Parker Wellbore Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

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

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

3 Months Ended

Mar. 31, 2012

Parent, Guarantor, Non-Guarantor Unaudited Consolidating Condensed Financial Statements [Abstract]

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

13.

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 March 31, 2012 and December 31, 2011 and for the three months ended March 31, 2012 and 2011. 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)


	March 31, 2012
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	34,861		$	948		$	33,187		$	—		$	68,996
Accounts and notes receivable, net		289,607			98,059			300,437			(496,897	)		191,206
Rig materials and supplies		—			(467	)		25,880			—			25,413
Deferred costs		—			—			4,989			—			4,989
Deferred income taxes		—			4,705			633			485			5,823
Other tax assets		68,326			(35,722	)		1,766			(307	)		34,063
Assets held for sale		—			—			5,315			—			5,315
Other current assets		788			325			7,528			—			8,641

Total current assets		393,582			67,848			379,735			(496,719	)		344,446

Property, plant and equipment, net		79			514,919			235,806			—			750,804

Investment in subsidiaries and intercompany advances		758,264			(236,275	)		1,364,952			(1,886,941	)		—

Other noncurrent assets		43,682			67,371			19,285			365			130,703

Total assets	$	1,195,607		$	413,863		$	1,999,778		$	(2,383,295	)	$	1,225,953

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	147,249		$	—		$	—		$	—		$	147,249
Accounts payable and accrued liabilities		67,128			73,391			190,441			(211,161	)		119,799
Accrued income taxes		(702	)		1,684			4,557			(355	)		5,184

Total current liabilities		213,675			75,075			194,998			(211,516	)		272,232


Long-term debt		331,000			—			—			—			331,000
Other long-term liabilities		8,284			6,066			15,737			—			30,087
Long-term deferred tax liability		5,059			26,318			(14,021	)		894			18,250
Intercompany payables		62,583			43,657			111,619			(217,859	)		—
Contingencies		—			—			—			—			—

Stockholders’ equity:
Common stock		19,584			18,049			43,003			(61,052	)		19,584
Capital in excess of par value		640,974			733,119			1,444,091			(2,177,210	)		640,974
Retained earnings (accumulated deficit)		(85,552	)		(488,421	)		204,973			283,448			(85,552	)

Total controlling interest stockholders’ equity		575,006			262,747			1,692,067			(1,954,814	)		575,006

Noncontrolling interest		—			—			(622	)		—			(622	)

Total Equity		575,006			262,747			1,691,445			(1,954,814	)		574,384

Total liabilities and stockholders’ equity	$	1,195,607		$	413,863		$	1,999,778		$	(2,383,295	)	$	1,225,953

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED BALANCE SHEET

(Dollars in Thousands)

(Unaudited)


	December 31, 2011
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	55,670		$	4,212		$	37,987		$	—		$	97,869
Accounts and notes receivable, net		289,512			94,748			285,326			(485,663	)		183,923
Rig materials and supplies		—			762			29,185			—			29,947
Deferred costs		—			—			3,249			—			3,249
Deferred income taxes		—			5,311			853			486			6,650
Other tax assets		47,834			(25,218	)		2,742			—			25,358
Assets held for sale		—			—			5,315			—			5,315
Other current assets		788			6,381			8,133			—			15,302

Total current assets		393,804			86,196			372,790			(485,177	)		367,613

Property, plant and equipment, net		79			474,942			244,787			1			719,809
Investment in subsidiaries and intercompany advances		720,214			(212,883	)		1,347,719			(1,855,050	)		—
Other noncurrent assets		44,962			66,660			16,839			363			128,824

Total assets	$	1,159,059		$	414,915		$	1,982,135		$	(2,339,863	)	$	1,216,246

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	145,723		$	—		$	—		$	—		$	145,723
Accounts payable and accrued liabilities		60,120			94,056			181,010			(199,936	)		135,250
Accrued income taxes		(205	)		921			4,121			—			4,837

