Company Page

Parker Drilling Co.

Company Summary

Description

Parker Drilling (NYSE:PKD) provides advanced drilling solutions to the energy industry. We are a technically innovative company providing worldwide drilling services, rental tools and project management, including rig design, construction and operations management. Parker's international fleet includes 25 land rigs and two barge rigs in strategic markets, and its U.S. fleet includes 13 barge rigs in the U.S. Gulf of Mexico. Parker's rental tools business supplies premium equipment to operators on land and offshore in the U.S. and select international markets. Parker's project management business includes multiple contracts for the design, construction or operation of customer-owned rigs, including operation of an extended-reach-drilling land rigs (also designed and built by Parker) and an offshore drilling platform.

PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)

	Successor		Predecessor
	September 30, 2019		December 31, 2018
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	101,106	$	48,602
Restricted cash	—		10,389
Accounts and notes receivable, net of allowance for bad debts	167,236		136,437
Rig materials and supplies	22,367		36,245
Other current assets	28,380		35,231
Total current assets	319,089		266,904
Property, plant and equipment, net of accumulated depreciation	297,213		534,371
Intangible assets, net	15,117		4,821
Deferred income taxes	4,608		2,143
Other non-current assets	31,630		20,175
Total assets	$	667,657	$	828,414

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Debtor in possession financing	$	—	$	10,000
Accounts payable and accrued liabilities	107,638		75,063
Accrued income taxes	6,352		3,385
Total current liabilities	113,990		88,448
Long-term debt	177,032		—
Other long-term liabilities	15,328		11,544
Long-term deferred tax liability	6,491		510
Commitments and contingencies
Total liabilities not subject to compromise	312,841		100,502
Liabilities subject to compromise	—		600,996
Total liabilities	312,841		701,498
Stockholders' equity:
Predecessor preferred stock	—		500
Predecessor common stock	—		1,398
Predecessor capital in excess of par value	—		766,347
Predecessor accumulated other comprehensive income (loss)	—		(6,879)
Successor common stock	150		—
Successor capital in excess of par value	345,831		—
Successor accumulated other comprehensive income (loss)	205		—
Retained earnings (accumulated deficit)	8,630		(634,450)
Total stockholders' equity	354,816		126,916
Total liabilities and stockholders' equity	$	667,657	$	828,414

PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)
(Unaudited)

	Successor				Predecessor
	Three Months Ended September 30,		Three Months Ended June 30,		Three Months Ended September 30,
	2019		2019		2018
Revenues	$	160,083	$	156,031	$	123,395
Expenses:
Operating expenses	117,486		112,649		93,943
Depreciation and amortization	20,329		20,391		27,520
	137,815		133,040		121,463
Total operating gross margin	22,268		22,991		1,932
General and administrative expense	(5,983)		(5,610)		(14,495)
Loss on impairment	—		—		(43,990)
Gain (loss) on disposition of assets, net	(92)		(53)		9
Reorganization items	(211)		(962)		—
Total operating income (loss)	15,982		16,366		(56,544)
Other income (expense):
Interest expense	(7,118)		(7,663)		(11,350)
Interest income	362		374		23
Other	(258)		(644)		(709)
Total other income (expense)	(7,014)		(7,933)		(12,036)
Income (loss) before income taxes	8,968		8,433		(68,580)
Income tax expense	4,979		3,792		2,371
Net income (loss)	3,989		4,641		(70,951)
Less: Predecessor preferred stock dividend	—		—		906
Net income (loss) available to common stockholders	$	3,989	$	4,641	$	(71,857)
Basic earnings (loss) per common share:	$	0.27	$	0.31	$	(7.70)
Diluted earnings (loss) per common share:	$	0.27	$	0.31	$	(7.70)
Number of common shares used in computing earnings per share:
Basic	15,044,739		15,044,739		9,334,390
Diluted	15,044,739		15,044,739		9,334,390

PARKER DRILLING COMPANY AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)

	Successor				Predecessor
	Three Months Ended September 30,		Three Months Ended June 30,		Three Months Ended September 30,
	2019		2019		2018
Revenues:
U.S. rental tools	$	49,256	$	52,936	$	50,944
International rental tools	24,067		22,155		20,151
Total rental tools services	73,323		75,091		71,095
U.S. (lower 48) drilling	14,487		12,479		4,530
International and Alaska drilling	72,273		68,461		47,770
Total drilling services	86,760		80,940		52,300
Total revenues	160,083		156,031		123,395

