<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-36498
PROSPECTUS SUPPLEMENT DATED SEPTEMBER 14, 2000
(TO PROSPECTUS DATED MAY 25, 2000)
12,000,000 Shares
[PARKER DRILLING LOGO]
PARKER DRILLING COMPANY
COMMON STOCK
--------------------------------------------------------------------------------
We are offering 12,000,000 shares of our common stock. Our common stock is
listed on The New York Stock Exchange under the symbol "PKD." The last sale
price of our common stock on The New York Stock Exchange on September 14, 2000
was $6.75 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 IN THE ACCOMPANYING PROSPECTUS.
<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -----------
<S> <C> <C>
Initial price to public..................................... $6.625 $79,500,000
Underwriting discount....................................... $0.298 $ 3,576,000
Proceeds, before expenses, to Parker........................ $6.327 $75,924,000
</TABLE>
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The underwriters may, under certain circumstances, purchase up to an additional
1,800,000 shares of common stock from us at the initial price to public less the
underwriting discount.
--------------------------------------------------------------------------------
Lehman Brothers, on behalf of the underwriters, expects to deliver the common
stock on or about September 20, 2000.
LEHMAN BROTHERS
JEFFERIES & COMPANY, INC.
RBC DOMINION SECURITIES
<PAGE> 2
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. YOU SHOULD NOT
RELY ON ANY OTHER REPRESENTATIONS. OUR AFFAIRS MAY CHANGE AFTER THIS PROSPECTUS
SUPPLEMENT IS DISTRIBUTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS
PROSPECTUS SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE
FRONT OF THIS DOCUMENT.
------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUPPLEMENT
Summary............................... S-3
Price Range of Common Stock and
Dividends........................... S-5
Use of Proceeds....................... S-5
Selected Consolidated Financial
Data................................ S-6
Certain United States Federal Tax
Consequences to Non-U.S. Holders of
Common Stock........................ S-7
Underwriting.......................... S-10
Legal Matters......................... S-12
Independent Accountants............... S-12
Forward-Looking Statements............ S-12
PROSPECTUS
About this Prospectus................. 2
Where You Can Find More Information... 2
Forward-Looking Statements............ 3
The Company........................... 4
Risk Factors.......................... 4
Use of Proceeds....................... 7
Ratios of Earnings to Fixed Charges
and Earnings to Fixed Charges plus
Dividends........................... 7
Description of Debt Securities........ 8
Description of Capital Stock.......... 20
Depositary Shares..................... 24
Description of Warrants............... 26
Plan of Distribution.................. 26
Legal Matters......................... 28
Experts............................... 28
</TABLE>
S-2
<PAGE> 3
SUMMARY
The following summary contains basic information about us and our common
stock. It does not contain all the information that is important to you. You
should read the following summary together with the more detailed information
and financial statements and notes to the financial statements appearing
elsewhere in this prospectus supplement or incorporated by reference in the
attached prospectus. Unless we say otherwise, we assume in this prospectus
supplement that the underwriters will not exercise their over-allotment option
with respect to the common stock offering.
THE COMPANY
We are a leading worldwide provider of contract drilling and drilling
related services, operating in the transition zones of the Gulf of Mexico and
Nigeria, in the offshore waters of the Gulf of Mexico and the Caspian Sea, and
on land in Alaska and international oil and gas producing regions. Historically,
we operated exclusively on land, specializing in deep, difficult wells and
drilling in remote areas. In the last four years we have diversified into the
offshore drilling business through the acquisition of 26 barge rigs and seven
jackup rigs operating in the Gulf of Mexico and Nigeria and into the rental tool
business through the acquisition of a rental tool company. During 1999 we sold
13 lower-48 domestic land rigs pursuant to our strategic plan to focus on
offshore and international land markets where margins are typically higher. We
received $40,000,000 in cash and 1,000,000 shares of common stock of Unit
Corporation as consideration for this sale. Earlier this month, we sold these
1,000,000 shares for $15,000,000, resulting in a pre-tax gain of approximately
$7,400,000.
