EX-99 2 a123115-exhibit991.htm EXHIBIT 99 Exhibit
Exhibit 99


Parker Drilling Reports 2015 Fourth Quarter Results

HOUSTON, February 17, 2016 - Parker Drilling Company (NYSE: PKD) today reported results for the quarter ended December 31, 2015, including a net loss of $35.6 million, or $(0.29) per share, on revenues of $148.7 million.
The net loss included the following pre-tax charges:
* $6.1 million of asset and inventory write-offs, which include $4.8 million to reduce the carrying value of two rigs and $1.3 million in inventory writedowns, related to the Company's decision to no longer provide its drilling services in Colombia;
* $4.3 million of non-cash charges to increase the provision for the reduction in carrying value of certain drilling-related assets; and,
* $4.8 million loss associated with the sale of the Company's investment in a joint venture.
Excluding these pre-tax charges, the adjusted net loss was $23.3 million, or $(0.19) per share.
Fourth quarter Adjusted EBITDA was $28.6 million, compared with $35.4 million for the preceding quarter.
Gary Rich, the Company's Chairman, President and CEO said, "Cost reductions, particularly those implemented in the second half of the year, resulted in fourth quarter Adjusted EBITDA that was slightly higher than we anticipated despite a 14 percent sequential decline in revenues. We experienced activity declines across all three segments as low commodity prices continued to curtail customer activity across multiple geographic markets.
2015 Summary
"In 2015, we successfully accomplished several initiatives aimed at navigating this difficult operating environment. We lowered our cost base through headcount reductions and minimized rig-related costs, maintained our working capital diligence, reduced capital expenditures and, where possible, sustained utilization and market share.
"We further strengthened our financial position by reducing our total debt by $30 million during the year and enhanced our liquidity and financial flexibility by increasing our revolver capacity. By efficiently managing our cash receipts and spending, we ended the year with a cash balance of $134 million and an undrawn revolver. Our total liquidity as of December 31, 2015 was approximately $322 million as compared with approximately $178 million at December 31, 2014.
"From an operational perspective, our U.S. rental tools business outperformed the U.S. rig count as we maintained share and grew our Gulf of Mexico footprint. While the U.S. rig count declined 47 percent in 2015, our U.S. rental tools revenue was 37 percent lower. In addition, we increased gross margin as a percentage of revenue in our international rental tools business despite lower revenue as we inserted new management, consolidated and closed locations, reduced headcount, and improved the management of our supply chain.
"Going forward, we believe rig utilization and pricing will continue to come under pressure, especially as the deteriorating market fundamentals impact our international drilling customers. We also think the lower U.S. rig count will further impact utilization and pricing for our rental tools. In response, we will maintain our focus on managing our cash flows. As part of that strategy, our 2016 capital expenditures are expected to be approximately $50 million as compared with $88 million in 2015."
Fourth Quarter Review
Parker Drilling's revenues for the 2015 fourth quarter, compared with the 2015 third quarter, decreased 14.2 percent to $148.7 million from $173.4 million, operating gross margin excluding depreciation and amortization expense (gross margin) decreased 22.7 percent to $34.3 million from $44.4 million and gross margin as a percentage of revenues was 23.1 percent, compared with 25.6 percent for the prior period.
Drilling Services
For the Company’s Drilling Services business, which is comprised of the U.S. (Lower 48) Drilling and International & Alaska Drilling segments, revenues declined 15.1 percent to $99.0 million from $116.6 million, gross margin decreased 24.6 percent to $20.5 million from $27.2 million, and gross margin as a percentage of revenues was 20.7 percent, compared with 23.3 percent for the prior period.
U.S. (Lower 48) Drilling
U.S. (Lower 48) Drilling segment revenues were $3.5 million, a 41.7 percent decrease from 2015 third quarter revenues of $6.0 million. Gross margin was a $2.2 million loss as compared with a 2015 third quarter gross margin loss of $1.9 million. The declines in revenues and margin were primarily the result of lower utilization, partially offset by lower costs.



