<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 10-Q
---------------------
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
----------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (918) 585-8221
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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
--- ---
As of April 30, 2000, 77,527,605 common shares were outstanding.
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<PAGE>
<TABLE>
PARKER DRILLING COMPANY
INDEX
<CAPTION>
<S> <C>
Part I. Financial Information Page No.
Consolidated Condensed Balance Sheets (Unaudited) -
March 31, 2000 and December 31, 1999 2
Consolidated Condensed Statements of Operations (Unaudited) -
Three Months Ended March 31, 2000 and 1999 3
Consolidated Condensed Statements of Cash Flows (Unaudited) -
Three Months Ended March 31, 2000 and 1999 4
Notes to Unaudited Consolidated Condensed
Financial Statements 5 - 7
Report of Independent Accountants 8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 14
Part II. Other Information
Item 6, Exhibits and Reports on Form 8-K 15
Signatures 16
Exhibit 15, Letter Re Unaudited Interim
Financial Information
Exhibit 27, Financial Data Schedule [Edgar Version Only]
</TABLE>
<PAGE>
<PAGE>
<TABLE>
PART 1. FINANCIAL INFORMATION
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
<CAPTION>
March 31, December 31,
2000 1999
----------- ------------
ASSETS
------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 55,256 $ 45,501
Other short-term investments 777 777
Accounts and notes receivable 86,235 75,411
Rig materials and supplies 14,813 13,766
Other current assets 9,976 15,988
---------- ----------
Total current assets 167,057 151,443
Property, plant and equipment less accumulated
depreciation and amortization of $439,077 at
March 31, 2000 and $423,514 at December 31, 1999 640,806 661,402
Goodwill, net of accumulated amortization of
$22,174 at March 31, 2000 and $20,304
at December 31, 1999 202,220 204,090
Other noncurrent assets 68,156 65,808
---------- ----------
Total assets $1,078,239 $1,082,743
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt $ 5,142 $ 5,054
Accounts payable and accrued liabilities 73,041 58,732
Accrued income taxes 7,896 8,323
---------- ----------
Total current liabilities 86,079 72,109
---------- ----------
Long-term debt 647,250 648,577
Deferred income tax 22,114 28,273
Other long-term liabilities 5,470 4,363
Stockholders' equity:
Common stock, $.16 2/3 par value 12,921 12,895
Capital in excess of par value 343,921 343,374
Comprehensive income-net unrealized gain
on investments available for sale (net
of taxes of $2,150 at March 31, 2000 and
$908 at December 31, 1999). 3,821 1,613
Retained earnings (accumulated deficit) (43,337) (28,461)
---------- ----------
Total stockholders' equity 317,326 329,421
---------- ----------
Total liabilities and stockholders' equity $1,078,239 $1,082,743
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Per Share Amounts)
(Unaudited)
<CAPTION>
Three Months Ended
--------------------
March 31, March 31,
2000 1999
-------- --------
<S> <C> <C>
Revenues:
Domestic drilling $ 27,454 $ 28,417
International drilling 38,668 50,941
Rental tools 7,829 7,267
Other 2 221
-------- --------
Total revenues 73,953 86,846
-------- --------
Operating expenses:
Domestic drilling 22,844 27,845
International drilling 30,434 35,018
Rental tools 3,582 2,557
Other (1) 97
Depreciation and amortization 21,025 19,976
General and administrative 5,003 4,404
Restructuring charges - 2,200
Provision for reduction in
carrying value of certain assets - 1,500
-------- --------
Total operating expenses 82,887 93,597
-------- --------
Operating income (loss) (8,934) (6,751)
-------- --------
Other income and (expense):
Interest expense (14,512) (13,264)
Interest income 947 387
Gain on disposition of assets 974 2,440
Other income - net 1,845 1,684
-------- --------
Total other income and (expense) (10,746) (8,753)
-------- --------
Income (loss) before income taxes (19,680) (15,504)
-------- --------
Income tax expense (benefit):
Current tax expense-foreign 2,596 2,992
Deferred tax benefit (7,400) (5,700)
-------- --------
(4,804) (2,708)
-------- --------
Net income (loss) $(14,876) $(12,796)
-------- --------
-------- --------
Earnings (loss) per share,
Basic $ (.19) $ (.17)
-------- --------
Diluted $ (.19) $ (.17)
-------- --------
Number of common shares used
in computing earnings per share:
Basic 77,466,332 76,959,672
---------- ----------
Diluted 77,466,332 76,959,672
