Parker Drilling Reports Results for 2009 Year and Fourth Quarter

HOUSTON, Feb. 25 /PRNewswire-FirstCall/ -- Parker Drilling (NYSE: PKD), a global drilling contractor and service provider, today reported results for the year and three-month periods ended December 31, 2009.  The Company's results for the year included net income of $9.3 million or $0.08 per diluted share on revenues of $752.9 million, compared with net income of $22.7 million or $0.20 per diluted share on revenues of $829.8 million for the prior year.  Excluding the effects of non-routine items the Company reported 2009 net income of $16.5 million or $0.14 per diluted share, compared with similarly adjusted 2008 net income of $92.6 million or $0.82 per diluted share.  Adjusted EBITDA, excluding non-routine items, was $166.8 million, compared with $285.6 million for the prior year.  

For the three months ended December 31, 2009, Parker reported a net loss of $4.3 million or $0.04 per diluted share on revenues of $175.8 million, compared with a net loss of $40.2 million or $0.36 per diluted share on revenues of $212.4 million for the prior year's fourth quarter.  Excluding the effects of non-routine items the Company reported a 2009 fourth quarter net loss of $0.5 million or $0.00 per diluted share, compared with similarly adjusted 2008 fourth quarter net income of $29.2 million or $0.26 per diluted share.  Adjusted EBITDA, excluding non-routine items, was $34.5 million, compared with $75.6 million for the prior year's fourth quarter.

"As a result of our business balance and geographic diversity Parker was able to lessen the impact of the volatile conditions and difficult market forces of 2009," said president and chief executive officer David C. Mannon.  "We delivered sound financial results despite significant market instability and uncertainty. Guided by our long-term strategy, we continued to invest for future growth during this industry down-cycle and to position ourselves for stronger performance in the years ahead.  In 2009 we captured the lead position in the U.S. barge drilling market, expanded the presence of our rental tools operation and moved forward on our projects to begin drilling operations in Alaska, a growing market for us.  We enter 2010 in sound financial condition with sufficient resources to provide for the needs of our current operations and to fund our growth initiatives."  

Fourth Quarter Highlights

    --  Revenues of $175.8 million, though below the prior year's fourth quarter
        revenues, were better than the 2009 third quarter in all but the
        Construction Contracts segment;
    --  Gross margin for the Rental Tools segment increased, compared to the
        2009 third quarter, due to improving demand and less price discounting;
    --  The U.S. Barge Drilling segment reported a positive gross margin for the
        2009 fourth quarter. In doing so, it achieved a better-than-breakeven
        gross margin for the year, believed to be one of the best performances
        in that marketplace;
    --  The Company's Alaska projects continued to progress. The BP-owned
        Liberty rig is being commissioned on site in preparation to begin
        drilling operations in mid-2010. Construction continued on the two
        Parker-owned arctic land rigs scheduled for delivery to Alaska during
        the third quarter;
    --  Parker employees set a new company record for safety. The Company's
        Total Recordable Incident Rate (TRIR) for 2009 was 0.48, a better safety
        performance than our 2008 record-setting level and significantly better
        than the industry's average TRIR of 1.19.


Mr. Mannon added, "Our 2009 results reflect the impact of the decline in domestic drilling and slowdown of international activity and demonstrate the advantages of our focused strategy.  In the difficult market conditions we faced we remained profitable and we made market gains in some key areas."  

Commenting on the business outlook, Mr. Mannon said, "More recently, market declines have moderated and there are signs in some areas that improvements are underway.  The utilization rate for the U.S. Gulf of Mexico barge drilling fleet has improved, though dayrates remain low.  The domestic land rig count has recovered significantly, particularly in the shale plays where rental tool usage is more prevalent, leading to growing demand for rental tools and a lessening of price discounts.  The number of international rig tenders has grown, yet commitments are slow to develop and pressure on dayrates remains. Our project engineering and project management opportunities are growing, indicating an expanded field for Parker's unique capabilities and offering the prospect of significant future growth from this business segment.