Our current marketable rig fleet consists of 27 barge drilling and workover
rigs, seven jackup rigs, four platform rigs, 41 international land rigs and one
land rig in Alaska. Our barge drilling and workover fleet is dedicated to the
transition zone waters, which are generally defined as coastal waters to depths
of up to 25 feet. Our jackup and platform rig fleets currently operate in the
Gulf of Mexico market. Our international land rig fleet consists of 41 drilling
rigs. Of these rigs, 17 are helicopter rigs and 36 are capable of drilling to
depths of 15,000 feet or more. The diversity of our rig fleet, both in terms of
geographic location and asset class, enables us to provide a broad range of
services to oil and gas operators around the world.
Demand for our services is highly dependent on the level of spending by oil
and gas companies on the exploration and production of oil and gas, which in
turn is dependent on current oil and gas prices as well as future price
expectations. Historically, oil and gas prices have been principally dependent
upon demand, the level of production of the major oil producing countries and
weather conditions.
The outlook for the oil and gas industry has improved significantly during
2000. Oil prices have rebounded to their highest levels in over nine years, due
in part to production limits imposed by OPEC during a period of increasing
demand, which has resulted in reduced oil inventories. Natural gas prices in
North America have also strengthened considerably, and the average of the next
12-month natural gas forward contracts reached $4.68 per MMBtu as of September
8, 2000. In response to higher commodity prices, operators have increased
spending on exploration and production in 2000 compared to 1999, and we
anticipate they will further increase their exploration and production budgets
for 2001.
Our domestic operations are favorably impacted by increased levels of
natural gas demand that have pushed natural gas prices to their highest levels
since June 1996. Demand for natural gas is expected to grow over the next
several years due primarily to growth in the U.S. economy and newly constructed
natural gas-fired power generation plants. Natural gas supply has declined due
to depletion of reservoirs and reduced drilling over the last two years, leaving
natural gas storage at levels that are significantly lower than in recent years.
We believe that the current higher prices and increased demand, if sustained,
will lead to further increases in natural gas drilling domestically,
particularly in the Gulf of Mexico.
International land drilling markets have been slow to react to the increase
in crude oil prices over the past 18 months. We currently have 15 of our 41
international land rigs working. Our international land rig utilization began to
improve early this year and we anticipate this trend will continue based on
contracts we have in hand and the number of inquiries we are receiving for new
projects. Based on the continuation of these trends, we anticipate increased
earnings from our international segment.
S-3
<PAGE> 4
After being on standby since December 1999, our four Nigerian barge rigs
are currently operating at full contract dayrates. Our Caspian Sea barge rig is
currently testing the first well on the Kashagan structure and is scheduled to
move to a second location in the near future. Based on announced test results,
we believe there will be substantial continuing work for this rig.
The following table presents as of the dates indicated the average dayrates
and rig utilization percentages for our rigs.
<TABLE>
<CAPTION>
AVERAGE DAYRATE AVERAGE UTILIZATION
------------------------------------- ---------------------------
SEPTEMBER 1, SEPTEMBER 1, PERCENT SEPTEMBER 1, SEPTEMBER 1,
2000 1999 CHANGE 2000 1999
------------ ------------ ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Domestic Jackups....................... $25,604 $14,500 77% 86% 43%
Domestic Barges........................ 14,969 13,475 11% 82% 68%
Deep Drilling........................ 18,380 16,740 10% 100% 100%
Intermediate Drilling................ 14,500 12,167 19% 100% 60%
Workover............................. 9,980 7,928 26% 56% 44%
International Barges................... 40,576 34,633 17% 100% 100%
Platform Rigs.......................... 13,500 13,935 -3% 50% 75%
International Land Rigs................ 16,279 17,893 -9% 39% 34%
PARKER RIG FLEET.................. 19,434 17,359 12% 59% 49%
</TABLE>
BUSINESS STRATEGY
Our business strategy is to capitalize on improving conditions in the
oilfield service industry and enhance profitability by:
(1) maximizing our returns on our assets in the Gulf of Mexico where
improving utilization and dayrates are providing increasing
earnings and cash flow;
(2) leveraging our international presence where our experience and
long-standing presence position us well to serve customers' needs;
(3) expanding and diversifying our operations by pursuing acquisitions
of complementary assets and businesses; and
(4) reducing our long-term debt.
