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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549Form 10-K
  (MARK ONE)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934FOR THE FISCAL
    YEAR ENDED DECEMBER 31, 2010oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF
    THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD
    FROM          TO   COMMISSION FILE NUMBER 1-7573
 PARKER DRILLING
    COMPANY
 (Exact name of registrant as
    specified in its charter)
  Delaware

73-0618660(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)5 Greenway Plaza,
    Suite 100, Houston, Texas(Address of principal
    executive offices)

77046(Zip code)   Registrants telephone number, including area code:
 (281) 406-2000
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which Registered:Common Stock, par value
    $0.162/3
    per share

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
   o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated filer o

Accelerated filer þ

Non-accelerated filero
    (Do not check if a smaller reporting company)

Smaller reporting company o   Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE




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TABLE OF
    CONTENTS
   
 PagePART IItem 1.

Business


3Item 1A.

Risk Factors


14Item 1B.

Unresolved Staff Comments


28Item 2.

Properties


28Item 3.

Legal Proceedings


31PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


32Item 6.

Selected Financial Data


33Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


34Item 7A.

Quantitative and Qualitative Disclosures about
    Market Risk


50Item 8.

Financial Statements and Supplementary Data


52Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


92Item 9A.

Controls and Procedures


92Item 9B.

Other Information


93PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


93Item 11.

Executive Compensation


93Item 12.

Security Ownership of Certain Beneficial Owners,
    Management and Related Stockholder Matters


93Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


93Item 14.

Principal Accounting Fees and Services


94PART IVItem 15.

Exhibits and Financial Statement Schedules


94Signatures


99EX-10.4EX-10.18EX-10.19EX-10.21EX-10.28EX-21EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   2




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PART I  ITEM 1.
    BUSINESS  General
        
    International Drilling
    U.S. Drilling
    Rental Tools
    Project Management and Engineering Services
    Construction Contract  Our Rig
    Fleet
    
    11 rigs in the Commonwealth of Independent States/Africa-Middle
    East (CIS/AME) region, including 8 land rigs and 1
    arctic-class barge rig in Kazakhstan and 2 land rigs in
    Algeria
    10 rigs in the Americas region, including 7 land rigs and 1
    barge rig in Mexico and 2 land rigs in Colombia
    5 land rigs in the Asia Pacific region, including 2 rigs in
    Indonesia, 1 rig in Papua New Guinea and 2 rigs in New Zealand.
    Three additional rigs, located in this region, were classified
    as assets held for sale as of December 31, 2010
    13 barge drilling rigs in the inland shallow waters of the
    U.S. Gulf of Mexico (GOM)
    1 unassigned land rig currently held in our yard in New Iberia,
    Louisiana.    Our
    International Drilling Business
    
    customers who typically are major independent and national oil
    and gas companies and integrated service providers; 3




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
    drilling programs in remote locations with little infrastructure
    and/or harsh
    environments requiring specialized drilling equipment with a
    large inventory of spare parts and other ancillary equipment and
    self-supported service capabilities;
    complex wells (i.e., high pressure, deep depths, hazardous or
    geologically challenging) requiring specialized equipment and
    considerable experience to drill; and
    international contracts that generally cover periods of one year
    or more.  Our
    Rental Tools Business
        Our
    Project Management and Engineering Services Business
    Our
    Construction Contract Business
     4




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Our U.S.
    Gulf of Mexico and Inland Waterways Business
  well-to-well,
    Our
    Strategy
    Achieving and Maintaining Market
    Leadership.
  Growing Through Selective Investment.
  
    expanding and broadening our non-capital intensive project
    management and engineering services activities by leveraging our
    experience
    growing our rental tools operation by locating new service
    facilities in markets with growing demand from new and existing
    customers
    adding new equipment to our drilling rig fleet that improves
    opportunities with operators
    entering new markets that align with the products and services
    we offer.  Differentiating our Brand.
  Safety:
  Training:
 5




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Technology: 76-year
  Performance:
  Maintaining Financial Discipline. stronger-than-peer
  2010
    Strategic Actions
    
    The Yastreb rig, which was designed, built and operated by us
    for ENL, operator of the Sakhalin-1 Project, set a new world
    record for extended-reach drilling with the Odoptu
    OP-11 well. OP-11 achieved a total measured depth of
    40,502 feet (7.67 miles). OP-11 also set a world
    record with a horizontal reach of 37,648 feet
    (7.13 miles) under the sea floor. As our customers take the
    search for oil and gas into frontier regions, we believe that
    this kind of expertise will become more valued in the years
    ahead.
    We infused our rental tools business with approximately
    $49 million in capital investments, most of which went
    directly for new equipment to serve the increased demand for
    rental tools created by the growth in U.S. unconventional
    shale drilling.
    We hold the number one position in the U.S. Gulf of Mexico
    barge drilling market measured by barge rigs working. According
    to industry compiled information, over 50 percent of all
    wells drilled by barge rigs in the shallow waters of the Gulf of
    Mexico during 2010 were drilled by Parker rigs.
    In our International Drilling segment:  -
    four drilling contracts in the Americas region were extended
    into 2012.-
    three new contracts in our Asia Pacific region, one of which
    mobilized a rig that had been ready-stacked since 2009-
    our Caspian Sea arctic barge contract was extended into 2012.  Our
    Competitive Strengths
    Outstanding Safety, Planned Maintenance, Inventory Control
    and Training Programs.
 6




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Geographically Targeted Operations and
    Assets.
  Technological Leadership.
  Strong and Experienced Senior Management
    Team.
  Project Management.
    Customers
   7




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Competition
            Contracts
   8




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lost-in-hole
  Seasonality
    Insurance
    and Indemnification
  on-site
  12-month
  control-of-well
  Control-of-well control-of-well control-of-well
    knock-for-knock
  clean-up
 9




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Employees
    December 31,2010


2009International Drilling


740



1,108Alaska(1)


138



140U.S. Drilling


329



347Rental Tools


250



240Project Management and Engineering Services, Construction
    Contract and Corporate(2)


554



537Total employees


2,011



2,372     (1)
    
    Our employees in Alaska are supporting the business expansion
    into this region.(2)
    
    Includes 327 and 301 employees located in Russia who
    support the Orlan platform and Yastreb rig drilling activities
    in 2010 and 2009, respectively.  Environmental
    Considerations
     10




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11




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2
   12




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FINANCIAL
    INFORMATION ABOUT INDUSTRY SEGMENTS AND GEOGRAPHIC
    AREAS
  We operate in five segments:
  EXECUTIVE
    OFFICERS
    
    Robert L. Parker Jr., 62, is the executive chairman of
    the board of directors. Mr. Parker joined the Company in
    1973 as a contract representative, and was appointed manager of
    U.S. operations and a vice president later in 1973. He was
    elected executive vice president in 1976, and president and
    chief operating officer in 1977. In 1991, he was elected chief
    executive officer, was appointed chairman in 2006, and has
    retained the position of executive chairman since 2009. He has
    been a director since 1973.
    David C. Mannon, 53, is president, chief executive
    officer and member of the board of directors. Mr. Mannon
    joined the Company in 2004 as senior vice president and chief
    operating officer, and was elected president in 2007, and chief
    executive officer and director in 2009. From 2003 to 2004,
    Mr. Mannon held the positions of president and chief
    executive officer of Triton Engineering Services Company
    (Triton), a subsidiary of Noble Drilling. From 1988 to March
    2003 he held various other positions with Triton. From 1980
    through 1988, Mr. Mannon served Sedco-Forex, formerly
    Sedco, as a drilling engineer.
    W. Kirk Brassfield, 55, was elected senior vice president
    and chief financial officer in 2005. Mr. Brassfield joined
    the Company in 1998 as controller and principal accounting
    officer, and was appointed vice president, finance and
    accounting in 2004. From 1991 through 1998, Mr. Brassfield
    served in various positions, including subsidiary controller and
    director of financial planning of MAPCO Inc., a diversified
    energy company. From 1979 through 1991, Mr. Brassfield
    served at the public accounting firm KPMG.
    Jon-Al Duplantier, 43, joined the Company in 2009 as vice
    president and general counsel. From 1995 to 2009,
    Mr. Duplantier served in several legal and business roles
    at ConocoPhillips, including senior counsel 
    Exploration and Production, managing counsel 
    Indonesia, executive assistant  Exploration and
    Production, and counsel  Dubai. Prior to joining
    ConocoPhillips, he served as a patent attorney for DuPont from
    1992 to 1995.
    Philip Agnew, 42, joined the Company in December 2010 as
    vice president of technical services. Mr. Agnew has more
    than 20 years experience in design, construction and
    project management. From 2003 to 2010, Mr. Agnew held the
    position of President at Aker MH, Inc., a business unit of Aker
    Solutions AS. From 1998 to 2003, Mr. Agnew served as
    Project Manager and then vice president  Project
    Development at Signal International (previously Friede Goldman
    Offshore; TDI-Halter LP; Texas Drydock, Inc.). Prior to his
    career at Signal International, Mr. Agnew served a variety
    of leadership roles at Schlumberger Sedco Forex International
    Resources, Interface Consulting International, Inc., and
    Brown & Root, Inc.
    Philip A. Schlom, 46, joined the Company in 2009 as
    principal accounting officer and corporate controller. From 2008
    to 2009, he held the position of vice president and corporate
    controller for Shared Technologies 13




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Inc. From 1997 to 2008, Mr. Schlom held several senior
    financial positions at Flowserve Corporation, a leading
    manufacturer of pumps, valves and seals for the energy sector.
    From 1988 through 1997, Mr. Schlom worked at the public
    accounting firm PricewaterhouseCoopers.  Other
    Parker Drilling Company Officers
  
    Denis J. Graham, 61, joined the Company in 2000 as vice
    president of engineering. Mr. Graham served in a variety of
    positions for Diamond Offshore Drilling Company from 1979 to
    2000, including senior vice president of technical services
    immediately prior to joining the Company. Mr. Graham is a
    Registered Professional Engineer in the State of Texas.
    David W. Tucker, 55, treasurer, joined the Company in
    1978 as a financial analyst and served in various financial and
    accounting positions before being named chief financial officer
    of the Companys wholly-owned subsidiary, Hercules Offshore
    Corporation, in February 1998. Mr. Tucker was named
    treasurer of the Company in 1999.
    J. Daniel Chapman, 40, joined the Company in 2009 as
    chief compliance officer and counsel. Prior to joining the
    Company, Mr. Chapman was employed by Baker Hughes from 2002
    to 2009 where he served in several legal counsel positions
    including compliance counsel, international trade counsel,
    division counsel (drilling fluids), and global ethics and
    compliance director. Prior to 2002, Mr. Chapman was
    employed as a securities and mergers and acquisitions lawyer
    with the law firms of Freshfields (London) and King &
    Spalding (Atlanta and Houston).  Available
    Information
  www.parkerdrilling.com Form 10-K, Form 10-Q, Form 8-K http://www.sec.gov.
  ITEM 1A.
    RISK
    FACTORS  Form 10-K,
  Risks
    Related to Our Business
  Volatile
    oil and natural gas prices impact demand for our drilling and
    related services. A decrease in demand for crude oil and natural
    gas or other factors may reduce demand for our services and
    substantially reduce our profitability or result in
    losses.
   14




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
    the demand for oil and natural gas;
    the cost of exploring for, producing and delivering oil and
    natural gas;
    expectations regarding future energy prices;
    advances in exploration, development and production technology;
    the adoption or repeal of laws and government regulations, both
    in the United States and other countries;
    the imposition or lifting of economic sanctions against foreign
    countries;
    the number of ongoing and recently completed rig construction
    projects which may create overcapacity;
    local and worldwide military, political and economic events,
    including events in the oil producing countries in Africa, the
    Middle East, Russia, Central Asia, Southeast Asia and Americas;
    the ability of the Organization of Petroleum Exporting Countries
    (OPEC) to set and maintain production levels and prices;
    the level of production by non-OPEC countries;
    weather conditions;
    expansion or contraction of worldwide economic activity, which
    affects levels of consumer and industrial demand;
    the rate of discovery of new oil and natural gas reserves;
    domestic and foreign tax policies;
    acts of terrorism in the United States or elsewhere;
    the development and use of alternative energy sources; and
    the policies of various governments regarding exploration and
    development of their oil and natural gas reserves.  Our
    operations were impacted by the 2010 drilling rig accident in
    the U.S. Gulf of Mexico and its consequences and could be
    adversely affected in the future
   15




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Continued
    effects of the economic recession may result in lower demand for
    our drilling rigs and rental tools business, which could have a
    material adverse effect on our drilling, project management and
    engineering services and rental tool business.
    Rig
    upgrade, refurbishment and construction projects are subject to
    risks and uncertainties, including delays and cost overruns,
    which could have an adverse impact on our results of operations
    and cash flows.
    
    shortages of equipment or skilled labor;
    unforeseen engineering problems;
    unanticipated change orders;
    work stoppages;
    adverse weather conditions;
    unexpectedly long delivery times for manufactured rig components;
    unanticipated repairs to correct defects in construction not
    covered by warranty;
    failure or delay of third-party equipment vendors or service
    providers;
    unforeseen increases in the cost of equipment, labor or raw
    materials, particularly steel; 16




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
    disputes with customers, shipyards or suppliers;
    latent damages or deterioration to hull, equipment and machinery
    in excess of engineering estimates and assumptions;
    financial or other difficulties with current customers at
    shipyards and suppliers;
    loss of revenue associated with downtime to remedy
    malfunctioning equipment not covered by warranty;
    unanticipated cost increases;
    loss of revenue and payments of liquidated damages for downtime
    to perform repairs associated with defects, unanticipated
    equipment refurbishment and delays in commencement of
    operations; and
    inability to obtain the required permits or approvals, including
    import/export documentation.    Failure
    to retain skilled and experienced personnel could affect our
    operations.
    Our
    debt levels and debt agreement restrictions may limit our
    liquidity and flexibility in obtaining additional financing and
    in pursuing other business opportunities.
    