---------- ----------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(Dollars in Thousands)
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
-------------------
2000 1999
-------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (14,876) $ (12,796)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 21,025 19,976
Gain on disposition of assets (974) (2,440)
Expenses not requiring cash 1,212 1,064
Deferred income taxes (7,400) (5,700)
Provision for reduction in carrying
value of certain assets - 1,500
Change in operating assets and liabilities 10,163 11,163
--------- ---------
Net cash provided by operating activities 9,150 12,767
--------- ---------
Cash flows from investing activities:
Capital expenditures (net of reimbursements of
$11.0 million in 2000 and $21.5 million in 1999) (386) (15,263)
Proceeds from the sale of equipment 2,217 4,355
Other-net (92) -
--------- ---------
Net cash provided by (used in) investing
activities 1,739 (10,908)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of debt - -
Principal payments under debt obligations (1,134) (1,309)
Other - (66)
--------- ---------
Net cash used in financing activities (1,134) (1,375)
--------- ---------
Net change in cash and cash equivalents 9,755 484
Cash and cash equivalents at
beginning of period 45,501 24,314
--------- ---------
Cash and cash equivalents at
end of period $ 55,256 $ 24,798
--------- ---------
--------- ---------
Supplemental cash flow information:
Interest paid $ 5,457 $ 5,711
Taxes paid $ 3,024 $ 3,797
Supplemental noncash investing activity:
Net unrealized gain on investments available
for sale (net of taxes of $1,242) $ 2,208 $ -
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. General - In the opinion of the Company, the accompanying unaudited
consolidated condensed financial statements reflect all adjustments (of a
normally recurring nature) which are necessary for a fair presentation of
(1) the financial position as of March 31, 2000 and December 31, 1999, (2)
the results of operations for the three months ended March 31, 2000 and
1999, and (3) cash flows for the three months ended March 31, 2000 and
1999. Results for the three months ended March 31, 2000 are not
necessarily indicative of the results which will be realized for the year
ending December 31, 2000. The financial statements should be read in
conjunction with the Company's Form 10-K for the year ended December 31,
1999.
2. Earnings per share -
<TABLE>
RECONCILIATION OF INCOME AND NUMBER OF SHARES USED
TO CALCULATE BASIC AND DILUTED EARNINGS PER SHARE (EPS)
<CAPTION>
For the Three Months Ended
March 31, 2000
------------------------------------------
Income (loss) Shares Per-Share
(Numerator) (Denominator) Amount
------------ ------------- ---------
<S> <C> <C> <C>
Basic EPS:
Income (loss) available to
common stockholders $(14,876,000) 77,466,332 $(.19)
Effect of Dilutive Securities:
Stock options and grants -
Diluted EPS:
Income (loss) available to common
stockholders + assumed
conversions $(14,876,000) 77,466,332 $(.19)
------------ ------------ -----
------------ ------------ -----
</TABLE>
<PAGE>
<PAGE>
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)
<TABLE>
RECONCILIATION OF INCOME AND NUMBER OF SHARES USED
TO CALCULATE BASIC AND DILUTED EARNINGS PER SHARE (EPS)
<CAPTION>
For the Three Months Ended
March 31, 1999
------------------------------------------
Income (loss) Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
<S> <C> <C> <C>
Basic EPS:
Income (loss) available to
common stockholders $(12,796,000) 76,959,672 $(.17)
Effect of Dilutive Securities:
Stock options and grants -
Diluted EPS:
Income (loss) available to common
stockholders + assumed
conversions $(12,796,000) 76,959,672 $(.17)
------------ ----------- -----
------------ ----------- -----
</TABLE>
The Company has outstanding $175,000,000 of Convertible Subordinated Notes
which are convertible into 11,371,020 shares of common stock at $15.39 per
share. The notes have been outstanding since their issuance in July 1997,
but were not included in the computation of diluted EPS because the
assumed conversion of the notes would have had an anti-dilutive effect on
EPS. For the three months ended March 31, 2000 and 1999, options to
purchase 7,269,250 and 5,605,000 shares of common stock, respectively, at
prices ranging from $2.25 to $12.1875, were outstanding but not included
in the computation of diluted EPS because the assumed exercise of the
options would have had an anti-dilutive effect on EPS due to the net loss
incurred during the respective periods.