Operating expenses:
U.S. rental tools	25,513		25,267		21,949
International rental tools	20,243		19,224		18,773
Total rental tools services	45,756		44,491		40,722
U.S. (lower 48) drilling	10,549		9,923		5,701
International and Alaska drilling	61,181		58,235		47,520
Total drilling services	71,730		68,158		53,221
Total operating expenses	117,486		112,649		93,943

Operating gross margin, excluding depreciation and amortization:
U.S. rental tools	23,743		27,669		28,995
International rental tools	3,824		2,931		1,378
Total rental tools services	27,567		30,600		30,373
U.S. (lower 48) drilling	3,938		2,556		(1,171)
International and Alaska drilling	11,092		10,226		250
Total drilling services	15,030		12,782		(921)
Total operating gross margin, excluding depreciation and amortization	42,597		43,382		29,452
Depreciation and amortization	(20,329)		(20,391)		(27,520)
Total operating gross margin	$	22,268	$	22,991	$	1,932

PARKER DRILLING COMPANY AND SUBSIDIARIES
ADJUSTED EBITDA
(Dollars in Thousands)
(Unaudited)

	Successor				Predecessor
	Three Months Ended				Three Months Ended
	September 30, 2019		June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018
Net income (loss) available to common stockholders	$	3,989	$	4,641	$	(90,248)	$	(43,073)	$	(71,857)
Interest expense	7,118		7,663		274		8,778		11,350
Income tax expense	4,979		3,792		656		2,235		2,371
Depreciation and amortization	20,329		20,391		25,102		24,340		27,520
Predecessor preferred stock dividend	—		—		—		—		906
EBITDA	36,415		36,487		(64,216)		(7,720)		(29,710)
Adjustments:
Loss on impairment	—		—		—		6,708		43,990
(Gain) loss on disposition of assets, net	92		53		(384)		1,598		(9)
Pre-petition restructuring charges⁽¹⁾	—		—		—		11,411		7,724
Reorganization items	211		962		92,977		9,789		—
Interest income	(362)		(374)		(8)		(15)		(23)
Other	258		644		10		414		709
Adjusted EBITDA^{(1) (2)}	$	36,614	$	37,772	$	28,379	$	22,185	$	22,681


(1)	Pre-petition restructuring charges have been allocated to the respective period in which the expense was incurred. Accordingly adjusted EBITDA will differ from what was reported previously.

(2)	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.

PARKER DRILLING COMPANY AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EARNINGS PER SHARE
(Dollars in Thousands, except Per Share)
(Unaudited)

	Successor				Predecessor
	Three Months Ended September 30,		Three Months Ended June 30,		Three Months Ended September 30,
	2019		2019		2018
Net income (loss) available to common stockholders	$	3,989	$	4,641	$	(71,857)
Diluted earnings (loss) per common share	$	0.27	$	0.31	$	(7.70)

Adjustments:
Loss on impairment	$	—	$	—	$	43,990
Net adjustments	—		—		43,990

Adjusted net income (loss) available to common stockholders ⁽¹⁾	$	3,989	$	4,641	$	(27,867)
Adjusted diluted earnings (loss) per common share ⁽¹⁾	$	0.27	$	0.31	$	(2.99)

By Webcast:	Connect to the webcast via the Investor Relations section of the Parker Drilling website at http://www.parkerdrilling.com. Please log in at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call and can be accessed on the Company's website for 12 months.

By Phone:	Dial (+1) (412) 902-0003 at least 10 minutes prior to the scheduled start time and ask for the Parker Drilling call.

	A recording of the call will be available through November 13, 2019 by dialing (+1) (201) 612-7415 and using the conference ID 13695493#.


(1)	The Company's 1-for-15 reverse stock split was effective when markets opened on July 27, 2018. All share and per share data have been retroactively restated for all periods presented.

