<PAGE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 10-K
(Mark One) ---------------------
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED AUGUST 31, 1994
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
------------------- -------------------
COMMISSION FILE NUMBER 1-7573
PARKER DRILLING COMPANY
(Exact name of registrant as specified in its charter)
Delaware 73-0618660
- - - ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Parker Building, Eight East Third Street, Tulsa, Oklahoma 74103
----------------------------------------------------------------
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (918) 585-8221
-----------------------------------------------------------------
Securities registered pursuant
to Section 12(b) of the Act:
N/A Name of each exchange on which registered:
- - - ------------------------------- ------------------------------------------
(Title of class) New York Stock Exchange, Inc.
Securities registered pursuant to section 12(g) of the Act:
Common Stock, par value $.16 2/3 per share
-----------------------------------------------------------
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K. [ ]
As of September 30, 1994, 55,125,084 common shares were outstanding, and
the aggregate market value of the common shares (based upon the closing price
of these shares on the New York Stock Exchange) held by nonaffiliates was $294
million.
Documents Incorporated by Reference
Part III, Items 10 through 13 Portions of the Company's definitive Proxy
Statement in connection with its Annual
Meeting to be held December 14, 1994<PAGE>
<PAGE>
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PART I
PAGE
<S> <C> <C>
Item 1. Business 1
Item 2. Properties 4
Item 3. Legal Proceedings 5
Item 4. Submission of Matters to a Vote of Security Holders 6
PART II
Item 5. Market for Registrant's Common Stock and
Related Stockholder Matters 6
Item 6. Selected Financial Data 7
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Item 8. Financial Statements and Supplementary Data 13
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 31
PART III
Item 10. Directors and Executive Officers of the Registrant 31
Item 11. Executive Compensation 31
Item 12. Security Ownership of Certain Beneficial Owners
and Management 31
Item 13. Certain Relationships and Related Transactions 31
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 32
Signatures 37
</TABLE>
<PAGE>
<PAGE>
PART I
Item 1. BUSINESS
GENERAL DEVELOPMENT
Parker Drilling Company was incorporated in the state of Oklahoma in
1954. The Company's predecessor was a contract drilling business established
in 1934 by Gifford C. Parker. The founder was the father of Robert L. Parker
Sr., the current chairman and a principal stockholder, and the grandfather of
Robert L. Parker Jr., president and chief executive officer. In March 1976,
the state of incorporation of the Company was changed to Delaware through the
merger of the Oklahoma corporation into its wholly owned subsidiary Parker
Drilling Company, a Delaware corporation. Unless otherwise indicated, the
term "Company" refers to Parker Drilling Company together with its
subsidiaries and "Parker Drilling" refers solely to the parent, Parker
Drilling Company.
The Company's principal business is providing land contract drilling
services on a worldwide basis to firms in the oil and gas industry.
Internationally, the Company specializes in difficult wells and drilling in
remote locations, utilizing equipment that is specially designed by the
Company to be easily transported by helicopter or other vehicles into
difficult access areas. Domestically, the Company specializes in the drilling
of deep gas wells (to 15,000 feet or deeper). The Company is also engaged in
coring and geothermal operations.
In addition to land contract drilling services, the Company also provides
a wide range of drilling engineering and project management services. The
Company provides consulting services in the area of well design services for
drilling programs. Included in project management services provided are
training, quality control, location construction, catering and logistics of
equipment and personnel.
In August 1975, the Company acquired Parker Technology, Inc. ("Partech")
(Registered Trademark) (formerly OIME, Inc.), a drilling equipment
manufacturing concern in Odessa, Texas. This vertical integration step
allowed the Company to meet customer requests for more rigs during periods of
growth in the drilling industry. Partech (Registered Trademark) designs and
constructs specialized rigs and rig components to meet the unique needs of the
Company and its customers. However, with minimal demand for rig construction
during recent years, Partech (Registered Trademark) functions primarily as a
service center for the Company's drilling operations. The scope of Partech's
operations was downsized in late fiscal 1994 with a reduction in the number of
manufacturing and technical support personnel and the sale of excess
manufacturing equipment and inventories. In fiscal years 1994, 1993 and 1992,
its operations accounted for less than 10 percent of the Company's total
revenue.
Parker Kinetic Designs, Inc. ("Parker Kinetic"), formed in July 1984,
specializes in the commercialization of pulse power technologies for
industrial, scientific and military applications. Parker Kinetic is a leading
developer of pulse power applications. The Austin, Texas-based subsidiary
also provides specialized engineering services in electromagnetic accelerator
research.
- 1 - <PAGE>
<PAGE>
CUSTOMERS
The Company's drilling customer base consists of major oil companies,
foreign national oil and gas companies, independent oil and gas companies and
industrial users. The Company's 20 largest customers accounted for
approximately 87 percent of total revenue during fiscal 1994. Three customers
accounted for approximately 14 percent, 12 percent and 11 percent,
respectively. In fiscal 1993, three customers accounted for approximately 22
percent, 14 percent and 10 percent, respectively. In fiscal 1992, two
customers accounted for approximately 15 percent and 12 percent, respectively.
CONTRACTS
The Company generally obtains drilling contracts through competitive
bidding. Under most contracts the Company is paid a daily fee, or day rate.
The day rate received is based on several factors, including: type of
equipment, services and personnel furnished; investment required to perform
the contract; location of well; length of the contract and competitive market
forces. Footage rate contracts are occasionally accepted in which the Company
is paid a rate per foot drilled upon reaching a specified depth. The Company
drilled shallow (under 10,000 feet) wells under footage contract terms in the
past fiscal year in connection with several international contracts. Footage
contract terms generally place greater risk on the Company although this risk
is limited by the shallow well depths.
The Company generally receives a lump sum fee, which in most cases
approximates the cost incurred by the Company, to move its equipment to the
drilling site. Domestic contracts are generally for one well, while
international contracts are more likely to be for multi-well programs. The
Company continues to obtain contracts under which the Company provides
drilling engineering and integrated project management services. The Company
provides drilling project services from well design and engineering expertise
to site preparation and road construction in an effort to help customers
eliminate or reduce duplication of resources on drilling programs around the
world.
While oil and gas exploration efforts have remained stable or increased
in many areas outside the United States, domestic drilling programs have
remained relatively depressed. Day rates on domestic contracts continue to
cover cash costs before local overhead. International day rates and profit
margins continue to be more favorable than those for domestic operations.
Because of the difficult remote drilling sites encountered internationally,
specialized equipment is often required, sometimes resulting in additional
modification or construction costs which are generally offset by favorable day
rates for the Company. Substantially all the international contracts provide
for payment in U.S. dollars, with a minimum local currency portion to cover
local expenditures.
COMPETITION
Significant competition remains in the drilling industry although both
the number of companies and available rigs have decreased during the energy
industry downturn. The number of rigs continues to exceed demand,
particularly in the domestic market. A number of large and small drilling
contractors provide competition for drilling contracts in all areas the
Company serves. Although no single drilling competitor operates in all areas
the Company serves, certain competitors are present in more than one of those
areas.
- 2 - <PAGE>
<PAGE>
COMPETITION (continued)
Historically, competition for drilling services has been based on four
factors: (1) type and condition of equipment available, (2) location of or
ability to deploy such equipment, (3) quality of service and personnel and (4)
price. In each of the first three areas, management believes that the Company
has for many years ranked at or near the top of the drilling industry. During
the past several years, the prevailing factor in obtaining contracts has been
price due to the surplus of available rigs in the drilling industry. While
willing to bid a day rate that will generate a financial loss on a contract,
the Company is not willing to bid a job on a negative cash flow basis before
local overhead. The Company's patented drilling equipment is a factor in
obtaining certain contracts located in remote and difficult-access locations
and in drilling certain wells requiring specialized equipment.
RESEARCH AND DEVELOPMENT
In response to customers' needs of reducing drilling costs, the Company
has developed a new slim hole drilling and coring rig. The new series of
lighter electric rigs features a two-speed top drive and the Parkomatic
(Registered Trademark) automatic drilling system. Combining technology from
the drilling and mining industries, the Company pioneered continuous wireline
coring in order to allow geological assessments to be made during the drilling
program. The Company has utilized this technology in the performance of
several contracts and actively markets this capability to its customers.
Parker Kinetic engineers and manufactures high-energy pulse power
equipment. Parker Kinetic has developed the homopolar pulse generator, a
machine that stores kinetic energy in a rotor, then rapidly converts that
energy into a high-current electrical pulse. Pulse power can be used for,
among other things, high-speed solid-state welding, sintering and material
compaction, pulsed heating and powering electromagnetic launch devices.
Parker Kinetic continues to refine this technology in order to make it
practical and economically feasible for industrial, scientific and military
applications. With the recent decline in military expenditures by the United
States government, Parker Kinetic has shifted the focus of its research
activities to industrial applications and markets.
Twenty-four employees are involved in research and development. The
costs associated with the Company's research and development efforts are not
significant.
- 3 - <PAGE>
<PAGE>
<TABLE>
EMPLOYEES
At August 31, 1994, the Company employed 2,106 persons, up 18% from the
1,784 employed at August 31, 1993. The following table sets forth the
composition of the Company's employees:
<CAPTION> August 31,
----------------
1994 1993
----- -----
<S> <C> <C>
International Drilling Operations 1,614 1,309
Domestic Drilling Operations 298 262
Corporate and Other Domestic 194 213
</TABLE>
RISKS AND ENVIRONMENTAL CONSIDERATIONS
Certain political and economic risks are inherent in international
operations. These risks include expropriation of equipment, currency rate
fluctuations, foreign currency conversion restrictions and local tax
regulations. The Company minimizes the potential impact of these risks by
operating in several geographical areas and by generally entering contracts
which are denominated in U. S. dollars. Additionally, the Company seeks to
obtain contractual indemnification from operators against certain of these
risks. The Company carries political risk insurance covering its equipment in
most foreign locations.