THE OFFERING
Common stock offered............ 12,000,000 shares(1)
Common stock outstanding after
the offering.................... 89,670,100 shares(1)
Use of proceeds................. We estimate that we will receive net proceeds
from the common stock offering of $75.4
million.
We intend to use the net proceeds of the
offering to acquire, upgrade and refurbish
certain offshore and land drilling rigs and
for general corporate purposes, including
repayment of debt and working capital.
Net proceeds will be invested in short-term
investments until they are used.
NYSE symbol..................... PKD
---------------
(1) The common stock outstanding after the offering is based on shares
outstanding as of July 31, 2000 and excludes 11,371,020 shares of common
stock reserved for issuance upon conversion of our outstanding convertible
notes and 9,967,820 shares of common stock issuable upon exercise of
outstanding stock options under our stock option plans.
S-4
<PAGE> 5
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
Our common stock is listed on the NYSE under the symbol "PKD." The
following table sets forth the quarterly high and low sales prices for our
common stock as reported on the NYSE Composite Tape for the periods indicated.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1998:
Quarter Ended March 31, 1998.............................. $13.187 $ 8.875
Quarter Ended June 30, 1998............................... 11.125 6.625
Quarter Ended September 30, 1998.......................... 7.312 3.875
Quarter Ended December 31, 1998........................... 6.312 2.812
1999:
Quarter Ended March 31, 1999.............................. 4.688 2.250
Quarter Ended June 30, 1999............................... 4.375 3.000
Quarter Ended September 30, 1999.......................... 5.625 3.312
Quarter Ended December 31, 1999........................... 4.750 3.000
2000:
Quarter Ended March 31, 2000.............................. 5.125 3.000
Quarter Ended June 30, 2000............................... 6.875 3.750
Quarter Ending September 30, 2000 (through September 14,
2000).................................................. 7.437 4.875
</TABLE>
We have paid no dividends on our common stock since February 1987.
Restrictions contained in our Revolving Credit Facility prohibit the payment of
cash dividends, and the indenture for our 9 3/4% Senior Notes restricts the
payment of such dividends. We have no present intention to pay dividends on our
common stock in the foreseeable future and anticipate that future earnings will
be retained to finance future operations and expansion.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the offering of
approximately $75.4 million ($86.8 million if the underwriters' over-allotment
option is exercised in full) after deducting the underwriting discounts and
commissions and estimated fees and expenses of the offering. We intend to use
the net proceeds of the offering to acquire, upgrade and refurbish certain
offshore and land drilling rigs and for general corporate purposes, including
repayment of debt and working capital.
Net proceeds will be invested in short-term investments until they are
used.
S-5
<PAGE> 6
SELECTED CONSOLIDATED FINANCIAL DATA
The historical financial data presented in the table below as of and for
each of the years ended August 31, 1997 and 1998, the four months ended December
31, 1998 and the year ended December 31, 1999 are derived from our consolidated
financial statements audited by PricewaterhouseCoopers LLP, independent
accountants. The historical financial data presented in the table below as of
and for each of the six-month periods ended June 30, 1999 and 2000 are derived
from our unaudited consolidated financial statements. In the opinion of
management of our company, such unaudited consolidated financial statements
include all adjustments (consisting of normal recurring adjustments) necessary
for a fair presentation of the financial data for such periods. The results for
the six months ended June 30, 2000 are not necessarily indicative of the results
to be achieved for the full year.
The data presented below should be read in conjunction with our
consolidated financial statements, including the notes thereto, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" incorporated by reference in this prospectus supplement and the
attached prospectus.