    $460.9 million of long-term debt and $9.1 million of
    unamortized debt discount which is included in equity pursuant
    to applicable accounting standards for convertible debt
    instruments;
    $12.0 million of current portion of long-term debt;
    $31.5 million of operating lease commitments; and
    $16.3 million of standby letters of credit.   17




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
    delay spending on capital projects, including maintenance
    projects and the acquisition or construction of additional rigs,
    rental tools and other assets;
    sell equity securities, sell assets; or
    restructure or refinance our debt.      
    result in a reduction of our credit rating, which would make it
    more difficult for us to obtain additional financing on
    acceptable terms;
    require us to dedicate a substantial portion of our cash flows
    from operating activities to the repayment of our debt and the
    interest associated with our debt;
    limit our operating flexibility due to financial and other
    restrictive covenants, including restrictions on incurring
    additional debt, and create liens on our properties;
    place us at a competitive disadvantage compared with our
    competitors that have relatively less debt; and
    make us more vulnerable to downturns in our business.  Our
    current operations and future growth may require significant
    additional capital, and the amount of our indebtedness could
    impair our ability to fund our capital
    requirements.
    
    cash on hand;
    funds generated from our operations;
    public offerings or private placements of equity and debt
    securities;
    commercial bank loans;
    capital leases; and
    sales of assets.   18




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Certain
    of our contracts are subject to cancellation or delay by our
    customers without penalty and with little or no
    notice.
      We
    rely on a small number of customers and the loss of a
    significant customer could adversely affect us.
    The
    contract drilling and the rental tools businesses are highly
    competitive and cyclical, with intense price
    competition.
     19




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Our
    international operations are also subject to governmental
    regulation and other risks.
    
    political, social and economic instability, war, terrorism and
    civil disturbances;
    limitations on insurance coverage, such as war risk coverage, in
    certain areas;
    expropriation, confiscatory taxation and nationalization of our
    assets;
    foreign laws and governmental regulation, including
    inconsistencies and unexpected changes in laws or regulatory
    requirements, and changes in interpretations or enforcement of
    existing laws or regulations;
    increases in governmental royalties;
    import-export quotas or trade barriers;
    hiring and retaining skilled and experienced workers, many of
    whom are represented by foreign labor unions;
    work stoppages;
    damage to our equipment or violence directed at our employees,
    including kidnapping;
    piracy of vessels transporting our people or equipment;
    unfavorable changes in foreign monetary and tax policies;
    solicitation by government officials for improper payments or
    other forms of corruption;
    foreign currency fluctuations and restrictions on currency
    repatriation;
    repudiation, nullification, modification or renegotiation of
    contracts; and
    other forms of governmental regulation and economic conditions
    that are beyond our control.    and/or
 20




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We are
    subject to hazards customary for drilling operations, which
    could adversely affect our financial performance if we are not
    adequately indemnified or insured.
     21




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Government
    regulations and environmental risks, which reduce our business
    opportunities and increase our operating costs, might become
    more stringent in the future.
    Regulation
    of greenhouse gases and climate change could have a negative
    impact on our business.
    2
   22




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and/or
  We are
    regularly involved in litigation, some of which may be
    material.
  Form 10-K
  We are
    currently conducting an investigation into possible violations
    of the Foreign Corrupt Practices Act (FCPA) and other laws
    concerning our international operations. The Securities and
    Exchange Commission and the Department of Justice are conducting
    parallel investigations into possible FCPA violations. If we are
    found to have violated the FCPA or other legal requirements, we
    may be subject to criminal and civil penalties and other
    remedial measures, which could materially harm our business,
    results of operations, financial condition and
    liquidity.
       23




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We are
    subject to laws and regulations concerning our international
    operations, including export restrictions, U.S. economic
    sanctions and other activities that we conduct abroad. We have
    conducted an internal review concerning our compliance with
    these legal requirements and have voluntarily disclosed the
    results of our review to the U.S. government. If we are not in
    compliance with applicable legal requirements, we may be subject
    to civil or criminal penalties and other remedial measures,
    which could materially harm our business, results of operations,
    financial condition and liquidity.
    Increased
    regulation of hydraulic fracturing could result in reductions or
    delays in drilling and completing new oil and natural gas wells,
    which could adversely impact the demand for rental
    tools.
    Risks
    Related to Our Common Stock
  The
    market price of our common stock has fluctuated
    significantly.
    
    the other risk factors described in this
    Form 10-K,
    including changes in oil and natural gas prices;
    a shortfall in rig utilization, operating revenue or net income
    from that expected by securities analysts and investors;
    changes in securities analysts estimates of the financial
    performance of us or our competitors or the financial
    performance of companies in the oilfield service industry
    generally;
    changes in actual or market expectations with respect to the
    amounts of exploration and development spending by oil and gas
    companies;
    general conditions in the economy and in energy-related
    industries;
    general conditions in the securities markets;
    political instability, terrorism or war; and
    the outcome of pending and future legal proceedings,
    investigations, tax assessments and other claims. 24




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A
    hostile takeover of our company would be
    difficult.
    Risks
    Related to our Debt Securities
  We may
    not be able to repurchase our 9.125% Senior Notes upon a
    change of control.
      We may
    not have sufficient cash to repurchase the
    2.125% Convertible Senior Notes at the option of the holder
    upon a fundamental change or to pay the cash payable upon a
    conversion.
   25




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The
    indenture for our 9.125% Senior Notes and our senior
    secured credit agreement impose significant operating and
    financial restrictions, which may prevent us from capitalizing
    on business opportunities and taking some actions.
    
    make investments and other restricted payments, including
    dividends;
    incur additional indebtedness;
    create liens;
    engage in sale leaseback transactions;
    sell our assets or consolidate or merge with or into other
    companies; and
    engage in transactions with affiliates.    DISCLOSURE
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K Form 10-K,
  
    stability of prices and demand for oil and natural gas;
    levels of oil and natural gas exploration and production
    activities;
    demand for contract drilling and drilling-related services and
    demand for rental tools;
    our future operating results and profitability;
    our future rig utilization, dayrates and rental tools activity;
    entering into new, or extending existing, drilling contracts and
    our expectations concerning when our rigs will commence
    operations under such contracts;
    growth through acquisitions of companies or assets;
    construction or upgrades of rigs and expectations regarding when
    these rigs will commence operations;
    capital expenditures for acquisition of rigs, construction of
    new rigs or major upgrades to existing rigs;
    scheduled delivery of drilling rigs for operation in Alaska
    under the terms of our agreement with BP Exploration (Alaska)
    Inc.;
    entering into joint venture agreements;
    our future liquidity;
    availability and sources of funds to reduce our debt and
    expectations of when debt will be reduced; 26




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
    the outcome of pending or future legal proceedings,
    investigations, tax assessments and other claims;
    the availability of insurance coverage for pending or future
    claims;
    the enforceability of contractual indemnification in relation to
    pending or future claims;
    compliance with covenants under our senior secured credit
    facility and indentures for our senior notes; and
    organic growth of our operations.  Form 10-K,
  
    worldwide economic and business conditions that adversely affect
    market conditions
    and/or the
    cost of doing business;
    our inability to access the credit markets;
    the U.S. economy and the demand for natural gas;
    worldwide demand for oil;
    fluctuations in the market prices of oil and natural gas;
    imposition of unanticipated trade restrictions;
    unanticipated operating hazards and uninsured risks;
    political instability, terrorism or war;
    governmental regulations, including changes in accounting rules
    or tax laws or ability to remit funds to the U.S., that
    adversely affect the cost of doing business;
    changes in the tax laws that would allow double taxation on
    foreign sourced income;
    the outcome of our investigation and the parallel investigations
    by the SEC and the Department of Justice into possible
    violations of U.S. law, including the Foreign Corrupt
    Practices Act;
    contemplated U.S. legislation on carbon emissions;
    potential new employer taxes on U.S. health
    care plans;
    adverse environmental events;
    adverse weather conditions;
    global health concerns;
    changes in the concentration of customer and supplier
    relationships;
    ability of our customers and suppliers to obtain financing for
    their operations;
    unexpected cost increases for new construction and upgrade and
    refurbishment projects;
    delays in obtaining components for capital projects and in
    ongoing operational maintenance and equipment certifications;
    shortages of skilled labor; 27




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
    unanticipated cancellation of contracts by operators;
    breakdown of equipment;
    other operational problems including delays in
    start-up of
    operations;
    changes in competition;
    the effect of litigation and contingencies; and
    other similar factors , some of which are discussed in documents
    referred to or incorporated by reference into this
    Form 10-K
    and our other reports and filings with the SEC.  Form 10-K, Form 10-K
  ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES   28




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Land and
    Barge Rigs
    Year entered

Drillinginto service/

depth ratingName

Type(2)

upgraded

(in feet)

LocationInternationalAsia Pacific(1)Rig 231

L

1981/1997


13,000


IndonesiaRig 253

L

1982/1996


15,000


IndonesiaRig 188

L

1979/2003


18,000


New ZealandRig 246

L

1981/1998


18,000


New ZealandRig 226

HH

1989/2010


18,000


Papua New GuineaCIS/AMERig 264

L

2007


20,000


AlgeriaRig 265

L

2007


20,000


AlgeriaRig 107

L

1983/2009


15,000


KazakhstanRig 216

L

2001/2009


25,000


KazakhstanRig 230

L

1980/2003


18,000


KazakhstanRig 236

L

1978/2008


18,000


KazakhstanRig 247

L

1981/2008


18,000


KazakhstanRig 249

L

2000/2009


25,000


KazakhstanRig 257

B

1999/2010


30,000


KazakhstanRig 258

L

2001/2009


25,000


KazakhstanRig 269

L

2008


21,000


KazakhstanAmericasRig 268

L

1978/2009


30,000


ColombiaRig 271

L

1982/2009


30,000


ColombiaRig 53

B

1978/2007


18,000


MexicoRig 121

L

1980/2007


18,000


MexicoRig 122

L

1980/2008


18,000


MexicoRig 165

L

1978/2007


30,000


MexicoRig 221

L

1982/2007


30,000


MexicoRig 256

L

1978/2007


25,000


MexicoRig 266

L

2008


20,000


MexicoRig 267

L

2008


20,000


Mexico   29




---



##### Table of Contents



Year entered


Drillinginto service/


depth ratingName

Type(2)


upgraded


(in feet)


LocationUS DrillingU.S. Gulf of Mexico (GOM)Rig 8


B



1978/2007



14,000



GOMRig 20


B



1981/2007



13,000



GOMRig 21


B



1979/2007



14,000



GOMRig 12


B



1979/2006



18,000



GOMRig 15


B



1978/2007



15,000



GOMRig 50


B



1981/2006



20,000



GOMRig 51


B



1981/2008



20,000



GOMRig 54


B



1980/2006



25,000



GOMRig 55


B



1981/2010



25,000



GOMRig 56


B



1979/2005



25,000



GOMRig 72


B



1982/2005



30,000



GOMRig 76


B



1977/2009



30,000



GOMRig 77


B



2006/2006



30,000



GOMUnassignedRig 270


L







21,000



     (1)
    
    Excludes three rigs classified for accounting purposes as assets
    held for sale as of December 31, 2010.(2)
    
    Type is defined as: L  land rig; B  barge
    rig; HH  heli-hoist rig. 30




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##### Table of Contents



YTDDecember 31,2010

2009U.S. Gulf of MexicoU.S. Gulf of Mexico barge rigsRigs available for service(1)


13.0



15.0Utilization rate of rigs available for service(2)


63
%


35
%International Land & Barge RigsAsia Pacific RegionRigs available for service(1)(3)


8.0



8.0Utilization rate of rigs available for service(2)


37
%


47
%Americas RegionRigs available for service(1)


10.0



10.0Utilization rate of rigs available for service(2)


78
%


82
%CIS/AME RegionRigs available for service(1)


11.0



12Utilization rate of rigs available for service(2)


45
%


76
%UnassignedRigs available for service(1)


1.0



1.0Utilization rate of rigs available for service(2)


0
%


0
%Total International Land & Barge RigsRigs available for service(1)


30.0



31.0Utilization rate of rigs available for service(2)


53
%


68
%     (1)
    
    The number of rigs available for service is determined by
    calculating the number of days each rig was in our fleet and was
    under contract or available for contract. For example, a rig
    under contract or available for contract for six months of a
    year is 0.5 rigs available for service during such year. Our
    method of computation of rigs available for service may not be
    comparable to other similarly titled measures of other companies.(2)
    
