<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period ________________________ to ________________________
Commission file number 1-9245
NABORS INDUSTRIES, INC.
______________________________________________________________________________
(Exact name of registrant as specified in its charter)
DELAWARE 93-0711613
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
515 W. GREENS ROAD, SUITE 1200, HOUSTON, TEXAS 77067
______________________________________________________________________________
(Address of principal executive offices)
(Zip Code)
713-874-0035
______________________________________________________________________________
(Registrant's telephone number, including area code)
______________________________________________________________________________
(Former name, former address and former fiscal year, if change since last
report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Number of shares of common stock outstanding as of April 30, 1995
totaled 83,928,322.
<PAGE> 2
NABORS INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at
March 31, 1995 and September 30, 1994 2
Condensed Consolidated Statements of
Income and Retained Earnings for the Three
Months and Six Months Ended March 31, 1995
and 1994 3
Condensed Consolidated Statements of Cash
Flows for the Six Months Ended March 31, 1995
and 1994 4
Notes to Condensed Consolidated
Financial Statements 5-6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7-10
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
<PAGE> 3
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
(Unaudited)
March 31, September 30,
1995 1994
------------ -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 14,200 $ 22,563
Marketable securities 1,765 22,669
Accounts receivable, net 120,410 102,069
Rig inventory and supplies 15,986 15,029
Prepaid expenses and other current assets 20,397 15,745
------------ -------------
Total current assets 172,758 178,075
Property, plant and equipment, net 333,044 283,141
Marketable securities 11,508 20,266
Other long-term assets 9,421 8,791
------------ -------------
Total assets $ 526,731 $ 490,273
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $ 12,822 $ 16,536
Short-term borrowings 15,524 6,502
Trade accounts payable 46,170 34,190
Accrued liabilities 43,727 40,220
Income taxes payable 3,585 2,379
------------ -------------
Total current liabilities 121,828 99,827
Long-term obligations 54,567 61,879
Other long-term liabilities 7,523 8,251
Deferred income taxes 4,668 2,892
------------ -------------
Total liabilities 188,586 172,849
------------ -------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $.10 per share:
Authorized 10,000 shares; none issued or outstanding - -
Capital stock, par value $.10 per share:
Authorized common shares 200,000;
issued and outstanding 84,650 and 84,380 8,465 8,438
Authorized Class B shares 8,000, none issued or outstanding - -
Capital in excess of par value 225,904 218,319
Cumulative translation adjustment (2,979) (2,748)
Net unrealized (loss) gain on marketable securities (545) 1,345
Retained earnings since May 1, 1988 112,094 95,165
Less treasury stock, at cost, 755 and 505 common shares (4,794) (3,095)
------------ -------------
Total stockholders' equity 338,145 317,424
------------ -------------
Total liabilities and stockholders' equity $ 526,731 $ 490,273
============ =============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE> 4
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND RETAINED EARNINGS
FOR THE THREE MONTHS AND SIX MONTHS ENDED MARCH 31, 1995 AND 1994
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
(Unaudited)
Three Months Six Months
-------------------- --------------------
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $ 143,335 $ 118,577 $ 269,337 $ 252,509
--------- --------- --------- ---------
Operating expenses:
Direct costs 108,825 89,790 202,570 193,823
General and administrative expenses 12,974 11,778 24,613 23,863
Depreciation and amortization 7,373 6,486 14,336 13,382
--------- --------- --------- ---------
Operating expenses 129,172 108,054 241,519 231,068
--------- --------- --------- ---------
Operating income 14,163 10,523 27,818 21,441
--------- --------- --------- ---------
Other income (expense):
Interest expense (2,146) (2,188) (4,094) (4,386)
Interest income 264 505 850 1,141
Gain on sale of long-term assets 824 78 745 1,664
Other income (expense), net 1,342 533 2,679 (174)
--------- --------- --------- ---------
Other income (expense) 284 (1,072) 180 (1,755)
--------- --------- --------- ---------
Income before income taxes 14,447 9,451 27,998 19,686
Income taxes 2,163 1,216 4,641 2,386
--------- --------- --------- ---------
Net income 12,284 8,235 23,357 17,300
Reclassification of pre-quasi-
reorganization tax benefit (3,325) (965) (6,428) (2,825)
Retained earnings, beginning of period 103,135 101,020 95,165 93,815
--------- --------- --------- ---------
Retained earnings, end of period $ 112,094 $ 108,290 $ 112,094 $ 108,290
========= ========= ========= =========
Earnings per share $ .14 $ .10 $ .27 $ .20
========= ========= ========= =========
