FORM 10-Q
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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PARKER DRILLING COMPANY
(Exact name of registrant as specified in its charter)
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Delaware
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73-0618660
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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5 Greenway Plaza, Suite 100,
Houston, Texas
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77046
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(Address of principal executive offices)
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(Zip code)
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(281) 406-2000
(Registrant’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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PARKER DRILLING COMPANY AND SUBSIDIARIES
|
|||
CONSOLIDATED CONDENSED BALANCE SHEETS
|
|||
(Dollars in Thousands)
|
|||
(Unaudited)
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March 31,
2018 |
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December 31,
2017 |
||||
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(Unaudited)
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||||
ASSETS
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|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
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$
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118,315
|
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$
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141,549
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Accounts and Notes Receivable, net of allowance for bad debts of $7,596 at March 31, 2018 and $7,564 at December 31, 2017
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126,685
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122,511
|
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||
Rig materials and supplies
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31,822
|
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31,415
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Other current assets
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20,438
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22,361
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Total current assets
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297,260
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317,836
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Property, plant and equipment, net of accumulated depreciation of $1,353,509 at March 31, 2018 and $1,343,105 at December 31, 2017
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610,744
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625,771
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Goodwill (Note 2)
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6,708
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6,708
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Intangible assets, net (Note 2)
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6,551
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7,128
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Deferred income taxes
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1,826
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1,284
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Other noncurrent assets
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28,041
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31,552
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Total assets
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$
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951,130
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$
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990,279
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LIABILITIES AND STOCKHOLDERS' EQUITY
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|||||||
Current liabilities:
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|
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Accounts payable and accrued liabilities
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$
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90,372
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$
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99,246
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Accrued income taxes
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4,191
|
|
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4,430
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Total current liabilities
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94,563
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103,676
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Long-term debt, net of unamortized debt issuance costs of $6,596 at March 31, 2018 and $7,029 at December 31, 2017
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578,404
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577,971
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Other long-term liabilities
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11,110
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12,433
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Long-term deferred tax liability
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78
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78
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Commitments and contingencies (Note 6)
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Stockholders' equity:
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||||
Preferred Stock, $1.00 par value, 1,942,000 shares authorized, 7.25% Series A Mandatory Convertible, 500,000 shares issued and outstanding
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500
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500
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Common Stock, $0.16
2
/
3
par value, authorized 280,000,000 shares, issued and outstanding, 139,249,563 shares (138,935,734 shares in 2017)
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23,192
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23,140
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Capital in excess of par value
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744,644
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744,746
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Accumulated deficit
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(497,549
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)
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(468,753
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)
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Accumulated other comprehensive income (loss)
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(3,812
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)
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(3,512
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)
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Total stockholders' equity
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266,975
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296,121
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Total liabilities and stockholders' equity
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$
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951,130
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$
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990,279
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PARKER DRILLING COMPANY AND SUBSIDIARIES
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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
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(Dollars in Thousands, Except Per Share Data)
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||||||||||
(Unaudited)
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Three Months Ended March 31,
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||||||
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2018
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2017
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||||
Revenues
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$
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109,675
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$
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98,271
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Expenses:
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||||
Operating expenses
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91,534
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85,814
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Depreciation and amortization
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28,549
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32,202
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120,083
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118,016
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Total operating gross margin (loss)
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(10,408
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)
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(19,745
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)
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General and administrative expense
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(6,201
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)
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(7,040
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)
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Gain (loss) on disposition of assets, net
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343
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(352
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)
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Total operating income (loss)
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(16,266
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)
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(27,137
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)
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Other income (expense):
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Interest expense
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(11,240
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)
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(10,870
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)
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Interest income
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23
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10
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Other
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291
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530
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Total other income (expense)
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(10,926
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)
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(10,330
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)
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Income (loss) before income taxes
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(27,192
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)
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(37,467
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)
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Income tax expense (benefit)
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1,604
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2,342
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Net income (loss)
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(28,796
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)
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(39,809
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)
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Less: Mandatory convertible preferred stock dividend
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906
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—
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Net income (loss) available to common stockholders
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$
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(29,702
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)
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$
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(39,809
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)
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Basic earnings (loss) per common share:
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$