    Rig utilization rates are based on a weighted average basis
    assuming 365 days availability for all rigs available for
    service. Rigs acquired or disposed of are treated as added to or
    removed from the rig fleet as of the date of acquisition or
    disposal. Rigs that are in operation or fully or partially
    staffed and on a revenue-producing standby status are considered
    to be utilized. Rigs under contract that generate revenues
    during moves between locations or during mobilization or
    demobilization are also considered to be utilized. Our method of
    computation of rig utilization may not be comparable to other
    similarly titled measures of other companies.(3)
    
    December 31, 2010 three rigs were removed from the
    marketable rig count and classified as assets held for sale.  ITEM 3.
    LEGAL
    PROCEEDINGS  Form 10-K,
 31




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##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES    2010

2009Quarter

High

Low

High

LowFirst

$
5.85


$
4.55


$
3.39


$
1.28Second


5.76



3.75



5.39



1.80Third


4.44



3.43



5.89



3.43Fourth


4.95



3.85



6.54



4.19       Issuer
    Purchases of Equity Securities
    Issuer Purchases of Equity SecuritiesTotal Numberof Shares


Average PricePeriod

Purchased


Paid Per ShareOctober 1-31, 2010


51,230


$
4.37November 1-30, 2010


38,429


$
4.02December 1-31, 2010


44,354


$
4.56Total


134,013


$
4.33  32




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K.
  Year Ended December 31,2010


2009(1)


2008(1)(2)


2007(1)


2006(3)(Dollars in thousands, except per share amounts)Income Statement DataTotal revenues

$
659,475


$
752,910


$
829,842


$
654,573


$
586,435Total operating income


45,107



39,322



59,180



190,983



143,326Equity in loss of unconsolidated joint venture, net of tax










(1,105
)


(27,101
)


Other expense


(33,602
)


(29,495
)


(28,405
)


(24,141
)


(25,891
)Income tax (expense) benefit


(26,213
)


(560
)


(6,942
)


(36,895
)


(36,409
)Net income (loss)


(14,708
)


9,267



22,728



102,846



81,026Net income (loss) attributable to controlling interest


(14,461
)


9,267



22,728



102,846



81,026Basic earnings per share:Income from continuing operations

$
(0.13
)

$
0.08


$
0.20


$
0.94


$
0.76Net income (loss) attributable to controlling interest

$
(0.13
)

$
0.08


$
0.20


$
0.94


$
0.76Diluted earnings per share:Income from continuing operations

$
(0.13
)

$
0.08


$
0.20


$
0.93


$
0.75Net income (loss) attributable to controlling interest

$
(0.13
)

$
0.08


$
0.20


$
0.93


$
0.75Balance Sheet DataCash and cash equivalents

$
51,431


$
108,803


$
172,298


$
60,124


$
92,203Marketable securities


















62,920Property, plant and equipment, net


816,147



716,798



675,548



585,888



435,473Assets held for sale


5,287















4,828Total assets


1,274,555



1,243,086



1,205,720



1,067,173



901,301Total long-term debt including current portion of long-term debt


472,862



423,831



441,394



349,309



329,368Total equity


588,066



595,899



582,172



549,322



459,099     (1)
    
    The Company adopted, effective January 1, 2009, newly
    issued accounting guidance regarding Accounting for
    Convertible Debt Instruments That May Be Settled in Cash upon
    Conversionwhich applies to all convertible debt instruments
    that have a net settlement feature. We reflected the
    impact of the new accounting guidance during each of the
    quarterly periods in our respective Quarterly Reports on
    Form 10-Q
    filed with the SEC during 2009. The adoption of this accounting
    guidance impacted the historical accounting for our
    $125 million aggregate principal amount of
    2.125% Convertible Senior Notes due 2012 issued on
    July 5, 2007 by requiring adjustments to related interest
    expense, deferred income taxes, long-term debt, and
    shareholders equity for 2008 and 2007, which are
    illustrated in the notes to the consolidated financial
    statements.(2)
    
    The 2008 results reflect a $100.3 million charge for
    impairment of goodwill that is described in the notes to the
    consolidated financial statements in Item 8 of this
    Form 10-K.(3)
    
    The 2006 results reflect the reversal of a $12.6 million
    valuation allowance at the end of 2006 as it was no longer
    considered more likely than not under the accounting
    guidance related to accounting for income tax uncertainties and
    the utilization of $5.4 million of net operating losses,
    both related to Louisiana state net operating loss carryforwards. 33




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  OVERVIEW
    AND OUTLOOK
  Overview
      
    Rental Tools segment revenues increased 50 percent in 2010
    compared to 2009, setting a new record. Rental Tools segment
    gross margins, excluding depreciation and amortization,
    increased 81 percent over 2009.
    Utilization in the Companys U.S. Barge Drilling
    segment nearly doubled to 63 percent in 2010 from
    35 percent in 2009.
    Over 50 percent of all wells drilled in 2010 by barge rigs
    in the shallow waters of the Gulf of Mexico were drilled by
    Parker rigs.
    In our International Drilling segment, the Americas region
    extended four contracts into 2012. We also secured three new
    contracts in our Asia Pacific region, one of which mobilized a
    rig that had been ready-stacked since 2009. In addition, the
    contract for Rig 257, the Companys Caspian Sea arctic
    barge drilling rig, was extended into 2012.
    The Parker-operated Yastreb rig set a new, extended-reach
    drilling record of 40,502 feet, nearly eight miles, in
    total measured depth, operating incident-free throughout. This
    rig, designed, built and operated by us for Exxon Neftegas
    Limited, set this record during development drilling of the
    Sakhalin-1 Projects Odoptu field.    year-to-year,
   34




---



##### Table of Contents



Outlook
        RESULTS
    OF OPERATIONS
  Year
    Ended December 31, 2010 Compared with Year Ended
    December 31, 2009
   35




---



##### Table of Contents



Year Ended December 31,2010


2009(Dollars in thousands)Revenues:International Drilling

$
220,371



33
%

$
293,337



39
%U.S. Drilling


64,543



10
%


49,628



6
%Rental Tools


172,598



26
%


115,057



15
%Project Management and Engineering Services


110,873



17
%


109,445



15
%Construction Contract


91,090



14
%


185,443



25
%Total revenues

$
659,475



100
%

$
752,910



100
%Operating gross margin:International drilling gross margin excluding depreciation and
    amortization

$
42,786



19
%

$
101,851



35
%U.S. drilling gross margin excluding depreciation and
    amortization


11,209



17
%


1,574



3
%Rental tools gross margin excluding depreciation and amortization


112,562



65
%


62,317



54
%Project management and engineering services gross margin
    excluding depreciation and amortization


21,438



19
%


23,646



22
%Construction contract gross margin excluding depreciation and
    amortization


202



0
%


8,132



4
%Depreciation and amortization


(115,030
)






(113,975
)Total operating gross margin


73,167







83,545General and administrative expense


(30,728
)






(45,483
)Provision for reduction in carrying value of certain assets


(1,952
)






(4,646
)Gain on disposition of assets, net


4,620







5,906Total operating income

$
45,107






$
39,322    36




---



##### Table of Contents



ProjectManagementInternational








& Engineering


ConstructionDrilling


U.S. Drilling


Rental Tools


Services


Contract(Dollars in thousands)Year Ended December 31, 2010Operating gross margin(1)

$
(11,511
)

$
(11,503
)

$
74,541


$
21,438


$
202Depreciation and amortization


54,297



22,712



38,021







Operating gross margin excluding depreciation and amortization

$
42,786


$
11,209


$
112,562


$
21,438


$
202Year Ended December 31, 2009Operating gross margin(1)

$
50,723


$
(26,797
)

$
27,841


$
23,646


$
8,132Depreciation and amortization


51,128



28,371



34,476







Operating gross margin excluding depreciation and amortization

$
101,851


$
1,574


$
62,317


$
23,646


$
8,132     (1)
    
    Operating gross margin is calculated as revenues less direct
    operating expenses, including depreciation and amortization
    expense.  International
    Drilling Segment
        start-up
  U.S.
    Drilling Segment
   37




---



##### Table of Contents



Rental
    Tools Segment
      Project
    Management and Engineering Services Segment
    percentage-of-completion rig-up
  Other
    Financial Data
   38




---



##### Table of Contents



Year
    Ended December 31, 2009 Compared with Year Ended
    December 31, 2008
   39




---



##### Table of Contents



Year Ended December 31,2009


2008(Dollars in thousands)Revenues:International drilling

$
293,337



39
%

$
325,096



39
%U.S. Drilling


49,628



6
%


173,633



21
%Rental Tools


115,057



15
%


171,554



21
%Project Management and Engineering Services


109,445



15
%


110,147



13
%Construction Contract


185,443



25
%


49,412



6
%Total revenues

$
752,910



100
%

$
829,842



100
%Operating gross margin:International drilling gross margin excluding depreciation and
    amortization

$
101,851



35
%

$
93,687



29
%U.S. drilling gross margin excluding depreciation and
    amortization


1,574



3
%


89,202



51
%Rental tools gross margin excluding depreciation and amortization


62,317



54
%


104,506



61
%Project management and engineering services gross margin
    excluding depreciation and amortization


23,646



22
%


18,470



17
%Construction contract gross margin excluding depreciation and
    amortization


8,132



4
%


2,597



5
%Depreciation and amortization


(113,975
)






(116,956
)Total operating gross margin


83,545







191,506General and administrative expense


(45,483
)






(34,708
)Impairment of goodwill










(100,315
)Provision for reduction in carrying value of certain assets


(4,646
)






Gain on disposition of assets, net


5,906







2,697Total operating income

$
39,322






$
59,180    40




---



##### Table of Contents



ProjectManagementInternational








& Engineering


ConstructionDrilling


U.S. Drilling


Rental Tools


Services


Contract(Dollars in thousands)Year Ended December 31, 2009Operating gross margin(1)

$
50,723


$
(26,797
)

$
27,841


$
23,646


$
8,132Depreciation and amortization


51,128



28,371



34,476







Operating gross margin excluding depreciation and amortization

$
101,851


$
1,574


$
62,317


$
23,646


$
8,132Year Ended December 31, 2008Operating gross margin(1)

$
41,786


$
53,964


$
74,689


$
18,470


$
2,597Depreciation and amortization


51,901



35,238



29,817







Operating gross margin excluding depreciation and amortization

$
93,687


$
89,202


$
104,506


$
18,470


$
2,597     (1)
    
    Operating gross margin is calculated as revenues less direct
    operating expenses, including depreciation and amortization
    expense.  International
    Drilling Segment
          U.S.
    Drilling Segment
   41




---



##### Table of Contents



Rental
    Tools Segment
    Project
    Management and Engineering Services Segment
    Construction
    Contract Segment
    costs-to-date
  Other
    Financial Data
     42




---



##### Table of Contents



LIQUIDITY
    AND CAPITAL RESOURCES
  Liquidity
    2010

2009

2008(Dollars in thousands)Operating Activities

$
123,550


$
110,872


$
220,318Investing activities


(212,709
)


(150,718
)


(196,607
)Financing activities


31,787



(23,649
)


88,463Net change in cash and cash equivalents


(57,372
)


(63,495
)


112,174   Operating
    Activities
      Investing
    Activities
       43




---



##### Table of Contents



Financing
    Activities
      9.125% Senior
    Notes
            9.625% Senior
    Notes, due October 2013
   44




---



##### Table of Contents



2008
    Credit Agreement:
    Revolver 
  Term Loan 
      2.125% Convertible
    Senior Notes
   45




---



##### Table of Contents




    Notes Conversion Feature  The initial
    conversion price for Note holders to convert their notes into
    shares is at a common stock share price equivalent of $13.85
    (77.2217 shares of common) stock per $1,000 note value.
    Conversion rate adjustments occur for any issuances of stock,
    warrants, rights or options (except for stock purchase plans or
    dividend re-investments) or any other transfer of benefit to
    substantially all stockholders, or as a result of a tender or
    exchange offer. The Company may, under advice of our Board of
    Directors, increase the conversion rate at our sole discretion
    for a period of at least 20 days.
    Notes Settlement Feature  Upon tender of the
    Notes for conversion, we can either settle entirely in shares of
    common stock or a combination of cash and shares of common
    stock, solely at our option. Our intent is to satisfy conversion
    obligation for our Notes in cash, rather than in common stock,
    for at least the aggregate principal amount of the Notes. This
    reduces the resulting potential earnings dilution to only
    include any possible conversion premium, which would be the
    difference between the average price of our shares and the
    conversion price per share of common stock.
    Contingent Conversion Feature  Note holders
    may only convert Notes when either sales price or trading price
    conditions are met, on or after the Notes due date or upon
    certain accounting changes or certain corporate transactions
    (fundamental changes) involving stock distributions. Make-whole
    provisions are only included in the accounting and fundamental
    change conversions such that holders do not lose value as a
    result of the changes.
    Settlement Feature  Upon conversion, we will
    pay either cash or provide shares of our common stock, if any,
    based on a daily conversion rate multiplied by a volume weighted
    average price of our common stock during a specified period
    following the conversion date. Conversions can be settled in
    cash or shares, solely at our discretion.    and/or
         46