Total current liabilities		205,638			94,977			185,131			(199,936	)		285,810

Long-term debt		337,000			—			—			—			337,000
Other long-term liabilities		8,081			9,474			15,897			—			33,452
Long-term deferred tax liability		1,151			25,232			(11,296	)		847			15,934
Intercompany payables		62,583			43,657			111,619			(217,859	)		—
Contingencies		—			—			—			—			—

Stockholders’ equity:
Common stock		19,508			18,049			43,003			(61,052	)		19,508
Capital in excess of par value		637,042			733,120			1,444,091			(2,177,211	)		637,042
Retained earnings (accumulated deficit)		(111,944	)		(509,594	)		194,246			315,348			(111,944	)

Total controlling interest stockholders’ equity		544,606			241,575			1,681,340			(1,922,915	)		544,606

Noncontrolling interest		—			—			(556	)		—			(556	)

Total Equity		544,606			241,575			1,680,784			(1,922,915	)		544,050

Total liabilities and stockholders’ equity	$	1,159,059		$	414,915		$	1,982,135		$	(2,339,863	)	$	1,216,246

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

(Dollars in Thousands)

(Unaudited)


	Three Months ended March 31, 2012
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—			99,157		$	103,025		$	(25,613	)	$	176,569
Operating expenses		—			43,559			76,986			(25,613	)		94,932
Depreciation and amortization		—			15,595			12,024			—			27,619

Total operating gross margin		—			40,003			14,015			—			54,018

General and administration expense ⁽¹⁾		(45	)		(5,374	)		(78	)		—			(5,497	)
Gain on disposition of assets, net		—			418			74			—			492

Total operating income (loss)		(45	)		35,047			14,011			—			49,013

Other income and (expense):
Interest expense		(9,001	)		(36	)		(1,949	)		2,949			(8,037	)
Interest income		95			178			2,702			(2,949	)		26
Changes in fair value of derivative positions		(49	)		—			—			—			(49	)
Other		—			13			3			—			16
Equity in net earnings of subsidiaries		31,900			—			—			(31,900	)		—

Total other income and (expense)		22,945			155			756			(31,900	)		(8,044	)

Income (benefit) before income taxes		22,900			35,202			14,767			(31,900	)		40,969

Income tax expense (benefit):
Current		(8,110	)		11,479			6,262			—			9,631
Deferred		4,618			2,550			(2,156	)		—			5,012

Total income tax expense (benefit)		(3,492	)		14,029			4,106			—			14,643

Net income (loss)		26,392			21,173			10,661			(31,900	)		26,326

Less: Net (loss) attributable to noncontrolling interest		—			—			(66	)		—			(66	)

Net income (loss) attributable to controlling interest	$	26,392		$	21,173		$	10,727		$	(31,900	)	$	26,392

(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)


	Three Months ended March 31, 2011
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	—		$	87,405		$	108,091		$	(39,317	)	$	156,179
Operating expenses		—			50,402			96,291			(39,317	)		107,376
Depreciation and amortization		—			15,210			12,389			—			27,599

Total operating gross margin		—			21,793			(589	)		—			21,204

General and administration expense ⁽¹⁾		(45	)		(6,699	)		(62	)		—			(6,806	)
Gain on disposition of assets, net		—			810			194			—			1,004

Total operating income (loss)		(45	)		15,904			(457	)		—			15,402

Other income and (expense):
Interest expense		(6,852	)		(8,910	)		(1,728	)		11,629			(5,861	)
Interest income		8,970			190			2,516			(11,629	)		47
Other		—			—			11			—			11
Equity in net earnings of subsidiaries		3,965			—			—			(3,965	)		—

Total other income and (expense)		6,083			(8,720	)		799			(3,965	)		(5,803	)

Income (benefit) before income taxes		6,038			7,184			342			(3,965	)		9,599

Income tax expense (benefit):
Current		(65	)		222			3,861			—			4,018
Deferred		1,276			151			(606	)		—			821