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(0.21
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)
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$
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(0.31
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)
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Diluted earnings (loss) per common share:
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$
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(0.21
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)
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$
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(0.31
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)
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Number of common shares used in computing earnings per share:
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|||||
Basic
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138,765,995
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130,142,527
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Diluted
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138,765,995
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130,142,527
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PARKER DRILLING COMPANY AND SUBSIDIARIES
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CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
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(Dollars in Thousands)
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(Unaudited)
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Three Months Ended March 31,
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||||||
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2018
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2017
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||||
Comprehensive income (loss):
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|
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Net income (loss)
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$
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(28,796
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)
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$
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(39,809
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)
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Other comprehensive income (loss), net of tax:
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|
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Currency translation difference on related borrowings
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276
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83
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Currency translation difference on foreign currency net investments
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(576
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)
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763
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Total other comprehensive income (loss), net of tax:
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(300
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)
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846
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Comprehensive income (loss)
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(29,096
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)
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(38,963
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)
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PARKER DRILLING COMPANY AND SUBSIDIARIES
|
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
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(Dollars in Thousands)
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|||
(Unaudited)
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Three Months Ended March 31,
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||||||
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2018
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2017
|
||||
Cash flows from operating activities:
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|
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Net income (loss)
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$
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(28,796
|
)
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|
$
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(39,809
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)
|
Adjustments to reconcile net income (loss):
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|
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|
||||
Depreciation and amortization
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28,549
|
|
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32,202
|
|
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(Gain) loss on disposition of assets
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(343
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)
|
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352
|
|
||
Deferred tax expense (benefit)
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(543
|
)
|
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(642
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)
|
||
Expenses not requiring cash
|
1,107
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|
|
2,150
|
|
||
Change in assets and liabilities:
|
|
|
|
||||
Accounts and notes receivable
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(4,179
|
)
|
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(4,874
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)
|
||
Other assets
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10,011
|
|
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(2,692
|
)
|
||
Accounts payable and accrued liabilities
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(17,962
|
)
|
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(15,937
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)
|
||
Accrued income taxes
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(48
|
)
|
|
1,665
|
|
||
Net cash provided by (used in) operating activities
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(12,204
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)
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(27,585
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)
|
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|
||||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
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(8,924
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)
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(14,451
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)
|
||
Proceeds from the sale of assets
|
70
|
|
|
46
|
|
||
Net cash provided by (used in) investing activities
|
(8,854
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)
|
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(14,405
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Payments of debt issuance costs
|
(1,148
|
)
|
|
—
|
|
||
Preferred stock dividend
|
(906
|
)
|
|
—
|
|
||
Shares surrendered in lieu of tax
|
(122
|
)
|
|
(352
|
)
|
||
Proceeds from the issuance of common stock
|
—
|
|
|
25,200
|
|
||
Proceeds from the issuance of mandatory convertible preferred stock
|
—
|
|
|
50,000
|
|
||
Payment of equity issuance costs
|
—
|
|
|
(2,861
|
)
|
||
Net cash provided by (used in) financing activities
|
(2,176
|
)
|
|
71,987
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
(23,234
|
)
|
|
29,997
|
|
||
Cash and cash equivalents at beginning of period
|
141,549
|
|
|
119,691
|
|
||
Cash and cash equivalents at end of period
|
$
|
118,315
|
|
|
$
|
149,688
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
20,588
|
|
|
$
|
20,588
|
|
Income taxes paid
|
$
|
1,996
|
|
|
$
|
1,551
|
|
PARKER DRILLING COMPANY AND SUBSIDIARIES
|
||||||||||||||||||
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
|
||||||||||||||||||
(Dollars and Shares in Thousands)
|
||||||||||||||||||
(Unaudited)
|
|
Shares
|
|
Preferred Stock
|
|
Common
Stock
|
|
Treasury Stock
|
|
Capital in
Excess of
Par Value
|
|
Accumulated
Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total
Stockholders’
Equity
|
|||||||||||||||
Balances, December 31, 2017
|
139,436
|
|
|
$
|
500
|
|
|
$
|
23,310
|
|
|
$
|
(170
|
)
|
|
$
|
744,746
|
|
|
$
|
(468,753
|
)
|
|
$
|
(3,512
|
)
|
|
$
|
296,121
|
|
Activity in employees’ stock plans
|
314
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|
(175
|
)
|
|
—
|
|
|
—
|
|
|
(123
|
)
|
|||||||
Amortization of stock-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
979
|
|
|
—
|
|
|
—
|
|
|
979
|
|
|||||||
Mandatory convertible preferred stock dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(906
|
)
|
|
—
|
|
|
—
|
|
|
(906
|
)
|
|||||||
Comprehensive Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,796
|
)
|
|
—
|
|
|
(28,796
|
)
|
|||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(300
|
)
|
|
(300
|
)
|
|||||||
Balances, March 31, 2018
|
139,750
|
|
|
$
|
500
|
|
|
$
|
23,362
|
|
|
$
|
(170
|
)
|
|
$
|
744,644
|
|
|
$
|
(497,549
|
)
|
|
$
|
(3,812
|
)
|
|
$
|
266,975
|
|
Dollars in thousands
|
Goodwill
|
||
Balance at December 31, 2017
|
$
|
6,708
|
|
Additions
|
—
|
|
|
Balance at March 31, 2018
|
$
|
6,708
|
|
|
|
|
Balance at March 31, 2018
|
||||||||||||||
Dollars in thousands
|
Estimated Useful Life (Years)
|
|
Gross Carrying Amount
|
|
Write-off Due to Disposal
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Developed technology
|
6
|
|
$
|
11,630
|
|
|
$
|
—
|
|
|
$
|
(5,815
|
)
|
|
$
|
5,815
|
|
Trade names
|
5
|
|
4,940
|
|
|
(332
|
)
|
|
(3,872
|
)
|
|
736
|
|
||||
Total amortized intangible assets
|
|
|
$
|
16,570
|
|
|
$
|
(332
|
)
|
|
$
|
(9,687
|
)
|
|
$
|
6,551
|
|
Dollars in thousands
|
Expected future intangible amortization expense
|
||
2018
|
$
|
1,730
|
|
2019
|
$
|
2,306
|
|
2020
|
$
|
2,030
|
|
2021
|
$
|
485
|
|
Beyond 2021
|
$
|
—
|
|
Dollars in thousands
|
March 31,
2018 |
|
December 31,
2017 |
||||
6.75% Senior Notes, due July 2022
|
$
|
360,000
|
|
|
$
|
360,000
|
|
7.50% Senior Notes, due August 2020
|
225,000
|
|
|
225,000
|
|
||
Total principal
|
585,000
|
|
|
585,000
|
|
||
Less: unamortized debt issuance costs
|
(6,596
|
)
|
|
(7,029
|
)
|
||
Total long-term debt
|
578,404
|
|
|
577,971
|
|
•
|
Level 1 — Unadjusted quoted prices for identical assets or liabilities in active markets;
|
•
|
Level 2 — Direct or indirect observable inputs, including quoted prices or other market data, for similar assets or liabilities in active markets or identical assets or liabilities in less active markets; and
|
•
|
Level 3 — Unobservable inputs that require significant judgment for which there is little or no market data.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
Dollars in thousands
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Long-term debt
|
|
|
|
|
|
|
|
||||||||
6.75% Notes
|
$
|
360,000
|
|
|
$
|
279,900
|
|
|
$
|
360,000
|
|
|
$
|
296,100
|
|
7.50% Notes
|
225,000
|
|
|
205,313
|
|
|
225,000
|
|
|
206,438
|
|
||||
Total
|
$
|
585,000
|
|
|
$
|
485,213
|
|
|
$
|
585,000
|
|
|
$
|
502,538
|
|
|
Three months ended March 31, 2018
|
|||||||||
|
Net Income (Loss)
Available to Common Stockholders (Numerator)
|
|
Shares
(Denominator)
|
|
Per-Share
Amount
|
|||||
Basic earnings (loss) per common share
|
$
|
(29,702,000
|
)
|
|
138,765,995
|
|
|
$
|
(0.21
|
)
|
Effect of dilutive securities:
|
|
|
|
|
|
|||||
Restricted stock units
(1)
|
—
|
|
|
—
|
|
|
—
|
|
||
Mandatory convertible preferred stock
(2)
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
Diluted earnings (loss) per common share
|
$
|
(29,702,000
|
)
|
|
138,765,995
|
|
|
$
|
(0.21
|
)
|
|
|
|
|
|
|
|||||
|
Three months ended March 31, 2017
|
|||||||||
|
Net Income (Loss)
Available to Common Stockholders (Numerator)
|
|
Shares
(Denominator)
|
|
Per-Share
Amount
|
|||||
Basic earnings (loss) per common share
|
$
|
(39,809,000
|
)
|
|
130,142,527
|
|
|
$
|
(0.31
|
)
|
Effect of dilutive securities:
|
|
|
|
|
|
|||||
Restricted stock units
(1)
|
—
|
|
|
—
|
|
|
—
|
|
||
Mandatory convertible preferred stock
(2)
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
Diluted earnings (loss) per common share
|
$
|
(39,809,000
|
)
|
|
130,142,527
|
|
|
$
|
(0.31
|
)
|
|
|
|
|
|
|
(1)
|
For the
three months ended March 31, 2018
and
2017
, respectively, all common shares potentially issuable in connection with outstanding restricted stock unit awards have been excluded from the calculation of diluted EPS as the Company incurred losses during the periods, therefore, inclusion of such potential common shares would be anti-dilutive.
|
(2)
|
Weighted average common shares issuable upon the assumed conversion of our Convertible Preferred Stock (as defined below) totaling
23,809,500
shares were excluded from the computation of diluted EPS as such shares would be anti-dilutive.