Weighted average number of shares outstanding 86,620 85,757 86,673 85,067
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE> 5
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1994
(IN THOUSANDS)
<TABLE>
<CAPTION>
(Unaudited)
1995 1994
---------- -----------
<S> <C> <C>
Net cash provided by operating activities $ 27,384 $ 27,015
---------- -----------
Cash flows from investing activities:
Cash paid for acquisition, net (20,000) -
Purchases of marketable securities (8,491) (8,191)
Maturities of marketable securities 22,328 -
Sales of marketable securities 12,416 -
Payments received on investment in sales-type
leases and notes receivable 59 195
Capital expenditures (40,822) (23,451)
Proceeds from sales of long-term assets 1,850 2,728
---------- -----------
Net cash used for investing activities (32,660) (28,719)
---------- -----------
Cash flows from financing activities:
Decrease in restricted cash 269 57
Decrease in long-term borrowings, net (11,026) (15,635)
Increase (decrease) in short-term borrowings, net 9,022 (5,218)
Common and treasury stock transactions (1,352) 19,771
---------- -----------
Net cash used for financing activities (3,087) (1,025)
---------- -----------
Net decrease in cash and cash equivalents (8,363) (2,729)
Cash and cash equivalents, beginning of period 22,563 63,052
---------- -----------
Cash and cash equivalents, end of period $ 14,200 $ 60,323
========== ===========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE> 6
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 INTERIM FINANCIAL INFORMATION
The unaudited condensed consolidated financial statements of
the Company are prepared in conformity with generally accepted accounting
principles, but do not purport to be a complete presentation inasmuch as all
note disclosures required are not included. Reference is made to the Company's
1994 Annual Report on Form 10-K for additional note disclosures.
In the opinion of management, the condensed consolidated
financial statements contain all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial position of
the Company as of March 31, 1995 and the results of its operations and its cash
flows for the respective periods ended March 31, 1995 and 1994. Interim
results for the six months ended March 31, 1995 are not necessarily indicative
of results which will be realized for the full year ending September 30, 1995.
NOTE 2 ACQUISITIONS
During October 1994, the Company consummated its merger with
Sundowner Offshore Services, Inc. ("Sundowner"), a company that provides
contract well servicing and workover services in the Gulf of Mexico and various
international offshore markets utilizing self-contained, modular platform rigs
and jackup workover rigs. Under the merger agreement, Sundowner stockholders
received 2.8 shares of the Company's common stock for each of their shares of
Sundowner. As a result, the Company issued 13.1 million common shares to
Sundowner stockholders.
The merger has been accounted for as a pooling-of-interests.
Accordingly, the accompanying condensed consolidated financial statements have
been retroactively restated to include the results of operations, financial
position and cash flows of Sundowner for all periods prior to consummation of
the merger. In addition, the accompanying condensed consolidated financial
statements include adjustments to Sundowner's deferred income tax expense to
reflect the combined companies use of the Company's net operating loss
carryforwards for U.S. federal income tax purposes.
Operating results of the separate companies for the three
months and six months ended March 31, 1994 are as follows:
<TABLE>
<CAPTION>
Three Months Six Months
--------------------------- ---------------------------
Revenues Net Income Revenues Net Income
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Nabors $103,526 $ 7,010 $221,125 $ 15,548
Sundowner 15,051 1,079 31,384 1,476
Deferred income tax adjustment - 146 - 276
-------- --------- -------- ---------
$118,577 $ 8,235 $252,509 $ 17,300
======== ========= ======== =========
</TABLE>
During January 1995, the Company acquired Delta Drilling
Company ("Delta"), a company engaged in the business of contract land drilling
in the United States. The purchase price of Delta was approximately $20
million in cash. The acquisition was accounted for under the purchase method
of accounting; accordingly, the total purchase price was allocated to net
assets based on estimated fair values.
5
<PAGE> 7
NOTE 3 MARKETABLE SECURITIES
During December 1994, the Company reclassified certain
investments in equity securities to trading securities as a result of a tender
offer for the Company's investment, which the Company accepted in April 1995.
As a result of this reclassification and sale of certain of these securities
during the second quarter, the Company has recorded a gain in other income
totaling $1 million and $2.2 million during the three month and six month
periods ended March 31, 1995, respectively. During May 1995, the Company
received a combination of shares, warrants and cash in settlement of the tender
offer.