---



##### Table of Contents



Other
    Liquidity
    
    $125.0 million aggregate principal amount of
    2.125% Convertible Senior Notes due July 15, 2012,
    less an associated $9.1 million in unamortized debt
    discount which is included in equity pursuant to applicable
    accounting standards for convertible debt instruments;
    $300.0 million aggregate principal amount of
    9.125% Senior Notes, due April 1, 2018; and
    $57.0 million drawn against our 2008 Credit Facility,
    including $25.0 million under our Revolving Credit Facility
    and $32.0 million under our Term Loan Facility,
    $12.0 million of which is classified as current.      Less Than


Years


Years


More ThanTotal


1 Year


2 - 3


4 - 5


5 Years(Dollars in Thousands)Contractual cash obligations:Long-term debt  principal(1)

$
482,000


$
12,000


$
170,000


$



$
300,000Long-term debt  interest(1)


207,303



32,321



58,638



54,750



61,594Operating leases(2)


31,520



7,163



8,040



6,079



10,238Purchase commitments(3)


27,890



27,890











Total contractual obligations

$
748,713


$
79,374


$
236,678


$
60,829


$
371,832Commercial commitments:Long-term debt  standbyRevolving credit facility

$
25,000


$
25,000standby letters of credit(4)


16,250



16,250











Total commercial commitments

$
41,250


$
41,250


$



$



$
     (1)
    
    Long-term debt includes the principal and interest cash
    obligations of the 9.125% Notes and the 2.125% Notes.
    The remaining unamortized discount of $9.1 million on the
    2.125% Notes is not included in the contractual cash
    obligations schedule.(2)
    
    Operating leases consist of lease agreements in excess of one
    year for office space, equipment, vehicles and personal property.(3)
    
    We have purchase commitments outstanding as of December 31,
    2010, related to rig upgrade projects and new rig construction.(4)
    
    We have an $80.0 million revolving credit facility. As of
    December 31, 2010, $25.0 million has been drawn down
    and $16.3 million of availability has been used to support
    letters of credit that have been issued, resulting in an
    estimated $38.7 million of availability. The revolving
    credit facility expires May 14, 2013. 47




---



##### Table of Contents



OTHER
    MATTERS
  Business
    Risks
    Liberty
    Project Status
  start-up.
  project-to-date
      Critical
    Accounting Policies
    and/or
   48




---



##### Table of Contents



Insurance Reserves.
      Accounting for Income Taxes.
 49




---



##### Table of Contents



Revenue Recognition. cost-to-cost
  Recent
    Accounting Pronouncements
    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Foreign
    Currency Exchange Rate Risk
    Interest
    Rate Risk
   50




---



##### Table of Contents



51




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     Internal Control  Integrated Framework Controls and Procedures
         52




---



##### Table of Contents



Internal Control
     Integrated Framework
  KPMG
    LLP
    53




---



##### Table of Contents



PARKER
    DRILLING COMPANY AND SUBSIDIARIES
  CONSOLIDATED STATEMENT OF
    OPERATIONS
  Year Ended December 31,2010


2009


2008(Dollars in thousands, except per share data)Revenues:International drilling

$
220,371


$
293,337


$
325,096U.S. drilling


64,543



49,628



173,633Rental tools


172,598



115,057



171,554Project management and engineering services


110,873



109,445



110,147Construction contract


91,090



185,443



49,412Total revenues


659,475



752,910



829,842Operating expenses:International drilling


177,585



191,486



231,409U.S. drilling


53,334



48,054



84,431Rental tools


60,036



52,740



67,048Project management and engineering services


89,435



85,799



91,677Construction contract


90,888



177,311



46,815Depreciation and amortization


115,030



113,975



116,956Total operating expenses


586,308



669,365



638,336Total operating gross margin


73,167



83,545



191,506General and administration expense


(30,728
)


(45,483
)


(34,708
)Impairment of goodwill










(100,315
)Provision for reduction in carrying value of certain assets


(1,952
)


(4,646
)


Gain on disposition of assets, net


4,620



5,906



2,697Total operating income


45,107



39,322



59,180Other income and (expense):Interest expense


(26,805
)


(29,450
)


(29,266
)Interest income


257



1,041



1,405Loss on extinguishment of debt


(7,209
)






Equity in loss of unconsolidated joint venture, net of taxes










(1,105
)Other


155



(1,086
)


(544
)Total other expense


(33,602
)


(29,495
)


(29,510
)Income before income taxes


11,505



9,827



29,670Income tax expense (benefit):Current tax expense (benefit)


27,521



15,424



(1,539
)Deferred tax expense (benefit)


(1,308
)


(14,864
)


8,481Total income tax expense


26,213



560



6,942Net income (loss)


(14,708
)


9,267



22,728Less: Net (loss) attributable to noncontrolling interest


(247
)






Net income (loss) attributable to controlling interest

$
(14,461
)

$
9,267


$
22,728Basic earnings per share:

$
(0.13
)

$
0.08


$
0.20Diluted earnings per share:

$
(0.13
)

$
0.08


$
0.20Number of common shares used in computing earnings per share:Basic


114,258,965



113,000,555



111,400,396Diluted


114,258,965



114,925,446



112,430,545    54




---



##### Table of Contents



PARKER
    DRILLING COMPANY AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEET
   December 31,2010


2009(Dollars in thousands)ASSETSCurrent assets:Cash and cash equivalents

$
51,431


$
108,803Accounts and notes receivable, net of allowance for bad debts of
    $7,020 in 2010 and $4,095 in 2009


168,876



188,687Rig materials and supplies


25,527



31,633Deferred costs


2,229



4,531Deferred income taxes


9,278



9,650Other tax assets


46,429



37,818Assets held for sale


5,287



Other current assets


59,067



62,407Total current assets


368,124



443,529Property, plant and equipment, at cost:Drilling equipment


996,255



1,004,920Rental tools


269,474



232,559Buildings, land and improvements


31,918



30,548Other


54,806



50,847Construction in progress


338,873



211,8891,691,326



1,530,763Less accumulated depreciation and amortization


875,179



813,965Property, plant and equipment, net


816,147



716,798Other assets:Rig materials and supplies


13,930



9,291Debt issuance costs


9,214



5,406Deferred income taxes


61,016



55,749Other assets


6,124



12,313Total other assets


90,284



82,759Total assets

$
1,274,555


$
1,243,086LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt

$
12,000


$
12,000Accounts payable


107,894



95,207Accrued liabilities


50,877



72,703Accrued income taxes


4,492



9,126Total current liabilities


175,263



189,036Long-term debt


460,862



411,831Other long-term liabilities


30,193



30,246Long-term deferred tax liability


20,171



16,074Commitments and contingencies (Note 13)






Stockholders equity:Preferred stock, $1 par value, 1,942,000 shares
    authorized, no shares outstanding






Common stock,
    $0.162/3
    par value, authorized 280,000,000 shares, issued and
    outstanding, 116,369,044 shares (116,239,097 shares in
    2009)


19,397



19,374Capital in excess of par value


630,409



623,557Accumulated deficit


(61,493
)


(47,032
)Total controlling interest stockholders equity


588,313



595,899Noncontrolling interest


(247
)


Total equity


588,066



595,899Total liabilities and stockholders equity

$
1,274,555


$
1,243,086    55




---



##### Table of Contents



PARKER
    DRILLING COMPANY AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENT OF CASH FLOWS
   Year Ended December 31,2010


2009


2008(Dollars in thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)

$
(14,708
)

$
9,267


$
22,728Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization


115,030



113,975



116,956Impairment of goodwill










100,315Loss on extinguishment of debt


7,209







Gain on disposition of assets


(4,620
)


(5,906
)


(2,697
)Deferred tax expense


(1,308
)


(14,864
)


8,481Provision for reduction in carrying valueof certain assets


1,952



4,646



Equity loss in unconsolidated joint venture










1,105Expenses not requiring cash


14,829



11,626



15,333Change in assets and liabilities:Accounts and notes receivable


20,752



1,656



(14,958
)Rig materials and supplies


(856
)


(3,464
)


(11,271
)Other current assets


(2,969
)


(29,903
)


(15,737
)Accounts payable and accrued liabilities


(10,868
)


29,735



(238
)Accrued income taxes


(4,124
)


(13,004
)


(2,404
)Other assets


3,231



7,108



2,705Net cash provided by operating activities


123,550



110,872



220,318CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures


(219,184
)


(160,054
)


(197,070
)Proceeds from the sale of assets


6,475



9,336



4,512Proceeds from insurance claims










951Investment in unconsolidated joint venture










(5,000
)Net cash used in investing activities


(212,709
)


(150,718
)


(196,607
)CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of debt


300,000







50,000Proceeds from draw on revolver credit facility


25,000



4,000



73,000Paydown on senior notes


(225,000
)


Paydown on term note


(12,000
)


(6,000
)


Paydown on revolver credit facility


(42,000
)


(20,000
)


(35,000
)Payment of debt issuance costs


(7,976
)






(1,846
)Payment of debt extinguishment costs


(7,466
)


Proceeds from stock options exercised


26



199



1,969Excess tax benefit (expense) from stock-based compensation


1,203



(1,848
)


340Net cash provided by (used in) financing activities


31,787



(23,649
)


88,463Net increase (decrease) in cash and cash equivalents


(57,372
)


(63,495
)


112,174Cash and cash equivalents at beginning of year


108,803



172,298



60,124Cash and cash equivalents at end of year

$
51,431


$
108,803


$
172,298Supplemental cash flow information:Interest paid

$
30,377


$
28,721


$
27,192Income taxes paid

$
41,064


$
17,462


$
45,615    56




---



##### Table of Contents



PARKER
    DRILLING COMPANY AND SUBSIDIARIES
  CONSOLIDATED STATEMENT OF STOCKHOLDERS
    EQUITY
   TotalCapital in





Controlling





TotalCommon


Excess of


Accumulated


Stockholders


Noncontrolling


StockholdersShares


Stock


Par Value


Deficit


Equity


Interest


Equity(Dollars and shares in thousands)Balances, December 31, 2007


111,916


$
18,653


$
609,696


$
(79,027
)

$
549,322






$
549,322Activity in employees stock plans


1,540



257



2,895







3,152







3,152Excess tax benefit from stock based compensation










340







340







340Amortization of restricted stock plan compensation










6,630







6,630







6,630Net income (total comprehensive income of $22,728)














22,728



22,728







22,728Balances, December 31, 2008


113,456


$
18,910


$
619,561


$
(56,299
)

$
582,172


$



$
582,172Activity in employees stock plans


2,783



464



1,483







1,947







1,947Excess tax benefit from stock based compensation










(1,848
)






(1,848
)






(1,848
)Amortization of restricted stock plan compensation










4,361







4,361







4,361Net income (total comprehensive income of $9,267)














9,267



9,267







9,267Balances, December 31, 2009


116,239


$
19,374


$
623,557


$
(47,032
)

$
595,899


$



$
595,899Activity in employees stock plans


130



23



114







137







137Excess tax benefit from stock options exercised










1,203







1,203







1,203Amortization of restricted stock plan compensation










5,535







5,535







5,535Net income (total comprehensive net loss of $14,708)














(14,461
)


(14,461
)


(247
)


(14,708
)Balances, Dec 31, 2010


116,369


$
19,397


$
630,409


$
(61,493
)

$
588,313


$
(247
)

$
588,066    57




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS  Note 1 
    Summary
    of Significant Accounting Policies  Nature of Operations 
  Consolidation
  Non-Controlling Interest
  Reclassifications
  Revenue Recognition. cost-to-cost
  Use of Estimates
   58




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Reimbursable Costs out-of-pocket out-of-pocket
  Cash and Cash Equivalents
  Accounts Receivable and Allowance for Doubtful
    Accounts
    December 31,2010


2009(Dollars in thousands)Trade

$
175,246


$
192,782Notes receivable


650



Allowance for doubtful accounts(1)


(7,020
)


(4,095
)Total receivables

$
168,876


$
188,687     (1)
    
    Additional information on the allowance for doubtful accounts
    for the years ended December 31, 2010, 2009 and 2008 is
    reported on Schedule II  Valuation and
    Qualifying Accounts.  Property, Plant and Equipment
  Land drilling equipment

3 to 20 yearsBarge drilling equipment

3 to 20 yearsDrill pipe, rental tools and other

4 to 7 yearsBuildings and improvements

15 to 30 years
      59




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Assets held for sale 
  Goodwill
  Rig Materials and Supplies
  Deferred Costs
  Debt Issuance Costs
  Income Taxes
  Earnings (Loss) Per Share (EPS)
  Derivatives and hedging 
 60




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Concentrations of Credit Risk
      Fair Value of Financial Instruments
  Stock-Based Compensation 
      Note 2 
    Disposition
    of Assets  Disposition of Assets 
 61




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Provision for Reduction in Carrying Value of an Asset
  Note 3 
    Assets
    Held for Sale    Note 4 
    Goodwill    Note 5 
    Long-Term
    Debt    December 31,


December 31,2010


2009(Dollars in thousands)Senior Notes Payable in April 2018 with fixed interest at 9.125%
    payable semi-annually in April and October.