|
Dollars in thousands
|
Foreign Currency Items
|
||
December 31, 2017
|
$
|
(3,512
|
)
|
Current period other comprehensive income (loss), net of tax
|
(300
|
)
|
|
March 31, 2018
|
$
|
(3,812
|
)
|
Dollars in thousands
|
March 31,
2018 |
|
December 31,
2017 |
||||
Contract assets - current
(1)
|
915
|
|
|
973
|
|
||
Contract assets - noncurrent
(1)
|
—
|
|
|
—
|
|
||
Total contract assets
|
$
|
915
|
|
|
$
|
973
|
|
|
|
|
|
||||
Contract liabilities - current
(2)
|
$
|
(200
|
)
|
|
$
|
(641
|
)
|
Contract liabilities - noncurrent
(2)
|
(354
|
)
|
|
(380
|
)
|
||
Total contract liabilities
|
$
|
(554
|
)
|
|
$
|
(1,021
|
)
|
Dollars in thousands
|
Contract
Assets |
|
Contract Liabilities
|
||||
Balance at December 31, 2017
|
$
|
973
|
|
|
$
|
(1,021
|
)
|
Decrease due to recognition of revenue that was included in the beginning contract liability balance
|
(424
|
)
|
|
467
|
|
||
Increase due to cash received, excluding amounts recognized as revenue during the period
|
—
|
|
|
—
|
|
||
Increase due to revenue recognized during the period but contingent on future performance
|
366
|
|
|
—
|
|
||
Balance at March 31, 2018
|
$
|
915
|
|
|
$
|
(554
|
)
|
|
Three months ended March 31, 2018
|
||||||||
Dollars in thousands
|
Remaining 2018
|
|
2019
|
|
2020
|
|
Beyond 2020
|
|
Total
|
Deferred revenue
|
$965
|
|
$324
|
|
$239
|
|
$581
|
|
$2,109
|
•
|
customers typically are major, independent, or national oil and natural gas companies or integrated service providers;
|
•
|
drilling programs in remote locations with little infrastructure, requiring a large inventory of spare parts and other ancillary equipment and self-supported service capabilities;
|
•
|
complex wells and/or harsh environments (such as high pressures, deep depths, hazardous or geologically challenging conditions and sensitive environments) requiring specialized equipment and considerable experience to drill; and
|
•
|
O&M contracts that generally cover periods of one year or more.
|
|
Three Months Ended
March 31, |
||||||
Dollars in thousands
|
2018
|
|
2017
|
||||
Revenues:
(1)
|
|
|
|
||||
Drilling Services:
|
|
|
|
||||
U.S. (Lower 48) Drilling
|
$
|
1,354
|
|
|
$
|
1,215
|
|
International & Alaska Drilling
|
56,096
|
|
|
63,213
|
|
||
Total Drilling Services
|
57,450
|
|
|
64,428
|
|
||
Rental Tools Services:
|
|
|
|
||||
U.S. Rental Tools
|
34,748
|
|
|
20,231
|
|
||
International Rental Tools
|
17,477
|
|
|
13,612
|
|
||
Total Rental Tools Services
|
52,225
|
|
|
33,843
|
|
||
Total revenues
|
109,675
|
|
|
98,271
|
|
||
Operating gross margin:
(2)
|
|
|
|
||||
Drilling Services:
|
|
|
|
||||
U.S. (Lower 48) Drilling
|
(5,288
|
)
|
|
(7,226
|
)
|
||
International & Alaska Drilling
|
(5,336
|
)
|
|
(1,785
|
)
|
||
Total Drilling Services
|
(10,624
|
)
|
|
(9,011
|
)
|
||
Rental Tools Services:
|
|
|
|
||||
U.S. Rental Tools
|
4,231
|
|
|
(3,773
|
)
|
||
International Rental Tools
|
(4,015
|
)
|
|
(6,961
|
)
|
||
Total Rental Tools Services
|
216
|
|
|
(10,734
|
)
|
||
Total operating gross margin
|
(10,408
|
)
|
|
(19,745
|
)
|
||
General and administrative expense
|
(6,201
|
)
|
|
(7,040
|
)
|
||
Gain (loss) on disposition of assets, net
|
343
|
|
|
(352
|
)
|
||
Total operating income (loss)
|
(16,266
|
)
|
|
(27,137
|
)
|
||
Interest expense
|
(11,240
|
)
|
|
(10,870
|
)
|
||
Interest income
|
23
|
|
|
10
|
|
||
Other income (loss)
|
291
|
|
|
530
|
|
||
Income (loss) before income taxes
|
$
|
(27,192
|
)
|
|
$
|
(37,467
|
)
|
|
Three months ended March 31, 2018
|
||||||||||||
Dollars in thousands
|
United States
|
|
Russia
|
|
EMEA & Asia
|
|
Latin America
|
|
Other CIS
|
|
Other
|
|
Total
|
Revenues
|
$43,995
|
|
$31,292
|
|
$20,044
|
|
$3,513
|
|
$3,550
|
|
$7,281
|
|
$109,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2017
|
||||||||||||
Dollars in thousands
|
United States
|
|
Russia
|
|
EMEA & Asia
|
|
Latin America
|
|
Other CIS
|
|
Other
|
|
Total
|
Revenues
|
$32,573
|
|
$34,448
|
|
$15,101
|
|
$2,866
|
|
$6,308
|
|
$6,975
|
|
$98,271
|
•
|
in connection with any sale or other disposition of all or substantially all of the assets of that guarantor (including by way of merger or consolidation) to a person that is not (either before or after giving effect to such transaction) a subsidiary of the Company;
|
•
|
in connection with any sale of such amount of capital stock as would result in such guarantor no longer being a subsidiary to a person that is not (either before or after giving effect to such transaction) a subsidiary of the Company;
|
•
|
if the Company designates any restricted subsidiary that is a guarantor as an unrestricted subsidiary;
|
•
|
if the guarantee by a guarantor of all other indebtedness of the Company or any other guarantor is released, terminated or discharged, except by, or as a result of, payment under such guarantee; or
|
•
|
upon legal defeasance or covenant defeasance (satisfaction and discharge of the indenture).