International & Alaska Drilling
International & Alaska Drilling segment revenues were $95.5 million, a 13.7 percent decrease from 2015 third quarter revenues of $110.7 million. Gross margin was $22.6 million, a 22.3 percent decrease from 2015 third quarter gross margin of $29.1 million. Gross margin as a percentage of revenues was 23.7 percent as compared with 26.3 percent in the 2015 third quarter. The decrease in revenues is primarily attributable to lower Latin America rig utilization and project services activities, partially offset by lower operating costs.
Rental Tools Services
Rental Tools segment revenues were $49.8 million, a 12.3 percent decrease from 2015 third quarter revenues of $56.8 million. Gross margin was $13.8 million, a 19.8 percent decrease from 2015 third quarter gross margin of $17.2 million. Gross margin as a percentage of revenues was 27.7 percent as compared with 30.3 percent in the 2015 third quarter. Reduced revenues and gross margin were primarily due to the continued decline in U.S. land drilling activity, as well as lower activity in certain international markets.
General and Administrative expense decreased to $6.9 million for the 2015 fourth quarter, from $8.9 million for the 2015 third quarter.
The Company's effective tax rate in the fourth quarter was 7%, primarily due to discrete items as well as receiving no tax benefit from certain charges incurred during the quarter.
Capital expenditures in the fourth quarter were $15.7 million, and were $88.2 million for the year.
Conference Call
Parker Drilling has scheduled a conference call for 10:00 a.m. Central Time (11:00 a.m. Eastern Time) on Thursday, February 18, 2016, to review reported results.  The call will be available by telephone at (888) 510-1785, access code 2054769.  The call can also be accessed through the Investor Relations section of the Company's website.  A replay of the call can be accessed on the Company's website for 12 months and will be available by telephone from February 18, 2016 through February 25, 2016 at (888) 203-1112, access code 2054769#.
Cautionary Statement
This press release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements in this press release 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 are forward-looking statements. These statements include, but are not limited to, statements about anticipated future financial or operational results; the outlook for rental tools utilization and rig utilization and dayrates; the results of past capital expenditures; scheduled start-ups of rigs; general industry conditions such as the demand for drilling and the factors affecting demand; competitive advantages such as technological innovation; future operating results of the Company's rigs, rental tools operations and projects under management; future capital expenditures; expansion and growth opportunities; acquisitions or joint ventures; asset sales; successful negotiation and execution of contracts; scheduled delivery of drilling rigs or rental equipment for operation; the strengthening of the Company's financial position; increases in utilization or market share; outcomes of legal proceedings; compliance with credit facility and indenture covenants; and similar matters. These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Although the Company believes that its expectations stated in this press release are reasonable, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, that could cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include risks relating to changes in worldwide economic and business conditions, fluctuations in oil and natural gas prices, compliance with existing laws and changes in laws or government regulations, the failure to realize the benefits of, and other risks relating to, acquisitions, the risk of cost overruns, our ability to refinance our debt and other important factors, many of which could adversely affect market conditions, demand for our services, and costs, and all or any one of which could cause actual results to differ materially from those projected. For more information, see "Risk Factors" in the Company's Annual Report filed on Form 10-K with the Securities and Exchange Commission and other public filings and press releases. Each forward-looking statement speaks only as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Company Description
Parker Drilling provides drilling services and rental tools to the energy industry. The Company's Drilling Services business serves operators in the inland waters of the U.S. Gulf of Mexico utilizing Parker Drilling's barge rig fleet and in select international markets and harsh-environment regions utilizing Parker-owned and customer-owned equipment. The Company's Rental Tools Services business supplies premium equipment and well services to operators on land and offshore in the U.S. and international markets.  More information about Parker Drilling can be found on the Company's website at www.parkerdrilling.com.





CONTACT: Jason Geach, Vice President, Investor Relations & Corporate Development, (281) 406-2310, jason.geach@parkerdrilling.com; or Greg Rosenstein, Director of Investor Relations, (281) 406-2030, gregory.rosenstein@parkerdrilling.com.





PARKER DRILLING COMPANY
Consolidated Condensed Balance Sheets
(Dollars in Thousands)
 
 
 
 
 
December 31, 2015
 
December 31, 2014
 
(Unaudited)
 
 
ASSETS
 
 
 
CURRENT ASSETS
 
 
 
Cash and Cash Equivalents
$
134,294

 
$
108,456

Accounts and Notes Receivable, Net
175,105

 
270,952

Rig Materials and Supplies
34,937

 
47,943

Deferred Costs
1,367

 
5,673

Other Current Assets
21,038

 
29,279

TOTAL CURRENT ASSETS
366,741

 
462,303

 
 
 
 
PROPERTY, PLANT AND EQUIPMENT, NET
805,841

 
895,940

 
 
 
 
OTHER ASSETS
 
 
 
