )     —       (181,556 )
Proceeds from the sale of assets
    —       2,276       2,309       —       4,585  
Intercompany dividend payment
    —               (10,000 )     10,000       —  
 
                             
Net cash provided by (used in) investing activities
    —       (143,146 )     (43,825 )     10,000       (176,971 )
 
                             
 
                                       
Cash flows from financing activities:
                                       
Proceeds from debt issuance
    300,000       —       —       —       300,000  
Proceeds from draw on revolver credit facility
    20,000       —       —       —       20,000  
Paydown on Senior notes
    (225,000 )     —       —       —       (225,000 )
Paydown on term note
    (9,000 )                             (9,000 )
Paydown on revolver credit facility
    (42,000 )     —       —       —       (42,000 )
Payment of debt issuance costs
    (8,001 )     —       —       —       (8,001 )
Payment of debt extinguishment costs
    (7,466 )     —       —       —       (7,466 )
Proceeds from stock options exercised
    26       —       —       —       26  
Excess tax benefit from stock-based compensatio
    1,212       —       —       —       1,212  
Intercompany advances, net
    (82,473 )     111,581       (29,108 )     —       —  
 
                             
Net cash provided by (used in) financing activities
    (52,702 )     111,581       (29,108 )     —       29,771  
 
                             
 
                                       
Net change in cash and cash equivalents
    (38,019 )     1,352       (24,802 )     —       (61,469 )
Cash and cash equivalents at beginning of period
    58,189       1,768       48,846       —       108,803  
 
                             
Cash and cash equivalents at end of period
  $ 20,170     $ 3,120     $ 24,044     $ —     $ 47,334  
 
                             
See accompanying notes to unaudited consolidated condensed financial statements.