|
|
March 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantor
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
56,723
|
|
|
$
|
16,509
|
|
|
$
|
45,083
|
|
|
$
|
—
|
|
|
$
|
118,315
|
|
Accounts and Notes receivable, net
|
—
|
|
|
35,177
|
|
|
91,508
|
|
|
—
|
|
|
126,685
|
|
|||||
Rig materials and supplies
|
—
|
|
|
(2,869
|
)
|
|
34,318
|
|
|
373
|
|
|
31,822
|
|
|||||
Other current assets
|
—
|
|
|
5,613
|
|
|
14,825
|
|
|
—
|
|
|
20,438
|
|
|||||
Total current assets
|
56,723
|
|
|
54,430
|
|
|
185,734
|
|
|
373
|
|
|
297,260
|
|
|||||
Property, plant and equipment, net
|
(19
|
)
|
|
423,377
|
|
|
187,144
|
|
|
242
|
|
|
610,744
|
|
|||||
Goodwill
|
—
|
|
|
6,708
|
|
|
—
|
|
|
—
|
|
|
6,708
|
|
|||||
Intangible assets, net
|
—
|
|
|
6,551
|
|
|
—
|
|
|
—
|
|
|
6,551
|
|
|||||
Investment in subsidiaries and intercompany advances
|
2,931,773
|
|
|
2,983,588
|
|
|
4,024,920
|
|
|
(9,940,281
|
)
|
|
—
|
|
|||||
Other noncurrent assets
|
(256,973
|
)
|
|
234,495
|
|
|
533,156
|
|
|
(480,811
|
)
|
|
29,867
|
|
|||||
Total assets
|
$
|
2,731,504
|
|
|
$
|
3,709,149
|
|
|
$
|
4,930,954
|
|
|
$
|
(10,420,477
|
)
|
|
$
|
951,130
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
$
|
(70,088
|
)
|
|
$
|
191,260
|
|
|
$
|
586,677
|
|
|
$
|
(617,477
|
)
|
|
$
|
90,372
|
|
Accrued income taxes
|
80,627
|
|
|
(59,776
|
)
|
|
(16,660
|
)
|
|
—
|
|
|
4,191
|
|
|||||
Total current liabilities
|
10,539
|
|
|
131,484
|
|
|
570,017
|
|
|
(617,477
|
)
|
|
94,563
|
|
|||||
Long-term debt, net
|
578,404
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
578,404
|
|
|||||
Other long-term liabilities
|
2,867
|
|
|
3,875
|
|
|
4,368
|
|
|
—
|
|
|
11,110
|
|
|||||
Deferred tax liability
|
—
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
78
|
|
|||||
Intercompany payables
|
1,871,869
|
|
|
1,468,837
|
|
|
2,495,167
|
|
|
(5,835,873
|
)
|
|
—
|
|
|||||
Total liabilities
|
2,463,679
|
|
|
1,604,196
|
|
|
3,069,630
|
|
|
(6,453,350
|
)
|
|
684,155
|
|
|||||
Total equity
|
267,825
|
|
|
2,104,953
|
|
|
1,861,324
|
|
|
(3,967,127
|
)
|
|
266,975
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
2,731,504
|
|
|
$
|
3,709,149
|
|
|
$
|
4,930,954
|
|
|
$
|
(10,420,477
|
)
|
|
$
|
951,130
|
|
|
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
|
|
|||||
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 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 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
|
|
|
Three months ended March 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantor
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
42,591
|
|
|
$
|
81,622
|
|
|
$
|
(14,538
|
)
|
|
$
|
109,675
|
|
Operating expenses
|
—
|
|
|
25,817
|
|
|
80,255
|
|
|
(14,538
|
)
|
|
91,534
|
|
|||||
Depreciation and amortization
|
—
|
|
|
19,996
|
|
|
8,553
|
|
|
—
|
|
|
28,549
|
|
|||||
Total operating gross margin (loss)
|
—
|
|
|
(3,222
|
)
|
|
(7,186
|
)
|
|
—
|
|
|
(10,408
|
)
|
|||||
General and administrative expense
(1)
|
(89
|
)
|
|
(5,983
|
)
|
|
(129
|
)
|
|
—
|
|
|
(6,201
|
)
|
|||||
Gain (loss) on disposition of assets, net
|
—
|
|
|
11
|
|
|
332
|
|
|
—
|
|
|
343
|
|
|||||
Total operating income (loss)
|
(89
|
)
|
|
(9,194
|
)
|
|
(6,983
|
)
|
|
—
|
|
|
(16,266
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(12,228
|
)
|
|
223
|
|
|
(2,056
|
)
|
|
2,821
|
|
|
(11,240
|
)
|
|||||
Interest income
|
182
|
|
|
181
|
|
|
2,481
|
|
|
(2,821
|
)
|
|
23
|
|
|||||
Other
|
—
|
|
|
2
|
|
|
289
|
|
|
—
|
|
|
291
|
|
|||||
Equity in net earnings of subsidiaries
|
(16,372
|
)
|
|
—
|
|
|
—
|
|
|
16,372
|
|
|
—
|
|
|||||
Total other income (expense)
|
(28,418
|
)
|
|
406
|
|
|
714
|
|
|
16,372
|
|
|
(10,926
|
)
|
|||||
Income (loss) before income taxes
|
(28,507
|
)
|
|
(8,788
|
)
|
|
(6,269
|
)
|
|
16,372
|
|
|
(27,192
|
)
|
|||||
Income tax expense (benefit)
|
288
|
|
|
329
|
|
|
987
|
|
|
—
|
|
|
1,604
|
|
|||||
Net income (loss)
|
(28,795
|
)
|
|
(9,117
|
)
|
|
(7,256
|
)
|
|
16,372
|
|
|
(28,796
|
)
|
|||||
Less: Mandatory convertible preferred stock dividend
|
906
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
906
|
|
|||||
Net income (loss) available to common stockholders
|
$
|
(29,701
|
)
|
|
$
|
(9,117
|
)
|
|
$
|
(7,256
|
)
|
|
$
|
16,372
|
|
|
$
|
(29,702
|
)
|
|
Three months ended March 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantor
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
27,893
|
|
|
$
|
88,237
|
|
|
$
|
(17,859
|
)
|
|
$
|
98,271
|
|
Operating expenses
|
—
|
|
|
20,950
|
|
|
82,723
|
|
|
(17,859
|
)
|
|
85,814
|
|
|||||
Depreciation and amortization
|
—
|
|
|
21,188
|
|
|
11,014
|
|
|
—
|
|
|
32,202
|
|
|||||
Total operating gross margin (loss)
|
—
|
|
|
(14,245
|
)
|
|
(5,500
|
)
|
|
—
|
|
|
(19,745
|
)
|
|||||
General and administrative expense
(1)
|
(78
|
)
|
|
(6,870
|
)
|
|
(92
|
)
|
|
—
|
|
|
(7,040
|
)
|
|||||
Gain (loss) on disposition of assets, net
|
—
|
|
|
(216
|
)
|
|
(136
|
)
|
|
—
|
|
|
(352
|
)
|
|||||
Total operating income (loss)
|
(78
|
)
|
|
(21,331
|
)
|
|
(5,728
|
)
|
|
—
|
|
|
(27,137
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(11,669
|
)
|
|
(45
|
)
|
|
(1,942