PARKER DRILLING COMPANY AND SUBSIDIARIES
ADJUSTED EBITDA⁽¹⁾
(Dollars in Thousands)
(Unaudited)

	Three Months Ended
	June 30, 2018		March 31, 2018		December 31, 2017		September 30, 2017		June 30, 2017
Net income (loss) available to common stockholders	$	(23,784)	$	(29,702)	$	(29,599)	$	(21,217)	$	(31,127)
Interest expense	11,197		11,240		11,194		11,067		11,095
Income tax expense (benefit)	1,586		1,604		3,036		1,919		1,743
Depreciation and amortization	27,136		28,549		29,122		30,067		30,982
Convertible preferred stock dividend	907		906		906		906		1,239
EBITDA	17,042		12,597		14,659		22,742		13,932

Adjustments:
Interest income and other	1,161		(314)		242		510		(582)
(Gain) loss on disposition of assets, net	478		(343)		2,483		(97)		113
Provision for reduction in carrying value of certain assets	—		—		1,938		—		—
Special items ⁽²⁾	—		—		3,033		—		—

Adjusted EBITDA	$	18,681	$	11,940	$	22,355	$	23,155	$	13,463


(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, 2017, special items include a $3.0 million write-off of inventory associated with select international drilling assets. This item is recorded in operating expenses in the Consolidated Statement Of Operations.

PARKER DRILLING COMPANY AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)


		Three Months Ended
		June 30,				March 31,
		2018		2017		2018
Revenues:
Drilling Services:
U.S. (Lower 48) Drilling		$	3,283	$	5,042	$	1,354
International and Alaska Drilling		53,302		60,669		56,096
	Total Drilling Services	56,585		65,711		57,450
Rental Tools Services:
U.S. Rental Tools		$	42,083	$	29,704	$	34,748
International Rental Tools		19,935		14,192		17,477
	Total Rental Tools Services	62,018		43,896		52,225
Total revenues		$	118,603	$	109,607	$	109,675

Operating expenses:
Drilling Services:
U.S. (Lower 48) Drilling		$	4,686	$	6,067	$	4,053
International and Alaska Drilling		48,278		51,404		51,426
	Total Drilling Services	52,964		57,471		55,479
Rental Tools Services:
U.S. Rental Tools		$	19,326	$	15,973	$	18,938
International Rental Tools		19,344		16,197		17,117
	Total Rental Tools Services	38,670		32,170		36,055
Total operating expenses		$	91,634	$	89,641	$	91,534

Operating gross margin (loss), excluding depreciation and amortization:
Drilling Services:
U.S. (Lower 48) Drilling		$	(1,403)	$	(1,025)	$	(2,699)
International and Alaska Drilling		5,024		9,265		4,670
	Total Drilling Services	3,621		8,240		1,971
Rental Tools Services:
U.S. Rental Tools		$	22,757	$	13,731	$	15,810
International Rental Tools		591		(2,005)		360
	Total Rental Tools Services	23,348		11,726		16,170


(1)	We believe Adjusted net income (loss) available to common stockholders and Adjusted diluted earnings (loss) per common 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 (loss) available to common stockholders and Diluted earnings (loss) per common share to be items outside of the Company's normal operating results. Adjusted net income (loss) available to common stockholders and Adjusted diluted earnings (loss) per common share are not measures of financial performance under GAAP, and should not be considered in isolation or as an alternative to Net income (loss) available to common stockholders or Diluted earnings (loss) per common share.

(2)	On July 27, 2018, the Company completed a 1 for 15 reverse stock split. All share and per share data have been retroactively restated for all periods presented.

PARKER DRILLING COMPANY
Consolidated Condensed Balance Sheets
(Dollars in Thousands)

	December 31, 2017		December 31, 2016
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	141,549	$	119,691
Accounts and Notes Receivable, net	122,511		113,231
Rig materials and supplies	31,415		32,354
Deferred costs	3,145		1,436
Other current assets	19,216		19,606
Total current assets	317,836		286,318

Property, plant and equipment, net	625,771		693,439

Other assets:
Deferred income taxes	1,284		70,309
Other assets	45,388		53,485
Total other assets	46,672		123,794

Total assets	$	990,279	$	1,103,551

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and Accrued liabilities	$	103,676	$	102,921
Total current liabilities	103,676		102,921

Long-term debt, net of unamortized debt issuance costs	577,971		576,326

Long-term deferred tax liability	78		69,333

Other long-term liabilities	12,433		15,836

Total stockholders' equity	296,121		339,135

Total liabilities and stockholders' equity	$	990,279	$	1,103,551

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,
	2017		2016		2017

Revenues	$	116,334	$	94,025	$	118,308

Expenses:
Operating expenses	91,912		80,529		88,120
Depreciation and amortization	29,122		33,190		30,067
	121,034		113,719		118,187
Total operating gross margin (loss)	(4,700)		(19,694)		121