<TABLE>
<CAPTION>
FOUR SIX SIX
YEAR YEAR MONTHS YEAR MONTHS MONTHS
ENDED ENDED ENDED ENDED ENDED ENDED
AUGUST 31, AUGUST 31, DECEMBER 31, DECEMBER 31, JUNE 30, JUNE 30,
1997 1998 1998 1999 1999 2000
----------- ----------- ------------ ------------ ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Drilling................................. $ 283,598 $ 446,565 $ 125,896 $ 296,623 $ 155,040 $ 143,553
Rental................................... 25,457 32,723 10,245 27,656 13,555 17,356
Other.................................... 2,589 1,935 582 274 245 4
----------- ----------- ----------- ----------- ----------- -----------
Total revenues....................... 311,644 481,223 136,723 324,553 168,840 160,913
----------- ----------- ----------- ----------- ----------- -----------
Operating Expenses:
Drilling................................. 189,979 295,602 94,648 226,425 118,129 109,274
Rental................................... 8,549 13,749 4,416 10,910 5,375 7,130
Other.................................... 4,722 2,365 932 1,899 108 2
Depreciation, depletion and
amortization........................... 46,256 68,574 26,529 82,170 40,302 42,029
General and administrative............... 14,414 17,273 5,904 16,312 8,195 9,447
Restructuring charges.................... -- -- -- 3,000 3,000 --
Provision for reduction in carrying value
of certain assets...................... -- -- 4,055 10,607 5,250 --
----------- ----------- ----------- ----------- ----------- -----------
Total operating expenses............. 263,920 397,563 136,484 351,323 180,359 167,882
----------- ----------- ----------- ----------- ----------- -----------
Operating income (loss).................... 47,724 83,660 239 (26,770) (11,519) (6,969)
----------- ----------- ----------- ----------- ----------- -----------
Other income (expense):
Interest income (expense) -- net......... (27,484) (43,657) (16,808) (54,203) (25,978) (27,397)
Other.................................... 3,316 4,524 301 40,396 5,220 3,824
----------- ----------- ----------- ----------- ----------- -----------
Total other income (expense)......... (24,168) (39,133) (16,507) (13,807) (20,758) (23,573)
----------- ----------- ----------- ----------- ----------- -----------
Income (loss) before income taxes.......... 23,556 44,527 (16,268) (40,577) (32,277) (30,542)
Income tax expense (benefit)............... 7,241 16,435 (1,635) (2,680) (6,408) (6,184)
----------- ----------- ----------- ----------- ----------- -----------
Net income (loss).................... $ 16,315 $ 28,092 $ (14,633) $ (37,897) $ (25,869) $ (24,358)
=========== =========== =========== =========== =========== ===========
Earnings (loss) per share (fully
diluted)................................. $ .23 $ .36 $ (.19) $ (.49) $ (.34) $ (.31)
=========== =========== =========== =========== =========== ===========
Weighted average shares outstanding (fully
diluted)................................. 71,760,543 77,789,390 76,828,879 77,159,461 77,039,523 77,518,230
=========== =========== =========== =========== =========== ===========
OTHER FINANCIAL DATA:
EBITDA(1).................................. $ 93,980 $ 152,234 $ 30,823 $ 66,007 $ 34,033 $ 35,060
Capital expenditures:
Maintenance.............................. 14,702 36,796 19,054 12,484 8,691 7,723
Other.................................... 72,724 159,282 33,657 36,662 27,176 17,911
BALANCE SHEET DATA (END OF PERIOD):
Cash, cash equivalents and other short-term
investments.............................. $ 212,789 $ 55,253 $ 24,314 $ 46,278 $ 19,343 $ 25,687
Property, plant and equipment, net......... 439,651 727,840 729,873 661,402 719,271 646,621
Total assets............................... 984,136 1,200,544 1,159,326 1,082,743 1,118,085 1,056,586
Total long-term debt, including current
portion.................................. 567,126 651,559 661,883 653,631 670,357 651,172
Total stockholders' equity................. 348,723 377,962 363,950 329,421 338,996 309,520
</TABLE>
---------------
(1) EBITDA represents operating income (loss) before depreciation, depletion,
amortization and provision for reduction in carrying value of certain
assets. EBITDA is frequently used by securities analysts and is presented
here to provide additional information about the Company's operations.