The United States and various other countries have enacted legislation or
adopted regulations controlling the discharge of materials into the
environment. Such legislation provides for the imposition of penalties and
liabilities, regardless of fault, for hazardous waste discharges. In certain
circumstances, the Department of the Interior is authorized to suspend
operations that threaten to harm life, property or the environment. Under
most of the Company's contracts, the Company is indemnified from environ-
mental damages except in certain cases of surface pollution. The Company
purchases limited pollution insurance to cover costs associated with clean up
of sudden and accidental spills. In those contracts where the Company accepts
liability for pollution caused by its negligence or is not covered by
insurance, the Company's financial exposure is generally restricted to an
acceptable amount in the contract.
The Company believes that it substantially complies with all
environmental legislation and regulations. Compliance with such provisions
and regulations has not had a material effect upon the Company's operations;
however, the effect of any future environmental enactments cannot be
predicted.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company operates principally in one segment, contract drilling
services. Information about the Company's operations by geographic areas for
the three years ended August 31, 1994, is set forth in Note 11 of Notes to
Consolidated Financial Statements.
Item 2. PROPERTIES
The Company owns and occupies a ten-story building in downtown Tulsa,
Oklahoma, as its home office. The Company also owns a five-story office
building in Tulsa purchased as a long-term investment and currently is leasing
it to third parties. Additionally, the Company owns and leases office space
and operating facilities in various locations, but only to the extent
necessary for administrative and operational functions.
- 4 - <PAGE>
<PAGE>
<TABLE>
Item 2. PROPERTIES (continued)
During fiscal 1994, the Company acquired seven international rigs, of
which six are currently under contract in Argentina and one in Colombia. The
Company also decided to dispose of 16 domestic and retired three international
rigs from the rig fleet. The following table shows, as of August 31, 1994,
the locations and drilling depth ratings of the Company's remaining 96 rigs:
<CAPTION>
Drilling Depth Rating in Feet
-------------------------------------------------------------
10,000
or Over
less 15,000 17,000 20,000 25,000 30,000 30,000 TOTAL
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DOMESTIC
Alaska 1 2 3
Central States 3 2 14 1 2 1 23
Rocky Mountains 1 3 6 2 1 13
West Coast 1 1 1 3
-- -- -- -- -- -- -- ---
Total Domestic 1 4 5 22 1 7 2 42
-- -- -- -- -- -- -- ---
INTERNATIONAL
South America 9 2 1 9 2 4 27
Africa, Middle
East and CIS 3 2 1 3 9
Asia Pacific 3 2 2 8 3 18
Total -- -- -- -- -- -- -- ---
International 15 6 4 20 5 4 - 54
-- -- -- -- -- -- -- ---
TOTAL 16 10 9 42 6 11 2 96
== == == == == == == ===
</TABLE>
<TABLE>
The following table sets forth the utilization rates during each of the
previous three years. Rigs disposed of or reclassified as assets held for
sale in fiscal 1994 have been treated as removed from the rig fleet as of the
last day of the fiscal year. Rigs that were disposed of or reclassified as
assets held for sale in fiscal 1992 have been removed from the calculation of
rig utilization for that year. A rig is considered to be utilized when it is
either operating or drawing revenue while being moved or on a standby status.
<CAPTION>
Average Utilization
For the Years Ended
August 31,
--------------------
1994 1993 1992
----- ---- -----
<S> <C> <C> <C>
International Utilization 56% 40% 52%
Domestic Utilization 15% 14% 13%
Overall Utilization 35% 26% 31%
</TABLE>
Item 3. LEGAL PROCEEDINGS
In the opinion of Company counsel, there are no pending legal proceedings
to which the Company is a party that could have a materially adverse effect
upon its business or its financial position.
- 5 - <PAGE>
<PAGE>
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to Parker Drilling Company security
holders during the fourth quarter of fiscal year 1994.
PART II
<TABLE>
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Parker Drilling Company common stock is listed for trading on the New
York Stock Exchange under the symbol PKD. At the close of business on
September 30, 1994, there were 4,916 holders of record of Parker Drilling
common stock. Prices on Parker Drilling's common stock for the fiscal years
ending August 31, 1994 and 1993, were as follows:
<CAPTION>
Fiscal Year 1994 Fiscal Year 1993
---------------- ----------------
Quarter High Low High Low
------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
First $7.750 $5.250 $6.125 $4.625
Second 6.250 4.875 5.750 4.500
Third 6.250 4.875 7.250 5.375
Fourth 6.375 5.375 7.625 6.000
</TABLE>
No dividends have been paid on common stock since February 1987.
Restrictions contained in Parker Drilling's existing credit agreement limit
the payment of cash dividends to the lesser of 40 percent of consolidated net
income for the preceding fiscal year, or $2.6 million. The Company has no
present intention to pay dividends on its common stock in the foreseeable
future because of its business plan to reinvest earnings in the Company's
operations.
- 6 - <PAGE>
<PAGE>
<TABLE>
Item 6. SELECTED FINANCIAL DATA
<CAPTION>
Parker Drilling Company and Subsidiaries
(In Thousands Except Per Share Data)
Years Ended August 31, 1994 1993 1992 1991 1990
- - - -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue $152,424 $100,801 $123,332 $112,818 $108,541
Income (loss)
from continuing
operations before
extraordinary items $(28,806) $(10,687) $(11,166) $ 1,977 $(18,845)
Discontinued
operations:
Income from
operations - - - - 3,489
Gain on disposal - - - 1,184 16,645
Extraordinary items - - - - 5,743
-------- -------- -------- -------- --------
Net income (loss) $(28,806) $(10,687) $(11,166) $ 3,161 $ 7,032
======== ======== ======== ======== ========
Earnings (loss) per
share, primary and
fully diluted:
Income (loss) from
continuing operations
before extraordinary
items $ (.53) $ (.20) $ (.21) $ .04 $ (.37)
Discontinued
operations:
Income from
operations - - - - .07
Gain on disposal - - - .02 .33
Extraordinary items - - - - .11
-------- -------- -------- -------- --------
Net income (loss) $ (.53) $ (.20) $ (.21) $ .06 $ .14
======== ======== ======== ======== ========
Total assets $209,348 $236,342 $245,869 $264,794 $265,384
Long-term debt $ - $ - $ 142 $ 1,907 $ 7,067
Redeemable
preferred stock $ - $ - $ 157 $ 315 $ 473
</TABLE>
- 7 - <PAGE>
<PAGE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
During fiscal 1994, cash and short-term investments decreased $29.5
million. The decline was caused by the Company financing capital expenditures
of $34.8 million primarily with existing cash and short-term investments.
The Company's operating activities provided $1.0 million of cash in
fiscal 1994, a decline of $12.8 million from fiscal 1993. The decline was
caused by an increase in the Company's working capital, particularly accounts
receivable. Proceeds from the sale of property, plant and equipment included
$2.2 million from the sale of an airplane and $1.2 million of insurance
proceeds for damages to an international rig, which occurred during a blowout.
Capital expenditures increased $16.0 million to a total of $34.8 million
in fiscal 1994. Significant capital expenditures during fiscal 1994 included
$19.3 million to acquire and modify seven international drilling rigs. Six of
the rigs are currently under contract in Argentina and the seventh is
operating in Colombia for a major customer. The increase in capital spending
over fiscal 1993 reflects the increase in international drilling activity
experienced by the Company during fiscal 1994. Capital expenditures in fiscal
1995 are forecast to be $14.0 million, $8.0 million of which is primarily to
maintain current operations. In the event the Company obtains additional
contracts that require the purchase or construction of new or specialized
rigs, or significant modifications to existing rigs, capital expenditures
could increase further. Any significant increase in capital expenditures
would be subject to any restrictions imposed on the Company as specified
below.
The Company had a credit agreement ("Agreement") with two banks which
provided for a $15.0 million revolving credit facility through September 1,
1994. The Agreement was amended in the third quarter of fiscal 1994 to extend
$7.5 million of the revolving credit facility through March 1, 1996. All of
the credit facility was available for drawdown as of August 31, 1994. The
Agreement contains restrictions on annual capital expenditures and certain
senior and subordinated indebtedness which can be incurred by Parker Drilling
Company and certain subsidiaries designated in the Agreement. These
designated subsidiaries comprise the operating subsidiaries through which the
Company performs the majority of its drilling operations. The credit facility
also limits payment of dividends on the Company's common stock to the lesser
of 40 percent of consolidated net income for the preceding fiscal year, or
$2.6 million. The remaining subsidiaries of the Company are not a party to
the credit facility and are able to make capital expenditures and obtain
independent financing from lenders that have no recourse to Parker Drilling
Company and the designated subsidiaries, subject only to an overall limitation
of indebtedness.
The restrictions in the Agreement are not anticipated to restrict growth
or investment opportunities in the foreseeable future.
Management believes that the current level of cash and short-term
investments, together with cash generated from operations, should be
sufficient to meet the Company's immediate capital needs. However, in the
event the Company obtains additional contracts requiring further significant
capital expenditures or acquires equipment or companies in the drilling
service industry, management believes the Company would likely meet both
short-term and long-term capital needs through a combination of cash generated
from operations, borrowings under the bank credit agreement and either equity
or long-term debt financing.
- 8 -<PAGE>
<PAGE>
RESULTS OF OPERATIONS 1994 VS. 1993
The fiscal 1994 net loss of $28.8 million represents an increase in net
loss of $18.1 million from fiscal 1993. However, excluding the provision for
reduction in carrying value of certain assets of $19.7 million recognized in
fiscal 1994, the net loss improved $1.6 million from fiscal 1993 to fiscal
1994. The primary reasons for the improvement were an increase in drilling
margins of $5.3 million, partially offset by increases in depreciation expense
of $1.6 million and income tax expense of $2.2 million.
During the fourth quarter of fiscal 1994, management analyzed its
domestic operations and made the strategic decision to reorganize certain of
these operations and sell certain of these assets. In Alaska, the Company
intends to look for opportunities to joint venture or combine operations with
other drilling companies in order to lower operating and administrative costs.