General and administrative expense	(5,100)		(9,132)		(7,033)
Provision for reduction in carrying value of certain assets	(1,938)		—		—
Gain (loss) on disposition of assets, net	(2,483)		(1,364)		97
Total operating income (loss)	(14,221)		(30,190)		(6,815)

Other income (expense)
Interest expense	(11,194)		(11,048)		(11,067)
Interest income	84		10		128
Other	(326)		(1,409)		(638)
Total other income (expense)	(11,436)		(12,447)		(11,577)

Income (loss) before income taxes	(25,657)		(42,637)		(18,392)

Income tax expense (benefit)	3,036		6,292		1,919

Net income (loss)	(28,693)		(48,929)		(20,311)
Less: Mandatory convertible preferred stock dividend	$	906	$	—	$	906
Net income (loss) available to common stockholders	$	(29,599)	$	(48,929)	$	(21,217)

Earnings (loss) per common share - Basic
Net income (loss)	$	(0.21)	$	(0.39)	$	(0.15)

Earnings (loss) per common share - Diluted
Net Income (loss)	$	(0.21)	$	(0.39)	$	(0.15)

Number of common shares used in computing earnings per share:
Basic	138,675,403		124,830,473		138,300,015
Diluted	138,675,403		124,830,473		138,300,015

PARKER DRILLING COMPANY
Selected Financial Data
(Dollars in Thousands)
(Unaudited)


		Three Months Ended						Year Ended December 31,
		December 31,				September 30,		2017		2016		2015
		2017		2016		2017

Revenues:
Drilling Services:
U.S. (Lower 48) Drilling		$	1,546	$	848	$	4,585	$	12,389	$	5,429	$	30,358
International & Alaska Drilling		60,648		61,478		62,726		247,254		287,332		435,096
	Total Drilling Services:	62,194		62,326		67,311		259,643		292,761		465,454
Rental Tools Services:
U.S. Rental Tools		36,324		16,130		35,677		121,937		71,613		141,889
International Rental Tools		17,816		15,569		15,320		60,940		62,630		104,840
	Total Rental Tools Services	54,140		31,699		50,997		182,877		134,243		246,729
	Total revenues	$	116,334	$	94,025	$	118,308	$	442,520	$	427,004	$	712,183

Operating expenses:
Drilling Services:
U.S. (Lower 48) Drilling		$	4,205	$	4,232	$	5,052	$	19,524	$	19,733	$	36,247
International & Alaska Drilling		52,619		47,307		50,345		206,552		222,824		325,346
	Total Drilling Services:	56,824		51,539		55,397		226,076		242,557		361,593
Rental Tools Services:
U.S. Rental Tools		17,283		12,102		16,086		62,797		50,216		77,056
International Rental Tools		17,805		16,888		16,637		66,614		69,748		87,641
	Total Rental Tools Services	35,088		28,990		32,723		129,411		119,964		164,697
	Total operating expenses	$	91,912	$	80,529	$	88,120	$	355,487	$	362,521	$	526,290

Operating gross margin (loss):
Drilling Services:
U.S. (Lower 48) Drilling		$	(2,659)	$	(3,384)	$	(467)	$	(7,135)	$	(14,304)	$	(5,889)
International & Alaska Drilling		8,029		14,171		12,381		40,702		64,508		109,750
	Total Drilling Services	5,370		10,787		11,914		33,567		50,204		103,861
Rental Tools Services:
U.S. Rental Tools		19,041		4,028		19,591		59,140		21,397		64,833
International Rental Tools		11		(1,319)		(1,317)		(5,674)		(7,118)		17,199
	Total Rental Tools Services	19,052		2,709		18,274		53,466		14,279		82,032
	Total operating gross margin excluding depreciation and amortization	24,422		13,496		30,188		87,033		64,483		185,893
Depreciation and amortization		(29,122)		(33,190)		(30,067)		(122,373)		(139,795)		(156,194)
	Total operating gross margin (loss)	$	(4,700)	$	(19,694)	$	121	$	(35,340)	$	(75,312)	$	29,699

PARKER DRILLING COMPANY
Adjusted EBITDA ⁽¹⁾
(Dollars in Thousands)
(Unaudited)