EBITDA is not a measurement presented in accordance with generally accepted
accounting principles. EBITDA should not be considered in isolation or as a
substitute for net income, cash flow provided by operating activities or
other income or cash flow data prepared in accordance with generally
accepted accounting principles or as a measure of a company's profitability
or liquidity.
S-6
<PAGE> 7
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-U.S. HOLDERS OF COMMON STOCK
The following is a general discussion of certain United States federal
income and estate tax consequences of the purchase, ownership and disposition of
common stock by a Non-U.S. Holder. As used herein the term "Non-U.S. Holder"
means any person or entity other than:
- a citizen or resident of the United States,
- a corporation or partnership or other entity created or organized in or
under the laws of the United States or any political subdivision thereof
(unless, in the case of a partnership, Treasury regulations are adopted
which provide otherwise),
- an estate the income of which is subject to U.S. federal income taxation
regardless of its source,
- a trust that is subject to the primary supervision of a United States
court and which has one or more United States persons who have the
authority to control all substantial decisions of the trust.
If a partnership holds common stock, the tax treatment of a partner will
generally depend upon the status of the partner and upon the activities of the
partnership. Partners of partnerships that hold common stock should consult
their tax advisors as to the particular tax consequences to them.
This discussion does not address all aspects of United States federal
income and estate taxes and does not deal with foreign, state and local
consequences that may be relevant to such Non-U.S. Holders in light of their
personal circumstances. Furthermore, this discussion is based on provisions of
the Code, existing and proposed regulations promulgated thereunder and
administrative and judicial interpretations thereof and other applicable
authorities, as of the date hereof, all of which are subject to change, possibly
with retroactive effect. EACH PROSPECTIVE PURCHASER OF COMMON STOCK IS ADVISED
TO CONSULT A TAX ADVISOR WITH RESPECT TO CURRENT AND POSSIBLE FUTURE TAX
CONSEQUENCES OF ACQUIRING, HOLDING AND DISPOSING OF COMMON STOCK AS WELL AS ANY
TAX CONSEQUENCES THAT MAY ARISE UNDER THE LAWS OF ANY U.S. STATE, MUNICIPALITY
OR OTHER TAXING JURISDICTION.
DIVIDENDS
Dividends paid to a Non-U.S. Holder of common stock generally will be
subject to withholding of United States federal income tax at a 30% rate or such
lower rate as may be specified by an applicable income tax treaty. However,
dividends that are effectively connected with the conduct of a trade or business
by the Non-U.S. Holder within the United States or, where a tax treaty applies,
are attributable to a United States permanent establishment of the Non-U.S.
Holder, are not subject to the withholding tax, but instead are subject to
United States federal income tax on a net income basis at applicable graduated
individual or corporate rates. Certain certification and disclosure requirements
must be complied with in order for effectively connected income to be exempt
from withholding. Any dividends received by a foreign corporation that are
effectively connected with the conduct of a trade or business within the United
States may be subject to an additional "branch profits tax" at a 30% rate or
such lower rate as may be specified by an applicable income tax treaty.
Dividends paid on or before December 31, 2000 to an address outside the
United States are presumed to be paid to a resident of the country of address
(unless the payer has knowledge to the contrary) for purposes of the withholding
tax rules discussed above and, under the current interpretation of United States
Treasury regulations, for purposes of determining the applicability of a tax
treaty rate. However, United States Treasury regulations that are effective for
payments made after December 31, 2000 (the "Final Regulations") provide that a
Non-U.S. Holder of common stock who wishes to claim the benefit of an applicable
treaty rate (and avoid back-up withholding as discussed below) for dividends
paid after that date, will be required to satisfy applicable certification and
other requirements.
S-7
<PAGE> 8
A Non-U.S. Holder of common stock eligible for a reduced rate of United
States withholding tax pursuant to an income tax treaty may obtain a refund of
any excess amounts withheld by filing an appropriate claim for refund with the
Internal Revenue Service.
