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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
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(MARK ONE)
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
[X] SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
[ ] SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________
COMMISSION FILE NUMBER 333-70444
A. Full Title of the Plan and the Address of the Plan, if Different From
That of the Issuer Named Below:
PARKER DRILLING COMPANY STOCK BONUS PLAN
B. Name of Issuer of the Securities Held Pursuant to the Plan and the
Address of its Principal Executive Office:
PARKER DRILLING COMPANY
1401 ENCLAVE PARKWAY, SUITE 600
HOUSTON, TEXAS 77077
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Parker Drilling Company Stock Bonus Plan
Index
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Page(s)
Report of Independent Registered Public Accounting Firm........................1
Financial Statements
Statements of Net Assets Available for Plan Benefits
as of December 31, 2004 and 2003...............................................2
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 2004...........................................3
Notes to Financial Statements................................................4-8
Supplemental Schedules
Schedule H, Line 4i - Schedule of Assets (Held at End of Year).................9
Schedule H, Line 4j - Schedule of Reportable Transactions.....................10
Report of Independent Registered Public Accounting Firm
To the Administrator of the
Parker Drilling Company Stock Bonus Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Parker Drilling Company Stock Bonus Plan (the "Plan") at December 31,
2004 and 2003, and the changes in net assets available for benefits for the year
ended December 31, 2004, in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
(held at end of year) and reportable transactions are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
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PricewaterhouseCoopers LLP
Houston, Texas
June 24, 2005
1
Parker Drilling Company Stock Bonus Plan
Statements of Net Assets Available for Plan Benefits
December 31, 2004 and 2003
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2004 2003
Assets
Investments, at fair value
Common stock of Parker Drilling Company; 2,970,284
shares (cost $12,390,006) in 2004 and 3,425,293 shares
(cost $14,060,711) in 2003 $ 11,673,215 $ 8,734,496
Mutual funds 27,248,077 24,248,665
Participant loans 1,512,793 1,384,042
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Total investments 40,434,085 34,367,203
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Receivables
Employer matching contributions 97,794 112,774
Participant contributions 228 -
--------------- ---------------
Total receivables 98,022 112,774
--------------- ---------------
Net assets available for plan benefits $ 40,532,107 $ 34,479,977
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The accompanying notes are an integral part of these financial statements.
2
Parker Drilling Company Stock Bonus Plan
Statement of Changes in Net Assets Available for Plan Benefits
Year Ended December 31, 2004
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Additions to net assets attributed to
Contributions
Employer matching $ 1,476,749
Participant 2,865,592
Rollover 118,832
Interest and dividend income 113,232
Net appreciation in the fair value of investments 6,552,113
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Total additions 11,126,518
Deductions from net assets attributed to
Distributions (5,060,090)
Administrative expenses (14,298)
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Total deductions (5,074,388)
Net increase 6,052,130
Net assets available for plan benefits
Beginning of year 34,479,977
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End of year $ 40,532,107
==============
The accompanying notes are an integral part of these financial statements.
3
Parker Drilling Company Stock Bonus Plan
Notes to Financial Statements
December 31, 2004 and 2003
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1. Summary of Significant Plan Provisions
On September 1, 1980, Parker Drilling Company and its subsidiaries
adopted the Parker Drilling Company Profit Sharing Plan, which was
amended in 1983 to qualify as a 401(k) plan under the Internal Revenue
Code. Effective September 1, 1985, the name of the plan was changed to
the Parker Drilling Company Stock Bonus Plan (the "Plan"). The Plan was
amended and restated generally effective January 1, 2001, to comply with
certain tax laws. It was thereafter amended effective January 1, 2002 to
reflect certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA"). The Plan was further amended
effective January 1, 2003, and November 1, 2003 to comply with new tax
laws and to incorporate various plan design and administrative changes.
The Plan is a defined contribution plan and is subject to the provisions
of the Employee Retirement Income Security Act of 1974 ("ERISA"). The
following description of the Plan provides only general information.