Total income tax expense		1,211			373			3,255			—			4,839

Net income (loss)		4,827			6,811			(2,913	)		(3,965	)		4,760

Less: Net loss attributable to noncontrolling interest		—			—			(67	)		—			(67	)

Net income (loss) attributable to controlling interest	$	4,827		$	6,811		$	(2,846	)	$	(3,965	)	$	4,827

(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)


	Year Ended March 31, 2012
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:	$	26,392		$	21,173		$	10,661		$	(31,900	)	$	26,326
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		—			15,595			12,024			—			27,619
Gain on disposition of assets		—			(418	)		(74	)		—			(492	)
Deferred income tax expense		4,618			2,550			(2,156	)		—			5,012
Expenses not requiring cash		6,839			191			(31	)		—			6,999
Equity in net earnings of subsidiaries		(31,900	)		—			—			31,900			—
Change in accounts receivable		(95	)		(2,326	)		(3,859	)		—			(6,280	)
Change in other assets		(20,726	)		16,618			689			—			(3,419	)
Change in liabilities		6,154			(24,103	)		(2,051	)		—			(20,000	)

Net cash provided by (used in) operating activities		(8,718	)		29,280			15,203			—			35,765

Cash flows from investing activities:
Capital expenditures		—			(56,611	)		(2,822	)		—			(59,433	)
Proceeds from the sale of assets		—			697			39			—			736

Net cash (used in) investing activities		—			(55,914	)		(2,783	)		—			(58,697	)

Cash flows from financing activities:
Pay down on term note		(6,000	)		—			—			—			(6,000	)
Excess tax benefit from stock-based compensation		59			—			—			—			59
Intercompany advances, net		(6,150	)		23,370			(17,220	)		—			—

Net cash provided by (used in) financing activities		(12,091	)		23,370			(17,220	)		—			(5,941	)

Net change in cash and cash equivalents		(20,809	)		(3,264	)		(4,800	)		—			(28,873	)

Cash and cash equivalents at beginning of year		55,670			4,212			37,987			—			97,869

Cash and cash equivalents at end of year	$	34,861		$	948		$	33,187		$	—		$	68,996

PARKER DRILLING COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)


	Three months ended March 31, 2011
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	4,827		$	6,811		$	(2,913	)	$	(3,965	)	$	4,760
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		—			15,210			12,389			—			27,599
Gain on disposition of assets		—			(810	)		(194	)		—			(1,004	)
Deferred income tax expense		1,276			151			(606	)		—			821
Expenses not requiring cash		4,507			—			(54	)		—			4,453
Equity in net earnings of subsidiaries		(3,965	)		—			—			3,965			—
Change in accounts receivable		6,968			24,315			(41,030	)		—			(9,747	)
Change in other assets		326			39,374			(2,321	)		—			37,379
Change in liabilities		3,372			(66,599	)		39,723			—			(23,504	)

Net cash provided by operating activities		17,311			18,452			4,994			—			40,757


Cash flows from investing activities:
Capital expenditures		—			(47,233	)		(3,431	)		—			(50,664	)
Proceeds from the sale of assets		—			1,360			201			—			1,561
Proceeds from insurance settlements					250									250

Net cash used in investing activities		—			(45,623	)		(3,230	)		—			(48,853	)


Cash flows from financing activities:
Paydown on term note		(3,000	)		—			—			—			(3,000	)
Proceeds from stock options exercised		135			—			—			—			135
Excess tax benefit from stock-based compensation		1,125			—			—			—			1,125
Intercompany advances, net		(6,201	)		22,638			(16,437	)		—			—

Net cash provided by (used in) financing activities		(7,941	)		22,638			(16,437	)		—			(1,740	)


Net change in cash and cash equivalents		9,370			(4,533	)		(14,673	)		—			(9,836	)
Cash and cash equivalents at beginning of year		13,835			2,317			35,279			—			51,431

Cash and cash equivalents at end of period	$	23,205		$	(2,216	)	$	20,606		$	—		$	41,595

See accompanying notes to unaudited consolidated condensed financial statements.