GAIN ON DISPOSITION OF COMMON STOCK
A Non-U.S. Holder generally will not be subject to United States federal
income tax with respect to gain recognized on a sale or other disposition of
common stock unless:
(1) the gain is effectively connected with the conduct of a trade or
business of the Non-U.S. Holder in the United States, or, where a tax treaty
applies, is attributable to a United States permanent establishment of the
Non-U.S. Holder,
(2) in the case of a Non-U.S. Holder who is an individual and holds the
common stock as a capital asset, such holder is present in the United States for
183 or more days in the taxable year of the sale or other disposition and
certain other conditions are met,
(3) the Non-U.S. Holder is subject to tax pursuant to the provisions of the
U.S. tax law applicable to certain U.S. expatriates, or
(4) we are or have been a "U.S. real property holding corporation" for
United States federal income tax purposes.
We do not believe that we are a "U.S. real property holding corporation"
for U.S. federal income tax purposes. However, if we are or become a "U.S. real
property holding corporation," so long as our common stock is and continues to
be regularly traded on an established securities market, only a Non-U.S. Holder
who, actually and constructively, holds or held (at any time during the shorter
of the five year period preceding the date of disposition or the holder's
holding period) more than five percent of our common stock will be subject to
U.S. federal income tax on the disposition of our common stock.
U.S. FEDERAL ESTATE TAX
The fair market value of common stock held by an individual Non-U.S. Holder
at the time of death will be included in such holder's gross estate for United
States federal estate tax purposes, unless an applicable estate tax treaty
provides otherwise.
INFORMATION REPORTING AND BACKUP WITHHOLDING
We must report annually to the IRS and to each Non-U.S. Holder the amount
of any dividends paid to such holder and the tax withheld with respect to such
dividends, regardless of whether withholding was reduced by an applicable tax
treaty. Copies of the information returns reporting such dividends and
withholding may also be made available to the tax authorities in the country in
which the Non-U.S. Holder resides under the provisions of an applicable income
tax treaty or information exchange agreement.
Under current law, backup withholding at the rate of 31% (as opposed to the
general withholding tax rate of 30% described above) generally will not apply to
dividends paid to a Non-U.S. Holder at an address outside the United States
(unless the payer has knowledge that the payee is a U.S. person). Under the
Final Regulations, however, a Non-U.S. Holder will be subject to backup
withholding unless applicable certification requirements are met.
Payment of the proceeds from a sale of common stock to or through a U.S.
office of a broker will be subject to information reporting and backup
withholding unless the owner certifies as to its status as a Non-U.S. Holder
under penalties of perjury or otherwise establishes an exemption. Payment of the
proceeds from a sale of common stock to or through a non-U.S. office of a broker
generally will not be subject to information reporting or backup withholding.
However, if such broker is a U.S. person, a "controlled foreign corporation" or
a foreign person that derives 50% or more of its gross income from the conduct
of a trade or business in the United States, such payment will be subject to
information reporting,
S-8
<PAGE> 9
but currently not backup withholding, unless such broker has documentary
evidence in its records that the owner is a Non-U.S. Holder and certain other
conditions are met or the owner otherwise establishes an exemption.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules may be allowed as a refund or a credit against such
holder's U.S. federal income tax liability provided the required information is
furnished to the IRS.
Special rules may apply to certain Non-U.S. Holders, such as foreign
insurance companies, "controlled foreign corporations," "passive foreign
investment companies," "foreign personal holding companies," and companies that
accumulate earnings for the purpose of avoiding tax, that are subject to special
treatment under the Code. Such entities should consult their own tax advisors to
determine the United States federal, state, local and other tax consequences
that may be relevant to them.