As a result, the Company reduced the carrying value of certain assets in
Alaska, including rigs, spare parts and property that will be sold. The
Company's Partech (Registered Trademark) manufacturing operations are being
downsized by the sale of land, buildings, equipment and excess inventories,
and accordingly, the Company has written down to net realizable value certain
drilling equipment, property and inventories that will be disposed. In the
Lower-48 divisions, the Company intends to dispose of a number of mechanical
rigs and certain rig equipment which also have been written down to net
realizable value. Write-offs relating to the Lower-48 and Alaska rigs have
resulted in the removal of 16 rigs from Parker's fleet. Aggregating the items
described above, the Company recorded a $19.7 million provision during the
fourth quarter of fiscal 1994.
Drilling revenue increased by $50.8 million as utilization of the
Company's international rig fleet increased from 40% in fiscal 1993 to 56% in
fiscal 1994. Domestic rig utilization increased slightly from 14% to 15%.
(Rigs disposed of or reclassified as assets held for sale in fiscal 1994 have
been treated as removed from the rig fleet as of the last day of the fiscal
year.)
Western Hemisphere international drilling revenue increased $21.1 million
from fiscal 1993 to fiscal 1994. Revenue from the country of Argentina
increased $18.5 million as the Company re-entered the Argentina drilling
market during the fourth quarter of fiscal 1993. Currently, the Company has
eleven shallow to medium-depth rigs and one deep drilling rig in Argentina.
Ten of these rigs were under contract during fiscal 1994. In Colombia,
revenue increased $2.7 million in fiscal 1994 as the Company engaged in more
deep drilling at higher day rates when compared to fiscal 1993. Management
anticipates Western Hemisphere international operations will continue to be a
growth market for the Company in fiscal 1995.
International drilling revenue from operations in Asia and the Pacific
increased $20.9 million in fiscal 1994. The primary reasons for the increase
were the resumption of operations in Pakistan during the first quarter of
fiscal 1994, and the operation of two geothermal rigs in the Philippines, a
new market for the Company in fiscal 1994. Also contributing to the increase
in drilling revenue was an increase in utilization in Papua New Guinea during
fiscal 1994. Management anticipates revenue from this region will decline
slightly in fiscal 1995.
- 9 -<PAGE>
<PAGE>
RESULTS OF OPERATIONS 1994 VS. 1993 (continued)
Drilling revenue from operations in Africa, the Middle East and CIS
increased $9.6 million in fiscal 1994. During the fourth quarter of fiscal
1993, the Company began operating in the country of Kazakhstan under a labor
contract for a major customer. Revenue from operations in Kazakhstan
increased $6.8 million in fiscal 1994. In the Russian Republic an increase in
operating days for two workover rigs generated an additional $2.3 million in
revenue in fiscal 1994 versus fiscal 1993. In Africa, a decline in revenue
from decreased utilization in Chad was offset by revenue from a one-rig
contract in Congo. The Congo contract was completed in fiscal 1994 and the
rig has been redeployed to the Argentina market. In the second half of fiscal
1994, the Company's major customer in Kazakhstan curtailed its involvement in
that country pending settlement of an oil export pipeline situation. It is
anticipated that this development, combined with a forecasted decline in
utilization in Chad and the Russian Republic, will cause revenue from this
region to decline in fiscal 1995.
Domestic drilling revenue declined slightly in fiscal 1994 compared to
fiscal 1993. An increase in utilization in the continental United States
could not completely offset the loss of revenue from the Company's specialized
arctic drilling rig, which was released late in the third quarter of fiscal
1994. Management forecasts this rig will begin operations again in the second
quarter of fiscal 1995. Management anticipates that domestic utilization and
revenue in fiscal 1995 will approximate fiscal 1994 levels.
Although drilling revenue increased $50.8 million in fiscal 1994 versus
fiscal 1993, drilling margins (drilling revenue less drilling expense) did not
increase proportionately. Drilling margins in Colombia declined due to
increased operating expenses and costs associated with the start-up of two
rigs. In Argentina, the initial startup costs of entering a new market and
putting ten newly acquired rigs to work negatively impacted drilling margins.
Additionally, during this transition period the Company encountered drilling
problems which resulted in slower-than-expected drilling progress on some of
the footage rate contracts. Management is taking steps to resolve the
drilling problems and reduce operating expenses in these countries.
Depreciation expense increased $1.6 million in fiscal 1994, the result of
an increase in capital spending during 1994. Based on forecasted capital
expenditures of $14.0 million in fiscal 1995, management anticipates
depreciation expense in fiscal 1995 will remain consistent with fiscal 1994.
Other income (expense) increased $.6 million in fiscal 1994 compared to
fiscal 1993. Interest income, net of interest expense, decreased $.5 million
due to the decline in cash and short-term investments during fiscal 1994.
Other income in fiscal 1994 included a $1.0 million gain recognized when
proceeds from an insurance settlement exceeded the book value of equipment
damaged in connection with a blowout on an international rig. Fiscal 1994
other income also included the reversal of a prior year foreign payroll tax
accrual totalling $1.5 million. Offsetting this income in fiscal 1994, was a
$2.6 million charge for the settlement of litigation. (See Note 12 of the
Notes to Consolidated Financial Statements.) Fiscal 1993 other expense
included a $.9 million adjustment of a prior year's workers' compensation
liability. Income tax expense increased $2.2 million primarily because of an
increase in international drilling activity, which resulted in an increase in
current tax expense.
- 10 -<PAGE>
<PAGE>
RESULTS OF OPERATIONS 1993 VS. 1992
The fiscal 1993 net loss of $10.7 million represented a $.5 million
improvement over fiscal 1992's $11.2 million loss. However, excluding the
provision for reduction in carrying value of certain assets of $19.3 million
recognized in fiscal 1992, net income (loss) declined $18.8 million from
fiscal 1992 to fiscal 1993. The primary reasons for the decline were a
decrease in drilling margins of $14.4 million and a decrease in other income
of $3.0 million, offset by a decrease in income tax expense (benefit) of $3.1
million. Fiscal 1992 also included a gain on settlement of $4.0 million.
In fiscal 1993, utilization of the Company's international rig fleet
decreased to 40% compared with 52% in fiscal 1992. This was the primary
reason for a drop in drilling revenue of $19.4 million in fiscal 1993.
Domestic utilization increased slightly from 13% in fiscal 1992 to 14% in
fiscal 1993.
Western Hemisphere international drilling revenue in fiscal 1993 remained
consistent with fiscal 1992. Increased utilization in Ecuador and
commencement of operations in Argentina during the fourth quarter of fiscal
1993 offset revenue losses from decreased utilization in Peru and the
cessation of drilling operations in fiscal 1992 of a subsidiary operating in
Canada. (This subsidiary was sold during the third quarter of fiscal 1993.
See Note 4 of Notes to Consolidated Financial Statements.)
International drilling revenue from operations in Asia and the Pacific
declined $17.1 million in fiscal 1993 due to decreased utilization in the
countries of Myanmar, Pakistan and Papua New Guinea.
Drilling revenue from operations in Africa, the Middle East and CIS
declined a combined $5.8 million in fiscal 1993. Revenue from operations in
the Russian Republic declined $8.9 million due primarily to the termination in
the second quarter of fiscal 1992 of a three-rig contract, partially offset by
revenue from two workover rigs which began operating in the fourth quarter of
fiscal 1993. Revenue from Africa increased $2.9 million as revenue from
increased utilization in Chad more than offset the loss of revenue from the
completion during fiscal 1992 of a one-rig contract in the Congo.
Domestic drilling revenue increased $3.7 million due primarily to a full
year's operation in fiscal 1993 of the Company's specialized arctic rig.
Utilization in the Lower-48 states and Hawaii remained consistent with fiscal
1992.
Other revenue declined $3.2 million due to a decrease in engineering
services provided by the Company's subsidiary Parker Kinetic to the United
States Army and Air Force, partially offset by increased outside sales by the
Company's manufacturing subsidiary, Partech (Registered Trademark).
Drilling profit margin (drilling revenue less drilling expense) declined
$14.4 million from fiscal 1992 to fiscal 1993. The decline was primarily the
result of a decrease in activity in some of the more profitable international
markets of the Russian Republic and Myanmar.
Depreciation expense in fiscal 1993 remained consistent with fiscal 1992.
General and administrative expense declined $.8 million due primarily to
termination benefits paid in fiscal 1992.
- 11 - <PAGE>
<PAGE>
RESULTS OF OPERATIONS 1993 VS. 1992 (continued)
Other income and (expense) declined $7.3 million in fiscal 1993 compared
to fiscal 1992. Interest income, net of interest expense, remained consistent
in fiscal 1993 with fiscal 1992. Other expense in fiscal 1993 included a $.9
million adjustment of a prior year's workers' compensation liability. Fiscal
1992 included a $1.4 million gain recognized when proceeds from an insurance
settlement exceeded the book value of equipment lost and associated expenses
in connection with a blowout which occurred while drilling a well in Wyoming.
Fiscal 1992 also included a $4.0 million gain from a settlement with a major
oil and gas producer. (See Note 5 of Notes to Consolidated Financial
Statements for a description of the settlement.) Income tax expense
(benefit) improved $3.1 million primarily because of a decrease in
international drilling activity which resulted in a decrease in current tax
expense and the reversal of deferred tax liabilities in the current year.
OTHER MATTERS
Internationally, the Company specializes in drilling in remote locations
and under difficult geological or operating conditions. The Company's
international services are primarily utilized by international and national
oil companies in the exploration and development of reserves of oil.
Domestically, the Company specializes in drilling deep wells in search of
natural gas. Business activity is dependent on the exploration and
development activities of the major, independent and national oil and gas
companies that make up the Company's customer base. Generally, temporary
fluctuations in oil and gas prices do not materially affect these companies'
exploration and development activities, and consequently do not materially
affect the operations of the Company. However, sustained increases or
decreases in oil and natural gas prices could have an impact on customers'
long-term exploration and development activities which in turn could
materially affect the Company's operations. Generally, a sustained change in
the price of oil would have a greater impact on the Company's international
operations while a sustained change in the price of natural gas would have a
greater effect on domestic operations. Weak prices for natural gas have
resulted in depressed markets for domestic drilling services over the past
decade.