"Though we are encouraged by the recent direction of activity in some of our markets, we remain cautious about the immediacy of a broad upturn and the near term impact on our financial performance.  We believe we are well positioned to deliver profitable growth as the markets improve.  To enhance the potential of this, we will continue to focus on cost management within our operations, improvements in delivering efficient performance to our customers and maintaining a safe working environment for our employees," Mannon concluded.

Fourth Quarter Review

Results for the three months ended December 31, 2009, included the impact of several non-routine items that decreased net income by $3.8 million. At the end of 2009 Parker retired three unutilized and previously cold-stacked rigs – two workover barge rigs and one international land rig.  The effect of these retirements was to reduce pre-tax income by $1.9 million or $0.01 per diluted share, after taxes.  In addition, the Company received a settlement in connection with litigation over a Parker-owned rig damaged in 2005, resulting in pre-tax income of $3.8 million or $0.02 per diluted share, after taxes.  Also included in non-routine expenses are the costs related to the ongoing Department of Justice and Securities and Exchange Commission investigations and our related internal review regarding services provided by a customs agent in certain countries and possible violations of the Foreign Corrupt Practices Act and other laws, in addition to a provision for other regulatory expenses.  The fourth quarter pre-tax cost of these was $3.9 million or $0.02 per diluted share, after taxes. The Company also adjusted the expected impact of a previously recorded recovery of foreign tax credits.  The fourth quarter impact of this was $2.5 million or $0.02 per diluted share. The results for the 2008 fourth quarter included non-routine, net after-tax expense of $69.8 million or $0.62 per diluted share.  Details of the non-routine items are provided in the attached financial tables.

Parker's revenues for the 2009 fourth quarter declined to $175.8 million, or by 17 percent, from 2008 fourth quarter revenues of $212.4 million.  The Company's 2009 fourth quarter gross margin declined to $43.0 million, or by 46 percent, from the 2008 fourth quarter gross margin of $79.6 million, while gross margin as a percentage of revenues decreased to 24.5 percent in the 2009 fourth quarter from 37.5 percent in the 2008 fourth quarter.

    --  International Drilling revenues declined to $72.7 million from $86.2
        million, and gross margin declined to $21.9 million from $27.7 million.
        The decrease in revenues was the result of lower average fleet
        utilization, modestly higher average dayrates and the impact of Barge
        Rig 257 being in a shipyard for a scheduled overhaul and upgrade during
        part of the quarter. These effects were partially offset by lower
        operating costs throughout the segment.



Average fleet utilization for the 2009 fourth quarter was 64 percent, compared
with 87 percent for the prior year's fourth quarter and 61 percent for the
preceding third quarter. For the fourth quarter, the ten-rig Americas regional
fleet operated at 80 percent utilization, the twelve-rig CIS/AME regional fleet
operated at 68 percent utilization, and the eight-rig Asia Pacific regional
fleet operated at 46 percent utilization. Rig 259 was retired at the end of
2009, reducing the Company's international fleet to 30 rigs and the CIS/AME
regional fleet to eleven rigs. (Additional rig fleet information is available
on Parker's website under "Investor Relations" at "Quarterly Support
Materials").




    --  U.S. Barge Drilling revenues declined to $14.5 million from $33.6
        million, while gross margin fell to $1.3 million from $14.7 million. The
        operation produced a better-than-breakeven gross margin despite the
        downturn in industry demand, lower fleet utilization and significantly
        reduced dayrates.



Average fleet utilization for the 2009 fourth quarter was 51 percent, compared
with 61 percent for the prior year's fourth quarter and 33 percent for the
preceding third quarter. The Company's barge fleet dayrates averaged $19,300
for the 2009 fourth quarter, compared with $39,400 for the prior year's fourth
quarter and $26,200 for the preceding third quarter. At year-end 2009, Parker's
Gulf of Mexico barge rig fleet was reduced to 13 rigs with the retirements of
Rigs 6B and 16B. (Additional rig fleet information is available on Parker's
website under "Investor Relations" at "Quarterly Support Materials").