S-9
<PAGE> 10
UNDERWRITING
Under the underwriting agreement dated the date of this prospectus
supplement, each of the underwriters named below, for whom Lehman Brothers Inc.,
Jefferies & Company, Inc. and RBC Dominion Securities Corporation are acting as
representatives, has severally agreed to purchase from us the respective number
of shares of common stock shown opposite its name below:
<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
------------ ----------------
<S> <C>
Lehman Brothers Inc. ....................................... 6,696,000
Jefferies & Company, Inc. .................................. 2,232,000
RBC Dominion Securities Corporation......................... 2,232,000
A.G. Edwards & Sons, Inc. .................................. 120,000
Fahnestock & Co. Inc. ...................................... 120,000
Fidelity Capital Markets
a division of National Financial Services LLC ............ 120,000
Johnson Rice & Company L.L.C. .............................. 120,000
Edward D. Jones & Co., L.P. ................................ 120,000
Legg Mason Wood Walker, Incorporated ....................... 120,000
Raymond James & Associates, Inc. ........................... 120,000
----------
Total............................................. 12,000,000
==========
</TABLE>
The underwriting agreement provides that the underwriters' obligations to
purchase shares of common stock depend on the satisfaction of the conditions
contained in the underwriting agreement. It also provides that if any of the
shares of common stock are purchased by the underwriters under the underwriting
agreement, all of the shares of common stock that the underwriters have agreed
to purchase under the underwriting agreement must be purchased. The conditions
contained in the underwriting agreement include the conditions that:
- the representations and warranties made by us to the underwriters are
true;
- there is no material change in our condition or the financial markets;
and
- we deliver to the underwriters customary closing documents.
The representatives have advised us that they propose to offer the shares
of common stock directly to the public at the public offering price set forth on
the cover page of this prospectus supplement, and to dealers, who may include
the underwriters, at the public offering price less a selling concession not in
excess of $0.16 per share. The underwriters may allow, and the dealers may
reallow, a concession not in excess of $0.10 per share to brokers and dealers.
After completion of the offering, the underwriters may change the offering price
and other selling terms.
We have granted the underwriters an option to purchase up to 1,800,000
additional shares of common stock, exercisable solely to cover over-allotments,
if any, at the public offering price less the underwriting discount shown on the
cover page of this prospectus supplement. The underwriters may exercise this
option at any time until 30 days after the date of the underwriting agreement.
If this option is exercised, each underwriter will be committed, so long as the
conditions of the underwriting agreement are satisfied, to purchase a number of
additional shares of common stock proportionate to the underwriter's initial
commitment as indicated in the table above, and we will be obligated, under the
over-allotment option, to sell the shares of common stock to the underwriters.
Subject to certain exceptions, we have agreed not to, without the prior
consent of Lehman Brothers Inc., directly or indirectly, offer, sell or
otherwise dispose of any shares of common stock or any securities which may be
converted into or exchanged for any such shares of common stock for a period of
90 days from the date of this prospectus supplement. All of our executive
officers and directors have agreed under lock-up agreements that, without the
prior written consent of Lehman Brothers Inc., they will not, directly or
indirectly, offer, sell or otherwise dispose of any shares of common stock or
any
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securities which may be converted into or exchanged for any such shares for the
period ending 90 days after the date of this prospectus supplement.
The underwriting discount is equal to the public offering price per share
of common stock less the amount paid by the underwriters to us per share of
common stock. The underwriting discount is 4.5% of the public offering price. We
have agreed to pay the underwriters the following total amount, assuming either
no exercise or full exercise by the underwriters of their over-allotment option:
<TABLE>
<CAPTION>
TOTAL FEES
----------------------------------------
WITHOUT EXERCISE OF WITH FULL EXERCISE
OVER-ALLOTMENT OF OVER-ALLOTMENT
FEE PER SHARE OPTION OPTION
------------- ------------------- ------------------
<S> <C> <C> <C>
Underwriting discount paid by Parker........... $0.298 $3,576,000 $4,112,400
</TABLE>
We estimate that the total expenses payable by us in connection with this
offering, excluding underwriting discounts and commissions, will be
approximately $500,000.
Our common stock is listed on the New York Stock Exchange under the symbol
"PKD."
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act, and to contribute to payments
that the underwriters may be required to make for these liabilities.