$
300,000


$
Senior Notes payable in October 2013 with interest at 9.625%
    payable semi-annually in April and October net of unamortized
    premium of $2,427 at December 31, 2009. (Effective interest
    rate of 9.24% at December 31, 2009)






227,427$125.0 million aggregate principal Convertible Senior Notes
    payable in July 2012 with interest at 2.125% payable
    semi-annually in January and July, net of unamortized discount
    of $9,138 at December 31, 2010 and $14,596 at
    December 31, 2009


115,862



110,404Term Note which began amortizing September 30, 2009 at
    equal installments of $3.0 million per quarter with
    interest at prime, plus an applicable margin or LIBOR, plus an
    applicable margin. (Effective interest rate of 3.50% at
    December 31, 2010 and 3.48% at December 31, 2009)


32,000



44,000Revolving Credit Facility with interest at prime, plus an
    applicable margin or LIBOR, plus an applicable margin.
    (Effective interest rate of 5.25% at December 31, 2010 and
    2.98% December 31, 2009)


25,000



42,000Total debt


472,862



423,831Less current portion


12,000



12,000Total long-term debt

$
460,862


$
411,831  62




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    
    2011  $12.0 million
    2012  $137.0 million
    2013  $33.0 million
    2014  $0 million
    2015 and thereafter  $300.0 million  9.125% Senior
    Notes, due April 2018
            9.625% Senior
    Notes, due October 2013
   63




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008
    Credit Agreement:
    Revolver:
    Term
    Loan:
        2.125% Convertible
    Senior Notes, due July 2012
   64




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    
    Notes Conversion Feature  the initial
    conversion price for Note holders to convert their notes into
    shares is at a common stock share price equivalent of $13.85
    (77.2217 shares of common stock) per $1,000 note value.
    Conversion rate adjustments occur for any issuances of stock,
    warrants, rights or options (except for stock purchase plans or
    dividend re-investments) or any other transfer of benefit to
    substantially all stockholders, or as a result of a tender or
    exchange offer. We may, under advice of our Board of Directors,
    increase the conversion rate at our sole discretion for a period
    of at least 20 days
    Notes Settlement Feature  upon tender of the
    Notes for conversion, we can either settle entirely in shares of
    common stock or a combination of cash and shares of common
    stock, solely at our option. Our intent is to satisfy our
    conversion obligation for our Notes in cash, rather than in
    common stock, for at least the aggregate principal amount of the
    Notes. This reduces the resulting potential earnings dilution to
    only include any possible conversion premium, which would be the
    difference between the average price of our shares and the
    conversion price per share of common stock.
    Contingent Conversion Feature  Note holders
    may only convert the Notes when either sales price or trading
    price conditions are met, on or after the Notes due date
    or upon certain accounting changes or certain corporate
    transactions (fundamental changes) involving stock
    distributions. Make-whole provisions are only included in the
    accounting and fundamental change conversions such that holders
    do not lose value as a result of the changes.
    Settlement Feature  Upon conversion, we will
    pay either cash or provide shares of our common stock if any,
    based on a daily conversion rate multiplied by a volume weighted
    average price of our common stock during a specified period
    following the conversion date. Conversions can be settled in
    cash or shares, solely at our discretion.    and/or
       65




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 6 
    Income
    Taxes    Year Ended December 31,2010


2009


2008(Dollars in thousands)United States

$
8,985


$
(62,265
)

$
(30,212
)Foreign


2,520



72,092



59,882$
11,505


$
9,827


$
29,670     Year Ended December 31,2010


2009


2008(Dollars in thousands)Current:United States:Federal

$
(273
)

$
(4,541
)

$
(3,751
)State


184



128



407Foreign


27,610



19,837



1,805Deferred:United States:Federal


(3,981
)


(14,818
)


8,914State


1,459



(1,793
)


(784
)Foreign


1,214



1,747



351$
26,213


$
560


$
6,942  66




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2010


2009


2008% of Pre-Tax





% of Pre-Tax





% of Pre-TaxAmount


Income


Amount


Income


Amount


Income(Dollars in thousands)Computed Expected Tax Expense

$
4,027



35
%

$
3,439



35
%

$
10,384



35
%Foreign Taxes


18,951



165
%


20,432



208
%


22,391



75
%Tax Effect Different From Statutory Rates


(7,996
)


(70
)%


(10,658
)


(108
)%


(4,449
)


(15
)%State Taxes, net of federal benefit


1,579



14
%


(1,355
)


(14
)%


(180
)


(1
)%Foreign Tax Credits


(15,442
)


(134
)%


(14,152
)


(144
)%


(20,404
)


(69
)%Kazakhstan Tax Settlement


13,304



116
%














Mexico Tax Settlement


1,022



9
%Change in Valuation Allowance


506



4
%


638



6
%


(1,835
)


(6
)%Foreign Corporation Income










5,116



52
%


2,997



10
%FIN 48  Uncertain Tax Positions


983



9
%


2,982



30
%


(13,002
)


(44
)%State NOL










(165
)


(2
)%






Tax Benefit of Foreign Divestment


















(3,456
)


(12
)%Permanent Differences


6,003



52
%


2,893



29
%


3,189



11
%Prior Year Return to Provision Adjustments


1,775



15
%


(3,237
)


(33
)%






Foreign Tax Credits  Prior Years










(5,389
)


(55
)%






Other


1,501



13
%


16







(1,329
)


(4
)%Goodwill


















12,636



43
%Actual Tax Expense

$
26,213



228
%

$
560



6
%

$
6,942



23
%  67




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2010


2009(Dollars in thousands)Deferred tax assetsCurrent deferred tax assets:Reserves established against realization of certain assets

$
4,287


$
4,876Accruals not currently deductible for tax purposes


4,991



4,774Net current deferred tax assets


9,278



9,650Non-current deferred tax assets:Federal net operating loss carryforwards


4,337



4,288State net operating loss carryforwards


7,879



6,291Other state deferred tax asset, net


702



4,913Foreign Tax Credits


29,594



14,152Other long term liabilities


369



2,149Note Hedge Interest


4,925



7,204Percentage of Completion Construction Projects


18



17Goodwill


1,156



3,483FIN 48


10,487



11,245Foreign tax local


6,244



6,232Other


837



969Gross long-term deferred tax assets


66,548



60,943Valuation Allowance


(5,532
)


(5,194
)Net non-current deferred tax assets


61,016



55,749Net deferred tax assets


70,294



65,399Deferred tax liabilities:Non-current deferred tax liabilities:Property, Plant and equipment


(1,747
)


(1,963
)Deferred tax impact of Foreign Earnings


(5,484
)Foreign tax local


(8,912
)


(6,708
)Federal benefit of foreign tax


(1,039
)


(1,032
)Convertible Debt  State


(46
)


(1,023
)Convertible Debt  Federal


(3,198
)


(5,109
)Deferred compensation


255



(239
)Net non-current deferred tax liabilities


(20,171
)


(16,074
)Net deferred tax asset

$
50,123


$
49,325    68




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      15-year
        In MillionsBalance at January 1, 2010

$
(14.6
)Additions based on tax positions taken during a prior year


(3.6
)Additions based on tax positions taken during the current year


(3.1
)Reductions based on tax positions taken during the current year


0.6Settlements


0.4Lapse of statute


4.8Balance at December 31, 2010

$
(15.5
)  69




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Colombia

2008-presentKazakhstan

2005-presentMexico

2006-presentPapua New Guinea

2004-presentRussia

2007-presentUnited States  Federal

1992-present
       Note 7 
    Common
    Stock and Stockholders Equity  Stock Plans
           70




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      1997 Stock PlanIncentive Options





Non-Qualified OptionsWeighted





WeightedAverage





AverageExercise





Exercise


Restricted


IntrinsicShares


Price


Shares


Price


Shares


ValueOutstanding at December 31, 2009





$




130,300


$
3.59



Granted


















Exercised










(6,800
)


3.78






$
11,424Cancelled










(25,000
)


1.99



Outstanding at December 31, 2010





$




98,500


$
3.98



    Outstanding OptionsWeightedAverage

WeightedRemaining

Average

AggregateNumber of

Contractual

Exercise

IntrinsicPlan

Exercise Prices

Shares

Life

Price

Value1997 Stock Plan
    Non-qualified

$
3.34 - $4.20



98,500



0.43 years


$
3.98


$
58,115   Exercisable OptionsWeightedAverage

AggregateNumber of

Exercise

IntrinsicPlan

Exercise Prices

Shares

Price

Value1997 Stock Plan
    Non-qualified

$
3.34 - $4.20



98,500


$
3.98


$
58,115     Stock Reserved for Issuance
  December 31,2010

2009Stock plans


9,441,168



3,738,679Stock bonus plan


24,666



24,666Total shares reserved for issuance


9,465,834



3,763,345  71




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 8 
    Reconciliation
    of Income and Number of Shares Used to Calculate Basic and
    Diluted Earnings per Share (EPS)  For the Year Ended December 31, 2010Income


Shares


Per-Share(Numerator)


(Denominator)


AmountBasic EPS

$
(14,461,000
)


114,258,965


$
(0.13
)Effect of dilutive securities:Stock options and restricted stock









$
Diluted EPS

$
(14,461,000
)


114,258,965


$
(0.13
)   For the Year Ended December 31, 2009Income


Shares


Per-Share(Numerator)


(Denominator)


AmountBasic EPS

$
9,267,000



113,000,555


$
0.08Effect of dilutive securities:Stock options and restricted stock






1,924,891


$
Diluted EPS:

$
9,267,000



114,925,446


$
0.08   For the Year Ended December 31, 2008Income


Shares


Per-Share(Numerator)


(Denominator)


AmountBasic EPS

$
22,728,000



111,400,396


$
0.20Effect of dilutive securities:Stock options and restricted stock






1,030,149


$
Diluted EPS:

$
22,728,000



112,430,545


$
0.20         Note 9 
    Employee
    Benefit Plan   72




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 10 
    Reportable
    Segments    Year Ended December 31,Operations by Reportable Industry Segment

2010


2009


2008(Dollars in thousands)Revenues:International drilling(1)

$
220,371


$
293,337


$
325,096U.S. drilling(1)


64,543



49,628



173,633Rental tools(1)


172,598



115,057



171,554Project management and engineering services(1)


110,873



109,445



110,147Construction contract(1)


91,090



185,443



49,412Total revenues


659,475



752,910



829,842Operating income:International drilling(2)


(11,511
)


50,723



41,786U.S. drilling(2)


(11,503
)


(26,797
)


53,964Rental tools(2)


74,541



27,841



74,689Project management and engineering services(2)


21,438



23,646



18,470Construction contract(2)


202



8,132



2,597Total operating gross margin


73,167



83,545



191,506General and administrative expense


(30,728
)


(45,483
)


(34,708
)Impairment of goodwill










(100,315
)Provision for reduction in carrying value of certain assets


(1,952
)


(4,646
)


Gain on disposition of assets, net


4,620



5,906



2,697Total operating income


45,107



39,322



59,180Interest expense


(26,805
)


(29,450
)


(29,266
)Loss on extinguishment of debt


(7,209
)






Equity in loss of unconsolidated joint venture, net of taxes










(1,105
)Other


412



(45
)


861Income before income taxes

$
11,505


$
9,827


$
29,670Identifiable assets:International drilling

$
454,576


$
511,716U.S. drilling


113,548



132,386Rental tools


178,193



96,469Total identifiable assets


746,317



740,571Corporate assets


528,238



502,515Total assets

$
1,274,555


$
1,243,086     (1)
    
    In 2010, BP accounted for approximately 12.4 percent of the
    Companys total revenues and approximately
    $81.9 million of our construction contract segment
    revenues. In 2010, ExxonMobil accounted for 73




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  approximately 11.6 percent of our total revenues,
    approximately $63.7 million of our project management and
    engineering services segment revenues and approximately
    $12.7 million of our rental tools segment revenues. In
    2009, BP accounted for approximately 23.0 percent of the
    Companys total revenues, approximately $150.3 million
    of our construction contract segment revenues and approximately
    $2.6 million of our rental tools segment revenues. In 2009,
    ExxonMobil accounted for approximately 14.6 percent of the
    Companys total revenues, approximately $75.7 million
    of our project management and engineering services segment
    revenues and approximately $20.7 million of our rental
    tools segment revenues. In 2008, ExxonMobil accounted for
    approximately 12.5 percent of the Companys total
    revenues, approximately $62.2 million of our project
    management and engineering services segment revenues and
    approximately $22.3 million of our rental tools segment
    revenues.(2)
    
    Operating income is calculated as revenues less direct operating
    expenses, including depreciation and amortization expense.  Year Ended December 31,Operations by Reportable Industry Segment

2010


2009


2008(Dollars in thousands)Capital expenditures:International drilling


50,871


$
29,864


$
75,680U.S. drilling


117,713



86,943



82,396Rental tools


48,872



36,822



36,806Corporate


1,728



9,155



2,188Total capital expenditures

$
219,184


$
162,784


$
197,070Depreciation and amortization:International drilling

$
52,429


$
48,383


$
50,461U.S. drilling


22,165



29,200



34,469Rental tools


36,558



33,798



29,057Corporate


3,878



2,594



2,969Total depreciation and amortization

$
115,030


$
113,975


$
116,956   74




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year Ended December 31,Operations by Geographic Area