    --  Revenues for Rental Tools declined to $25.1 million from $45.7 million,
        and the segment's gross margin declined to $13.8 million from $28.7
        million, primarily due to the decline in U.S. land and Gulf of Mexico
        shelf drilling activity and the impact of price discounting. This was
        partially offset by increased demand for workover equipment, growing
        coverage in the U.S. shale drilling areas and additional offshore deep
        drilling and international placements.
    --  Project Management and Engineering Services revenues declined to $27.6
        million from $37.9 million, and gross margin declined to $5.4 million
        from $8.1 million. The prior year included revenues associated with the
        relocation and upgrade of the "Yastreb" for ExxonNeftegas (ENL) on
        Sakhalin Island and operational revenues for ENL's Orlan platform which
        has since moved to a warm-stack rate with reduced crews.
    --  Construction Contract revenues increased to $35.8 million from $8.9
        million while gross margin increased to $0.6 million from $0.5 million.
        These increases are primarily due to the expanded scope and content of
        reimbursables at this stage of the BP Liberty project.


Capital Spending and Capitalization

Capital expenditures for 2009 were $160.1 million, including $33.2 million for the 2009 fourth quarter.  The 2009 spending included $62.2 million for the construction of Parker's two newbuild arctic land rigs for Alaska and $36.8 million for tubular goods and other rental equipment.

At December 31, 2009, total debt was $423.8 million and the Company's total debt-to-capitalization ratio was 41.6 percent, compared with 43.1 percent at the end of 2008. The Company's term loan is being amortized through 2013.  The remaining components of the Company's debt do not mature until 2012 and 2013.

Conference Call

Parker Drilling has scheduled a conference call for 10:00 a.m. CST (11:00 a.m. EST) on Thursday, February 25, 2010 to discuss its 2009 fourth quarter results.  Those interested in listening to the call by telephone may do so by dialing 480-629-9770.  Alternatively, the call can be accessed through the Investor Relations section of the Company's Web site at http://www.parkerdrilling.com.  A replay of the call will be available by telephone from February 25 to March 4, 2010 by dialing 303-590-3030 and using the access code 4204147#, and for 12 months on the Company's Web site.  

Cautionary Statement

This release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of the Securities Acts. All statements, 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 earnings per share guidance, the outlook for rig utilization and dayrates, general industry conditions including demand for drilling and customer spending and the factors affecting demand, competitive advantages including cost effective integrated solutions and technological innovation, future technological innovation, future operating results of the Company's rigs, rental tools operations and projects under management, capital expenditures, expansion and growth opportunities, asset sales, successful negotiation and execution of contracts, strengthening of financial position, increase in market share and other such matters are forward-looking statements.  Although the Company believes that its expectations stated in this release are based on reasonable assumptions, actual results may differ materially from those expressed or implied in the forward-looking statements due to certain risk factors, including the ongoing credit crisis, the volatility in oil and natural gas prices, which could reduce the demand for drilling services.  For a detailed discussion of risk factors that could cause actual results to differ materially from the Company's expectations, please refer to the Company's reports filed with the SEC, including the report on Form 10-K for the year December 31, 2008.  Each forward-looking statement speaks only as of the date of this release and the Company undertakes no obligation to publicly update or revise any forward-looking statement.

    
    
                  PARKER DRILLING COMPANY AND SUBSIDIARIES             
                   Consolidated Condensed Balance Sheets               
                                                                       
                                                                       
                                      December 31, 2009  December 31, 2008 
                                      -----------------  ----------------- 
                                         (Unaudited)                       
                ASSETS                       (Dollars in Thousands)        
    CURRENT ASSETS                                                     
        Cash and Cash Equivalents          $108,803           $172,298 
        Accounts and Notes Receivable, Net  188,687            186,164 
        Rig Materials and Supplies           31,633             30,241 
        Deferred Costs                        4,531              7,804 
        Deferred Income Taxes                 9,650              9,735 
        Other Current Assets                100,225             67,049 
                                            -------             ------ 
            TOTAL CURRENT ASSETS            443,529            473,291 
                                            -------            ------- 
                                                                       