|
)
|
|
2,786
|
|
|
(10,870
|
)
|
|||||
Interest income
|
149
|
|
|
179
|
|
|
2,468
|
|
|
(2,786
|
)
|
|
10
|
|
|||||
Other
|
—
|
|
|
32
|
|
|
498
|
|
|
—
|
|
|
530
|
|
|||||
Equity in net earnings of subsidiaries
|
(21,780
|
)
|
|
—
|
|
|
—
|
|
|
21,780
|
|
|
—
|
|
|||||
Total other income (expense)
|
(33,300
|
)
|
|
166
|
|
|
1,024
|
|
|
21,780
|
|
|
(10,330
|
)
|
|||||
Income (loss) before income taxes
|
(33,378
|
)
|
|
(21,165
|
)
|
|
(4,704
|
)
|
|
21,780
|
|
|
(37,467
|
)
|
|||||
Income tax expense (benefit)
|
6,430
|
|
|
(5,577
|
)
|
|
1,489
|
|
|
—
|
|
|
2,342
|
|
|||||
Net income (loss)
|
(39,808
|
)
|
|
(15,588
|
)
|
|
(6,193
|
)
|
|
21,780
|
|
|
(39,809
|
)
|
|||||
Less: Mandatory convertible preferred stock dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|||||
Net income (loss) available to common stockholders
|
$
|
(39,808
|
)
|
|
$
|
(15,588
|
)
|
|
$
|
(6,193
|
)
|
|
$
|
21,780
|
|
|
$
|
(39,809
|
)
|
|
Three months ended March 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantor
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
(28,795
|
)
|
|
$
|
(9,117
|
)
|
|
$
|
(7,256
|
)
|
|
$
|
16,372
|
|
|
$
|
(28,796
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Currency translation difference on related borrowings
|
—
|
|
|
—
|
|
|
276
|
|
|
—
|
|
|
276
|
|
|||||
Currency translation difference on foreign currency net investments
|
—
|
|
|
—
|
|
|
(576
|
)
|
|
—
|
|
|
(576
|
)
|
|||||
Total other comprehensive income (loss), net of tax:
|
—
|
|
|
—
|
|
|
(300
|
)
|
|
—
|
|
|
(300
|
)
|
|||||
Comprehensive income (loss)
|
(28,795
|
)
|
|
(9,117
|
)
|
|
(7,556
|
)
|
|
16,372
|
|
|
(29,096
|
)
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantor
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
(39,808
|
)
|
|
$
|
(15,588
|
)
|
|
$
|
(6,193
|
)
|
|
$
|
21,780
|
|
|
$
|
(39,809
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Currency translation difference on related borrowings
|
—
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|
83
|
|
|||||
Currency translation difference on foreign currency net investments
|
—
|
|
|
—
|
|
|
763
|
|
|
—
|
|
|
763
|
|
|||||
Total other comprehensive income (loss), net of tax:
|
—
|
|
|
—
|
|
|
846
|
|
|
—
|
|
|
846
|
|
|||||
Comprehensive income (loss)
|
(39,808
|
)
|
|
(15,588
|
)
|
|
(5,347
|
)
|
|
21,780
|
|
|
(38,963
|
)
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantor
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
(28,795
|
)
|
|
$
|
(9,117
|
)
|
|
$
|
(7,256
|
)
|
|
$
|
16,372
|
|
|
$
|
(28,796
|
)
|
Adjustments to reconcile net income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
—
|
|
|
19,996
|
|
|
8,553
|
|
|
—
|
|
|
28,549
|
|
|||||
(Gain) loss on disposition of assets
|
—
|
|
|
(11
|
)
|
|
(332
|
)
|
|
—
|
|
|
(343
|
)
|
|||||
Deferred tax expense (benefit)
|
(3,420
|
)
|
|
3,015
|
|
|
(138
|
)
|
|
—
|
|
|
(543
|
)
|
|||||
Expenses not requiring cash
|
1,411
|
|
|
(10
|
)
|
|
(11,032
|
)
|
|
10,738
|
|
|
1,107
|
|
|||||
Change in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts and notes receivable
|
—
|
|
|
(2,840
|
)
|
|
(1,339
|
)
|
|
—
|
|
|
(4,179
|
)
|
|||||
Other assets
|
23,587
|
|
|
(10,095
|
)
|
|
(61,331
|
)
|
|
57,850
|
|
|
10,011
|
|
|||||
Accounts payable and accrued liabilities
|
(12,971
|
)
|
|
5,333
|
|
|
74,636
|
|
|
(84,960
|
)
|
|
(17,962
|
)
|
|||||
Accrued income taxes
|
3,745
|
|
|
(2,907
|
)
|
|
(886
|
)
|
|
—
|
|
|
(48
|
)
|
|||||
Net cash provided by (used in) operating activities
|
(16,443
|
)
|
|
3,364
|
|
|
875
|
|
|
—
|
|
|
(12,204
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
(7,554
|
)
|
|
(1,370
|
)
|
|
—
|
|
|
(8,924
|
)
|
|||||
Proceeds from the sale of assets
|
—
|
|
|
44
|
|
|
26
|
|
|
—
|
|
|
70
|
|
|||||
Net cash provided by (used in) investing activities
|
—
|
|
|
(7,510
|
)
|
|
(1,344
|
)
|
|
—
|
|
|
(8,854
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Payments of debt issuance costs
|
(1,148
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,148
|
)
|
|||||
Preferred stock dividend
|
(906
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(906
|
)
|
|||||
Shares surrendered in lieu of tax
|
(122
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(122
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(2,176
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,176
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase (decrease) in cash and cash equivalents
|
(18,619
|
)
|
|
(4,146
|
)
|
|
(469
|
)
|
|
—
|
|
|
(23,234
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
75,342
|
|
|
20,655
|
|
|
45,552
|
|
|
—
|
|
|
141,549
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
56,723
|
|
|
$
|
16,509
|
|
|
$
|
45,083
|
|
|
$
|
—
|
|
|
$
|
118,315
|
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantor
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
(39,808
|
)
|
|
$
|
(15,588
|
)
|
|
$
|
(6,193
|
)
|
|
$
|
21,780
|
|
|
$
|
(39,809
|
)
|
Adjustments to reconcile net income (loss)
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
—
|
|
|
21,188
|
|
|
11,014
|
|
|
—
|
|
|
32,202
|
|
|||||
(Gain) loss on disposition of assets
|
—
|
|
|
216
|
|
|