Deferred Income Taxes
139,282

 
130,165

Other Assets
65,040

 
32,251

TOTAL OTHER ASSETS
204,322

 
162,416

 
 
 
 
TOTAL ASSETS
$
1,376,904

 
$
1,520,659

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
CURRENT LIABILITIES
 
 
 
Current Portion of Long-Term Debt
$
—

 
$
10,000

Accounts Payable and Accrued Liabilities
136,121

 
168,665

TOTAL CURRENT LIABILITIES
136,121

 
178,665

 
 
 
 
LONG-TERM DEBT
585,000

 
605,000

 
 
 
 
LONG-TERM DEFERRED TAX LIABILITY
68,654

 
52,115

 
 
 
 
OTHER LONG-TERM LIABILITIES
18,617

 
18,665

 
 
 
 
TOTAL CONTROLLING INTEREST IN STOCKHOLDERS' EQUITY
568,512

 
662,431

Noncontrolling interest
—

 
3,783

TOTAL EQUITY
568,512

 
666,214

 
 
 
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
1,376,904

 
$
1,520,659

 
 
 
 
 
 
 
 
Current Ratio
2.69

 
2.59

 
 
 
 
Total Debt as a Percent of Capitalization
51
%
 
48
%



PARKER DRILLING COMPANY
Consolidated Statement Of Operations
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
 
 
 
 
 
Three Months Ended September 30,
 
Three Months Ended December 31,
 
 
2015
 
2014
 
2015
 
 
 
 
 
 
REVENUES
$
148,748

 
$
243,213

 
$
173,418

 
 
 
 
 
 
EXPENSES:
 
 
 
 
 
Operating Expenses
114,488

 
167,990

 
128,963

Depreciation and Amortization
37,720

 
38,455

 
39,584

 
152,208

 
206,445

 
168,547

TOTAL OPERATING GROSS MARGIN
(3,460
)
 
36,768

 
4,871

 
 
 
 
 
 
General and Administrative Expense
(6,947
)
 
(9,675
)
 
(8,895
)
Provision for Reduction in Carrying Value of Certain Assets
(9,268
)
 
—

 
(906
)
Gain (Loss) on Disposition of Assets, Net
(1,043
)
 
621

 
383

 
 
 
 
 
 
TOTAL OPERATING INCOME (LOSS)
(20,718
)
 
27,714

 
(4,547
)
 
 
 
 
 
 
OTHER INCOME AND (EXPENSE):
 
 
 
 
 
Interest Expense
(11,388
)
 
(10,779
)
 
(11,293
)
Interest Income
60

 
39

 
7

Other
(6,119
)
 
1,148

 
(719
)
TOTAL OTHER EXPENSE
(17,447
)
 
(9,592
)
 
(12,005
)
 
 
 
 
 
 
INCOME (LOSS) BEFORE INCOME TAXES
(38,165
)
 
18,122

 
(16,552
)
 
 
 
 
 
 
INCOME TAX EXPENSE (BENEFIT)
(2,519
)
 
9,983

 
31,930

 
 
 
 
 
 
NET INCOME (LOSS)
(35,646
)
 
8,139

 
(48,482
)
 
 
 
 
 
 
Less: net income attributable to noncontrolling interest
—

 
386

 
138

NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST
$
(35,646
)
 
$
7,753

 
$
(48,620
)
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS (LOSS) PER SHARE - BASIC
$
(0.29
)
 
$
0.06

 
$
(0.40
)
 
 
 
 
 
 
EARNINGS (LOSS) PER SHARE - DILUTED
$
(0.29
)
 
$
0.06

 
$
(0.40
)
 
 
 
 
 
 
NUMBER OF COMMON SHARES USED IN COMPUTING EARNINGS PER SHARE:
 
 
 
 
 
Basic
122,951,598

 
121,755,421

 
122,933,518

Diluted
122,951,598

 
123,295,412

 
122,933,518




PARKER DRILLING COMPANY
Consolidated Statement Of Operations
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
 
 
 
 
 
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
 
 
 
 
 
 
REVENUES
$
712,183

 
$
968,684

 
$
874,172

 
 
 
 
 
 
EXPENSES:
 
 
 
 
 
Operating Expenses
526,290

 
669,381

 
571,672

Depreciation and Amortization
156,194

 
145,121

 
134,053

 
682,484

 
814,502

 
705,725

TOTAL OPERATING GROSS MARGIN
29,699

 
154,182

 
168,447

 
 