Historically, due to the importance of oil revenue to most of the
countries in which the Company operates, the Company's operations generally
have not been negatively impacted by adverse economic and political
conditions. However, there can be no assurances that such conditions could
not have a material adverse effect in the future.
- 12 - <PAGE>
<PAGE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Parker Drilling Company
We have audited the consolidated financial statements and financial
statement schedules of Parker Drilling Company and subsidiaries as listed in
Item 14(a)(1) and (2) of the Form 10-K. These financial statements and
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Parker Drilling Company and subsidiaries as of August 31, 1994 and 1993, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended August 31, 1994, in conformity with
generally accepted accounting principles. In addition, in our opinion, the
financial statement schedules referred to above, when considered in relation
to the basic financial statements taken as a whole, present fairly, in all
material respects, the information required to be included therein.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
October 18, 1994
- 13 - <PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands Except Earnings (Loss) Per Share
and Weighted Average Shares Outstanding)
For the Years Ended August 31, 1994 1993 1992
- - - -----------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue:
Drilling contracts $147,480 $ 96,719 $116,082
Other 4,944 4,082 7,250
-------- -------- --------
152,424 100,801 123,332
-------- -------- --------
Operating expense:
Drilling 114,732 69,237 74,196
Other 6,563 5,951 8,007
Depreciation, depletion
and amortization 21,950 20,400 20,550
General and administrative (Note 2) 18,314 17,593 18,385
Provision for reduction in carrying
value of certain assets (Note 3) 19,718 - 19,257
-------- -------- --------
181,277 113,181 140,395
-------- -------- --------
Operating income (loss) (28,853) (12,380) (17,063)
-------- -------- --------
Other income and (expense):
Interest expense (11) (53) (361)
Interest income 1,161 1,729 1,953
Minority interest (135) 149 596
Other 919 (469) 2,538
Gain on settlement (Note 5) - - 3,966
-------- -------- --------
1,934 1,356 8,692
-------- -------- --------
Income (loss) before income taxes (26,919) (11,024) (8,371)
-------- -------- --------
Income tax expense (benefit) 1,887 (337) 2,795
-------- -------- --------
Net income (loss) $(28,806) $(10,687) $(11,166)
======== ======== ========
Earnings (loss) per share,
primary and fully diluted $ (.53) $ (.20) $ (.21)
======== ======== ========
Weighted average shares
outstanding (fully diluted) 54,247,664 53,082,078 52,115,038
========== ========== ==========
The accompanying notes are an integral part
of the consolidated financial statements.
- 14 -
/TABLE
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
August 31, 1994 1993
- - - -----------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 10,660 $ 12,570
Other short-term investments 3,811 31,419
Accounts and notes receivable, net of
allowance for bad debts of $826 in
1994 and 1993 34,675 23,353
Rig materials and supplies 9,117 10,970
Other current assets 4,029 2,793
-------- --------
Total current assets 62,292 81,105
-------- --------
Property, plant and equipment, at cost:
Drilling equipment 538,025 550,239
Buildings, land and improvements 14,270 22,029
Other 24,399 28,059
Construction in progress 5,247 11,465
-------- --------
581,941 611,792
Less accumulated depreciation, depletion
and amortization 454,763 472,466
-------- --------
Net property, plant and equipment 127,178 139,326
-------- --------
Rig materials and supplies 9,127 7,969
-------- --------
Deferred charges and other assets:
Assets held for disposition (Note 3) 3,518 361
Notes receivable, net of allowance of
$224 in 1994 and $391 in 1993 2,871 2,871
Other 4,362 4,710
-------- --------
Total deferred charges and other assets 10,751 7,942
-------- --------
Total assets $209,348 $236,342
======== ========
The accompanying notes are an integral part
of the consolidated financial statements.
- 15 -
</TABLE>
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
<CAPTION>
August 31, 1994 1993
- - - ------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,233 $ 5,915
Accrued liabilities 7,336 9,646
Accrued income taxes 5,053 5,291
-------- --------
Total current liabilities 21,622 20,852
-------- --------
Deferred income tax (Note 7) 294 1,198
-------- --------
Other long-term liabilities 3,596 3,495
-------- --------
Minority interest 3,253 3,118
-------- --------
Commitments and contingencies (Note 12)
Stockholders' equity:
Common stock, $.16 2/3 par value,
authorized 70,000,000 shares, issued
and outstanding 55,112,749 shares
(54,985,768 shares in 1993) 9,185 9,164
Capital in excess of par value 202,403 201,784
Retained earnings (accumulated deficit) (28,307) 499
Other (2,698) (3,768)
-------- --------
Total stockholders' equity 180,583 207,679
-------- --------
Total liabilities and stockholders' equity $209,348 $236,342
======== ========
The accompanying notes are an integral part
of the consolidated financial statements.
- 16 -
/TABLE
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
For the Years Ended August 31, 1994 1993 1992
- - - ------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(28,806) $(10,687) $(11,166)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion and
amortization 21,950 20,400 20,550
Loss (gain) on disposition of
property, plant and equipment (2,083) (852) (2,575)
Provision for reduction in carrying
value of certain assets 19,718 - 19,257
Deferred tax expense (benefit) (904) (1,431) 868
Amortization of deferred compensation
and other 2,490 5,197 2,998
Change in assets and liabilities:
Accounts and notes receivable (10,889) 2,305 (598)
Rig materials and supplies (313) 1,696 (1,374)
Other current assets (1,356) (1,934) 147
Accounts payable and accrued
liabilities 1,109 573 (4,025)
Accrued income taxes (238) (1,349) 181
Minority interest 135 (149) (595)
Other assets 137 (48) 117
-------- -------- --------
Net cash provided by operating
activities 950 13,721 23,785
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of property,
plant and equipment 4,740 7,150 6,018
Capital expenditures (34,764) (18,717) (27,967)
Proceeds from sale of a subsidiary - 2,353 -
Decrease (increase) in other short-term
and long-term investments 27,608 (7,388) (8,521)
Other (140) (177) (274)
-------- -------- --------
Net cash provided by (used in)
investing activities (2,556) (16,779) (30,744)
-------- -------- --------
The accompanying notes are an integral part
of the consolidated financial statements.
- 17 -
/TABLE
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(continued)
(Dollars in Thousands)
For the Years Ended August 31, 1994 1993 1992
- - - ------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under debt
obligations $ - $ (777) $ (6,184)
Repurchase of common stock (304) (384) (435)
Proceeds from exercise of stock warrant - 4,320 -
Other - (819) (215)
-------- -------- --------
Net cash provided (used) by financing
activities (304) 2,340 (6,834)
-------- -------- --------
Net increase (decrease) in cash and
cash equivalents (1,910) (718) (13,793)
Cash and cash equivalents at beginning
of year 12,570 13,288 27,081
-------- -------- --------
Cash and cash equivalents at
end of year $ 10,660 $ 12,570 $ 13,288
======== ======== ========
Supplemental disclosures of cash
flow information:
Cash paid during the year for:
Interest $ 11 $ 47 $ 416
Income taxes $ 3,029 $ 2,361 $ 1,746
The accompanying notes are an integral part
of the consolidated financial statements.
- 18 -
/TABLE
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
Consolidated Statement of Redeemable Preferred
Stock and Stockholders' Equity
(Dollars in Thousands)
<CAPTION>
Other
--------------------------
Redeemable Capital Retained Unearned
preferred in excess earnings Currency restricted
stock Common of par (accumulated translation stock plan
Series C stock value deficit) adjustment compensation
--------- ------ --------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balances, August 31, 1991 $ 315 $8,753 $190,198 $22,376 $(383) $(1,862)
Redemption of preferred stock (158)
Activity in employees' stock plans 264 7,692 (4,882)
Acquisition of stock from certain
employees (12) (423)
Net income (loss) (11,166)
Cash dividends on preferred stock -
$.75 per share (18)
Cumulative foreign exchange
translation adjustments (356)
----- ------ -------- -------- ----- -------
Balances, August 31, 1992 157 9,005 197,467 11,192 (739) (6,744)
Redemption of preferred stock (157)
Activity in employees' stock plans 16 524 2,976
Acquisition of stock from certain
employees (11) (373)
Issuance of 925,000 common shares
upon exercise of a warrant
at $4.67 per share 154 4,166
Net income (loss) (10,687)
The accompanying notes are an integral part of the consolidated financial statements.
- 19 -
</TABLE>
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
Consolidated Statement of Redeemable Preferred
Stock and Stockholders' Equity
(Dollars in Thousands)
(continued)
<CAPTION>
Other
--------------------------
Redeemable Capital Retained Unearned
preferred in excess earnings Currency restricted
stock Common of par (Accumulated translation stock plan
Series C stock value deficit) adjustment compensation
--------- ------ --------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Cash dividends on preferred stock -
$.75 per share (6)
Currency translation adjustments assoc-
iated with assets of subsidiary sold 866
Cumulative foreign exchange
translation adjustments (127)
----- ------ -------- -------- ----- -------
Balances, August 31, 1993 - 9,164 201,784 499 - (3,768)
Activity in employees' stock plans 28 916 1,070
Acquisition of stock from certain
employees (7) (297)
Net income (loss) (28,806)
----- ------ -------- -------- ----- -------
Balances, August 31, 1994 $ - $9,185 $202,403 $(28,307) $ - $(2,698)
===== ====== ======== ======== ===== =======
The accompanying notes are an integral part of the consolidated financial statements.
- 20 -
</TABLE>
<PAGE>
<PAGE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Summary of Significant Accounting Policies
Consolidation - The consolidated financial statements include the
accounts of Parker Drilling Company ("Parker Drilling") and all of its
majority-owned subsidiaries (collectively, the "Company").
Drilling Contracts - The Company recognizes revenue and expenses on day
rate contracts as the drilling progresses (percentage-of-completion method)
because the Company does not bear the risk of completion of the well. For
footage contracts, the Company recognizes the revenue and expenses upon
completion of the well (completed-contract method).