136
|
|
|
—
|
|
|
352
|
|
|||||
Deferred tax expense (benefit)
|
(5,641
|
)
|
|
5,165
|
|
|
(166
|
)
|
|
—
|
|
|
(642
|
)
|
|||||
Expenses not requiring cash
|
1,781
|
|
|
91
|
|
|
278
|
|
|
—
|
|
|
2,150
|
|
|||||
Equity in net earnings of subsidiaries
|
21,780
|
|
|
—
|
|
|
—
|
|
|
(21,780
|
)
|
|
—
|
|
|||||
Change in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts and notes receivable
|
—
|
|
|
(3,668
|
)
|
|
(1,206
|
)
|
|
—
|
|
|
(4,874
|
)
|
|||||
Other assets
|
17,984
|
|
|
(18,296
|
)
|
|
(2,380
|
)
|
|
—
|
|
|
(2,692
|
)
|
|||||
Accounts payable and accrued liabilities
|
(34,867
|
)
|
|
15,591
|
|
|
3,339
|
|
|
—
|
|
|
(15,937
|
)
|
|||||
Accrued income taxes
|
(5,783
|
)
|
|
7,055
|
|
|
393
|
|
|
—
|
|
|
1,665
|
|
|||||
Net cash provided by (used in) operating activities
|
(44,554
|
)
|
|
11,754
|
|
|
5,215
|
|
|
—
|
|
|
(27,585
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
(10,994
|
)
|
|
(3,457
|
)
|
|
—
|
|
|
(14,451
|
)
|
|||||
Proceeds from the sale of assets
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
46
|
|
|||||
Net cash provided by (used in) investing activities
|
—
|
|
|
(10,994
|
)
|
|
(3,411
|
)
|
|
—
|
|
|
(14,405
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
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
|
(2,861
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,861
|
)
|
|||||
Shares surrendered in lieu of tax
|
(352
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(352
|
)
|
|||||
Intercompany advances, net
|
4,106
|
|
|
(2,090
|
)
|
|
(2,016
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
76,093
|
|
|
(2,090
|
)
|
|
(2,016
|
)
|
|
—
|
|
|
71,987
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net change in cash and cash equivalents
|
31,539
|
|
|
(1,330
|
)
|
|
(212
|
)
|
|
—
|
|
|
29,997
|
|
|||||
Cash and cash equivalents at beginning of period
|
65,000
|
|
|
14,365
|
|
|
40,326
|
|
|
—
|
|
|
119,691
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
96,539
|
|
|
$
|
13,035
|
|
|
$
|
40,114
|
|
|
$
|
—
|
|
|
$
|
149,688
|
|
|
Three Months Ended March 31,
|
||||||||||||
Dollars in Thousands
|
2018
|
|
2017
|
||||||||||
Revenues:
|
|
||||||||||||
Drilling Services:
|
|
|
|
|
|
|
|
||||||
U.S. (Lower 48) Drilling
|
$
|
1,354
|
|
|
1
|
%
|
|
$
|
1,215
|
|
|
1
|
%
|
International & Alaska Drilling
|
56,096
|
|
|
51
|
%
|
|
63,213
|
|
|
64
|
%
|
||
Total Drilling Services
|
57,450
|
|
|
52
|
%
|
|
64,428
|
|
|
65
|
%
|
||
Rental Tools Services:
|
|
|
|
|
|
|
|
||||||
U.S. Rental Tools
|
34,748
|
|
|
32
|
%
|
|
20,231
|
|
|
21
|
%
|
||
International Rental Tools
|
17,477
|
|
|
16
|
%
|
|
13,612
|
|
|
14
|
%
|
||
Total Rental Tools Services
|
52,225
|
|
|
48
|
%
|
|
33,843
|
|
|
35
|
%
|
||
Total revenues
|
109,675
|
|
|
100
|
%
|
|
98,271
|
|
|
100
|
%
|
||
Operating gross margin (loss) excluding depreciation and amortization:
|
|
|
|
|
|
|
|
||||||
Drilling Services:
|
|
|
|
|
|
|
|
||||||
U.S. (Lower 48) Drilling
|
(2,699
|
)
|
|
(199
|
)%
|
|
(2,985
|
)
|
|
(246
|
)%
|
||
International & Alaska Drilling
|
4,670
|
|
|
8
|
%
|
|
11,029
|
|
|
17
|
%
|
||
Total Drilling Services
|
1,971
|
|
|
3
|
%
|
|
8,044
|
|
|
12
|
%
|
||
Rental Tools Services:
|
|
|
|
|
|
|
|
||||||
U.S. Rental Tools
|
15,810
|
|
|
45
|
%
|
|
6,776
|
|
|
33
|
%
|
||
International Rental Tools
|
360
|
|
|
2
|
%
|
|
(2,363
|
)
|
|
(17
|
)%
|
||
Total Rental Tools Services
|
16,170
|
|
|
31
|
%
|
|
4,413
|
|
|
13
|
%
|
||
Total operating gross margin (loss) excluding depreciation and amortization
|
18,141
|
|
|
17
|
%
|
|
12,457
|
|
|
13
|
%
|
||
Depreciation and amortization
|
(28,549
|
)
|
|
|
|
(32,202
|
)
|
|
|
||||
Total operating gross margin (loss)
|
(10,408
|
)
|
|
|
|
(19,745
|
)
|
|
|
||||
General and administrative expense
|
(6,201
|
)
|
|
|
|
(7,040
|
)
|
|
|
||||
Gain (loss) on disposition of assets, net
|
343
|
|
|
|
|
(352
|
)
|
|
|
||||
Total operating income (loss)
|
$
|
(16,266
|
)
|
|
|
|
$
|
(27,137
|
)
|
|
|
Dollars in Thousands
|
U.S. (Lower 48)
Drilling |
|
International & Alaska Drilling
|
|
U.S. Rental Tools
|
|
International Rental
Tools |
|
Total
|
||||||||||
Three months ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating gross margin (loss)
(1)
|
$
|
(5,288
|
)
|
|
$
|
(5,336
|
)
|
|
$
|
4,231
|
|
|
$
|
(4,015
|
)
|
|
$
|
(10,408
|
)
|
Depreciation and amortization
|
2,589
|
|
|
10,006
|
|
|
11,579
|
|
|
4,375
|
|
|
28,549
|
|
|||||
Operating gross margin (loss) excluding depreciation and amortization
|
$
|
(2,699
|
)
|
|
$
|
4,670
|
|
|
$
|
15,810
|
|
|
$
|
360
|
|
|
$
|
18,141
|
|
Three months ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating gross margin (loss)
(1)
|
$
|
(7,226
|
)
|
|
$
|
(1,785
|
)
|
|
$
|
(3,773
|
)
|
|
$
|
(6,961
|
)
|
|
$
|
(19,745
|
)
|
Depreciation and amortization
|
4,241
|
|
|
12,814
|
|
|
10,549
|
|
|
4,598
|
|
|
32,202
|
|
|||||
Operating gross margin (loss) excluding depreciation and amortization
|
$
|
(2,985
|
)
|
|
$
|
11,029
|
|
|
$
|
6,776
|
|
|
$
|
(2,363
|
)
|
|
$
|
12,457
|
|
(1)
|
Operating gross margin (loss) is calculated as revenues less direct operating expenses, including depreciation and amortization expense.