 
 
 
 
General and Administrative Expense
(36,190
)
 
(35,016
)
 
(68,025
)
Provision for Reduction in Carrying Value of Certain Assets
(12,490
)
 
—

 
(2,544
)
Gain on Disposition of Assets, Net
1,643

 
1,054

 
3,994

 
 
 
 
 
 
TOTAL OPERATING INCOME (LOSS)
(17,338
)
 
120,220

 
101,872

 
 
 
 
 
 
OTHER INCOME AND (EXPENSE):
 
 
 
 
 
Interest Expense
(45,155
)
 
(44,265
)
 
(47,820
)
Interest Income
269

 
195

 
2,450

Loss on extinguishment of debt
—

 
(30,152
)
 
(5,218
)
Other
(9,747
)
 
2,539

 
1,503

TOTAL OTHER EXPENSE
(54,633
)
 
(71,683
)
 
(49,085
)
 
 
 
 
 
 
INCOME (LOSS) BEFORE INCOME TAXES
(71,971
)
 
48,537

 
52,787

 
 
 
 
 
 
INCOME TAX EXPENSE
22,313

 
24,076

 
25,608

 
 
 
 
 
 
NET INCOME (LOSS)
(94,284
)
 
24,461

 
27,179

 
 
 
 
 
 
Less: net income attributable to noncontrolling interest
789

 
1,010

 
164

NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST
$
(95,073
)
 
$
23,451

 
$
27,015

 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS (LOSS) PER SHARE - BASIC
$
(0.78
)
 
$
0.19

 
$
0.23

 
 
 
 
 
 
EARNINGS (LOSS) PER SHARE - DILUTED
$
(0.78
)
 
$
0.19

 
$
0.22

 
 
 
 
 
 
NUMBER OF COMMON SHARES USED IN COMPUTING EARNINGS PER SHARE:
 
 
 
 
 
Basic
122,562,187

 
121,186,464

 
119,284,468

Diluted
122,562,187

 
123,076,648

 
121,224,550




PARKER DRILLING COMPANY
Selected Financial Data
(Dollars in Thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended December 31,
 
 
 
December 31,
 
September 30,
 
2015
 
2014
 
2013
 
 
 
2015
 
2014
 
2015
 
 
 
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
Drilling Services:
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. (Lower 48) Drilling
 
$
3,451

 
$
32,124

 
$
5,961

 
$
30,358

 
$
158,405

 
$
153,624

 
International & Alaska Drilling
 
95,546

 
118,711

 
110,661

 
435,096

 
462,513

 
410,507

 
Total Drilling Services:
 
98,997

 
150,835

 
116,622

 
465,454

 
620,918

 
564,131

 
Rental Tools
 
49,751

 
92,378

 
56,796

 
246,729

 
347,766

 
310,041

 
  Total Revenues
 
$
148,748

 
$
243,213

 
$
173,418

 
$
712,183

 
$
968,684

 
$
874,172

 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
 
 
 
 
Drilling Services:
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. (Lower 48) Drilling
 
$
5,616

 
$
21,369

 
$
7,820

 
$
36,247

 
$
90,314

 
$
84,209

 
International & Alaska Drilling
 
72,902

 
93,564

 
81,586

 
325,346

 
368,424

 
324,439

 
Total Drilling Services:
 
78,518

 
114,933

 
89,406

 
361,593

 
458,738

 
408,648

 
Rental Tools
 
35,970

 
53,057

 
39,557

 
164,697

 
210,643

 
163,024

 
  Total Operating Expenses
 
$
114,488

 
$
167,990

 
$
128,963

 
$
526,290

 
$
669,381

 
$
571,672

 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING GROSS MARGIN:
 
 
 
 
 
 
 
 
 
 
 
 
 
Drilling Services:
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. (Lower 48) Drilling
 
$
(2,165
)
 
$
10,755

 
$
(1,859
)
 
$
(5,889
)
 
$
68,091

 
$
69,415

 
International & Alaska Drilling
 
22,644

 
25,147

 
29,075

 
109,750

 
94,089

 
86,068

 
Total Drilling Services:
 
20,479

 
35,902

 
27,216

 
103,861

 
162,180

 
155,483

 
Rental Tools
 
13,781

 
39,321

 
17,239

 
82,032

 
137,123

 
147,017

 
Depreciation and Amortization
 
(37,720
)
 
(38,455
)
 
