Guarantor/Non Guarantor Condensed Consolidated Financial Statements

9 Months Ended

Sep. 30, 2015

Guarantor Non-Guarantor Condensed Consolidated Financial Statements

Guarantor/Non Guarantor Condensed Consolidated Financial Statements

Guarantor/Non-Guarantor Condensed Consolidated Financial Statements

Our Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all existing domestic subsidiaries, except for Pioneer Services Holdings, LLC. The subsidiaries that generally operate our non-U.S. business concentrated in Colombia do not guarantee our Senior Notes. The non-guarantor subsidiaries do not have any payment obligations under the Senior Notes, the guarantees or the Indenture.

In the event of a bankruptcy, liquidation or reorganization of any non-guarantor subsidiary, such non-guarantor subsidiary will pay the holders of its debt and other liabilities, including its trade creditors, before it will be able to distribute any of its assets to us. In the future, any non-U.S. subsidiaries, immaterial subsidiaries and subsidiaries that we designate as unrestricted subsidiaries under the Indenture will not guarantee the Senior Notes. As of September 30, 2015, there were no restrictions on the ability of subsidiary guarantors to transfer funds to the parent company.

As a result of the guarantee arrangements, we are presenting the following condensed consolidated balance sheets, statements of operations and statements of cash flows of the issuer, the guarantor subsidiaries and the non-guarantor subsidiaries.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)



	September 30, 2015
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	26,349		$	1,770		$	7,560		$	—		$	35,679
Receivables, net of allowance	2,310			68,008			11,655			—			81,973
Intercompany receivable (payable)	(24,836		)	34,169			(9,333		)	—			—
Deferred income taxes	751			5,472			76			—			6,299
Inventory	—			5,841			3,154			—			8,995
Assets held for sale	—			2,065			—			—			2,065
Prepaid expenses and other current assets	1,309			3,052			1,566			—			5,927
Total current assets	5,883			120,377			14,678			—			140,938
Net property and equipment	3,475			741,288			33,933			—			778,696
Investment in subsidiaries	706,106			43,254			—			(749,360		)	—
Intangible assets, net of accumulated amortization	—			18,268			—			—			18,268
Noncurrent deferred income taxes	78,664			—			—			(78,664		)	—
Other long-term assets	9,530			919			777			—			11,226
Total assets	$	803,658		$	924,106		$	49,388		$	(828,024	)	$	949,128
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	582		$	32,562		$	1,928		$	—		$	35,072
Deferred revenues	—			13,993			779			—			14,772
Accrued expenses	3,629			41,042			2,792			—			47,463
Total current liabilities	4,211			87,597			5,499			—			97,307
Long-term debt, less current portion	410,000			—			—			—			410,000
Noncurrent deferred income taxes	—			127,409			—			(78,664		)	48,745
Other long-term liabilities	564			2,994			635			—			4,193
Total liabilities	414,775			218,000			6,134			(78,664		)	560,245
Total shareholders’ equity	388,883			706,106			43,254			(749,360		)	388,883
Total liabilities and shareholders’ equity	$	803,658		$	924,106		$	49,388		$	(828,024	)	$	949,128

	December 31, 2014
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	27,688		$	(5,516	)	$	12,752		$	—		$	34,924
Receivables, net of allowance	1,641			151,048			37,512			—			190,201
Intercompany receivable (payable)	(24,836		)	55,567			(30,728		)	(3		)	—
Deferred income taxes	1,827			8,196			975			—			10,998
Inventory	—			7,208			6,909			—			14,117
Assets held for sale	—			9,909			—			—			9,909
Prepaid expenses and other current assets	1,217			6,554			1,154			—			8,925
Total current assets	7,537			232,966			28,574			(3		)	269,074
Net property and equipment	4,179			763,994			89,118			(750		)	856,541
Investment in subsidiaries	850,807			116,799			—			(967,606		)	—
Intangible assets, net of accumulated amortization	—			24,223			—			—			24,223
Noncurrent deferred income taxes	90,664			—			2,753			(90,664		)	2,753
Other long-term assets	10,122			1,955			6,921			—			18,998
Total assets	$	963,309		$	1,139,937		$	127,366		$	(1,059,023	)	$	1,171,589
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	735		$	57,910		$	5,660		$	—		$	64,305
Current portion of long-term debt	—			27			—			—			27
Deferred revenues	—			3,315			—			—			3,315
Accrued expenses	11,109			64,063			4,376			(3		)	79,545
Total current liabilities	11,844			125,315			10,036			(3		)	147,192
Long-term debt, less current portion	455,000			53			—			—			455,053
Noncurrent deferred income taxes	138			160,104			—			(90,664		)	69,578
Other long-term liabilities	513			3,658			531			—			4,702
Total liabilities	467,495			289,130			10,567			(90,667		)	676,525
Total shareholders’ equity	495,814			850,807			116,799			(968,356		)	495,064
Total liabilities and shareholders’ equity	$	963,309		$	1,139,937		$	127,366		$	(1,059,023	)	$	1,171,589