|
|
Three Months Ended March 31,
|
||||
|
2018
|
|
2017
|
||
U.S. (Lower 48) Drilling
|
|
|
|
||
Rigs available for service
(1)
|
13.0
|
|
|
13.0
|
|
Utilization rate of rigs available for service
(2)
|
5
|
%
|
|
4
|
%
|
International & Alaska Drilling
|
|
|
|
||
Eastern Hemisphere
|
|
|
|
||
Rigs available for service
(1)
|
11.3
|
|
|
13.0
|
|
Utilization rate of rigs available for service
(2)
|
41
|
%
|
|
31
|
%
|
Latin America Region
|
|
|
|
||
Rigs available for service
(1)
|
7.0
|
|
|
7.0
|
|
Utilization rate of rigs available for service
(2)
|
14
|
%
|
|
14
|
%
|
Alaska
|
|
|
|
||
Rigs available for service
(1)
|
2.0
|
|
|
2.0
|
|
Utilization rate of rigs available for service
(2)
|
50
|
%
|
|
100
|
%
|
Total International & Alaska Drilling
|
|
|
|
||
Rigs available for service
(1)
|
20.3
|
|
|
22.0
|
|
Utilization rate of rigs available for service
(2)
|
33
|
%
|
|
32
|
%
|
(1)
|
The number of rigs available for service is determined by calculating the number of days each rig was in our fleet and was under contract or available for contract. For example, a rig under contract or available for contract for six months of a year is 0.5 rigs available for service for such year. Our method of computation of rigs available for service may or may not be comparable to other similarly titled measures of other companies.
|
(2)
|
Rig utilization rates are based on a weighted average basis assuming total days availability for all rigs available for service. Rigs acquired or disposed of are treated as added to or removed from the rig fleet as of the date of acquisition or disposal. Rigs that are in operation or fully or partially staffed and on a revenue-producing standby status are considered to be utilized. Rigs under contract that generate revenues during moves between locations or during mobilization or demobilization are also considered to be utilized. Our method of computation of rig utilization may or may not be comparable to other similarly titled measures of other companies.
|
•
|
a decrease of
$3.7 million
, excluding revenue from reimbursable costs (“reimbursable revenues”), resulting from decreased utilization for certain Company-owned rigs in Alaska and Russia;
|
•
|
a decrease of
$2.7 million
driven by a decline in average revenue per day primarily resulting from certain Company owned rigs being in standby mode during the first quarter of 2018 compared with operating mode during the first quarter of 2017;
|
•
|
a decrease of
$1.1 million
in reimbursable revenues, which decreased revenues but had a minimal impact on operating margins.
|
|
March 31, 2018
|
||
Dollars in thousands
|
|
||
Cash and cash equivalents on hand
(1)
|
$
|
118,315
|
|
Availability under Revolver
(2)
|
51,889
|
|
|
Total liquidity
|
$
|
170,204
|
|
(1)
|
As of
March 31, 2018
, approximately
$45.1 million
of the
$118.3 million
of cash and equivalents was held by our foreign subsidiaries.
|
(2)
|
The borrowing base under the
$80.0 million
Revolver was
$72.6 million
, which was further reduced by
$15.0 million
of restricted liquidity and
$5.7 million
in supporting letters of credit outstanding, resulting in availability under the revolver of
$51.9 million
.
|
|
Three Months Ended March 31,
|
||||||
Dollars in thousands
|
2018
|
|
2017
|
||||
Operating activities
|
$
|
(12,204
|
)
|
|
$
|
(27,585
|
)
|
Investing activities
|
(8,854
|
)
|
|
(14,405
|
)
|
||
Financing activities
|
(2,176
|
)
|
|
71,987
|
|
||
Net change in cash and cash equivalents
|
$
|
(23,234
|
)
|
|
$
|
29,997
|
|
•
|
delay spending on capital projects, including maintenance projects and the acquisition or construction of additional rigs, rental tools, and other assets;
|
•
|
issue additional equity;
|
•
|
sell assets; or
|
•
|
restructure or refinance our debt.
|
•
|
result in a reduction of our credit rating, which would make it more difficult for us to obtain additional financing on acceptable terms;
|
•
|
require us to dedicate a substantial portion of our cash flows from operating activities to the repayment of our debt and the interest associated with our debt;
|
•
|
limit our operating flexibility due to financial and other restrictive covenants, including restrictions on incurring additional debt and creating liens on our properties;
|
•
|
place us at a competitive disadvantage compared with our competitors that have relatively less debt; and
|
•
|
make us more vulnerable to downturns in our business.
|
•
|
make investments and other restricted payments, including dividends;
|
•
|
incur additional indebtedness;
|
•
|
create liens;
|
•
|
engage in sale leaseback transactions;
|
•
|
repurchase our common stock or Senior Notes;
|
•
|
sell our assets or consolidate or merge with or into other companies; and
|
•
|
engage in transactions with affiliates.
|
Exhibit
Number
|
|
|
|
Description
|
|
|
|
|
|
|
—
|
|
||
|
|
|
|
|
|
—
|
|
||
|
|
|
|
|
|
—
|
|
||
|
|
|
|
|
|
—
|
|
||
|
|
|
|
|
|
—
|
|
||
|
|
|
|
|
|
—
|
|
||
|
|
|
|
|
|
—
|
|
||
|
|
|
|
|
|
—
|
|
||
|
|
|
|
|
|
—
|
|
||
|
|
|
|
|
|
—
|
|
||
|
|
|
|
|
101.INS
|
|
—
|
|
XBRL Instance Document.
|
|
|
|
|
|
101.SCH
|
|
—
|
|
XBRL Taxonomy Schema Document.
|
|
|
|
|
|
101.CAL
|
|
—
|
|
XBRL Calculation Linkbase Document.
|
|
|
|
|
|
101.LAB
|
|
—
|
|
XBRL Label Linkbase Document.
|
|
|
|
|
|
101.PRE
|
|
—
|
|
XBRL Presentation Linkbase Document.
|
|
|
|
|
|
101.DEF
|
|
—
|
|
XBRL Definition Linkbase Document.
|
|
|
|
|
|
|
|
PARKER DRILLING COMPANY
|
||
|
|
|
|
|
Date:
|
May 2, 2018
|
By:
|
|
/s/ Gary G. Rich
|
|
|
|
|
Gary G. Rich
Chairman, President and Chief Executive Officer
|
|
|
|
|
|
|
|
By:
|
|
/s/ Michael W. Sumruld
|
|
|
|
|
Michael W. Sumruld
Senior Vice President and Chief Financial Officer |
1.
|
I, individually and on behalf of my heirs, personal representatives, successors, and assigns, release, waive, and discharge Company, its predecessors, successors, parents, subsidiaries, merged entities, operating units, affiliates, divisions, insurers, administrators, trustees, and the agents, representatives, officers, directors, shareholders, employees and attorneys of each of the foregoing (hereinafter “Released Parties”), from all claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs, expenses, damages, actions, and causes of action, whether in law or in equity, whether known or unknown, suspected or unsuspected, arising from my employment and termination from employment with Company, including but not limited to any and all claims pursuant to Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991 (42 U.S.C. § 2000e,
et seq
.), which prohibits discrimination in employment based on race, color, national origin, religion or sex; the Civil Rights Act of 1866 (42 U.S.C. §§1981, 1983 and 1985), which prohibits violations of civil rights; the Age Discrimination in Employment Act of 1967, as amended, and as further amended by the Older Workers Benefit Protection Act (29 U.S.C. §621,
et seq
.), which prohibits age discrimination in employment; the Employee Retirement Income Security Act of 1974, as amended (29 U.S.C. § 1001,
et seq
. ), which protects certain employee benefits; the Americans with Disabilities Act of 1990, as amended (42 U.S.C. § 12101,
et seq
.), which prohibits discrimination against the disabled; the Family and Medical Leave Act of 1993 (29 U.S.C. § 2601,
et seq
.), which provides medical and family leave; the Fair Labor Standards Act (29 U.S.C. § 201,
et seq.