Participants should refer to the Summary Plan Description and the plan
document for a more complete description of the Plan's provisions.
Plan Administrator and Trustee
The plan administrator is the Retirement Policy Committee which is
comprised of persons appointed by the plan sponsor, Parker Drilling
Company (the "Company"). JP Morgan Chase Bank is the trustee for the
investments held by the Plan. JP Morgan Retirement Plan Services is the
record keeper for the Plan.
Eligibility
Employees of participating employers of the Company, other than
employees covered by certain collective bargaining agreements, leased
employees, employees who are not citizens of the United States of
America (except for certain resident aliens) and other excluded
employees, are eligible to participate in the Plan on the first day of
the month following the completion of three months of service with the
Company.
Contributions
Participants may elect to contribute up to 30% of their eligible
compensation, as defined in the Plan, on a pre-tax basis. Participants
who have attained age 50 prior to the end of the plan year are eligible
to make additional pre-tax "catch-up" contributions. All pre-tax
employee contributions are subject to the applicable limitations of the
Internal Revenue Code of 1986, as amended (the "Code"). Plan
participants may also make rollover contributions to the Plan subject to
the provisions of the Plan and the Code.
Employer matching contributions are currently equal to 100% of the first
3% of eligible compensation contributed by the participant to the Plan,
plus 50% of the next 2% of eligible compensation contributed by the
participant to the Plan. Matching contributions are credited to
participant accounts on a monthly basis and are invested in Parker
Drilling Company common stock. Employee pre-tax "catch-up" contributions
are not eligible for employer matching contributions.
The Company may, at its discretion, also contribute a profit sharing
contribution to the Plan to be allocated to the accounts of eligible
participants as described in the plan document. The Company did not make
a profit sharing contribution for the year ended December 31, 2004.
4
Parker Drilling Company Stock Bonus Plan
Notes to Financial Statements
December 31, 2004 and 2003
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Vesting
Participants are immediately and fully vested in the value of employee
and employer contributions made to their accounts and related
earnings/losses.
Investment Program
Participants direct the investment of 100% of their contributions and
may transfer a portion or all of their account balance out of any fund
into one or any combination of the other available funds. The investment
fund options offered include 11 mutual funds. Participants may also
elect to invest a portion of their account balance in a self-directed
brokerage account, subject to the limitations of the Plan. Effective
November 1, 2003, the Parker Drilling Company common stock was
eliminated as an investment option for participant contributions.
However, to the extent a participant had invested his/her account in the
Parker Drilling Company common stock investment option, such investment
may be retained as to contributions prior to November 1, 2003.
Employer matching contributions are made in Parker Drilling Company
common stock. However, participants may sell their shares of Company
stock at any time and invest the proceeds in any of the other investment
fund options available under the Plan.
The Retirement Policy Committee periodically reviews the Plan's
investment fund options and makes changes to the available options from
time to time.
Participant Loans
The Plan permits participants to borrow a minimum of $1,000 up to a
maximum amount equal to the lesser of $50,000 or 50% of their vested
account balance. A participant may elect a repayment term of up to five
years for general purpose loans or up to ten years if the loan is for
the purchase of the participant's principal residence. Loans are secured
by the balance in the participant's account and payments are generally
made through payroll deductions. The interest rate for new loans is the
prime rate plus one percentage point and is fixed for the term of the
loan. A participant may only have one loan outstanding at any time. For
the plan years ending December 31, 2004 and 2003, interest rates ranged
from 5% to 10.5%.
Withdrawals and Distributions
A participant may receive benefit payments through any one of the
methods provided by the Plan upon separation from service, retirement or
financial hardship. Participants may withdraw their rollover and
after-tax contributions, if any, from the Plan at any time. Participants
may also make an in-service withdrawal of their vested account balance
on or after attainment of age 59-1/2. Distributions from the Plan can be
made in the form of a partial or single lump sum cash payment.