Cash and Cash Equivalents - For purposes of the balance sheet and the
statement of cash flows, the Company considers cash equivalents to be all
highly liquid debt instruments that had a remaining maturity of three months
or less at the date of purchase.
Other Short-term Investments - Other short-term investments include
primarily certificates of deposit, U. S. government securities and commercial
paper having remaining maturities of greater than three months at the date of
purchase and are stated at the lower of cost or market.
Property, Plant and Equipment - The Company provides for depreciation of
property, plant and equipment primarily on the straight-line method over the
estimated useful lives of the assets after provision for salvage value. When
properties are retired or otherwise disposed of, the related cost and
accumulated depreciation are removed from the accounts and any gain or loss is
included in operations. Management periodically evaluates the Company's
assets to determine if they are not in excess of their net realizable value.
Management considers a number of factors such as estimated future cash flows,
appraisals and current market value analysis in determining net realizable
value. Assets are written down to reflect any decrease in net realizable
value below their net carrying value (See Note 3).
Rig Materials and Supplies - Since the Company's foreign drilling
generally occurs in remote locations, making timely outside delivery of spare
parts unlikely, a complement of parts and supplies is maintained for each rig
either at the drilling site or in warehouses close to the operations. During
periods of high rig utilization, these parts are generally consumed and
replenished within a one-year period. During a period of lower rig
utilization in a particular location, the parts, like the related idle rigs,
are generally not transferred to other foreign locations until new contracts
are obtained because of the significant transportation costs which would
result from such transfers. The Company classifies those parts which are not
expected to be utilized in the following year as long-term assets.
Income Taxes and Change in Accounting Policy - During fiscal 1993, the
Company adopted Statement of Financial Accounting Standards (SFAS) No. 109:
Accounting for Income Taxes. Prior to the change the Company followed SFAS
No. 96: Accounting for Income Taxes. Similar to SFAS No. 96, SFAS No. 109
utilizes the liability method and deferred income taxes (assets) are recorded
to reflect the expected tax consequences in future years of differences
between the tax basis of assets and liabilities and their financial reporting
amounts at each year end. The change in this accounting policy had no effect
upon net income for the year ended August 31, 1993.
- 21 - <PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1 - Summary of Significant Accounting Policies (continued)
Earnings (Loss) Per Share - Earnings (loss) per share is computed by
dividing net income (loss), as adjusted for dividends on preferred stock, by
the weighted average number of common shares outstanding during the period.
Common shares issued under the 1969 Key Employees Stock Grant Plan, 1980
Incentive Career Stock Plan and the 1991 Stock Grant Plan are not considered
outstanding shares until the restrictions lapse. However, they are considered
common stock equivalents.
Concentrations of Credit Risk - Financial instruments which potentially
subject the Company to concentrations of credit risk consist primarily of
trade receivables with a variety of national and international oil and natural
gas companies. The Company generally does not require collateral on its trade
receivables. Such credit risk is considered by management to be limited due
to the large number of customers comprising the Company's customer base. The
Company places substantially all its interest-bearing investments with major
financial institutions and, by policy, limits the amount of credit exposure to
any one financial institution. At August 31, 1994, the Company had deposits
in domestic banks in excess of federally insured limits by approximately $.4
million. In addition, the Company had deposits in foreign banks of $4.1
million which are not federally insured.
Fair Market Value of Financial Instruments - The carrying amount of the
Company's cash and short-term investments approximates fair value because of
the short maturity of those instruments.
Note 2 - Reclassification of General and Administrative Expense
During fiscal 1994, the Company reviewed the classifications under which
peer companies report results of operations. In order to enhance
comparability, the Company reclassified division office expenses of the
following amounts from general and administrative expense to either drilling
or other operating expense: 1994 - $9,327,000; 1993 - $8,812,000; and 1992 -
$9,892,000.
Note 3 - Provision for Reduction in Carrying Value of Certain Assets
During the fourth quarter of fiscal 1994, management analyzed its
domestic operations and made the strategic decision to reorganize certain of
these operations and sell certain of these assets. In Alaska, the Company
intends to look for opportunities to joint venture or combine operations with
other drilling companies in order to lower operating and administrative costs.
As a result, the Company reduced the carrying value of certain assets in
Alaska, including rigs, spare parts and property that will be sold. The
Company's Partech (Registered Trademark) manufacturing operations are being
downsized by the sale of land, buildings, equipment and excess inventories,
and accordingly, the Company has written down to net realizable value certain
drilling equipment, property and inventories that will be disposed. In the
Lower-48 divisions, the Company intends to dispose of a number of mechanical
rigs and certain rig equipment which also have been written down to net
realizable value. Write-offs relating to the Lower-48 and Alaska rigs have
resulted in the removal of 16 rigs from Parker's fleet. Aggregating the items
described above, the Company recorded a $19,718,000 provision during the
fourth quarter of fiscal 1994.
- 22 - <PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 3 - Provision for Reduction in Carrying Value of Certain Assets
(continued)
During the fourth quarter of fiscal 1992, management evaluated the
Company's assets and operations with the intent of reducing future operating
costs and disposing of non-performing assets. As a result of this evaluation,
management decided to dispose of certain rig components and rig materials and
supplies. The Company recorded a $19,257,000 provision to reduce the carrying
value of these rig components and rig materials and supplies to their net
realizable value, and reduced its rig fleet by 16 rigs, 14 domestic and two
international.
Note 4 - Sale of a Subsidiary
On April 30, 1993, the Company sold its entire equity interest in a
subsidiary operating in Canada. The Company received $2,271,000 in cash and
notes receivable valued at $688,000. Under the terms of the agreement the
Company is entitled to receive a portion of the proceeds from the disposition
of certain remaining assets of the subsidiary. The book value of the
Company's investment in the subsidiary approximated the total sales price and,
consequently, no gain or loss from the sale was recorded.
Note 5 - Gain on Settlement
During fiscal 1987, the Company provided contract drilling services and
financed the development of a series of wells for a major oil and gas
operator. The Company was to be paid from the proceeds of producing wells.
Due to the uncertainty of future production from these wells the Company
deferred recognition of any drilling profit or subsequent interest income
until all its costs were recovered. At November 30, 1991, approximately
$134,000 in costs had yet to be recovered. In December 1991, the Company
agreed to a settlement with the operator whereby the Company received
$4,100,000 cash in final payment. Due to the Company's decision to defer
recognition of revenue until recovery of all costs, the Company recognized
$3,966,000 of income during the second quarter of fiscal 1992.
Note 6 - Long-term Debt
During fiscal 1993 and 1994 the Company had available a $15,000,000
revolving credit facility which was to expire September 1, 1994. In the third
quarter of fiscal 1994 the Company entered into an amendment to its Credit
Agreement. The amendment extends $7,500,000 of the $15,000,000 revolving
credit facility from September 1, 1994 through March 1, 1996. Interest on the
revolving credit facility is at prime plus 3/4 of one percent and commitment
fees on the unused credit facility are 1/2 of one percent. The facility
requires, among other things, maintenance of minimum working capital and
restricts capital expenditures and creation of additional indebtedness. Under
this agreement, the payment of dividends on the Company's common stock is
limited to the lesser of 40 percent of consolidated net income for the
preceding fiscal year or $2,600,000.
- 23 - <PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
<TABLE>
Note 7 - Income Taxes
Income (loss) before income taxes (in thousands) is summarized as
follows:
<CAPTION>
Years Ended August 31,
-------------------------------------
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
United States $(33,929) $(11,318) $(13,925)
Foreign 7,010 294 5,554
-------- -------- --------
$(26,919) $(11,024) $ (8,371)
======== ======== ========
</TABLE>
<TABLE>
Income tax expense (benefit) (in thousands) is summarized as follows:
<CAPTION>
Years Ended August 31,
-------------------------------------
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Current:
United States:
Federal $ - $ (110) $ 265
State (246) 6 (225)
Foreign 3,037 1,198 1,887
Deferred:
United States:
Federal (326) - 324
State - - -
Foreign (578) (1,431) 544
------ ------- ------
$1,887 $ (337) $2,795
====== ======= ======
</TABLE>
During fiscal 1993, the Company adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 109: Accounting for Income Taxes.
SFAS No. 109 requires recognition of deferred tax liabilities and assets for
the expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the difference between the
financial statement and tax basis of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.
The source of these temporary differences causing deferred tax liabilities
results from differences attributable to depreciation of property, plant and
equipment.
- 24 - <PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
<TABLE>
Note 7 - Income Taxes (continued)
Total income tax expense (benefit) differs from the amount computed by
multiplying income (loss) before income taxes by the U.S. federal income tax
statutory rate. The reasons for this difference (dollars in thousands) are as
follows:
<CAPTION>
Years Ended August 31,
------------------------------------------------------
1994 1993 1992
--------------- --------------- ---------------
% of % of % of
pretax pretax pretax
income income income
Amount (loss) Amount (loss) Amount (loss)
--------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Computed expected tax
expense (benefit) $(9,153) (34%) $(3,748) (34%) $(2,846) (34%)
Prior years tax
settlement - - - - (225) (3%)
Foreign tax at rates
different than U.S. 76 - (333) (3%) 542 6%
Limitation on recogni-
tion of tax benefit<F1> 11,536 43% 3,848 35% 4,503 54%
Alternative minimum tax - - - - 589 7%
Other (572) (2%) (104) (1%) 232 3%
------- ---- ------- ---- ------- ----
Actual tax expense
(benefit) $1,887 7% $ (337) (3%) $ 2,795 33%
======= ==== ======= ==== ======= ====
<FN>
<F1>
Represents an increase in the valuation allowance.