), including the wage and hour laws relating to payment of wages; and all other federal, state and local laws and regulations prohibiting employment discrimination. This Release also includes, but is not limited to, a release of any claims for breach of contract, mental pain, suffering and anguish, emotional upset, impairment of economic opportunities, unlawful interference with employment rights, defamation, intentional or negligent infliction of emotional distress, fraud, wrongful termination, wrongful discharge in violation of public policy, breach of any express or implied covenant of good faith and fair dealing, that Company has dealt with me unfairly or in bad faith, and all other common law contract and tort claims.
|
2.
|
Nothing in this Release shall affect in any way my rights of indemnification and directors and officers liability insurance coverage provided to me pursuant to the Company’s by-laws, my Employment Agreement, and/or pursuant to any other agreements or policies in effect prior to the effective date of my termination, which shall continue in full force and effect, in accordance with their terms, following the Effective Date.
|
3.
|
I forever waive and relinquish any right or claim to reinstatement to active employment with Company, its affiliates, subsidiaries, divisions, parent, and successors. I further acknowledge that Company has no obligation to rehire or return me to active duty at any time in the future.
|
4.
|
I acknowledge that all agreements applicable to my employment respecting noncompetition, nonsolicitation, nonrecruitment, derogatory statements, and the confidential or proprietary information of the Company shall continue in full force and effect as described in the Employment Agreement.
|
5.
|
I hereby acknowledge and affirm as follows:
|
6.
|
Other than certain matters for which I was responsible and that were properly resolved in the course of my employment with the Company, I have reported all matters, to the best of my knowledge and as part of my Separation Payment, that may potentially violate the law, the Company’s Code of Conduct or its policies to the Company’s Chief Compliance Officer, to its internal legal counsel or through its ethics helpline. To the best of my knowledge, all matters that I have reported have been, or are in the process of being, properly examined and addressed by the Company, or, to the extent I believe they have not been, I have identified those matters that I do not believe to have been properly examined and addressed by the Company to its Chief Compliance Officer or to its internal legal counsel.
|
7.
|
I acknowledge that this Release shall not be construed as an admission by any of the Released Parties of any liability whatsoever, or as an admission by any of the Released Parties of any violation of my rights or of any other person, or any violation of any order, law, statute, duty or contract.
|
8.
|
I agree that the terms and conditions of this Release are confidential and that I will not, directly or indirectly, disclose the existence of or terms of this Release to anyone other than my attorney or tax advisor, except to the extent such disclosure may be required for accounting or tax reporting purposes or otherwise be required by law or direction of a court. Nothing in this provision shall be construed to prohibit me from disclosing this Release to the Equal Employment Opportunity Commission in connection with any complaint or charge submitted to that agency.
|
9.
|
In the event that any provision of this Release should be held void, voidable, or unenforceable, the remaining portions shall remain in full force and effect.
|
10.
|
I hereby declare that this Release constitutes the entire and final settlement between me and the Company, superseding any and all prior agreements, and that the Company has not made any promise or offered any other agreement, except those expressed in this Release, to induce or persuade me to enter into this Release.
|
|
Three Months Ended
March 31, 2018 |
|
Fiscal Year Ended December 31,
|
||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|||||||
Pretax income (loss)
|
(27,192
|
)
|
|
(109,661
|
)
|
|
(156,644
|
)
|
|
(71,971
|
)
|
|
48,537
|
|
|
52,787
|
|
Fixed charges
|
11,240
|
|
|
44,231
|
|
|
45,974
|
|
|
45,379
|
|
|
45,436
|
|
|
50,196
|
|
Amortization of capitalized interest
|
935
|
|
|
3,810
|
|
|
3,916
|
|
|
3,793
|
|
|
3,939
|
|
|
4,058
|
|
Capitalized interest
|
—
|
|
|
(5
|
)
|
|
(162
|
)
|
|
(224
|
)
|
|
(1,171
|
)
|
|
(2,376
|
)
|
Earnings before income tax & fixed charges
|
(15,017
|
)
|
|
(61,625
|
)
|
|
(106,916
|
)
|
|
(23,023
|
)
|
|
96,741
|
|
|
104,665
|
|
Interest expense
|
11,240
|
|
|
44,226
|
|
|
45,812
|
|
|
45,155
|
|
|
44,265
|
|
|
47,820
|
|
Capitalized interest
|
—
|
|
|
5
|
|
|
162
|
|
|
224
|
|
|
1,171
|
|
|
2,376
|
|
Total fixed charges
|
11,240
|
|
|
44,231
|
|
|
45,974
|
|
|
45,379
|
|
|
45,436
|
|
|
50,196
|
|
Preferred dividends
|
906
|
|
|
3,051
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Combined fixed charges and preferred stock dividends
|
12,146
|
|
|
47,282
|
|
|
45,974
|
|
|
45,379
|
|
|
45,436
|
|
|
50,196
|
|
Ratio of earnings to fixed charges
|
(1
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
2.1x
|
|
|
2.1x
|
|
Ratio of earnings to combined fixed charges and preferred dividends
|
(2
|
)
|
|
(4
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|
(5
|
)
|
(1)
|
For the
three months ended March 31, 2018
, earnings were deficient to cover fixed charges by
$15.0 million
.
|
(2)
|
For the
three months ended March 31, 2018
, earnings were inadequate to cover combined fixed charges and preferred stock dividends by
$15.9 million
.
|
(3)
|
For the years ended December 31, 2017, 2016 and 2015, earnings were deficient to cover fixed charges by
$61.6 million
,
$106.9 million
and
$23.0 million
, respectively.
|
(4)
|
For the year ended December 31, 2017, earnings were inadequate to cover combined fixed charges and preferred stock dividends by
$64.7 million
.
|
(5)
|
The ratio of earnings to combined fixed charges and preferred stock dividends is the same as the ratio of earning to fixed charges as there was no preferred stock outstanding for the respective years.
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the quarterly period ended
March 31, 2018
, of Parker Drilling Company (the registrant);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a — 15(e) and 15d — 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Gary G. Rich
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Gary G. Rich
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President, Chief Executive Officer, and Director
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1.
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I have reviewed this quarterly report on Form 10-Q for the quarterly period ended
March 31, 2018
, of Parker Drilling Company (the registrant);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a — 15(e) and 15d — 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Michael W. Sumruld
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Michael W. Sumruld
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Senior Vice President and Chief Financial Officer
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1.
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The Company’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2018
(the Report) fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Gary G. Rich
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Gary G. Rich
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President, Chief Executive Officer, and Director
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1.
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The Company’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2018
(the Report) fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Michael W. Sumruld
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Michael W. Sumruld
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Senior Vice President and Chief Financial Officer
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