(39,584
)
 
(156,194
)
 
(145,121
)
 
(134,053
)
 
  Total Operating Gross Margin
 
$
(3,460
)
 
$
36,768

 
$
4,871

 
$
29,699

 
$
154,182

 
$
168,447

 
 
 
 
 
 
 
 
 
 
 
 
 
 




PARKER DRILLING COMPANY
Adjusted EBITDA
(Dollars in Thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
March 31, 2015
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss) Attributable to Controlling Interest
 
$
(35,646
)
 
$
(48,620
)
 
$
(14,029
)
 
$
3,222

 
$
7,753

Interest Expense
 
11,388

 
11,293

 
11,396

 
11,078

 
10,779

Income Tax (Benefit) Expense
 
(2,519
)
 
31,930

 
(6,916
)
 
(182
)
 
9,983

Depreciation and Amortization
 
37,720

 
39,584

 
38,351

 
40,539

 
38,455

 
 
 
 
 
 
 
 
 
 
 
EBITDA
 
10,943

 
34,187

 
28,802

 
54,657

 
66,970

 
 
 
 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
 
 
 
Other Income and Expense
 
6,059

 
712

 
1,510

 
1,197

 
(1,187
)
(Gain) Loss on Disposition of Assets, Net
 
1,043

 
(383
)
 
138

 
(2,441
)
 
(621
)
Provision for Reduction in Carrying Value of Certain Assets
 
9,268

 
906

 
2,316

 
—

 
—

Special items (2)
 
1,265

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA (1)
 
$
28,578

 
$
35,422

 
$
32,766

 
$
53,413

 
$
65,162

 
 
 
 
 
 
 
 
 
 
 

(1) We believe Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare our core operating results from period to period by removing the impact of our capital structure (interest expense from our outstanding debt), asset base (depreciation and amortization), remeasurement of foreign currency transactions, tax consequences, impairment and other special items. Special items include items impacting operating expenses that management believes detract from an understanding of normal operating performance. Management uses Adjusted EBITDA as a supplemental measure to review current period operating performance and period to period comparisons. Our Adjusted EBITDA may not be comparable to a similarly titled measure of another company because other entities may not calculate EBITDA in the same manner. EBITDA and Adjusted EBITDA are not measures of financial performance under U.S. Generally Accepted Accounting Principles (GAAP), and should not be considered in isolation or as an alternative to operating income or loss, net income or loss, cash flows provided by or used in operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP.

(2) For the three months ended December 31, 2015, special items include a $1.3 million write-off of inventory associated with our decision to no longer provide drilling services in Colombia.







PARKER DRILLING COMPANY
Reconciliation of Adjusted Earnings Per Share
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
 
 
 
Three Months Ended
 
 
 
December 31,
 
September 30,
 
 
 
2015
 
2014
 
2015
 
 
 
 
 
 
 
 
 Net income attributable to controlling interest
 
$
(35,646
)
 
$
7,753

 
$
(48,620
)
 Earnings per diluted share
 
$
(0.29
)
 
$
0.06

 
$
(0.40
)
 
 
 
 
 
 
 
 
 Adjustments:
 
 
 
 
 
 
 
Sale of investment in joint venture
 
$
4,799

 
—

 
—

 
Provision for reduction in carrying value of certain assets
 
9,268

 
—

 
—

 
Write-off inventory
 
1,265

 
—

 
—

 
Valuation allowance
 
—

 
—

 
36,632

 
           Total adjustments
 
15,332

 
—

 
36,632

 
 Tax effect of adjustments
 
(3,010
)
 
—

 
—

 
           Net adjustments
 
12,322

 
—

 
36,632

 
 
 
 
 
 
 
 
 Adjusted net income attributable to controlling interest(1)
 
$
(23,324
)
 
$
7,753

 
$
(11,988
)
 Adjusted earnings per diluted share(1)
 
$
(0.19
)
 
$
0.06

 
$
(0.10
)

(1) We believe Adjusted net income (loss) attributable to controlling interest and Adjusted earnings per diluted share are useful financial measures for investors to assess and understand operating performance for period to period comparisons. Management views the adjustments to net income attributable to controlling interest and earnings per diluted share to be items outside of the Company’s normal operating results. Adjusted net income (loss) attributable to controlling interest and Adjusted earnings per diluted share are not measures of financial performance under GAAP, and should not be considered in isolation or as an alternative to net income (loss) or earnings per diluted share.