2010


2009


2008(Dollars in thousands)Revenues:Africa and Middle East

$
22,621


$
32,003


$
40,036Asia Pacific


26,416



33,883



56,998CIS


149,963



195,807



210,325Latin America


103,885



117,651



122,521United States


356,590



373,566



399,962Total revenues


659,475



752,910



829,842Operating income:Africa and Middle East(1)


659



(2,795
)


(13,293
)Asia Pacific(1)


2,374



7,539



7,668CIS(1)


8,139



44,647



37,068Latin America(1)


1,210



20,964



27,072United States(1)


60,785



13,190



132,991Total operating income


73,167



83,545



191,506General and administrative expense


(30,728
)


(45,483
)


(34,708
)Impairment of goodwill










(100,315
)Provision for reduction in carrying value of certain assets


(1,952
)


(4,646
)


Gain on disposition of assets, net


4,620



5,906



2,697Total operating income


45,107



39,322



59,180Interest expense


(26,805
)


(29,450
)


(29,266
)Loss on extinguishment of debt


(7,209
)






Equity in loss of unconsolidated joint venture, net of taxes










(1,105
)Other


412



(45
)


861Income before income taxes

$
11,505


$
9,827


$
29,670Long-lived assets:(2)Africa and Middle East

$
32,288


$
36,821Asia Pacific


21,883



22,335CIS


151,365



142,888Latin America


53,273



61,322United States


557,338



453,431Total long-lived assets

$
816,147


$
716,797     (1)
    
    Operating income is calculated as revenues less direct operating
    expenses, including depreciation and amortization expense.(2)
    
    Long-lived assets primarily consist of property, plant and
    equipment, net and exclude assets held for sale, if any. 75




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 11 
    Commitments
    and Contingencies    (Dollars in thousands)2011


7,1632012


4,4112013


3,6292014


3,0452015


3,034Thereafter


10,238Total

$
31,520              76




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Asbestos-Related
    Claims
      Gulfco
    Site
    Customs
    Agent and Foreign Corrupt Practices Act (FCPA)
    Investigation
       77




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Demand
    Letter and Derivative Litigation
    In re Parker Drilling Derivative Litigation
   78




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Economic
    Sanctions Compliance
    Kazakhstan
    Ministry of Finance Tax Audit
           79




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Note 12 
    Related
    Party Transactions  Consulting
    Agreement
      U.S.-Kazakhstan
  Other
    Related Party Agreements
    Note 13 
    Supplementary
    Information     80




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 14 
    Guarantor/Non-Guarantor
    Consolidating Condensed Financial Statements  Rule 3-10(a)(1) Regulation S-X, sub-paragraph
   81




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  PARKER
    DRILLING COMPANY AND SUBSIDIARIES
  CONSOLIDATING
    CONDENSED STATEMENT OF OPERATIONS
  Year Ended December 31, 2010Parent


Guarantor


Non-Guarantor


Eliminations


Consolidated(Unaudited)(Dollars in Thousands)Total revenues

$



$
366,947


$
401,617


$
(109,089
)

$
659,475Operating expenses






237,584



342,783



(109,089
)


471,278Depreciation and amortization






63,402



51,628







115,030Total operating gross margin






65,961



7,206







73,167General and administration expense(1)


(225
)


(30,193
)


(310
)






(30,728
)Provision for reduction in carrying value of certain assets






(1,952
)










(1,952
)Gain on disposition of assets, net






2,067



2,553







4,620Total operating income (loss)


(225
)


35,883



9,449







45,107Other income and (expense):Interest expense


(30,771
)


(35,640
)


(16,185
)


55,791



(26,805
)Interest income


42,000



757



23,291



(65,791
)


257Loss on extinguishment of debt


(7,209
)














(7,209
)Other






88



67







155Equity in net earnings of subsidiaries


(22,962
)










22,962



Total other income and (expense)


(18,942
)


(34,795
)


7,173



12,962



(33,602
)Income (benefit) before income taxes


(19,167
)


1,088



16,622



12,962



11,505Income tax expense (benefit):Current


139



(189
)


27,571







27,521Deferred


(4,845
)


2,323



1,214







(1,308
)Total income tax expense (benefit)


(4,706
)


2,134



28,785







26,213Net income (loss)


(14,461
)


(1,046
)


(12,163
)


12,962



(14,708
)Less: Net (loss) attributable to noncontrolling interest










(247
)






(247
)Net income (loss) attributable to controlling interest

$
(14,461
)

$
(1,046
)

$
(11,916
)

$
12,962


$
(14,461
)     (1)
    
    General and administration expenses for field operations are
    included in operating expenses. 82




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  PARKER
    DRILLING COMPANY AND SUBSIDIARIES
  CONSOLIDATING
    CONDENSED STATEMENT OF OPERATIONS
  Year Ended December 31, 2009Parent


Guarantor


Non-Guarantor


Eliminations


Consolidated(Unaudited)(Dollars in thousands)Total revenues

$



$
381,145


$
430,430


$
(58,665
)

$
752,910Operating expenses






300,620



313,435



(58,665
)


555,390Depreciation and amortization






65,595



48,380







113,975Total operating gross margin






14,930



68,615







83,545General and administration expense(1)


(180
)


(44,973
)


(330
)






(45,483
)Provision for reduction in carrying value of certain assets






(3,206
)


(1,440
)






(4,646
)Gain on disposition of assets, net






4,190



1,716







5,906Total operating income (loss)


(180
)


(29,059
)


68,561







39,322Other income and (expense):Interest expense


(33,203
)


(35,838
)


(13,959
)


53,550



(29,450
)Interest income


43,183



1,184



16,585



(59,911
)


1,041Other


(3
)


(1,133
)


50







(1,086
)Equity in net earnings of subsidiaries


(20,797
)










20,797



Total other income and (expense)


(10,820
)


(35,787
)


2,676



14,436



(29,495
)Income (benefit) before income taxes


(11,000
)


(64,846
)


71,237



14,436



9,827Income tax expense (benefit):Current


(3,655
)


226



18,853







15,424Deferred


(16,612
)


1



1,747







(14,864
)Total income tax expense (benefit)


(20,267
)


227



20,600







560Net income (loss)


9,267



(65,073
)


50,637



14,436



9,267Net income attributable to noncontrolling interest


















Net income (loss) attributable to controlling interest

$
9,267


$
(65,073
)

$
50,637


$
14,436


$
9,267     (1)
    
    General and administration expenses for field operations are
    included in operating expenses. 83




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  PARKER
    DRILLING COMPANY AND SUBSIDIARIES
  CONSOLIDATING
    CONDENSED STATEMENT OF OPERATIONS
  Year Ended December 31, 2008Parent


Guarantor


Non-Guarantor


Eliminations


Consolidated(Unaudited)(Dollars in thousands)Total revenues

$



$
428,389


$
522,509


$
(121,056
)

$
829,842Operating expenses


2



210,644



431,790



(121,056
)


521,380Depreciation and amortization






67,602



49,354







116,956Total operating gross margin


(2
)


150,143



41,365







191,506General and administration expense(1)


(204
)


(34,107
)


(397
)






(34,708
)Impairment of goodwill






(100,315
)










(100,315
)Gain on disposition of assets, net






1,206



1,491







2,697Total operating income (loss)


(206
)


16,927



42,459







59,180Other income and (expense):Interest expense


(33,990
)


(35,643
)


(11,843
)


52,210



(29,266
)Changes in fair value of derivative positions


















Interest income


42,575



901



10,139



(52,210
)


1,405Equity in loss of unconsolidated joint venture, net of taxes










(1,105
)






(1,105
)Other


(2
)


357



(899
)






(544
)Equity in net earnings of subsidiaries


19,018











(19,018
)


Total other income and (expense)


27,601



(34,385
)


(3,708
)


(19,018
)


(29,510
)Income (benefit) before income taxes


27,395



(17,458
)


38,751



(19,018
)


29,670Income tax expense (benefit):Current


(3,463
)


1,523



401







(1,539
)Deferred


8,130



1



350







8,481Total income tax expense (benefit)


4,667



1,524



751







6,942Net income (loss)


22,728



(18,982
)


38,000



(19,018
)


22,728Net income attributable to noncontrolling interest


















Net income (loss) attributable to controlling interest

$
22,728


$
(18,982
)

$
38,000


$
(19,018
)

$
22,728     (1)
    
    General and administration expenses for field operations are
    included in operating expenses. 84




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  PARKER
    DRILLING COMPANY AND SUBSIDIARIES
  CONSOLIDATING
    CONDENSED BALANCE SHEET
  December 31, 2010Parent


Guarantor


Non-Guarantor


Eliminations


Consolidated(Unaudited)(Dollars in thousands)ASSETSCurrent assets:Cash and cash equivalents

$
13,835


$
2,317


$
35,279


$



$
51,431Accounts and notes receivable, net


1,179



99,734



215,650



(147,687
)


168,876Rig materials and supplies






(1,655
)


27,182







25,527Deferred costs










2,229







2,229Deferred income taxes


8,981



297











9,278Other tax assets


97,896



(62,678
)


11,211







46,429Assets held for sale










5,287







5,287Other current assets


557



41,564



30,129



(13,183
)


59,067Total current assets


122,448



79,579



326,967



(160,870
)


368,124Property, plant and equipment, net


79



538,005



278,063



0



816,147Investment in subsidiaries and intercompany advances


996,018



499,987



1,310,792



(2,806,797
)


Other noncurrent assets


72,202



14,542



6,653



(3,113
)


90,284Total assets

$
1,190,747


$
1,132,113


$
1,922,475


$
(2,970,780
)

$
1,274,555LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt

$
12,000


$



$



$



$
12,000Accounts payable and accrued liabilities


55,257



338,626



160,316



(395,428
)


158,771Accrued income taxes


609



93



3,790







4,492Total current liabilities


67,866



338,719



164,106



(395,428
)


175,263Long-term debt


460,862















460,862Other long-term liabilities


7,762



7,610



12,131



2,690



30,193Long-term deferred tax liability


3,361



21,958



(5,148
)






20,171Intercompany payables


62,583



473,144



103,667



(639,394
)


Contingencies


















Stockholders equity:Common stock


19,397



18,050



43,003



(61,053
)


19,397Capital in excess of par value


630,409



733,120



1,436,338



(2,169,458
)


630,409Retained earnings (accumulated deficit)


(61,493
)


(460,488
)


168,625



291,863



(61,493
)Total controlling interest stockholders equity


588,313



290,682



1,647,966



(1,938,648
)


588,313Noncontrolling interest










(247
)






(247
)Total Equity


588,313



290,682



1,647,719



(1,938,648
)


588,066Total liabilities and stockholders equity

$
1,190,747


$
1,132,113


$
1,922,475


$
(2,970,780
)

$
1,274,555  85




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  PARKER
    DRILLING COMPANY AND SUBSIDIARIES
  CONSOLIDATING
    CONDENSED BALANCE SHEET
  December 31, 2009Parent


Guarantor


Non-Guarantor


Eliminations


Consolidated(Unaudited)(Dollars in Thousands)ASSETSCurrent assets:Cash and cash equivalents

$
58,189


$
1,768


$
48,846


$



$
108,803Accounts and notes receivable, net


17,357



101,316



234,987



(164,973
)


188,687Rig materials and supplies






(1,150
)


32,783







31,633Deferred costs










4,531







4,531Deferred income taxes


9,650















9,650Other tax assets


96,450



(63,183
)


4,551







37,818Other current assets


557



45,513



27,084



(10,747
)


62,407Total current assets


182,203



84,264



352,782



(175,720
)


443,529Property, plant and equipment, net


79



434,870



281,725



124



716,798Investment in subsidiaries and intercompany advances


903,616



582,049



466,799



(1,952,464
)


Other noncurrent assets


56,658



5,094



29,107



(8,100
)


82,759Total assets

$
1,142,556


$
1,106,277


$
1,130,413


$
(2,136,160
)

$
1,243,086LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt

$
12,000


$



$



$



$
12,000Accounts payable and accrued liabilities


50,583



319,187



163,856



(365,716
)


167,910Accrued income taxes


1,069



624



7,433







9,126Total current liabilities


63,652



319,811



171,289



(365,716
)


189,036Long-term debt


411,831















411,831Other long-term liabilities


9,689



2,797



17,976



(216
)


30,246Long-term deferred tax liability


(1,098
)


9,404



7,768







16,074Intercompany payables


62,583



473,144



155,495



(691,222
)


Contingencies


















Stockholders equity:Common stock


19,374



18,049



43,003



(61,052
)


19,374Capital in excess of par value


623,557



722,851



530,626



(1,253,477
)


623,557Retained earnings (accumulated deficit)


(47,032
)


(439,779
)


204,256



235,523



(47,032
)Total controlling interest stockholders equity


595,899



301,121



777,885



(1,079,006
)


595,899Noncontrolling interest


















Total equity


595,899



301,121



777,885



(1,079,006
)


595,899Total liabilities and stockholders equity

$
1,142,556


$
1,106,277


$
1,130,413


$
(2,136,160
)

$
1,243,086  86




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  PARKER
    DRILLING COMPANY AND SUBSIDIARIES
  CONSOLIDATED
    CONDENSED STATEMENTS OF CASH FLOWS
  Year Ended December 31, 2010Parent


