Parker Drilling Reports 41% Increase in Annual Revenues
Parker Drilling Company (NYSE: PKD) reported 2005 fourth quarter revenues of $149.6 million and net income of $56.7 million or $0.58 per diluted share, compared to 2004 fourth quarter revenues of $109.8 million and a net loss of $5.3 million or $0.06 per share. Net income for the fourth quarter of 2005 includes $44.6 million or $0.45 per diluted share from non-routine items, $44.9 million of which is a non-cash deferred tax benefit, related primarily to the elimination of the valuation allowance.
For the year 2005, Parker Drilling reported revenues of $531.7 million and net income of $98.9 million, or $1.01 per diluted share. These revenues reflect a 41% increase while net income increased $146.0 million over 2004. For the year 2004, Parker Drilling reported revenues of $376.5 million and a net loss of $47.1 million, or $0.50 per share. Net income for 2005 includes non-routine items of $0.56 per diluted share. The details of the non-routine items for the year and the quarter are available on Parker's website and can be viewed or downloaded by going to "Investor Relations" and then to "Reconciliation of Non-GAAP Measures."
"We experienced one of our best years ever in 2005. Our operations not only contributed strong financial results, but also a record year for safety. We exceeded our debt reduction goal during the fourth quarter and with proceeds from our recent equity offering, we have taken steps to continue growing the company in 2006," said Robert L. Parker Jr., president and chief executive officer.
The average utilization of international land rigs for the fourth quarter of 2005 was 84 percent, significantly higher than the 65 percent reported for the fourth quarter of 2004. Current utilization is 83 percent for international land rigs. Average utilization for the Gulf of Mexico barge rigs for the fourth quarter of 2005 was 73 percent, compared to 79 percent reported for the fourth quarter of 2004. Current utilization is 74 percent for Gulf of Mexico barge rigs. Our deep drilling barge dayrates in the Gulf of Mexico averaged approximately $11,600 per day higher in the fourth quarter of 2005 when compared to the fourth quarter of 2004.
Capital expenditures for the year 2005 totaled $69.5 million. Total debt was $380.0 million at December 31, 2005, a reduction of $101.0 million from the previous year. The Company's cash, cash equivalents and marketable securities totaled $78.2 million at year end compared to $44.3 million at year end 2004.
The Company is positioned to show improved results from operations for 2006 and expects net income to range from $0.30 to $0.40 per diluted share. This range includes an estimated deferred tax expense of approximately $0.25 per diluted share.
Elimination of Valuation Allowance
The 2005 results reflect a non-cash benefit from the elimination of the
valuation allowance related to net operating loss carryforwards and other
deferred tax assets in the United States. The valuation allowance was
originally recorded in accordance with Generally Accepted Accounting
Principles (GAAP) as an offset to the Company's deferred tax assets, which
consisted primarily of net operating loss carryforwards. GAAP required the
Company to recognize a valuation allowance unless it was "more likely than
not" that the Company could realize the benefit of the net operating loss
carryforwards and deferred tax assets in future periods. Because the expected
earnings performance should enable the Company to benefit from the net
operating loss carryforwards, the valuation allowance is no longer required.
In 2006 the Company will begin to report deferred income tax expense. While
this will reduce reportable net income, the Company will receive the benefit
from not having to pay any significant U.S. cash taxes until the net operating
loss has been fully utilized.