    PROPERTY, PLANT AND EQUIPMENT, NET      716,798            675,548 
                                                                       
    OTHER ASSETS                                                       
        Deferred Income Taxes                55,749             22,956 
        Other Assets                         27,010             33,925 
                                             ------             ------ 
            TOTAL OTHER ASSETS               82,758             56,881 
                                             ------             ------ 
                                                                       
    TOTAL ASSETS                         $1,243,086         $1,205,720 
                                         ==========         ========== 
                                                                       
      LIABILITIES AND STOCKHOLDERS' EQUITY               
    CURRENT LIABILITIES                                                
        Current  Portion of Long-Term Debt  $12,000             $6,000 
        Accounts Payable and Accrued 
         Liabilities                        177,036            152,528 
                                            -------            ------- 
            TOTAL CURRENT LIABILITIES       189,036            158,528 
                                            -------            ------- 
                                                                       
    LONG-TERM DEBT                          411,831            435,394 
                                                                       
    LONG-TERM DEFERRED TAX LIABILITY         16,074              8,230 
                                                                       
    OTHER LONG-TERM LIABILITIES              30,246             21,396 
                                                                       
    STOCKHOLDERS' EQUITY                    595,899            582,172 
                                         ----------         ---------- 
    TOTAL LIABILITIES AND STOCKHOLDERS' 
     EQUITY                              $1,243,086         $1,205,720 
                                         ==========         ========== 
                                                                       
                                                                       
    Current Ratio                              2.33               2.99 
                                                                       
    Total Debt as a  Percent of                                        
     Capitalization                              42%                43%
                                                                       
    Book Value Per Common Share               $5.13              $5.13 
    
    
    
                    PARKER DRILLING COMPANY AND SUBSIDIARIES               
                Consolidated Condensed Statements of Operations            
                                  (Unaudited)                              
                                                                           
                            Three Months Ended            Year Ended 
                               December 31,              December 31, 
                             -----------------         ----------------- 
                             2009         2008         2009         2008 
                             ----         ----         ----         ---- 
                           (Dollars in Thousands)    (Dollars in Thousands)
    REVENUES:                                                              
        International                                                      
         Drilling           $72,712      $86,211     $293,338     $325,096 
        U.S. Drilling        14,533       33,634       49,628      173,633 
        Project Management 
         and Engineering                                                   
         Services            27,631       37,928      109,445      110,147 
        Construction                                                       
         Contract            35,800        8,911      185,442       49,412 
        Rental Tools         25,109       45,696      115,057      171,554 
                             ------       ------      -------      ------- 
    TOTAL REVENUES          175,785      212,380      752,910      829,842 
                            -------      -------      -------      ------- 
                                                                           
    OPERATING EXPENSES:                                                    
        International                                                      
         Drilling            50,858       58,494      191,486      231,409 
        U.S. Drilling        13,233       18,929       48,054       84,431 
        Project Management 
         and Engineering                                                   
         Services            22,202       29,858       85,799       91,677 
        Construction                                                       
         Contract            35,194        8,442      177,311       46,815 
        Rental Tools         11,302       17,034       52,740       67,048 
        Depreciation                                                       
         and Amortization    28,593       31,961      113,975      116,956 
                             ------       ------      -------      ------- 
    TOTAL OPERATING 
     EXPENSES               161,382      164,718      669,365      638,336 
                            -------      -------      -------      ------- 
                                                                           
    TOTAL OPERATING GROSS 
     MARGIN                  14,403       47,662       83,545      191,506 
                             ------       ------       ------      ------- 
                                                                           
    General and 
     Administrative Expense (11,485)     (10,288)     (45,483)     (34,708)
    Impairment of Goodwill        -     (100,315)           -     (100,315)
    Provision for Reduction 
     in Carrying Value of                                                  
     Certain Assets          (1,889)           -       (4,646)           - 
    Gain on Disposition of                                                 
     Assets, Net              3,899          683        5,906        2,697 
                              -----          ---        -----        ----- 
                                                                           
    TOTAL OPERATING INCOME    4,928      (62,258)      39,322       59,180 
                              -----      -------       ------       ------ 
                                                                           