Participants may elect an in-kind distribution of shares held in the
Parker Drilling Company common stock investment option in lieu of cash,
with fractional shares distributed in cash.
Hardship withdrawals are allowed in the event of a deemed financial
need, subject to the provisions of the Plan and the Code. Participants
may withdraw up to 100% of their pre-tax contributions and are suspended
for at least six months from making additional contributions to the
Plan.
Participant Accounts
Participant accounts are adjusted to reflect all participant and
employer contributions, withdrawals/distributions, earnings/losses and
applicable expenses attributable to the accounts. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account balance.
5
Parker Drilling Company Stock Bonus Plan
Notes to Financial Statements
December 31, 2004 and 2003
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Administrative Expenses
The Plan pays all expenses incurred by the Plan except to the extent
they are paid by the Company. During the plan year ended December 31,
2004, certain administrative costs and expenses of the Plan totaling
$33,092 were paid by the Company.
Amendment and Termination of the Plan
Although the Company has not expressed any intent to do so, the Plan may
be amended or terminated at any time subject to the provisions of ERISA.
2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements are presented on the accrual basis
of accounting except benefit payments which are reported on the cash
basis to conform with generally accepted accounting principles.
Investment Valuation
The Plan reports the investments in the financial statements at fair
value. Investments in mutual funds and Parker Drilling Company common
stock are reported at fair value based on quoted market prices.
Investment income is recorded as earned and dividends are recorded on
the ex-dividend date. Purchases and sales are recorded on a trade-date
basis. Distributions to participants are recorded when paid.
Use of Accounting Estimates
The preparation of the financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the
accompanying financial statements and disclosures. Actual results could
differ from those estimates.
6
Parker Drilling Company Stock Bonus Plan
Notes to Financial Statements
December 31, 2004 and 2003
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3. Investments
Plan investments are summarized as follows:
2004 2003
Parker Drilling Company common stock $ 11,673,215 * $ 8,734,496 *
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Other investments
American Century Growth Fund 4,960,595 * 4,681,011 *
American Century Ultra Fund 5,042,194 * 4,462,766 *
American Century Value Fund 1,016,502 467,829
American Century Prime Money Market Fund 4,539,892 * 4,288,878 *
American Century GNMA Income Fund 2,166,343 * 2,265,774 *
American Century Equity Index Fund 3,448,383 * 3,253,946 *
Schwab Personal Choice Retirement
Account Investment Fund 666,324 621,529
American Century Strategic Conservative Fund 250,131 164,377
American Century Strategic Moderate Fund 3,167,330 * 2,662,168 *
American Century Strategic Aggressive Fund 827,978 684,645
American Century International Growth Fund 524,772 273,209
JP Morgan US Small Company Fund 637,633 422,533
Participant loans 1,512,793 1,384,042
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Total other investments 28,760,870 25,632,707
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Total investments $ 40,434,085 $ 34,367,203
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* Individual investment represents 5% or more of net assets available
for plan benefits at the end of the year.
4. Tax Status
The Plan obtained its latest determination letter dated April 26, 2002,
in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Code. Although the Plan has been amended since receiving the
determination letter, management believes the Plan is currently designed
and being operated in compliance with the applicable requirements of the
Code and was therefore qualified (and the related trust was tax-exempt)
as of December 31, 2004 and 2003.
5. Risks and Uncertainties
The Plan provides for various investment options in any combination of
money market, bond, and equity mutual funds. Investment securities are
exposed to various risks, such as interest rate, credit and overall
market volatility risks. Due to the risks associated with certain
investments, it is at least reasonably possible that changes in the
values of investment securities will occur in the near term and that
such changes may materially affect participants' account balances and
the amounts reported in the statement of net assets available for plan
benefits and the statement of changes in net assets available for plan
benefits.