</FN>
</TABLE>
<TABLE>
The components of the Company's tax assets and (liabilities) as of August
31, 1994, are shown below (dollars in thousands):
<CAPTION>
<S> <C>
Domestic:
Deferred tax assets:
Net operating loss and tax credit carryforwards $67,379
Reserves established against realization of certain assets 1,455
Accruals not deducted for tax purposes 4,561
Depreciation of property, plant and equipment 8,913
-------
82,308
Deferred tax liabilities:
Depreciation of property, plant and equipment (13,503)
-------
Net deferred tax asset 68,805
Valuation allowance (68,805)
-------
-
Foreign: =======
Depreciation of property, plant and equipment 294
-------
Deferred tax liability $ 294
=======
</TABLE> - 25 -<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 7 - Income Taxes (continued)
At August 31, 1994, the Company had $137,800,000 net operating loss
carryforwards for tax purposes which expire over a fifteen year period
beginning 2000. In addition, the Company had $13,600,000 investment tax
credit carryforwards for tax purposes which expire over a fifteen year period
beginning 1997.
Note 8 - Redeemable Preferred Stock
In January 1984, the Company began redeeming annually one-tenth of the
$.75 cumulative Series C preferred stock shares then outstanding and completed
the redemption in January 1993.
Note 9 - Common Stock and Stock Options
The Company's 1969 Key Employees Stock Grant Plan (formerly the 1969 Key
Employees Stock Option Plan) was amended in December 1990 to provide for the
issuance of 223,000 shares of common stock for no cash consideration to key
non-officer employees. Each employee receiving a grant of shares may dispose
of 15 percent of his/her grant on each annual anniversary date from the date
of grant for the first four years. On the fifth year anniversary, the
employee may dispose of the remaining 40 percent of his/her grant. No shares
were granted and no shares were cancelled in fiscal 1994 and 1993. At August
31, 1994 there were no shares reserved for issuance or available for granting.
The Company's 1980 Incentive Career Stock Plan ("1980 Plan") provides for
the issuance of 2,100,000 shares of common stock for no cash consideration to
key employees. Each employee receiving a grant of shares may dispose of 15
percent of his/her grant on each annual anniversary date from the date of
grant for the first four years. On the fifth year anniversary, the employee
may dispose of the remaining 40 percent of his/her grant. No shares were
granted and no shares were cancelled in fiscal 1994 and 1993. There were 2,750
shares reserved for issuance and available for granting at August 31, 1994.
The Company's 1991 Stock Grant Plan ("1991 Plan") provides for the
issuance to officers and key employees of up to 3,160,000 shares of common
stock for no cash consideration. Shares granted under the 1991 Plan are fully
vested no earlier than 24 months from the effective date of the grant and not
later than 36 months. The specific vesting schedule for each grant is
determined at the time of grant. During fiscal 1994, 45,000 shares were
granted. There were no shares granted in fiscal 1993. As of August 31, 1994,
there were 2,125,195 shares reserved for issuance and available for granting.
The fair market value of the common stock at date of grant for the Plans
is recorded as deferred compensation and amortized to expense over the period
during which the restrictions lapse. Deferred compensation is shown as a
deduction from stockholders' equity.
During fiscal 1994, 1993 and 1992, the Company purchased 41,638, 64,173
and 74,200 Parker Drilling shares, respectively, from certain of its employees
who had received stock grants under the 1991 and 1980 Plans. The Company
acquired the shares at the market price (weighted average price was $7.31 per
share in fiscal 1994, $5.98 per share in fiscal 1993 and $5.87 per share in
fiscal 1992). The proceeds were used to pay the employees' tax withholding
obligations arising from the vesting of shares under the Plans.
- 26 -<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
<TABLE>
Note 9 - Common Stock and Stock Options (continued)
The following is a summary of common stock reserved for issuance at
fiscal year end:
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
Key employee stock plans 2,127,945 2,172,945
Stock Bonus Plan 79,867 43,486
Warrants<F1> 400,000 400,000
--------- ---------
Total shares reserved for issuance 2,607,812 2,616,431
========= =========
<FN>
<F1>
Warrants for 400,000 shares are exercisable at $3.88 per share, subject to
certain adjustments, no later than October 24, 1995.
</FN>
</TABLE>
Note 10 - Employee Benefit Plans
The Parker Drilling Company Stock Bonus Plan ("Plan") was adopted
effective September 1980 for employees of Parker Drilling and its subsidiaries
who are U.S. citizens and who have completed one year of service with the
Company. It was amended in 1983 to qualify as a 401(k) plan under the
Internal Revenue Code which permits a specified percentage of an employee's
salary to be voluntarily contributed on a before-tax basis and to provide for
a Company matching feature. Participants may contribute from one percent to
15 percent of eligible earnings and direct contributions to one or more of
seven investment funds. The Company presently makes dollar-for-dollar
matching contributions up to three percent of a Participant's compensation.
The Company's matching contribution is made in Parker Drilling common stock.
The Plan was amended in 1989 to change the vesting schedule to no percent
vesting if a Participant has less than five years of service and 100 percent
vesting if a Participant has five or more years of service. Each Plan year,
Company contributions can be made, at the discretion of the Board of
Directors, in amounts not exceeding the permissible deductions under the
Internal Revenue Code. The Company issued 123,619 shares to the Plan in 1994,
95,177 shares in 1993 and 81,899 shares in 1992.
- 27 -<PAGE>
<PAGE>
<TABLE>
Note 11 - Business Segments
Information regarding the Company's operations by geographic area is as
follows:
<CAPTION>
1994 1993 1992
--------- --------- ---------
(Dollars in Thousands)
<S> <C> <C> <C>
Operations by Geographic Area
Revenue:
United States $ 30,975 $ 30,936 $ 29,516
Other Western Hemisphere 52,722 31,604 32,634
Asia Pacific 43,445 22,556 39,701
Africa, Middle East and CIS 25,282 15,705 21,481
-------- -------- --------
Total revenue $152,424 $100,801 $123,332
======== ======== ========
Operations by Geographic Area
Operating income (loss):
United States $(30,518) $(11,355) $(19,952)
Other Western Hemisphere (5,937) 792 (4,264)
Asia Pacific 6,771 (1,240) 7,491
Africa, Middle East and CIS 831 (577) (338)
-------- -------- --------
Total operating income (loss) $(28,853) $(12,380) $(17,063)
======== ======== ========
Identifiable assets:
United States $ 64,337 $121,130 $124,806
Other Western Hemisphere 73,688 39,420 33,543
Asia Pacific 43,456 43,176 52,869
Africa, Middle East and CIS 27,867 32,616 34,651
-------- -------- --------
Total identifiable assets $209,348 $236,342 $245,869
======== ======== ========
</TABLE>
Three customers accounted for approximately 14 percent, 12 percent and 11
percent, respectively, of total revenue in 1994. Three customers accounted
for approximately 22 percent, 14 percent and 10 percent, respectively, of
total revenue in 1993. Two customers accounted for approximately 15 percent
and 12 percent, respectively, of total revenue in 1992. Operating income
(loss) is total revenue less operating expenses including depreciation,
depletion and amortization and an allocation of general corporate expenses
based on rig operating days. Operating income (loss) excludes interest
expense, interest capitalized, non-operating income or expense and income
taxes.
- 28 - <PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 12 - Commitments and Contingencies
At August 31, 1994, the Company had letters of credit facilities of
$17,651,000 of which $7,521,000 had been issued.
Certain officers have entered into a Severance Compensation and
Consulting Agreement ("the Agreement") with the Company. The Agreement has an
initial ten year term and provides certain benefits upon a change in control.
A change in control includes certain mergers, sale of all of the Company's
assets, liquidation of the Company or a third party acquiring a greater
percentage of stock than the aggregate ownership of Robert L. Parker, Robert
L. Parker Jr. and Robert L. Parker Trust. After a change in control occurs,
if an officer is terminated other than for cause or resigns for good reason,
the Agreement provides for a payment of three times the annual cash
compensation, a one year consulting agreement at the officer's annual cash
compensation, miscellaneous executive benefits and extended life and health
benefits for four years.
A former employee ("Plaintiff") was injured while working for the Company
on a rig owned and operated by another firm ("Defendant"). The Plaintiff was
granted an award totalling $6,750,000 from the Defendant. Pursuant to the
indemnity provision in the contract between the parties, the Company provided
a defense for the Defendant. The Defendant and the Company entered into
litigation to determine liability for funding the award. Upon resolution of
this matter, the Defendant paid $1,687,000 and the Company paid $5,063,000.
The Company has filed suit against its insurance companies and outside counsel
in order to determine ultimate liability for the $5,063,000 portion that the
Company has paid. During fiscal 1994, the Company recorded a $2,562,000
expense related to this litigation.
Note 13 - Related Party Transactions
At August 31, 1994, the Company owned an insurance policy on the life of
Mr. R. L. Parker, chairman and a principal stockholder. The Company is the
beneficiary of this policy which was issued pursuant to a Stock Purchase
Agreement ("Agreement") approved by vote of the stockholders at the 1975
Annual Meeting on December 10, 1975. This Agreement was entered into between
the Company and the Robert L. Parker Trust and provides that upon the death of
Robert L. Parker, the Company would be required, at the option of the Trust,
to purchase from the Trust at a discounted price the amount of Parker common
stock which could be purchased with the proceeds of the policy of $7,000,000.
On August 3, 1994, the Company and the Trust modified this Agreement so that
the Company will have the option but not the obligation to purchase the stock
at a discounted price with the proceeds or to retain the entire proceeds upon
the death of Robert L. Parker. If action under the agreement had been
required at August 31, 1994, and the Company elected to purchase Parker common
stock from the Trust, Parker Drilling's outstanding common stock would have
been reduced by approximately three percent.
As a part of the agreement to terminate the option held by the Trust and
to grant the Company a limited option to purchase stock at a discounted price,
the Company has also agreed to pay a premium of $655,019 annually for a split
dollar last-to-die life insurance policy on Robert L. Parker and Mrs. Robert
L. Parker. Upon the deaths of Mr. Parker and Mrs. Parker, the Company will be
reimbursed by the Robert L. Parker Sr. and Catherine M. Parker Family Trust
from the proceeds of the policy for the full amount of premiums paid plus
interest at the one-year treasury bill rate on the premiums paid after fiscal
year 1999. Additionally, Robert L. Parker Jr., Chief Executive Officer of the
Company and son of Robert L. Parker, will receive as a beneficiary of the
Trust one-third of the net proceeds of this policy. The face value of the
policy is $13,000,000.