<PAGE>
<PAGE>
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)
3. Business Segments - During the three months ended March 31, 1999 the
Company restructured its worldwide drilling operations into two primary
business units, "Domestic Operations" and "International Operations." The
primary services the Company provides are as follows: domestic drilling,
international drilling and rental tools. Information regarding the
Company's operations by industry segment for the three months ended March
31, 2000 and 1999 is as follows (dollars in thousands):
<TABLE>
<CAPTION>
March 31, March 31,
2000 1999
---------- -----------
<S> <C> <C>
Revenues:
Domestic drilling $ 27,454 $ 28,417
International drilling 38,668 50,941
Rental tools 7,829 7,267
Other 2 221
--------- ---------
Net revenues $ 73,953 $ 86,846
--------- ---------
Operating income (loss):
Domestic drilling (5,633) (9,737)
International drilling 274 8,829
Rental tools 1,926 2,564
Other (498) (303)
--------- ---------
Total operating income (loss)
by segment <1> (3,931) 1,353
Provision for reduction in
carrying value of certain
assets - (1,500)
Restructuring charges - (2,200)
General and administrative (5,003) (4,404)
--------- ---------
Total operating income (loss) (8,934) (6,751)
Interest expense (14,512) (13,264)
Other income (expense)-net 3,766 4,511
--------- ---------
Income (loss) before income taxes $ (19,680) $ (15,504)
--------- ---------
--------- ---------
</TABLE>
[FN]
<1> Total operating income (loss) by segment is calculated by
excluding General and administrative expense, Restructuring charges
and Provision for reduction in carrying value of certain assets from
Operating income (loss), as reported in the Consolidated Condensed
Statements of Operations.
<PAGE>
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders
Parker Drilling Company
We have reviewed the consolidated condensed balance sheet of Parker
Drilling Company and subsidiaries as of March 31, 2000 and the related
consolidated condensed statements of operations and cash flows for the three
month periods ended March 31, 2000 and 1999. These financial statements are
the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of December 31, 1999,
and the related consolidated statements of operations, stockholders' equity
and cash flows for the year then ended (not presented herein); and in our
report, dated February 3, 2000, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth
in the accompanying condensed consolidated balance sheet as of December 31,
1999, is fairly stated in all material respects in relation to the
consolidated balance sheet from which it has been derived.
By: /s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
April 25, 2000
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Form 10-Q contains certain statements that are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934. These
statements may be made directly in this document, referring to the Company, or
may be "incorporated by reference," referring to other documents filed by the
Company with the Securities and Exchange Commission. All statements included
in this document, other than statements of historical facts, that address
activities, events or developments that the Company expects, projects,
believes or anticipates will or may occur in the future, including future
operating results, future capital expenditures and investments in the
acquisition and refurbishment of rigs and equipment, repayment of debt,
expansion and growth of operations, anticipated cost savings, Year 2000
issues, and other such matters, are forward-looking statements.
Forward-looking statements are based on certain assumptions and analyses
made by the management of the Company in light of their experience and
perception of historical trends, current conditions, expected future
developments and other factors they believe are relevant. Although management
of the Company believes that their assumptions are reasonable based on current
information available, they are subject to certain risks and uncertainties,
many of which are outside the control of the Company. These risks include
worldwide economic and business conditions, fluctuations in the market prices
of oil and gas, industry conditions, international trade restrictions and
political instability, operating hazards and uninsured risks, governmental
regulations and environmental matters, substantial leverage, seasonality and
adverse weather conditions, concentration of customer and supplier
relationships, upgrade and refurbishment projects, competition, integration of
operations, acquisition strategy, and other similar factors (some of which are
discussed in documents referred to in this Form 10-Q.) Because the forward-
looking statements are subject to risks and uncertainties, the actual results
of operations and actions taken by the Company may differ materially from
those expressed or implied by such forward-looking statements.
OUTLOOK AND OVERVIEW
- --------------------
The loss recognized for the three months ended March 31, 2000 reflects
the continued weakness in most of the Company's drilling markets which has
resulted in a significant decrease in rig utilization and in dayrates since
the third quarter of fiscal year 1998. Lower crude oil prices throughout
calendar 1998 and into early 1999 negatively impacted the revenue and profits
of oil operators, who responded by reducing exploration and development
expenditures. This decline in spending adversely affected the level of
oilfield activity, and in turn, the revenue of most companies in the oilfield
service industry. Although crude oil and natural gas prices have increased
recently, oil operators have been slow to increase the exploration and
development spending in the areas where the Company operates. Management is
unable to predict when and to what extent that spending by operators, rig
dayrates and utilization will be positively affected by the increase in crude
oil prices.