	Three Months Ended
	December 31, 2017		September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016

Net income (loss) available to common shareholders	$	(29,599)	$	(21,217)	$	(31,127)	$	(39,809)	$	(48,929)
Interest expense	11,194		11,067		11,095		10,870		11,048
Income tax expense (benefit)	3,036		1,919		1,743		2,342		6,292
Depreciation and amortization	29,122		30,067		30,982		32,202		33,190
Mandatory convertible preferred stock dividend	906		906		1,239		—		—

EBITDA	14,659		22,742		13,932		5,605		1,601

Adjustments:
Other (income) expense	242		510		(582)		(540)		1,399
(Gain) loss on disposition of assets, net	2,483		(97)		113		352		1,364
Provision for reduction in carrying value of certain assets	1,938		—		—		—		—
Special items⁽²⁾	3,033		—		—		—		876


Adjusted EBITDA	$	22,355	$	23,155	$	13,463	$	5,417	$	5,240

PARKER DRILLING COMPANY
Reconciliation of Adjusted Earnings Per Share
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
		Three Months Ended
		December 31,				September 30,
		2017		2016		2017

Net income (loss) available to common shareholders		$	(29,599)	$	(48,929)	$	(21,217)
Income (loss) per diluted share		$	(0.21)	$	(0.39)	$	(0.15)

Adjustments:
	(Gain) loss on disposition of assets, net	$	2,588	—		—
	Provision for reduction in carrying value of certain assets	1,938		—		—
	Write-off inventory	3,033		—		—
	Valuation allowance	—		6,772		—
	Special items	—		876		—
	Net adjustments	7,559		7,648		—

Adjusted net income (loss) available to common shareholders⁽¹⁾		$	(22,040)	$	(41,281)	$	(21,217)
Adjusted income (loss) per diluted share⁽¹⁾		$	(0.16)	$	(0.33)	$	(0.15)

PARKER DRILLING COMPANY
Consolidated Statements Of Operations
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
					Three Months Ended June 30,
	Three Months Ended September 30,
	2017		2016		2017

Revenues	$	118,308	$	97,189	$	109,607

Expenses:
Operating Expenses	88,120		84,680		89,641
Depreciation and Amortization	30,067		34,474		30,982
	118,187		119,154		120,623
Total Operating Gross Margin (Loss)	121		(21,965)		(11,016)

General and Administrative Expense	(7,033)		(7,424)		(6,503)
Gain (Loss) on Disposition of Assets, net	97		(187)		(113)
Total Operating Income (Loss)	(6,815)		(29,576)		(17,632)

Other Income (Expense)
Interest Expense	(11,067)		(11,015)		(11,095)
Interest Income	128		9		22
Other	(638)		(351)		560
Total Other Income (Expense)	(11,577)		(11,357)		(10,513)

Income (Loss) before Income Taxes	(18,392)		(40,933)		(28,145)

Income Tax Expense (Benefit)	1,919		5,295		1,743

Net Income (Loss)	(20,311)		(46,228)		(29,888)
Mandatory convertible preferred stock dividend	906		—		1,239
Net Income (Loss) Available to Common Stockholders	$	(21,217)	$	(46,228)	$	(31,127)

Income (Loss) per Common Share - Basic
Net Income (Loss)	$	(0.15)	$	(0.37)	$	(0.23)

Income (Loss) per Common Share - Diluted
Net Income (Loss)	$	(0.15)	$	(0.37)	$	(0.23)

Number of common shares used in computing earnings per share:
Basic	138,300,015		124,486,848		137,833,318
Diluted	138,300,015		124,486,848		137,833,318


(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) Special items include:
	- For the three months ended December 31, 2016, special items include $0.9 million of net severance associated with the departure of three executives.

(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)	Special items include:

-	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.

-	For the three months ended December 31, 2016, special items include $0.9 million of net severance associated with the departure of three executives.

By Phone:	Dial (888) 510-1785 and use the access code 2054769.

	A recording of the call will be available for 1 week beginning Thursday, February 18, 2016 at 1:00 p.m. Central Time (2:00 p.m. Eastern Time) by dialing (888) 203-1112 and using the access code 2054769#.

By Webcast:	Connect to the webcast via the Investor Relations section of the Parker Drilling website at http://www.parkerdrilling.com. Please log in at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call and can be accessed on the Company's website for 12 months.

Parker Drilling Co.

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