    OTHER INCOME AND (EXPENSE):                                            
        Interest Expense     (6,787)      (8,358)     (29,450)     (29,266)
        Interest Income         146          284        1,041        1,405 
        Equity in Loss                                                     
         of Unconsolidated                                                 
         Joint Venture and 
         Related Charges, net                                              
         of tax                   -            -            -       (1,105)
        Other Income (Expense) (721)      (1,047)      (1,086)        (544)
                               ----       ------       ------         ---- 
    TOTAL OTHER INCOME                                                     
     AND (EXPENSE)           (7,362)      (9,121)     (29,495)     (29,510)
                             ------       ------      -------      ------- 
                                                                           
    INCOME (LOSS) BEFORE 
     INCOME TAXES            (2,434)     (71,379)       9,827       29,670 
                             ------      -------        -----       ------ 
                                                                           
    INCOME TAX EXPENSE  
     (BENEFIT)                                           
        Current               1,200      (14,563)      15,424       (1,539)
        Deferred                690      (16,615)     (14,864)       8,481 
                                ---      -------      -------        ----- 
    TOTAL INCOME TAX                                                       
     EXPENSE (BENEFIT)        1,890      (31,178)         560        6,942 
                              -----      -------          ---        ----- 
                                                                           
    NET INCOME              $(4,324)    $(40,201)      $9,267      $22,728 
                            =======     ========       ======      ======= 
                                                                           
                                                                           
    EARNINGS PER SHARE - 
     BASIC                                            
        Net Income           $(0.04)      $(0.36)       $0.08        $0.20 
                                                                           
    EARNINGS PER SHARE - 
     DILUTED                                           
        Net Income           $(0.04)      $(0.36)       $0.08        $0.20 
                                                                           
    NUMBER OF COMMON 
     SHARES USED IN 
     COMPUTING EARNINGS 
     PER SHARE           
        Basic           113,288,308  111,866,943  113,000,555  111,400,396 
        Diluted         115,483,718  112,148,249  114,946,584  112,430,545 
    
    
    
                   PARKER DRILLING COMPANY AND SUBSIDIARIES               
                            Selected Financial Data                       
                                  (Unaudited)                             
                                                                          
                                                Three Months Ended        
                                          ---------------------------------
                                           December 31,       September 30,
                                          --------------      -------------
                                          2009      2008           2009 
                                          ----      ----           ---- 
                                               (Dollars in Thousands)      
    REVENUES:                                                             
      International Drilling             $72,712   $86,211        $63,966 
      U.S. Drilling                       14,533    33,634         12,350 
      Project Management and                                              
       Engineering Services               27,631    37,928         25,869 
      Construction Contract               35,800     8,911         55,325 
      Rental Tools                        25,109    45,696         23,899 
                                          ------    ------         ------ 
        Total Revenues                   175,785   212,380        181,409 
                                         -------   -------        ------- 
                                                                          
    OPERATING EXPENSES:                                                   
      International Drilling              50,858    58,494         41,964 
      U.S. Drilling                       13,233    18,929         10,057 
      Project Management and                                              
       Engineering Services               22,202    29,858         19,420 
      Construction Contract               35,194     8,442         52,203 
      Rental Tools                        11,302    17,034         12,232 
                                          ------    ------         ------ 
        Total Operating Expenses         132,789   132,757        135,876 
                                         -------   -------        ------- 
                                                                          
    OPERATING GROSS MARGIN:                                               
      International Drilling              21,854    27,717         22,002 
      U.S. Drilling                        1,300    14,705          2,293 
      Project Management and                                              
       Engineering Services                5,429     8,070          6,449 
      Construction Contract                  606       469          3,122 
      Rental Tools                        13,807    28,662         11,667 
      Depreciation and Amortization      (28,593)  (31,961)       (29,307)
                                         -------   -------        ------- 
        Total Operating Gross Margin      14,403    47,662         16,226 
                                                                          
      General and Administrative Expense (11,485)  (10,288)        (9,812)
      Impairment of Goodwill                   -  (100,315)             - 
      Provision for Reduction in                                          
       Carrying Value of Certain Assets   (1,889)        -         (2,757)
      Gain on Disposition of Assets, Net   3,899       683          1,225 
                                          ------  --------         ------ 
    TOTAL OPERATING INCOME                $4,928  $(62,258)        $4,882 
                                          ======  ========         ====== 
                                                                          