- 29 -<PAGE>
<PAGE>
Note 14 - Supplementary Information
Maintenance and repairs expense for the years ended August 31, 1994, 1993
and 1992 was $15,548,000, $10,149,000 and $11,061,000, respectively.
Advertising, royalties, taxes other than payroll and income taxes,
depreciation and amortization of intangible assets, pre-operating costs and
similar deferrals were each less than one percent of total revenue. At August
31, 1994, accrued liabilities included $2,236,000 of workers' compensation
liabilities and $2,714,000 of accrued payroll and payroll taxes. At August
31, 1993, accrued liabilities included $2,420,000 of workers' compensation
liabilities and $3,334,000 of accrued payroll and payroll taxes. Other
long-term liabilities included $1,179,000 and $1,695,000 of workers'
compensation liabilities as of August 31, 1994 and 1993, respectively.
<TABLE>
Note 15 - Selected Quarterly Financial Data (Unaudited)
<CAPTION>
Quarter
-------------------------------------------------
First Second Third Fourth<F1> Total
--------- --------- --------- --------- ---------
(Dollars in Thousands Except Per Share Amounts)
<S> <C> <C> <C> <C> <C>
FISCAL 1994
- - - -----------
Revenue $40,043 $40,732 $36,679 $ 34,970 $152,424
Gross profit<F2> $ 6,044 $ 3,751 $ 1,049 $ (1,665) $ 9,179
Operating income (loss) $ 1,994 $(1,163) $(2,936) $(26,748) $(28,853)
Net income (loss) $ 1,608 $ (750) $(2,791) $(26,873) $(28,806)
======= ======= ======= ======== ========
Primary and fully
diluted earnings
(loss) per share $ .03 $ (.01) $ (.05) $ (.49) $ (.53)<F3>
======= ======= ======= ======== ========
FISCAL 1993
- - - -----------
Revenue $23,927 $25,306 $25,033 $ 26,535 $100,801
Gross profit<F2> $ 1,993 $ 555 $ 2,114 $ 551 $ 5,213
Operating income (loss) $(2,153) $(4,433) $(2,049) $ (3,745) $(12,380)
Net income (loss) $(2,527) $(4,971) $(2,113) $ (1,076) $(10,687)
======= ======= ======= ======== ========
Primary and fully
diluted earnings
(loss) per share $ (.05) $ (.09) $ (.04) $ (.02) $ (.20)
======= ======= ======= ======== ========
<FN>
<F1>
The fourth quarter of fiscal 1994 includes a $19,718,000 Provision for
reduction in carrying value of certain assets and a $2,562,000 charge for
litigation discussed in Notes 3 and 12, respectively.
<F2>
Gross profit is calculated by excluding General and administrative expense
and Provision for reduction in carrying value of certain assets from Operating
income (loss), as reported in the Consolidated Statement of Operations.
<F3>
As a result of shares issued during the year, earnings (loss) per share for
the year's four quarters, which are based on average shares outstanding during
each quarter, do not equal the annual earnings (loss) per share, which is
based on the average shares outstanding during the year.
</FN>
</TABLE>
- 30 -<PAGE>
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
This item is not applicable to the Company in that disclosure is required
under Regulation S-X by the Securities and Exchange Commission only if the
Company had changed independent auditors and, if it had, only under certain
circumstances.
PART III
Item 10. Directors and Executive Officers of the Registrant
The information required by this item is hereby incorporated by reference
from the information appearing under the captions "Proposal One - Election of
Directors" and "Executive Officers" in the Company's definitive proxy
statement for the Annual Meeting of Stockholders to be held December 14, 1994,
to be filed with the Securities and Exchange Commission ("Commission") within
120 days of the end of the Company's fiscal year on August 31, 1994.
Item 11. Executive Compensation
The information required by this item is hereby incorporated by reference
from the information appearing under the captions "Meetings, Committees and
Compensation of the Board", "Executive Compensation", "Severance Compensation
and Consulting Agreements", "Compensation Committee Report on Executive
Compensation" and "Performance Graph" in the Company's definitive proxy
statement for the Annual Meeting of Stockholders to be held December 14, 1994,
to be filed with the Commission within 120 days of the end of the Company's
fiscal year on August 31, 1994. Notwithstanding the foregoing, in accordance
with the instructions to Item 402 of Regulation S-K, the information contained
in the Company's proxy statement under the sub-headings "Compensation
Committee Report on Executive Compensation" and "Performance Graph" shall not
be deemed to be filed as part of or incorporated by reference into this Form
10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this item is hereby incorporated by reference
from the information appearing under the captions "Voting" and "Common Stock
Ownership of Directors and Executive Officers" in the Company's definitive
proxy statement for the Annual Meeting of Stockholders to be held December 14,
1994, to be filed with the Commission within 120 days of the end of the
Company's fiscal year on August 31, 1994.
Item 13. Certain Relationships and Related Transactions
The information required by this item is hereby incorporated by reference
to such information appearing under the caption "Certain Relationships and
Related Transactions" in the Company's definitive proxy statement for the
Annual Meeting of Stockholders to be held December 14, 1994, to be filed with
the Commission within 120 days of the end of the Company's fiscal year on
August 31, 1994.
- 31 - <PAGE>
<PAGE>
PART IV
<TABLE>
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as part of this report:
<CAPTION>
(1) Financial Statements of Parker Drilling Company and subsidiaries
which are included in Part II, Item 8:
Page
<S> <C>
Report of Independent Accountants 13
Consolidated Statement of Operations for each
of the three years in the period ended August 31, 1994 14
Consolidated Balance Sheet as of August 31, 1994 and 1993 15
Consolidated Statement of Cash Flows for each of the
three years in the period ended August 31, 1994 17
Consolidated Statement of Redeemable Preferred
Stock and Stockholders' Equity for each of the three
years in the period ended August 31, 1994 19
Notes to Consolidated Financial Statements 21
(2) Financial Statement Schedules:
Schedule V - Property, plant and equipment 34
Schedule VI - Accumulated depreciation, depletion and
amortization of property, plant and equipment 35
Schedule VIII - Valuation and qualifying accounts 36
</TABLE>
<TABLE>
<CAPTION>
(3) Exhibits:
Exhibit Number Description
-------------- -----------
<S> <C>
3(a) - Restated Certificate of Incorporation of Parker
Drilling Company; incorporated herein by
reference to Exhibit 3(a) to Annual Report on
Form 10-K for the year ended August 31, 1989,
as amended by Form 8 dated December 27, 1989.
3(b) - By-laws of Parker Drilling Company; incorporated
herein by reference to Exhibit 3(b) to Annual
Report on Form 10-K for the year ended August 31,
1992, as amended by Form 8 dated February 18, 1993.
10(a) - Credit Agreement, dated as of September 24, 1992,
between Morgan Guaranty Trust Company of New York,
Internationale Nederlanden Bank N.V. and Parker
Drilling Company as amended; incorporated herein by
reference to Exhibit 10(b) to Annual Report on Form
10-K for the year ended August 31, 1992, as amended
by Form 8 dated February 18, 1993; Exhibit(a) to
Quarterly Report on Form 10-Q for the quarterly
period ended February 28, 1994; Exhibit (a) to
Quarterly Report on Form 10-Q for the quarterly
period ended May 31, 1994.
10(b) - Parker Drilling Company and Subsidiaries 1991 Stock
Grant Plan; incorporated herein by reference to
Exhibit 10(c) to Annual Report on Form 10-K for the
year ended August 31, 1992, as amended by Form 8 dated
February 18, 1993.<F1>
</TABLE>
- 32 - <PAGE>
<PAGE>
PART IV
(continued)
<TABLE>
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(continued)
<CAPTION>
(3) Exhibits: (continued)
Exhibit Number Description
-------------- -----------
<S> <C>
10(c) - 1980 Incentive Career Stock Plan; incorporated
herein by reference to Exhibit 10(c) to Annual
Report on Form 10-K for the year ended August 31,
1989, as amended by Form 8 dated December 27, 1989.<F1>
10(d) - 1969 Key Employees Stock Grant Plan; incorporated
herein by reference to Exhibit 10(e) to Annual Report
on Form 10-K for the year ended August 31, 1992,
as amended by Form 8 dated February 18, 1993.<F1>
10(e) - Parker Drilling Company Stock Bonus Plan; incorporated
herein by reference to Exhibit 10(e) to Annual Report
on Form 10-K for the year ended August 31, 1993.
10(f) - 1975 Stock Purchase Agreement; incorporated herein by
reference to Exhibit 10(g) to Annual Report on Form
10-K for the year ended August 31, 1986, as amended
by Form 8 dated December 29, 1986.
10(g) - Form of Severance Compensation and Consulting Agreement
entered into between Parker Drilling Company and each
officer of Parker Drilling Company; incorporated herein by
reference to Exhibit 10(g) to Annual Report on Form 10-K
for the year ended August 31, 1988, as amended by Form 8
dated December 28, 1988 and Form 8 dated October 4, 1989.<F1>
21 - Subsidiaries of the Registrant.
23 - Consent of Independent Accountants.
27 - Financial Data Schedule
99 - Additional Exhibit - Annual Report on Form 11-K with To be
respect to Parker Drilling Company Stock Bonus Plan. filed by
amendment
<FN>
<F1>
Management Contract, Compensatory Plan or Agreement
</FN>
</TABLE>
(b) Reports on Form 8-K:
There were no reports on Form 8-K for the three months ended August
31, 1994.