Guarantor


Non-Guarantor


Eliminations


Consolidated(Unaudited)(Dollars in thousands)Cash flows from operating activities:Net income (loss)

$
(14,461
)

$
(1,046
)

$
(12,163
)

$
12,962


$
(14,708
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization






63,402



51,628







115,030Loss on extinguishment of debt


7,209















7,209Gain on disposition of assets






(2,067
)


(2,553
)






(4,620
)Deferred income tax expense


(4,845
)


2,323



1,214







(1,308
)Provision for reduction in carrying value of certain assets






1,952











1,952Expenses not requiring cash


14,829















14,829Equity in net earnings of subsidiaries


22,962











(22,962
)


Change in accounts receivable


16,178



(14,763
)


19,337







20,752Change in other assets


(2,505
)


(13,454
)


15,365







(594
)Change in liabilities


(144
)


7,793



(22,641
)






(14,992
)Net cash provided by (used in) operating activities


39,223



44,140



50,187



(10,000
)


123,550Cash flows from investing activities:Capital expenditures






(169,784
)


(49,400
)






(219,184
)Proceeds from the sale of assets






4,646



1,829







6,475Intercompany dividend payment










(10,000
)


10,000



Net cash provided by (used in) investing activities






(165,138
)


(57,571
)


10,000



(212,709
)Cash flows from financing activities:Proceeds from debt issuance


300,000















300,000Proceeds from draw on revolver credit facility


25,000















25,000Paydown on Senior notes


(225,000
)














(225,000
)Paydown on term note


(12,000
)














(12,000
)Paydown on revolver credit facility


(42,000
)














(42,000
)Payment of debt issuance costs


(7,976
)














(7,976
)Payment of debt extinguishment costs


(7,466
)














(7,466
)Proceeds from stock options exercised


26















26Excess tax benefit from stock-based compensation


1,203















1,203Intercompany advances, net


(115,364
)


121,547



(6,183
)






Net cash provided by (used in) financing activities


(83,577
)


121,547



(6,183
)






31,787Net change in cash and cash equivalents


(44,354
)


549



(13,567
)






(57,372
)Cash and cash equivalents at beginning of period


58,189



1,768



48,846







108,803Cash and cash equivalents at end of period

$
13,835


$
2,317


$
35,279


$



$
51,431  87




---



##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  PARKER
    DRILLING COMPANY AND SUBSIDIARIES
  CONSOLIDATING
    CONDENSED STATEMENT OF CASH FLOWS
  Year Ended December 31, 2009Parent


Guarantor


Non-Guarantor


Eliminations


Consolidated(Unaudited)(Dollars in thousands)Cash flows from operating activities:Net income (loss)

$
9,267


$
(65,073
)

$
50,637


$
14,436


$
9,267Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization






65,596



48,380







113,975Gain on disposition of assets






(4,190
)


(1,716
)






(5,906
)Deferred income tax expense (benefit)


(16,612
)


0



1,747







(14,864
)Provision for reduction in carrying value of certain assets






3,206



1,440







4,646Expenses not requiring cash


11,626















11,626Equity in net earnings of subsidiaries


20,797











(20,797
)


Change in accounts receivable


34,435



(38,905
)


6,126







1,656Change in other assets


(35,604
)


906



8,439







(26,259
)Change in liabilities


17,203



41,411



(41,883
)






16,731Net cash provided by operating activities


41,112



2,952



73,170



(6,361
)


110,872Cash flows from investing activities:Capital expenditures






(129,281
)


(30,773
)






(160,054
)Proceeds from the sale of assets






6,918



2,418







9,336Intercompany dividend payments










(6,361
)


6,361



Net cash used in investing activities






(122,363
)


(34,716
)


6,361



(150,718
)Cash flows from financing activities:Proceeds from draw on revolver credit facility


4,000















4,000Paydown on revolver credit facility


(26,000
)














(26,000
)Proceeds from stock options exercised


199















199Excess tax benefit from stock-based compensation


(1,848
)














(1,848
)Intercompany advances, net


(70,598
)


114,321



(43,723
)






Net cash provided by financing activities


(94,247
)


114,321



(43,723
)






(23,649
)Net increase in cash and cash equivalents


(53,135
)


(5,090
)


(5,270
)


(0
)


(63,495
)Cash and cash equivalents at beginning of year


111,324



6,858



54,116







172,298Cash and cash equivalents at end of year

$
58,189


$
1,768


$
48,846


$
(0
)

$
108,803  88




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##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  PARKER
    DRILLING COMPANY AND SUBSIDIARIES
  CONSOLIDATING
    CONDENSED STATEMENT OF CASH FLOWS
  Year Ended December 31, 2008Parent


Guarantor


Non-Guarantor


Eliminations


Consolidated(Unaudited)(Dollars in thousands)Cash flows from operating activities:Net income (loss)

$
22,728


$
(18,982
)

$
38,000


$
(19,018
)

$
22,728Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization






67,602



49,354







116,956Impairment of goodwill






100,315











100,315Amortization of debt issuance and premium


1,237















1,237Gain on disposition of assets






(1,206
)


(1,491
)






(2,697
)Deferred tax expense


8,130



1



350







8,481Equity in loss of unconsolidated joint venture










1,105







1,105Expenses not requiring cash


14,096















14,096Equity in net earnings of subsidiaries


(19,018
)










19,018



Change in accounts receivable


27,895



9,197



(52,050
)






(14,958
)Change in other assets


(36,459
)


39,580



(27,424
)






(24,303
)Change in liabilities


13,013



(60,528
)


44,873







(2,642
)Net cash provided by operating activities


31,622



135,979



52,717







220,318Cash flows from investing activities:Capital expenditures






(142,087
)


(54,983
)






(197,070
)Proceeds from the sale of assets






2,551



1,961







4,512Proceeds from insurance claims










951







951Investment in unconsolidated joint venture






(5,000
)










(5,000
)Net cash used in investing activities






(144,536
)


(52,071
)






(196,607
)Cash flows from financing activities:Proceeds from issuance of debt


50,000















50,000Principal payments under debt obligations


(35,000
)














(35,000
)Proceeds from revolver draw


73,000















73,000Payment of debt issuance costs


(1,846
)














(1,846
)Proceeds from stock options exercised


1,969















1,969Excess tax benefit from stock-based compensation


340















340Intercompany advances, net


(40,087
)


8,613



31,474







Net cash provided by financing activities


48,376



8,613



31,474







88,463Net increase in cash and cash equivalents


79,998



56



32,120







112,174Cash and cash equivalents at beginning of year


31,326



6,802



21,996







60,124Cash and cash equivalents at end of year

$
111,324


$
6,858


$
54,116


$



$
172,298  89




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##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 15 
    Selected
    Quarterly Financial Data  QuarterYear 2010

First


Second


Third


Fourth


Total(Unaudited)(Dollars in thousands except per share amounts)Revenues

$
157,605


$
156,525


$
172,029


$
173,316


$
659,475Operating gross margin

$
15,486


$
18,538


$
13,443


$
25,700


$
73,167Operating income

$
6,126


$
13,313


$
7,555


$
18,113


$
45,107Net income (loss) attributable to controlling interest

$
(2,051
)

$
507


$
492


$
(13,409
)

$
(14,461
)Basic earnings per share  net income (loss)(1)

$
(0.02
)

$



$



$
(0.12
)

$
(0.13
)Diluted earnings per share  net income (loss)(1)

$
(0.02
)

$



$



$
(0.12
)

$
(0.13
)   QuarterYear 2009

First


Second


Third


Fourth


Total(Unaudited)(Dollars in thousands except per share amounts)Revenues

$
173,925


$
221,791


$
181,409


$
175,785


$
752,910Operating gross margin

$
25,626


$
27,290


$
16,226


$
14,403


$
83,545Operating income (loss)

$
12,644


$
16,868


$
4,882


$
4,928


$
39,322Net income (loss) attributable to controlling interest

$
2,106


$
4,391


$
7,094


$
(4,324
)

$
9,267Basic earnings per share  net income (loss)(1)

$
0.02


$
0.04


$
0.06


$
(0.04
)

$
0.08Diluted earnings per share  net income (loss)(1)

$
0.02


$
0.04


$
0.06


$
(0.04
)

$
0.08     (1)
    
    As a result of shares issued during the year, earnings per share
    for each of the years four quarters, which are based on
    weighted average shares outstanding during each quarter, may not
    equal the annual earnings per share, which is based on the
    weighted average shares outstanding during the year.  Note 16 
    Recent
    Accounting Pronouncements  Revenue Recognition No. 2009-13 No. 08-1), Revenue Arrangements with Multiple
    Deliverables No. 2009-13 No. 2009-13 No. 2009-13
  Consolidation No. 2009-17, Consolidation (Topic 810) No. 2009-17
   90




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##### Table of Contents



NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fair Value Measurements and Disclosures
  Improving
    Disclosures about Fair Value Measurements.
  Subsequent Events
 91




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation of Disclosure Controls and Procedures Rules 13a-15(e) 15d-15(e)
  Managements Report on Internal Control over Financial
    Reporting Rules 13a-15(f) 15d-15(f).
  
    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the Company;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with accounting principles generally accepted in the
    United States, and that receipts and expenditures of the Company
    are being made only in accordance with authorization of
    management and directors of the Company; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    Companys assets that could have a material effect on the
    financial statements.        Form 10-K,
 92




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##### Table of Contents



Changes in Internal Control over Financial Reporting
  ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    Form 10-K.
      http://www.parkerdrilling.com. Form 8-K
  ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND RELATED
    STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE   93




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##### Table of Contents



ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES      PageReport of Independent Registered Public
    Accounting Firm


52Consolidated Statement of Operations for the
    years ended December 31, 2010, 2009 and 2008


54Consolidated Balance Sheet as of
    December 31, 2010 and 2009


55Consolidated Statement of Cash Flows for the
    years ended December 31, 2010, 2009 and 2008


56Consolidated Statement of Stockholders
    Equity for the years ended December 31, 2010, 2009 and
    2008


57Notes to the Consolidated Financial Statements


58(2) Financial Statement Schedule:Schedule II  Valuation and
    qualifying accounts


98      ExhibitNumber



Description3
.1



Restated Certificate of Incorporation of the Company, as amended
    on May 16, 2007 (incorporated by reference to Exhibit 3.1 to the
    Companys Quarterly Report on Form 10-Q filed on November
    9, 2007).3
.2



By-Laws of the Company, as amended on January 31, 2003
    (incorporated by reference to Exhibit 3(d) to the Companys
    Annual Report on Form 10-K filed on March 20, 2003).4
.1



Indenture, dated as of July 5, 2007, among Parker Drilling
    Company, the guarantors from time to time party thereto and The
    Bank of New York Trust Company, N.A., with respect to the
    2.125% Convertible Senior Notes due 2012 (incorporated by
    reference to Exhibit 4.1 to the Companys Current Report on
    Form 8-K filed on July 5, 2007).4
.2



Form of 2.125% Convertible Senior Note due 2012 (included
    in Exhibit 4(b)).4
.3



Second Supplemental Indenture, dated as of October 26, 2010,
    among Parker Drilling Company and The Bank of New York Mellon
    Trust Company, N.A., as trustee supplementing the indenture
    dated July 5, 2007 for the 2.125% Convertible Senior Notes
    due 2012 (incorporated by reference to Exhibit 4.1 to the
    Companys Quarterly Report on Form 10-Q filed on November
    8, 2010).4
.4



Indenture, dated March 22, 2010, among Parker Drilling Company,
    the guarantors named therein and The Bank of New York Mellon
    Trust Company, N.A., as trustee (incorporated by reference to
    Exhibit 4.1 to the Companys Current Report on Form 8-K
    filed on March 22, 2010).4
.5



Form of
    91/8% Senior
    Note due 2018 (included in Exhibit 4(d)).4
.6



Registration Rights Agreement, dated March 22, 2010, by and
    among Parker Drilling Company, the guarantors named therein,
    Bank of America Securities LLC, RBS Securities Inc., Barclays
    Capital Inc., Credit Suisse Securities (USA), Inc., Deutsche
    Bank Securities Inc., HSBC Securities (USA) Inc., Natixis
    Bleichroeder LLC and Wells Fargo Securities, LLC (incorporated
    by reference to Exhibit 10.1 to the Companys Current
    Report on Form 8-K filed on March 22, 2010). 94




---



##### Table of Contents



ExhibitNumber



Description10
.1



Credit Agreement, dated as of May 15, 2008, among Parker
    Drilling Company, as Borrower, Bank of America, N.A., as
    Administrative Agent and L/C Issuer, the several banks and other
    financial institutions or entities from time to time parties
    thereto, ABN AMRO BANK N.V., as Documentation Agent, and Banc of
    America Securities LLC and Lehman Brothers Inc., as Joint Lead
    Arrangers and Book Managers (incorporated by reference to
    Exhibit 10.1 to the Companys Current Report on Form 8-K
    filed on May 21, 2008).10
.2



Amended and Restated Parker Drilling Company Stock Bonus Plan
    effective as of January 1, 1999 (incorporated by reference to
    Exhibit 10(a) to the Companys Quarterly Report on Form
    10-Q filed on May 14, 1999).*10
.3