NOTE 4 CAPITAL STOCK
During the six month period ended March 31, 1995, 141,000
options were exercised at prices ranging from $1.07 to $4.90 per share. In
addition, 129,268 common shares were issued upon vesting under a stock award
plan.
During December 1994, the Company purchased 250,000 shares of
its common stock in the open market at a cost of $1.7 million, or $6.80 per
share.
During October 1994, the Company completed its merger with
Sundowner whereby the Company acquired all of the outstanding shares of
Sundowner in exchange for 13.1 million newly issued registered shares of the
Company's common stock (Note 2).
Earnings per share are determined using the weighted average
number of shares of stock outstanding for the periods reported. Stock options
and warrants are included in the weighted average number of shares as common
stock equivalents if dilutive, calculated using the treasury stock method.
NOTE 5 COMMITMENTS AND CONTINGENCIES
A petition was filed on March 4, 1994 in the 61st Judicial
Court, of Harris County, Texas against Nealwell Drilling Limited ("Nealwell")
and Sundowner, asserting that Nealwell breached a contract and Sundowner
tortiously interfered with alleged contract rights of Primrose Drilling
Ventures, Ltd. for the purchase of the Nealwell II jackup workover rig. The
Nealwell II (renamed the Dolphin III) was acquired by Sundowner in November
1993 for $2 million in cash. Primrose has alleged approximately $34.5 million
in actual damages as well as an amount of exemplary damages not less than its
actual damages. Company management believes that the litigation instituted by
Primrose is without merit and intends to vigorously defend all claims of
Primrose. Moreover, management believes that the amount of alleged damages
bears no reasonable or conceivable relation to the replacement value of the rig
or the revenues or other economic benefits to be derived from the rig in the
foreseeable future.
Sundowner has filed a cross-claim against Nealwell asserting
that, if the alleged contract existed between Primrose and Nealwell for the
sale of the rig, Nealwell fraudulently misrepresented or concealed that fact
from Sundowner. The cross-claim seeks recovery of any damages incurred by
Sundowner as a result of Nealwell's misrepresentations or concealment of facts
regarding the alleged contract. This case is in the preliminary discovery
stages.
The Company is a defendant or otherwise involved in a number
of lawsuits. In the opinion of management, the Company's ultimate liability
with respect to these lawsuits is not expected to have a significant or
material adverse effect on the Company's consolidated financial position or
results of operations.
6
<PAGE> 8
ITEM 2.
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
SECOND QUARTER AND FIRST SIX MONTHS OF FISCAL 1995 COMPARED TO SECOND QUARTER
AND FIRST SIX MONTHS FISCAL 1994
During October 1994, Nabors and Sundowner completed a tax-free
merger. Under the merger agreement, Sundowner stockholders received 2.8 shares
of the Company's common stock for each of their shares of Sundowner, or
approximately 13.1 million common shares. The exchange resulted in former
Sundowner stockholders owning approximately 15% of the common stock of Nabors
outstanding after the merger.
The merger has been accounted for as a pooling-of-interests.
Accordingly, the accompanying condensed consolidated financial statements have
been retroactively restated to include the results of operations, financial
position and cash flows of Sundowner for all periods prior to the consummation
of the merger.
Company revenues for the second quarter of fiscal 1995
("Current Quarter") and first six months of fiscal 1995 ("Current Period")
totaled $143.3 million and $269.3 million, respectively, representing a 21% and
7% increase over the prior year comparable period amounts. Operating income
during the Current Quarter and Current Period totaled $14.2 million and $27.8
million, respectively, representing a 35% and 30% increase over the prior year
comparable period amounts. Net income totaled $12.3 million ($.14 per share)
and $23.4 million ($.27 per share) during the Current Quarter and Current
Period, respectively, representing a 49% and 35% increase, respectively, over
the prior year comparable period amounts.
The increase in revenues for the Current Quarter and Current
Period was attributable to higher revenues for the Alaska, and US Lower 48 and
Canada operations, partially offset by lower revenues for the Company's
International and UK North Sea operations. Operating income increases for the
Current Quarter were primarily attributable to the improved performance of the
Company's Alaska, US Lower 48 and Canada, and International operations,
partially offset by a decrease in operating income for Sundowner as compared to
the comparable prior year quarter. For the Current Period the increase in
operating income was attributable to the improved performance of the Company's
Alaska, US Lower 48 and Canada, International, and Sundowner operations,
partially offset by decreased operating income for the Company's UK North Sea
operations.