Management anticipates that the Company will continue to incur losses
until there is a significant increase in the level of oilfield activity.
Management believes, however, that cash on hand, cash provided by operations
and funds available under the Company's $50 million revolving credit facility
will be adequate to meet working capital needs and maintenance capital
expenditures.
<PAGE>
<PAGE>
RESULTS OF OPERATIONS (continued)
- ---------------------
Three Months Ended March 31, 2000 Compared with Three Months Ended March 31,
- ---------------------------------------------------------------------------
1999
- -----
The Company recorded a net loss of $14.9 million for the three months
ended March 31, 2000 compared to a net loss of $12.8 million recorded for the
three month period ended March 31, 1999. The net loss in the first quarter of
2000 is reflective of the continuing decline in utilization in the
international land drilling operations. Decreased operating income from the
Company's international drilling operations exceeded the increase in
utilization and dayrates generated from domestic offshore drilling operations
in the Gulf of Mexico.
The Company's revenues decreased $12.9 million to $74.0 million in the
current quarter as compared to the first quarter of 1999. Domestic drilling
revenue decreased $1.0 million to $27.4 million. Domestic offshore drilling
revenues increased $5.7 million due primarily to increased utilization for the
intermediate and deep drilling barges and increased utilization and dayrates
for the jackup drilling rigs. The increase in offshore drilling revenues were
offset by the decrease in domestic land drilling. Domestic land drilling
revenue decreased $6.7 million related primarily to the sale of the Company's
thirteen lower 48 land rigs on September 30, 1999. The Company's one
remaining domestic land rig, located in Alaska, was stacked throughout the
current quarter and was operating during part of the comparable quarter in
1999.
International drilling revenue declined $12.3 million to $38.7 million in
the current quarter as compared to the first quarter of 1999. International
land drilling revenues decreased $16.2 million while offshore drilling
revenues increased $3.9 million. Primarily responsible for the international
land drilling revenues decrease was the Latin America region, which decreased
$9.7 million. This decrease is attributed to reduced rig utilization in
Colombia, Bolivia and Peru. In addition, land drilling revenues decreased in
the Asia Pacific region primarily attributed to New Guinea and Vietnam. The
Vietnam revenues in 1999 related to a one rig drilling contract that ended
during the third quarter of 1999.
<PAGE>
<PAGE>
RESULTS OF OPERATIONS (continued)
- ---------------------
The increase of $3.9 million in international offshore drilling revenues
was due primarily to revenues earned by newly constructed barge Rig 257 in the
Caspian Sea and barge Rig 75 in Nigeria. Rig 257 contributed $6.1 million
revenues during the current quarter despite being on a reduced dayrate for
approximately five weeks during the quarter due to winter conditions. With
the addition of Rig 75 the Company has four barge rigs in the Nigerian
offshore market. Due to continuing community unrest three of the four barge
rigs were on standby status during the current quarter, while one rig, barge
Rig 74, operated for 18 days. Despite the standby status, which resulted in
decreased revenues earned by the rigs, Nigerian offshore revenues increased
$1.8 million to $10.3 million during the current quarter. The increase is due
to revenues earned by the new barge Rig 75 and the start-up of drilling
operations on Rig 74 which was on standby status in the comparable quarter of
1999. Drilling operations on the remaining Nigerian barges are expected to
recommence during the second quarter. Offsetting the increased revenues in
the Caspian Sea and Nigeria was a $4.0 million decrease in international
offshore revenues due to the completion of a barge contract in Venezuela
during the third quarter of 1999.
Rental tool revenue increased $.6 million due to the increased level of
drilling activity in the Gulf of Mexico.