Parker Drilling Company Incentive Compensation Plan, dated
    December 17, 2008, and as amended and restated effective January
    1, 2008 (incorporated by reference to Exhibit 10(b) to the
    Companys Annual Report on Form 10-K filed on March 2,
    2009).*10
.4



Parker Drilling Company Incentive Compensation Plan (as amended
    and restated effective January 1, 2009)*10
.5



Parker Drilling Company Deferred Compensation Plan (incorporated
    herein by reference to Exhibit 10(h) to the Companys
    Annual Report on Form 10-K filed on November 9, 1995).*10
.6



Parker Drilling Company 1994 Non-Employee Director Stock Option
    Plan (incorporated by reference to Exhibit 10(i) to the
    Companys Annual Report on Form 10-K filed on November 9,
    1995).*10
.7



Parker Drilling Company 1994 Executive Stock Option Plan
    (incorporated by reference to Exhibit 10(j) to the
    Companys Annual Report on Form 10-K filed on November 9,
    1995).*10
.8



Parker Drilling Company and Subsidiaries 1991 Stock Grant Plan
    (incorporated by reference to Exhibit 10(c) to the
    Companys Annual Report on Form 10-K dated November 2,
    1992).*10
.9



Parker Drilling Company Third Amended and Restated 1997 Stock
    Plan effective July 24, 2002 (incorporated by reference to
    Exhibit 10(e) to the Companys Annual Report on Form 10-K
    filed on March 20, 2003).*10
.10



Form of Stock Option Award Agreement under the Parker Drilling
    Company Third Amended and Restated 1997 Stock Plan (incorporated
    by reference to Exhibit 10(m) to the Companys Annual
    Report on Form 10-K filed on March 16, 2005).*10
.11



Form of Stock Grant Award Agreement under the Parker Drilling
    Company Third Amended and Restated 1997 Stock Plan (incorporated
    by reference to Exhibit 10(n) to the Companys Annual
    Report on Form 10-K filed on March 16, 2005).*10
.12



Parker Drilling Company 2005 Long Term Incentive Plan 2005 LTIP
    (incorporated by reference to the Annex E to the Companys
    Definitive Proxy Statement filed on March 25, 2005).*10
.13



Amendment No. 1 to the Parker Drilling Company 2005 LTIP
    (incorporated by reference to Annex B to the Companys
    Definitive Proxy Statement filed on March 21, 2008).*10
.14



Second Amendment to the Parker Drilling Company 2005 LTIP, dated
    December 13, 2008 (incorporated by reference to Exhibit 10(j) to
    the Companys Annual Report on Form 10-K filed on March 2,
    2009).*10
.15



Form of Parker Drilling Company Restricted Stock Agreement under
    the 2005 LTIP (incorporated by reference to Exhibit 10.2 to the
    Companys Current Report on Form 8-K filed on May 3, 2005).*10
.16



Form of Parker Drilling Company Performance Based Restricted
    Stock Agreement under the 2005 LTIP (incorporated by reference
    to Exhibit 10.3 to the Companys Current Report on Form 8-K
    filed on May 3, 2005).*10
.17



Parker Drilling Company 2010 Long-Term Incentive Plan
    (incorporated by reference to Annex A to the Companys
    Definitive Proxy Statement filed on March 16, 2010).10
.18



Form of Parker Drilling Company Performance Unit Award Incentive
    Agreement under the 2010 LTIP.*10
.19



Form of Parker Drilling Company Restricted Stock Unit Incentive
    Agreement under the 2010 LTIP.*10
.20



Form of Indemnification Agreement entered into between Parker
    Drilling Company and each director and executive officer of
    Parker Drilling Company (incorporated by reference to Exhibit
    10(g) to the Companys Annual Report on Form 10-K filed on
    March 20, 2003).* 95




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##### Table of Contents



ExhibitNumber



Description10
.21



Form of Employment Agreement entered into between Parker
    Drilling Company and certain executive and other officers of
    Parker Drilling Company.*10
.22



Employment Agreement, dated as of October 23, 2009, by and
    between Parker Drilling Company and Robert L. Parker, Jr.
    (incorporated by reference to Exhibit 10.1 to the Companys
    Current Report on Form 8-K filed on October 29, 2009).10
.23



Employment Agreement, dated as of October 23, 2009, by and
    between Parker Drilling Company and David C. Mannon
    (incorporated by reference to Exhibit 10.2 to the Companys
    Current Report on Form 8-K filed on October 29, 2009).10
.24



Employment Agreement, dated as of December 29, 2010, by and
    between Parker Drilling Company and W. Kirk Brassfield
    (incorporated by reference to Exhibit 10.1 to the Companys
    Current Report on Form 8-K filed on January 4, 2011).10
.25



Consulting Agreement between Parker Drilling Company and Robert
    L. Parker Sr. dated April 12, 2006 (incorporated by reference to
    Exhibit 10.1 to the Companys Current Report on Form 8-K
    filed on April 12, 2006).*10
.26



Amendment to Consulting Agreement between Parker Drilling
    Company and Robert L. Parker Sr., effective as of May 1, 2008.
    (incorporated by reference to Exhibit 10(t) to the
    Companys Annual Report on Form 10-K filed on March 2,
    2009)*10
.27



Second Amendment to Consulting Agreement between Parker Drilling
    Company and Robert L. Parker Sr., dated May 1, 2009
    (incorporated by reference to Exhibit 10(n)(3) to the
    Companys Annual Report on Form 10-K filed on March 3,
    2010).*10
.28



Third Amendment to Consulting Agreement between Parker Drilling
    Company and Robert L. Parker Sr. dated May 1, 2010.*10
.29



Termination of Split Dollar Life Insurance Agreement between
    Parker Drilling Company, Robert L. Parker Sr., and
    Robert L. Parker Sr. and Catherine M. Parker Family Trust dated
    April 12, 2006 (incorporated by reference to Exhibit 10.2 to the
    Companys Current Report on Form 8-K filed on April 12,
    2006).*10
.30



Confirmation of Convertible Bond Hedge Transaction, dated as of
    June 28, 2007, by and between Parker Drilling Company and Bank
    of America, N.A (incorporated by reference to Exhibit 10.1 to
    the Companys Current Report on Form 8-K filed on July 5,
    2007).10
.31



Confirmation of Convertible Bond Hedge Transaction, dated as of
    June 28, 2007, by and between Parker Drilling Company and
    Deutsche Bank AG London (incorporated by reference to Exhibit
    10.2 to the Companys Current Report on Form 8-K filed on
    July 5, 2007).10
.32



Confirmation of Convertible Bond Hedge Transaction, dated as of
    June 28, 2007, by and between Parker Drilling Company and Lehman
    Brothers OTC Derivatives Inc. (incorporated by reference to
    Exhibit 10.3 to the Companys Current Report on Form
    8-K filed on July 5, 2007).10
.33



Confirmation of Issuer Warrant Transaction dated as of June 28,
    2007, by and between Parker Drilling Company and Bank of
    America, N.A. (incorporated by reference to Exhibit 10.4 to the
    Companys Current Report on Form 8-K filed on July 5, 2007).10
.34



Confirmation of Issuer Warrant Transaction, dated as of June 28,
    2007, by and between Parker Drilling Company and Deutsche Bank
    AG London (incorporated by reference to Exhibit 10.5 to the
    Companys Current Report on Form 8-K filed on July 5, 2007).10
.35



Confirmation of Issuer Warrant Transaction dated as of June 28,
    2007, by and between Parker Drilling Company and Lehman Brothers
    OTC Derivatives Inc. (incorporated by reference to Exhibit 10.6
    to the Companys Current Report on Form 8-K filed on July
    5, 2007).10
.36



Amendment to Confirmation of Issuer Warrant Transaction dated as
    of June 29, 2007, by and between Parker Drilling Company and
    Bank of America, N.A. (incorporated by reference to Exhibit 10.7
    to the Companys Current Report on Form 8-K filed on July
    5, 2007).10
.37



Amendment to Confirmation of Issuer Warrant Transaction, dated
    as of June 29, 2007, by and between Parker Drilling Company and
    Deutsche Bank AG, London Branch (incorporated by reference to
    Exhibit 10.8 to the Companys Current Report on Form
    8-K filed on July 5, 2007). 96




---



##### Table of Contents



ExhibitNumber



Description10
.38



Amendment to Confirmation of Issuer Warrant Transaction, dated
    as of June 29, 2007, by and between Parker Drilling Company and
    Lehman Brothers OTC Derivatives Inc. (incorporated by reference
    to Exhibit 10.9 to the Companys Current Report on Form 8-K
    filed on July 5, 2007).21




Subsidiaries of the Registrant.23
.1



Consent of KPMG LLP.31
.1



David C. Mannon, President and Chief Executive Officer, Rule
    13a-14(a)/15d-14(a) Certification.31
.2



W. Kirk Brassfield, Senior Vice President and Chief Financial
    Officer, Rule 13a-14(a)/15d-14(a) Certification.32
.1



David C. Mannon, President and Chief Executive Officer, Section
    1350 Certification.32
.2



W. Kirk Brassfield, Senior Vice President and Chief Financial
    Officer, Section 1350 Certification.     *
    
     Management contract, compensatory plan or agreement. 97




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##### Table of Contents



PARKER
    DRILLING COMPANY AND SUBSIDIARIES
 SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS  Balance


Chargedat


to cost


Charged





Balancebeginning


and


to other





at end ofClassifications

of year


expenses


accounts


Deductions


year(Dollars in thousands)Year ended December 31, 2010Allowance for doubtful accounts and notes

$
4,095


$
3,244


$
211


$
108


$
7,020Allowance for obsolete rig materials and supplies

$



$
309


$



$



$
309Deferred tax valuation allowance

$
5,194


$
338


$



$



$
5,532Year ended December 31, 2009Allowance for doubtful accounts and notes

$
3,169


$
2,246


$



$
1,320


$
4,095Allowance for obsolete rig materials and supplies

$



$



$



$



$
Deferred tax valuation allowance

$
4,556


$
638


$



$



$
5,194Year ended December 31, 2008Allowance for doubtful accounts and notes

$
3,152


$
76


$



$
59


$
3,169Allowance for obsolete rig materials and supplies

$
2,607


$
(903
)

$



$
1,704


$
Deferred tax valuation allowance

$
6,391


$



$



$
1,835


$
4,556  98




---



##### Table of Contents



SIGNATURES    PARKER DRILLING COMPANY
  By:
    /s/ W. Kirk Brassfield         Signature

Title

DateBy:

/s/  Robert
    L. Parker Jr.Robert
    L. Parker Jr.

Executive Chairman and Director

February 28, 2011By:

/s/  David
    C. MannonDavid
    C. Mannon

President, Chief Executive Officer, and Director (Principal
    Executive Officer)

February 28, 2011By:

/s/  W.
    Kirk BrassfieldW.
    Kirk Brassfield

Senior Vice President and Chief Financial Officer (Principal
    Financial Officer)

February 28, 2011By:

/s/  Philip
    A. SchlomPhilip
    A. Schlom

Controller (Principal Accounting Officer)

February 28, 2011By:

/s/  George
    J. DonnellyGeorge
    J. Donnelly

Director

February 28, 2011By:

/s/  John
    W. Gibson Jr.John
    W. Gibson Jr.

Director

February 28, 2011By:

/s/  Robert
    W. GoldmanRobert
    W. Goldman

Director

February 28, 2011By:

/s/  Gary
    R. KingGary
    R. King

Director

February 28, 2011 99




---



##### Table of Contents



Signature

Title

DateBy:

/s/  Robert
    E. McKee IIIRobert
    E. McKee III

Director

February 28, 2011By:

/s/  Roger
    B. PlankRoger
    B. Plank

Director

February 28, 2011By:

/s/  R.
    Rudolph ReinfrankR.
    Rudolph Reinfrank

Director

February 28, 2011  100




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##### Table of Contents



INDEX TO
    EXHIBITS
  ExhibitNumber



Description10
.4



Parker Drilling Company Incentive Compensation Plan (as amended
    and restated effective January 1, 2009).10
.18



Form of Parker Drilling Company Performance Unit Award Incentive
    Agreement under the 2010 LTIP.10
.19



Form of Parker Drilling Company Restricted Stock Unit Incentive
    Agreement under the 2010 LTIP.10
.21



Form of Employment Agreement entered into between Parker
    Drilling Company and certain executive and other officers of
    Parker Drilling Company.10
.28



Third Amendment to Consulting Agreement between Parker Drilling
    Company and Robert L. Parker Sr. dated May 1, 2010.21




Subsidiaries of the Registrant.23
.1



Consent of KPMG LLP  Independent Registered Public
    Accounting Firm.31
.1



David C. Mannon, President and Chief Executive Officer, Rule
    13a-14(a)/15d-14(a) Certification.31
.2



W. Kirk Brassfield, Senior Vice President and Chief Financial
    Officer, Rule 13a-14(a)/15d-14(a) Certification.32
.1



David C. Mannon, President and Chief Executive Officer, Section
    1350 Certification.32
.2



W. Kirk Brassfield, Senior Vice President and Chief Financial
    Officer, Section 1350 Certification.  101