- 33 - <PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
- - - ---------------------- --------- --------- --------- --------- ---------
Balance at Transfers Balance
beginning Additions add at end of
Classifications of period at cost Retirements (deduct) period
- - - ----------------------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
Year ended 8/31/94:
Drilling equipment $550,239 $35,823<F1> $47,845 $ (192) $538,025
Buildings, land and
improvements 22,029 58 8,002 185 14,270
Other 28,059 5,180 8,848 8 24,399
Construction in
progress 11,465 (6,297) - 79 5,247
-------- ------- ------- ------- --------
Total $611,792 $34,764 $64,695 $ 80 $581,941
======== ======= ======= ======= ========
Year ended 8/31/93:
Drilling equipment $546,870 $ 9,367 $ 5,863 $ (135) $550,239
Oil and gas 7,844 296 7,819 (321) -
Buildings, land and
improvements 22,526 91 587 (1) 22,029
Other 31,544 1,172 4,254 (403) 28,059
Construction in
progress 3,724 7,791 - (50) 11,465
-------- ------- ------- ------- --------
Total $612,508 $18,717 $18,523 $ (910)<F3> $611,792
======== ======= ======= ======= ========
Year ended 8/31/92:
Drilling equipment $597,619 $30,641<F2> $80,446 $ (944) $546,870
Oil and gas 8,010 132 - (298) 7,844
Buildings, land
and improvements 22,914 176 481 (83) 22,526
Other 30,916 1,355 750 23 31,544
Construction in
progress 8,597 (4,337) - (536) 3,724
-------- ------- ------- ------- --------
Total $668,056 $27,967 $81,677 $(1,838)<F3> $612,508
======== ======= ======= ======= ========
Property, plant and equipment is depreciated primarily on the straight-line
method over the estimated useful lives of the assets after provisions for
salvage value. The rates used are as follows:
Drilling equipment 10% to 25%
Oil and gas Units of Production
Buildings and improvements 4% to 10%
Other 10% to 33 1/3%
<FN>
<F1>
Includes expenditures to acquire seven international drilling rigs.
<F2>
Includes expenditures to complete construction of a specialized rig now in
Alaska and major modifications to three existing rigs now in Colombia and
Yemen.
<F3>
Includes foreign currency translation adjustment.
</FN>
</TABLE>
- 34 - <PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
- - - ---------------------- --------- --------- --------- --------- ---------
Balance Additions
at charged to Transfers Balance
beginning cost and add at end of
Classifications of period expenses Retirements (deduct) period
- - - ----------------------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
Year ended
August 31, 1994:
Drilling equipment $438,678 $35,848 $43,956 $ (13) $430,557
Buildings, land and
improvements 12,846 264 5,342 6 7,774
Other 20,942 1,801 6,318 7 16,432
-------- ------- ------- ------- --------
Total $472,466 $37,913<F1> $55,616 $ - $454,763
======== ======= ======= ======= ========
Year ended
August 31, 1993:
Drilling equipment $426,390 $17,829 $ 5,682 $ 141 $438,678
Oil and gas 4,230 256 4,237 (249) -
Buildings, land and
improvements 12,725 311 190 - 12,846
Other 23,413 2,004 4,150 (325) 20,942
-------- ------- ------- ------- --------
Total $466,758 $20,400 $14,259 $ (433)<F3> $472,466
======== ======= ======= ======= ========
Year ended
August 31, 1992:
Drilling equipment $481,118 $22,424 $77,606 $ 454 $426,390
Oil and gas 3,875 481 - (126) 4,230
Buildings, land and
improvements 12,474 758 432 (75) 12,725
Other 21,999 2,417 461 (542) 23,413
-------- ------- ------- ------- --------
Total $519,466 $26,080<F2> $78,499 $ (289)<F3> $466,758
======== ======= ======= ======= ========
<FN>
<F1>
Includes $15,963,000 classified on Statement of Operations as Provision for
reduction in carrying value of certain assets.
<F2>
Includes $5,530,000 classified on Statement of Operations as Provision for
reduction in carrying value of certain assets.
<F3>
Includes foreign currency translation adjustment.
</FN>
</TABLE>
- 35 - <PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E
- - - --------------------------------- --------- --------- --------- ---------
Balance Charged
at to cost Balance
beginning and at end of
Description of period expenses Deductions period
- - - --------------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Year ended August 31, 1994:
Allowance for doubtful accounts
and notes $1,217 $ - $ 167 $1,050
Reduction in carrying value of
rig materials and supplies $1,798 $1,017 $ 585 $2,230
Year ended August 31, 1993:
Allowance for doubtful accounts
and notes $1,390 $ - $ 173 $1,217
Reduction in carrying value of
rig materials and supplies $4,693 $1,373 $4,268 $1,798
Year ended August 31, 1992:
Allowance for doubtful accounts
and notes $2,882 $ - $1,492 $1,390
Reduction in carrying value of
rig materials and supplies $3,726 $3,730 $2,763 $4,693
</TABLE>
- 36 - <PAGE>
<PAGE>
<TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
PARKER DRILLING COMPANY
By /s/ Robert L. Parker Jr. Date: November 2, 1994
------------------------
Robert L. Parker Jr.
President and Chief
Executive Officer and
Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<CAPTION>
Signature Title Date
--------- ----- -----
<S> <C> <C>
Chairman of the Board and
By /s/ Robert L. Parker Director
------------------------ Date: November 2, 1994
Robert L. Parker
President and Chief Executive
Officer and Director
By /s/ Robert L. Parker Jr. (Principal Executive Officer)
------------------------ Date: November 2, 1994
Robert L. Parker Jr.
Vice President of Finance and
Chief Financial Officer
By /s/ James J. Davis (Principal Financial Officer)
------------------------ Date: November 2, 1994
James J. Davis
Corporate Controller
By /s/ Randy L. Ellis (Principal Accounting Officer)
------------------------ Date: November 2, 1994
Randy L. Ellis
Executive Vice President and
Chief Operating Officer and
By /s/ James W. Linn Director
------------------------ Date: November 2, 1994
James W. Linn
By /s/ Earnest F. Gloyna Director
------------------------ Date: November 2, 1994
Earnest F. Gloyna
By /s/ Eugene L. Swearingen Director
------------------------ Date: November 2, 1994
Eugene L. Swearingen
By /s/ David L. Fist Director
------------------------ Date: November 2, 1994
David L. Fist
By /s/ R. Rudolph Reinfrank Director
------------------------ Date: November 2, 1994
R. Rudolph Reinfrank
</TABLE> - 37 - <PAGE>
<PAGE>
<PAGE>
<TABLE>
SUBSIDIARIES OF THE REGISTRANT
<CAPTION>
Exhibit 21
Percentage of Voting
Securities Owned By
Immediate Parent as
of August 31, 1994
--------------------
Parent of the Registrant
Robert L. Parker 7% of Common Stock
(7% of voting
securities assuming
full dilution)
<S> <C>
Consolidated subsidiaries of the Registrant
(Jurisdiction of incorporation):
Parker Drilling Company of South America, Inc. (Oklahoma) 100%
Parker Drilling Company of Oklahoma, Inc. (Oklahoma) 100%
Parker Technology, Inc. (Oklahoma)<F1> 100%
Vance Systems Engineering, Inc. (Texas)<F2> 100%
Parker Drilling Company International Limited (Nevada)
(formerly Rig Holding Corporation)<F3> 100%
Parker Drilling Company of Alaska Limited (Alaska)<F4> 100%
Parker Drilling Company of New Guinea, Inc. (Oklahoma) 100%
Parker Drilling Company of North America, Inc. (Oklahoma) 100%
Parker Drilling Company Limited (Nevada) 100%
Certain subsidiaries have been omitted from the list since they would not, even
if considered in the aggregate, constitute a significant subsidiary. All
subsidiaries are included in the consolidated financial statements.
- - - ------------------------------------------------------------------------------
<FN>
<F1>
Parker Technology, Inc. owns 100% of three subsidiary corporations, namely:
Parco Masts and Substructures, Inc. (Oklahoma)
O.I.M.E. Export Corporation (Texas)
O.I.M.E. International, Inc. (Texas)
<F2>
Vance Systems Engineering, Inc. owns 100% of Parker Drilling Company
Limited (Bahamas), 100% of Parker Drilling Company Kuwait, Ltd. (Bahamas)
and 93% of Parker Drilling Company Eastern Hemisphere, Ltd. (Oklahoma).
Parker Drilling Company Limited owns 7% of Parker Drilling Company
Eastern Hemisphere, Ltd. (Oklahoma)
<F3>
Parker Drilling Company International Limited owns 100% of five
subsidiary corporations, namely:
Parker Drilling U.S.A. Ltd. (Nevada)
Choctaw International Rig Corp. (Nevada)
Creek International Rig Corp. (Nevada)
Osage International Rig Corp. (Nevada)
Fox International Rig Corp. (Nevada)
Choctaw International Rig Corp. owns 100% of the common stock of
Parker Drilling Company of Indonesia, Inc. (Oklahoma)
<F4>
Parker Drilling Company of Alaska Limited (Alaska) is general partner in
two consolidated partnerships, namely:
PCA Limited I (Alaska)
PCA Limited II (Alaska)
</FN>
</TABLE>
- 38 - <PAGE>
<PAGE>
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statements of Parker Drilling Company on Form S-8 (File No. 2-87944, 33-24155
and 33-56698) of our report dated October 18, 1994, on our audits of the
consolidated financial statements and financial statement schedules of Parker
Drilling Company and subsidiaries as of August 31, 1994 and 1993, and for the
years ended August 31, 1994, 1993 and 1992, which report is included in this
Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
October 18, 1994
- 39 -<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF AUGUST 31, 1994 AND THE CONSOLIDATED STATEMENT
OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 1994 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1994
<PERIOD-END> AUG-31-1994
<CASH> 10660
<SECURITIES> 3811
<RECEIVABLES> 35501
<ALLOWANCES> 826
<INVENTORY> 0
<CURRENT-ASSETS> 62292
<PP&E> 581941
<DEPRECIATION> 454763
<TOTAL-ASSETS> 209348
<CURRENT-LIABILITIES> 21622
<BONDS> 0
<COMMON> 9185
0
0
<OTHER-SE> 171398
<TOTAL-LIABILITY-AND-EQUITY> 209348
<SALES> 0
<TOTAL-REVENUES> 152424
<CGS> 0
<TOTAL-COSTS> 121295
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11
<INCOME-PRETAX> (26919)
<INCOME-TAX> 1887
<INCOME-CONTINUING> (28806)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (28806)
<EPS-PRIMARY> (.53)
<EPS-DILUTED> (.53)
</TABLE>