                                                                          
                                                                          
                         Marketable Rig Count Summary                     
                            As of December 31, 2009                       
                                                                          
                                                                     Total
                                                                     -----
                                                                          
      U.S. Gulf of Mexico Barge Rigs                                      
          Intermediate                                                  3 
          Deep                                                         10 
                                                                      --- 
      Total U.S. Gulf of Mexico Barge Rigs                             13 
                                                                          
      International Land and Barge Rigs                                   
          Asia Pacific                                                  8 
          Americas                                                     10 
          CIS/AME                                                      11 
          Other                                                         1 
                                                                      --- 
              Total International Land and Barge Rigs                  30 
                                                                          
                                                                          
                                                                      --- 
              Total Marketable Rigs                                    43 
                                                                      === 
    
    
    
                                        Adjusted EBITDA            
                                                                   
                                     (Dollars in Thousands)        
                                                                   
                                                                   
                                       Three Months Ended                     
                    ----------------------------------------------------------
                    December 31, September 30, June 30, March 31, December 31,
                         2009         2009       2009      2009      2008     
                    ------------ ------------- -------- --------- ------------
    Previously 
      Reported                                           
      Net Income 
      (Loss)          $(4,324)      $7,094      $4,391     $2,106  $(39,477)
     Restated 
      Interest                                           
      Expense, 
      Net of Tax -                                       
      Per APB 14-1          -            -           -          -      (724)
                          ---          ---         ---        ---      ---- 
     Restated Net 
      Income                                             
      (Loss)           (4,324)       7,094       4,391      2,106   (40,201)
      Adjustments:                                       
        Income Tax                                       
         (Benefit)                                       
         Expense        1,890       (9,155)      5,079      2,746   (31,178)
        Total Other                                      
         Income and                                      
         Expense        7,362        6,943       7,398      7,792     9,121 
        Loss/(Gain) on                                   
         Disposition of                                  
         Assets, Net   (3,899)      (1,225)       (704)       (78)     (683)
        Impairment of                                    
         Goodwill           -            -           -          -   100,315 
        Depreciation 
         and                                             
         Amortization  28,593       29,307      28,951     27,124    31,961 
        Provision for                                    
         Reduction in                                    
         Carrying 
         Value                                                              
         of Certain                     
         Assets         1,889        2,757           -          -         - 
                        -----        -----         ---        ---       --- 
                                        
    Adjusted EBITDA   $31,511      $35,721     $45,115    $39,690   $69,335 
                      =======      =======     =======    =======   ======= 
                                  
    Adjustments:                  
         Non-routine              
          Items         2,998        2,402       4,048      5,308     6,279 
                        -----        -----       -----      -----     ----- 
                                  
    Adjusted EBITDA               
     after Non-routine            
     Items            $34,509      $38,123     $49,163    $44,998   $75,614 
                      =======      =======     =======    =======   ======= 
    
    
    
                                       Three Months Ended                     
                   -----------------------------------------------------------
                   September 30, June 30, March 31, December 31, September 30, 
                        2008       2008      2008       2007         2007    
                   ------------- -------- --------- ------------ -------------
    Previously 
      Reported                                                               
      Net Income 
      (Loss)          $18,551    $22,596    $23,888    $34,571       $22,653 
     Restated 
      Interest                                                               
      Expense, 
      Net of Tax -                                                     
      Per APB 14-1       (721)      (699)      (686)      (670)         (562)
                         ----       ----       ----       ----          ---- 
     Restated Net 
      Income                                                                 
      (Loss)           17,830     21,897     23,202     33,901        22,091 
      Adjustments:                                                           
        Income Tax                                                           
         (Benefit)                                                           
         Expense       19,673     13,762      4,685    (21,830)       18,803 
        Total Other                                                          
         Income and                                                          
         Expense        6,344      6,531      7,514     31,385         9,706 
        Loss/(Gain) on                                                       
         Disposition of                                                      
         Assets, Net     (799)      (636)      (579)       784          (543)
        Impairment of 
         Goodwill                                                            
         Depreciation 
         and                                                                 
         Amortization  30,663     28,166     26,166     25,059        23,043 
        Provision for                                                        
         Reduction in                                                        
         Carrying 
         Value                                                               
         of Certain                                                          
         Assets             -          -          -        371         1,091 
                          ---        ---        ---        ---         ----- 
                                                                             