7
Parker Drilling Company Stock Bonus Plan
Notes to Financial Statements
December 31, 2004 and 2003
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6. Party-In-Interest
Certain plan investments are shares of Parker Drilling Company common
stock. These transactions represent investments in the Company and,
therefore, qualify as party-in-interest transactions. Further, certain
plan investments are shares of mutual funds managed by JP Morgan or
American Century. Transactions in mutual funds managed by JP Morgan
qualify as party-in-interest transactions as a result of JP Morgan's
role as the trustee for the Plan and transactions in mutual funds
managed by American Century qualify as party-in-interest as a result of
its affiliation with JP Morgan.
7. Fund Allocation
The Parker Drilling Company common stock fund includes contributions
from the Company and participants. Participant contributions are
directed solely by the participants. Contributions from the Company may
be liquidated by the participant at any time and the proceeds invested
in other investment fund options. All other funds are participant
directed.
The following table sets forth information related to the Parker
Drilling Company common stock fund and other participant directed funds'
assets available for plan benefits at December 31, 2004, and the changes
in such assets for the year then ended.
Common
Stock of
Parker
Drilling Participant
Company Directed Total
Net assets available for plan benefits at
December 31, 2003 $ 8,847,270 $ 25,632,707 $ 34,479,977
Contributions
Employer 1,476,749 - 1,476,749
Participant - 2,865,592 2,865,592
Rollover - 118,832 118,832
Interest and dividend income - 113,232 113,232
Net appreciation in the fair value of
investments 4,594,237 1,957,876 6,552,113
Distributions to employees (1,404,544) (3,655,546) (5,060,090)
Administrative expenses - (14,298) (14,298)
Interfund transfers (1,742,703) 1,742,703 -
------------ --------------- --------------
Net assets available for plan benefits at
December 31, 2004 $11,771,009 $ 28,761,098 $ 40,532,107
============ =============== ==============
8
Parker Drilling Company Stock Bonus Plan
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2004
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Identity of Issue, Borrower, Current
Lessor or Similar Party Description of Investment Value
Parker Drilling Company Parker Drilling Company common stock $ 11,673,215 (1)(2)(3)
American Century American Century Growth Fund 4,960,595 (1)(3)
American Century American Century Ultra Fund 5,042,194 (1)(3)
American Century American Century Value Fund 1,016,502 (3)
American Century American Century Prime Money Market Fund 4,539,892 (1)(3)
American Century American Century GNMA Income Fund 2,166,343 (1)(3)
American Century American Century Equity Index Fund 3,448,383 (1)(3)
Charles Schwab Schwab Personal Choice Retirement Account Investment Fund 666,324
American Century American Century Strategic Conservative Fund 250,131 (3)
American Century American Century Strategic Moderate Fund 3,167,330 (1)(3)
American Century American Century Strategic Aggressive Fund 827,978 (3)
American Century American Century International Growth Fund 524,772 (3)
JP Morgan JP Morgan US Small Company Fund 637,633 (3)
Various Participant loans, interest rates ranging from 5.0% to 10.5% 1,512,793
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$ 40,434,085
===============
(1) These investments are greater than 5% of assets available for plan benefits.
(2) The cost of investment in Parker Drilling Company common stock is $12,390,006.
(3) Identifies parties-in-interest.
9
Parker Drilling Company Stock Bonus Plan
Schedule H, Line 4j - Schedule of Reportable Transactions
Year Ended December 31, 2004
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(h)
Current
Value of
(a) (b) (c) (d) (g) Assets on (i)
Identity of Description Purchase Selling Cost of Transaction Net
Party Involved of Assets Price Price Asset Date Gain
Parker Drilling Co.* Common stock $ 1,496,289 $ - $ 1,496,289 $ 1,496,289 $ -
Parker Drilling Co.* Common stock - 2,914,678 2,869,965 2,914,678 44,713
* Party-in-interest as defined by ERISA.
10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
PARKER DRILLING COMPANY
STOCK BONUS PLAN
By: /s/ David W. Tucker
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Chairman of the Retirement Policy
Committee, Corporate Treasurer
Date: June 27, 2005
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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23.1 Consent of Independent Registered Public Accounting Firm