Profit margins (revenues less direct operating expenses) of $17.1 million
in the current quarter reflect a decrease of $4.2 million from the $21.3
million recorded during the three months ended March 31, 1999. The domestic
and international drilling segments recorded profit margin percentages (profit
margin as a percent of revenues) of 16.8% and 21.3% in the current quarter, as
compared to 2.0% and 31.3% in the first quarter of 1999. Domestically, profit
margins increased $4.0 million. Domestic profit margins were positively
impacted during the current quarter by increasing utilization in the Gulf of
Mexico particularly from the intermediate and deep drilling barges, and from
the jackup rigs. In addition, average dayrates for the jackup rigs increased
approximately 5% during the current quarter when compared to the first quarter
of 1999. Offsetting the increased domestic offshore profit margins was the
sale of all thirteen lower 48 domestic land rigs during the third quarter of
1999. In addition, the remaining domestic land rig, located in Alaska, has
been stacked since March, 1999.
International drilling profit margins declined $7.7 million to $8.2
million in the current quarter as compared to the first quarter of 1999.
International land drilling profit margins declined $5.5 million to $5.2
million during the current quarter primarily due to lower utilization in the
Company's land drilling operations as previously discussed. The international
offshore drilling profit margins declined $2.1 million to $3.0 million in the
current quarter. This decrease is primarily attributed to three barge rigs in
Nigeria on standby status during the current quarter due to community unrest.
Drilling operations are expected to recommence during the second quarter.
Depreciation and amortization expense increased $1.0 million to $21.0
million in the current quarter. Depreciation expense recorded on 1998/1999
capital additions, principally barge Rigs 257 and 75, was the primary reason
for the increase.
Interest expense increased $1.3 million due to $1.5 million in interest
capitalized to construction projects during the first quarter of 1999, no
interest was capitalized during the current quarter.
<PAGE>
<PAGE>
RESULTS OF OPERATIONS (continued)
- ---------------------
Income tax expense consists of foreign tax expense and deferred tax
benefit. Lower international drilling revenues and operating income has
resulted in a decrease in foreign tax expense when comparing the two periods.
The deferred tax benefit is due to the net loss incurred during the three
months ended March 31, 2000.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
As of March 31, 2000, the Company had cash, cash equivalents and other
short-term investments of $56.0 million, an increase of $9.7 million from
December 31, 1999. The primary sources of cash for the three-month period as
reflected on the Consolidated Statement of Cash Flows were $2.2 million from
the disposition of equipment, reimbursements approximating $11 million from
the operator to offset a portion of the expenditures to modify Rig 257 for
service in the Caspian Sea and $9.2 million provided by operating activities.
The primary uses of cash for the three-month period ended March 31, 2000
were $.4 million for capital expenditures (net of reimbursements) and $1.1
million for repayment of debt. Major projects included the modification of
Rig 249 for a contract to begin in the second half of 2000 in Kazakhstan.
To finance the Company's 1996 and 1997 acquisitions and the significant
capital expenditures made in 1998 and 1999, the Company has issued various
debt instruments. The Company has total long-term debt, including the current
portion, of $652.4 million at March 31, 2000. The Company entered into a
$50.0 million revolving credit facility with a group of banks led by Bank of
America on October 22, 1999. This facility is available for working capital
requirements, general corporate purposes and to support letters of credit.
The revolver is collateralized by accounts receivable, inventory and certain
barge rigs located in the Gulf of Mexico. The facility contains customary
affirmative and negative covenants. Availability under the revolving credit
facility is subject to certain borrowing base limitations based on 80 percent
of eligible receivables plus 50 percent of supplies in inventory. Currently,
the borrowing base is $43.7 million of which none has been drawn down and $8.1
million in letters of credit have been issued. The revolver terminates on
October 22, 2003. On October 7, 1999 a subsidiary of the Company entered into
a loan agreement with Boeing Capital Corporation for refinancing the
construction costs of Rig 75. The loan of $24.8 million plus interest is to
be repaid in 60 monthly payments of $0.5 million. The loan is collateralized
by Rig 75 and is guaranteed by the Parent.
<PAGE>
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES (continued)
- -------------------------------
The Company anticipates that working capital needs and funds required for
capital spending in 2000 will be met from existing cash, other short-term
investments, cash provided by operations, reimbursements from the operator for
expenditures on Rig 257 and, if necessary, from proceeds from sale of the Unit
common stock and funds available under the Company's revolving credit
facility. The Company anticipates cash requirements for capital spending will
be approximately $38 million, net of reimbursements, in 2000. Should new
opportunities requiring additional capital arise, the Company may utilize the
revolving credit facility. In addition, the Company may seek project
financing or equity participation from outside alliance partners or customers.