    Adjusted EBITDA   $73,711    $69,720    $60,988    $69,670       $74,191 
                      =======    =======    =======    =======       ======= 
                                                                             
    Adjustments:                                                             
         Non-routine                                                        
          Items         2,264      2,885        441          -             - 
                        -----      -----        ---        ---           --- 
                                                                          
    Adjusted EBITDA                                                        
     after Non-routine 
     Items            $75,975    $72,605    $61,429    $69,670       $74,191 
                      =======    =======    =======    =======       ======= 
    
    
    
                   PARKER DRILLING COMPANY AND SUBSIDIARIES               
                     Reconciliation of Non-Routine Items *                
                                  (Unaudited)                             
                   (Dollars in Thousands, except Per Share)               
                                                                          
                                                                          
                                   Three Months Ending     Year Ending    
                                    December 31, 2009   December 31, 2009 
                                    -----------------   ----------------- 
     Net income                           $(4,324)            $9,267 
     Earnings per diluted share            $(0.04)             $0.08 
                                                                     
     Adjustments:                                                    
       Provision for reduction in                                    
        carrying value                     $1,889             $4,646 
       Rig 57B settlement                  (3,750)            (3,750)
       U.S. regulatory                                               
        investigations / legal                                       
        matters                             3,944             15,702 
                                            -----             ------ 
                 Total adjustments         $2,083            $16,598 
       Tax effect of pre-tax non-                                    
        routine adjustments                  (729)            (5,809)
       Prior Years Foreign Tax                                       
        Credits/Fin 48 reserve              2,464             (3,589)
                                            -----             ------ 
                 Net non-routine                                     
                  adjustments              $3,818             $7,200 
                                           ------             ------ 
                                                                     
     Adjusted net income                    $(506)           $16,467 
                                            =====            ======= 
     Adjusted earnings per diluted share   $(0.00)             $0.14 
                                           ======              ===== 
                                                                          
                                                                          
                                                                          
                                   Three Months Ending     Year Ending    
                                    December 31, 2008   December 31, 2008 
                                    -----------------   ----------------- 
     Previously reported net income      $(39,477)           $25,558 
     Previously reported earnings                                    
      per diluted share                    $(0.35)             $0.23 
                                                                     
     Restated interest expense,                                      
      net of tax - per APB 14-1             $(724)           $(2,830)
                                                                     
     Restated net income                 $(40,201)           $22,728 
     Restated earnings per share           $(0.36)             $0.20 
                                                                     
     Adjustments:                                                    
       Impairment of Goodwill            $100,315           $100,315 
       Saudi Arabia                             -              1,105 
       FIN 48 tax benefit - Kazakhstan          -            (10,560)
       PNG tax                                  -              4,127 
       Other FIN 48 adjustments                 -              2,407 
       Prior year tax credits             (12,539)           (12,539)
       DOJ investigation                    6,279             11,869 
                                            -----             ------ 
                 Total adjustments        $94,055            $96,724 
       Tax effect of non-routine                                     
        adjustments                       (24,672)           (26,891)
                                          -------            ------- 
                 Net non-routine                                     
                  adjustments             $69,384            $69,833 
                                          -------            ------- 
                                                                     
     Adjusted net income                  $29,183            $92,561 
                                          =======            ======= 
     Adjusted earnings per diluted share    $0.26              $0.82 
                                            =====              ===== 
                                                                          
    * Adjusted net income, a non-GAAP financial measure, excludes items that
    management believes are of a non-routine nature and which detract from an
    understanding of normal operating performance and comparisons with other
    periods. Management also believes that results excluding these items are
    more comparable to estimates provided by securities analysts and used by
    them in evaluating the Company's performance.  
    

SOURCE Parker Drilling