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands)



	Three months ended September 30, 2015
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	—		$	104,810		$	2,670		$	—		$	107,480
Costs and expenses:
Operating costs	—			67,554			3,964			—			71,518
Depreciation and amortization	325			32,797			2,135			—			35,257
General and administrative	4,864			11,671			417			(138		)	16,814
Intercompany leasing	—			(1,215		)	1,215			—			—
Bad debt expense (recovery)	—			(1,071		)	—			—			(1,071		)
Impairment charges	—			2,329			—			—			2,329
Gain on dispositions of property and equipment	128			651			(174		)	—			605
Total costs and expenses	5,317			112,716			7,557			(138		)	125,452
Income (loss) from operations	(5,317		)	(7,906		)	(4,887		)	138			(17,972		)
Other income (expense):
Equity in earnings of subsidiaries	(11,208		)	(6,309		)	—			17,517			—
Interest expense	(5,473		)	2			6			—			(5,465		)
Other	(21		)	472			(1,098		)	(138		)	(785		)
Total other income (expense)	(16,702		)	(5,835		)	(1,092		)	17,379			(6,250		)
Income (loss) before income taxes	(22,019		)	(13,741		)	(5,979		)	17,517			(24,222		)
Income tax (expense) benefit ¹	4,479			2,533			(330		)	—			6,682
Net income (loss)	$	(17,540	)	$	(11,208	)	$	(6,309	)	$	17,517		$	(17,540	)



	Three months ended September 30, 2014
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	—		$	250,363		$	22,904		$	—		$	273,267
Costs and expenses:
Operating costs	—			159,958			18,998			—			178,956
Depreciation and amortization	358			42,250			3,473			—			46,081
General and administrative	7,110			18,665			976			(138		)	26,613
Intercompany leasing	—			(1,215		)	1,215			—			—
Bad debt expense (recovery)	—			19			—			—			19
Impairment charges	—			678			—			—			678
Gain on dispositions of property and equipment	—			147			(5		)	—			142
Gain on sale of fishing and rental services operations	—			(10,702		)	—			—			(10,702		)
Gain on litigation	(1,324		)	—			—			—			(1,324		)
Total costs and expenses	6,144			209,800			24,657			(138		)	240,463
Income (loss) from operations	(6,144		)	40,563			(1,753		)	138			32,804
Other income (expense):
Equity in earnings of subsidiaries	21,908			(3,742		)	—			(18,166		)	—
Interest expense	(8,943		)	(22		)	(4		)	—			(8,969		)
Loss on extinguishment of debt	—			—			—			—			—
Other	(2		)	707			(2,022		)	(138		)	(1,455		)
Total other income (expense)	12,963			(3,057		)	(2,026		)	(18,304		)	(10,424		)
Income (loss) before income taxes	6,819			37,506			(3,779		)	(18,166		)	22,380
Income tax (expense) benefit ¹	5,634			(15,598		)	37			—			(9,927		)
Net income (loss)	$	12,453		$	21,908		$	(3,742	)	$	(18,166	)	$	12,453

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands)



	Nine months ended September 30, 2015
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	—		$	399,596		$	36,709		$	—		$	436,305
Costs and expenses:
Operating costs	—			258,125			30,506			—			288,631
Depreciation and amortization	1,020			104,841			9,667			—			115,528
General and administrative	15,624			39,916			1,783			(414		)	56,909
Intercompany leasing	—			(3,645		)	3,645			—			—
Bad debt expense (recovery)	—			(358		)	—			—			(358		)
Impairment charges	—			23,766			56,632			(750		)	79,648
Gain on dispositions of property and equipment	128			(2,572		)	(195		)	—			(2,639		)
Total costs and expenses	16,772			420,073			102,038			(1,164		)	537,719
Income (loss) from operations	(16,772		)	(20,477		)	(65,329		)	1,164			(101,414		)
Other income (expense):
Equity in earnings of subsidiaries	(87,179		)	(73,472		)	—			160,651			—
Interest expense	(16,063		)	(120		)	18			—			(16,165		)
Other	(14		)	1,343			(3,894		)	(414		)	(2,979		)
Total other income (expense)	(103,256		)	(72,249		)	(3,876		)	160,237			(19,144		)
Income (loss) before income taxes	(120,028		)	(92,726		)	(69,205		)	161,401			(120,558		)
Income tax (expense) benefit ¹	12,438			5,547			(4,267		)	—			13,718
Net income (loss)	$	(107,590	)	$	(87,179	)	$	(73,472	)	$	161,401		$	(106,840	)