The Company cannot predict whether such financing or equity participation
would be available on terms acceptable to the Company.
<PAGE>
<PAGE>
OTHER MATTERS
- -------------
Indonesian Operations
- ---------------------
The current political and currency instability in Indonesia has created
uncertainty regarding the Company's Indonesian operations. The Company
provides management, technical and training support to an Indonesian-owned
drilling contractor, whose services include the drilling of geothermal wells
related to power plant projects. Due to the uncertain economic conditions,
certain of these power plant projects have been postponed or delayed. As a
result, payments from a significant customer for services provided by the
Indonesian contractor have been delayed. The Indonesian contractor initiated
two arbitration proceedings in late 1998 to collect these delinquent payments.
Recently, the arbitration panel awarded the contractor approximately $4.5
million including interest in the first proceeding. The contractor has
advised it will vigorously pursue collection of this award and prosecution of
a second arbitration proceeding in which the contractor is claiming
approximately $4.0 million. The Company believes that resolution of this
matter will not have a material adverse effect on the Company's results of
operations or financial position.
Year 2000
- ---------
The Company began preparing for Year 2000 in 1997 by replacing critical
financial, human resources and payroll systems with Year 2000 compliant off-
the-shelf software. The Year 2000 problem was not the main reason for
upgrading the information technology platform; however, it was beneficial in
achieving Year 2000 compliance. The Company also prepared contingency plans
to cover failures in its supply chain, communications, civil disturbances and
information technology systems.
The Company estimates that $225,000 was spent during 1998 and 1999 in its
Year 2000 compliance efforts. While the majority of those costs were internal
salaries, the Company's process for tracking internal costs did not capture
all of the costs incurred for each individual task on the project.
During the Year 2000 date transition, the Company did not experience any
material failure with its Information Technology or non-Information Technology
systems or key customers or suppliers. The Company will continue to monitor
mission critical applications, processes and vendors throughout the Year 2000
for any latent issues that may arise.
<PAGE>
PART II. OTHER INFORMATION
<TABLE>
<CAPTION>
<S> <C> <C>
Item 6. Exhibits and Reports on Form 8-K Page
(a) Exhibits:
Exhibit 15 Letter re Unaudited Interim Financial Information 18
Exhibit 27 Financial Data Schedule [Edgar Version Only]
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements 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
-----------------------
Registrant
Date: May 10, 2000
By: /s/ James J. Davis
----------------------------------------------
James J. Davis
Senior Vice President-Finance and
Chief Financial Officer
By: /s/ W. Kirk Brassfield
----------------------------------------------
W. Kirk Brassfield
Controller and
Chief Accounting Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- ------- -----------
15 Letter re Unaudited Interim Financial Information
27 Financial Data Schedule [Edgar Version Only]
<PAGE>
Exhibit 15
May 10, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 10549
Re: Parker Drilling Company
Registration on Form S-8 and Form S-3
We are aware that our report dated April 25, 2000, on our review of the interim
financial information of Parker Drilling Company for the three month periods
ended March 31, 2000 and 1999 and included in this Form 10-Q for the quarter
ended March 31, 2000 is incorporated by reference in the Company's registration
statements on Form S-8 (File No. 2-87944, 33-24155, 33-56698 and 33-57345), and
Form S-3 (File No. 333-36498).
By: /s/PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2000 AND THE
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED
MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 55,256
<SECURITIES> 777
<RECEIVABLES> 91,309
<ALLOWANCES> 5,074
<INVENTORY> 0
<CURRENT-ASSETS> 167,057
<PP&E> 1,079,883
<DEPRECIATION> 439,077
<TOTAL-ASSETS> 1,078,239
<CURRENT-LIABILITIES> 86,079
<BONDS> 647,250
0
0
<COMMON> 12,921
<OTHER-SE> 304,405
<TOTAL-LIABILITY-AND-EQUITY> 1,078,239
<SALES> 0
<TOTAL-REVENUES> 73,953
<CGS> 0
<TOTAL-COSTS> 77,884
<OTHER-EXPENSES> 5,003
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,512
<INCOME-PRETAX> (19,680)
<INCOME-TAX> (4,804)
<INCOME-CONTINUING> (14,876)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (14,876)
<EPS-BASIC> (.19)
<EPS-DILUTED> (.19)
</TABLE>