The underwriters may purchase and sell shares of common stock in the open
market. These transactions may include short sales, stabilizing transactions and
purchases to cover positions created by short sales. Short sales involve the
sale by the underwriters of a greater number of shares than they are required to
purchase in the offering. "Covered" short sales are sales made in an amount not
greater than the underwriters' option to purchase additional shares from the
issuer in the offering. The underwriters may close out any covered short
position by either exercising their option to purchase additional shares or
purchasing shares in the open market. In determining the source of shares to
close out the covered short position, the underwriters will consider, among
other things, the price of shares available for purchase in the open market as
compared to the price at which they may purchase shares through the
over-allotment option. "Naked" short sales are any sales in excess of such
option. The underwriters must close out any naked short position by purchasing
shares in the open market. A naked short position is more likely to be created
if the underwriters are concerned that there may be downward pressure on the
price of the common stock in the open market after pricing that could adversely
affect investors who purchase in the offering. Stabilizing transactions consist
of various bids for or purchases of common stock made by the underwriters in the
open market prior to the completion of the offering.
The underwriters may also impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the other underwriters have repurchased shares
sold by or for the account of such underwriter in stabilizing or short covering
transactions.
Similar to other purchase transactions, the underwriters' purchases to
cover the syndicate short sales may have the effect of raising or maintaining
the market price of the common stock or preventing or retarding a decline in the
market price of the common stock. As a result, the price of the common stock may
be higher than the price that might otherwise exist in the open market.
Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the common stock. In addition, neither
we nor any of the underwriters makes any representation that the underwriters
will engage in these transactions or that these transactions, once commenced,
will not be discontinued without notice.
Some of the underwriters or their affiliates have from time to time
provided investment banking and financial advisory services to us and our
affiliates in the ordinary course of business, for which they have received
customary fees, and they may continue to do so.
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Any offers in Canada will be made only under an exemption from the
requirements to file a prospectus in the relevant province of Canada in which
the sale is made.
Purchasers of the shares of common stock offered in this prospectus
supplement may be required to pay stamp taxes and other charges under the laws
and practices of the country of purchase, in addition to the offering price
listed on the cover of this prospectus supplement.
Fidelity Capital Markets, a division of National Financial Services LLC, is
acting as an underwriter of this offering and will be facilitating electronic
distribution through the Internet.
LEGAL MATTERS
Certain legal matters with respect to the common stock will be passed upon
for us by Vinson & Elkins L.L.P., Houston, Texas and for the underwriters by
Baker Botts L.L.P., Houston, Texas.
INDEPENDENT ACCOUNTANTS
The financial statements incorporated by reference from the Annual Report
on Form 10-K of Parker Drilling Company for the year ended December 31, 1999,
have been so incorporated in reliance upon the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
With respect to the unaudited financial information of Parker Drilling
Company for the three-month periods ended March 31, 2000 and 1999 and the three-
and six-month periods ended June 30, 2000 and 1999 included in the Forms 10-Q
for the quarters ended March 31 and June 30, 2000, incorporated by reference in
this prospectus, PricewaterhouseCoopers LLP reported that they have applied
limited procedures in accordance with professional standards for a review of
such information. However, their separate reports dated April 25 and July 27,
2000 incorporated by reference herein, state that they did not and they do not
express an opinion on that unaudited financial information. Accordingly, the
degree of reliance on their report on such information should be restricted in
light of the limited nature of the review procedures applied.
PricewaterhouseCoopers LLP is not subject to the liability provisions of Section
11 of the Securities Act of 1933 for their report on the unaudited financial
information because that report is not a "report" or a "part" of the
registration statement prepared or certified by PricewaterhouseCoopers LLP
within the meaning of Sections 7 and 11 of the Act.
FORWARD-LOOKING STATEMENTS
Statements in this prospectus supplement and the attached prospectus,
including the documents we incorporate by reference, regarding our management's
intentions, beliefs or expectations for the future are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933.
Such statements may be affected by various factors and are subject to numerous
risks summarized under "Forward-Looking Statements" in the attached prospectus.
Actual results and developments may differ materially from those expressed or
implied in this prospectus supplement and in the attached prospectus, including
the documents we incorporate by reference.
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<PAGE> 13
12,000,000 SHARES
[PARKER DRILLING LOGO]
PARKER DRILLING COMPANY
COMMON STOCK
----------------------------
PROSPECTUS SUPPLEMENT
SEPTEMBER 14, 2000
----------------------------
LEHMAN BROTHERS
JEFFERIES & COMPANY, INC.
RBC DOMINION SECURITIES
[MAP]