	Nine months ended September 30, 2014
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	—		$	701,518		$	70,595		$	—		$	772,113
Costs and expenses:
Operating costs	—			450,262			50,782			—			501,044
Depreciation and amortization	983			126,093			10,322			—			137,398
General and administrative	20,645			53,301			2,840			(414		)	76,372
Intercompany leasing	—			(3,645		)	3,645			—			—
Bad debt expense (recovery)	—			456			—			—			456
Impairment charges	—			678			—			—			678
Gain on dispositions of property and equipment	—			(1,317		)	(272		)	—			(1,589		)
Gain on sale of fishing and rental services operations	—			(10,702		)	—			—			(10,702		)
Gain on litigation	(4,200		)	—			—			—			(4,200		)
Total costs and expenses	17,428			615,126			67,317			(414		)	699,457
Income (loss) from operations	(17,428		)	86,392			3,278			414			72,656
Other income (expense):
Equity in earnings of subsidiaries	54,500			345			—			(54,845		)	—
Interest expense	(32,049		)	(39		)	3			—			(32,085		)
Loss on extinguishment of debt	(22,482		)	—			—			—			(22,482		)
Other	8			1,995			(1,229		)	(414		)	360
Total other income (expense)	(23		)	2,301			(1,226		)	(55,259		)	(54,207		)
Income (loss) before income taxes	(17,451		)	88,693			2,052			(54,845		)	18,449
Income tax (expense) benefit ¹	27,006			(34,193		)	(1,707		)	—			(8,894		)
Net income (loss)	$	9,555		$	54,500		$	345		$	(54,845	)	$	9,555

¹ The income tax expense (benefit) reflected in each column does not include any tax effect of the equity in earnings (losses) of subsidiaries.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)



	Nine months ended September 30, 2015
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
Cash flows from operating activities	$	45,023		$	97,868		$	(3,826	)	$	139,065
Cash flows from investing activities:
Purchases of property and equipment	(437		)	(128,363		)	(1,590		)	(130,390		)
Proceeds from sale of property and equipment	22			37,557			224			37,803
Proceeds from insurance recoveries	—			227			—			227
	(415		)	(90,579		)	(1,366		)	(92,360		)
Cash flows from financing activities:
Debt repayments	(45,000		)	(3		)	—			(45,003		)
Debt issuance costs	(999		)	—			—			(999		)
Proceeds from exercise of options	781			—			—			781
Purchase of treasury stock	(729		)	—			—			(729		)
	(45,947		)	(3		)	—			(45,950		)
Net increase (decrease) in cash and cash equivalents	(1,339		)	7,286			(5,192		)	755
Beginning cash and cash equivalents	27,688			(5,516		)	12,752			34,924
Ending cash and cash equivalents	$	26,349		$	1,770		$	7,560		$	35,679

	Nine months ended September 30, 2014
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
Cash flows from operating activities	$	33,766		$	98,247		$	22,917		$	154,930
Cash flows from investing activities:
Purchases of property and equipment	(691		)	(106,208		)	(13,839		)	(120,738		)
Proceeds from sale of property and equipment	—			6,916			281			7,197
Proceeds from sale of fishing and rental services operations	15,090			—			—			15,090
	14,399			(99,292		)	(13,558		)	(98,451		)
Cash flows from financing activities:
Debt repayments	(360,000		)	(19		)	—			(360,019		)
Proceeds from issuance of debt	320,000			—			—			320,000
Debt issuance costs	(9,173		)	—			—			(9,173		)
Tender premium costs	(15,381		)	—			—			(15,381		)
Proceeds from exercise of options	8,280			—			—			8,280
Purchase of treasury stock	(1,132		)	—			—			(1,132		)
	(57,406		)	(19		)	—			(57,425		)
Net increase (decrease) in cash and cash equivalents	(9,241		)	(1,064		)	9,359			(946		)
Beginning cash and cash equivalents	28,368			(2,059		)	1,076			27,385
Ending cash and cash equivalents	$	19,127		$	(3,123	)	$	10,435		$	26,439