The following table sets forth financial information with
respect to the Company and its subsidiaries on a consolidated basis by
geographical area for the periods indicated:
<TABLE>
<CAPTION>
Second Quarter First Six Months
----------------------------------------------- -------------------------------------------------
Favorable Favorable
(Unfavorable) (Unfavorable)
1995 1994 Variance 1995 1994 Variance
-------------- ------------- ------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Alaska $ 21,288 15% $ 16,220 14% $ 5,068 31% $ 40,313 15% $ 33,889 13% $ 6,424 19%
US Lower 48 and Canada 73,385 51% 46,884 39% 26,501 57% 130,272 48% 104,349 41% 25,923 25%
International 23,330 16% 28,063 24% (4,733) -17% 45,408 17% 56,140 23% (10,732) -19%
Sundowner 14,484 10% 15,051 13% (567) -4% 30,612 12% 31,384 12% (772) -2%
UK North Sea 10,848 8% 12,359 10% (1,511) -12% 22,732 8% 26,747 11% (4,015) -15%
-------------- -------------- ------------- -------------- -------------- ---------------
$143,335 100% $118,577 100% $24,758 21% $269,337 100% $252,509 100% $ 16,828 7%
============== ============== ============= ============== ============== ===============
Operating Income:
Alaska $ 3,911 23% $ 2,254 17% $ 1,657 74% $ 7,496 22% $ 5,650 21% $ 1,846 33%
US Lower 48 and Canada 7,720 44% 5,627 43% 2,093 37% 13,235 39% 12,229 45% 1,006 8%
International 4,100 23% 2,311 18% 1,789 77% 6,834 21% 3,025 11% 3,809 126%
Sundowner 857 5% 2,042 16% (1,185) -58% 4,267 13% 3,450 13% 817 24%
UK North Sea 791 5% 722 6% 69 10% 1,750 5% 2,865 10% (1,115) -39%
-------------- -------------- ------------- -------------- -------------- ---------------
17,379 100% 12,956 100% 4,423 34% 33,582 100% 27,219 100% 6,363 23%
Corporate expenses (3,216) (2,433) (783) -32% (5,764) (5,778) 14 0%
-------------- -------------- ------------- -------------- -------------- ---------------
$ 14,163 $ 10,523 $ 3,640 35% $ 27,818 $ 21,441 $ 6,377 30%
============== ============== ============= ============== ============== ===============
</TABLE>
7
<PAGE> 9
<TABLE>
<CAPTION>
Second Quarter First Six Months
----------------------------------------------- -------------------------------------------------
Favorable Favorable
(Unfavorable) (Unfavorable)
1995 1994 Variance 1995 1994 Variance
-------------- ------------- ------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Rig years:
Alaska 6.6 4% 4.0 3% 2.6 65% 6.4 4% 4.1 3% 2.3 56%
US Lower 48 and Canada 112.8 66% 78.5 60% 34.3 44% 106.2 65% 84.8 61% 21.4 25%
International:
Rig 25.1 15% 23.5 18% 1.6 7% 22.7 14% 24.2 17% (1.5) -6%
Labor 4.0 2% 4.0 3% 0.0 0% 4.0 2% 3.5 3% 0.5 14%
Sundowner 15.6 9% 14.2 11% 1.4 10% 16.7 11% 14.7 11% 2.0 14%
UK North Sea:
Rig - - - - - - - - 1.5 1% (1.5) -100%
Labor 7.7 4% 7.0 5% 0.7 10% 7.3 4% 5.5 4% 1.8 33%
-------------- -------------- ------------- -------------- -------------- ---------------
171.8 100% 131.2 100% 40.6 31% 163.3 100% 138.3 100% 25.0 18%
============== ============== ============= ============== ============== ===============
</TABLE>
Alaska revenues totaled $21.3 million and $40.3 million during
the Current Quarter and Current Period, respectively, representing a 31% and
19% increase over the prior year comparable period amounts. Drilling revenues
increased during the current year periods as equivalent rig years during the
Current Quarter and Current Period totaled 6.6 and 6.4 years, respectively,
compared to 4.0 and 4.1 years during the comparable prior year periods.
Additionally, Peak Oilfield revenues increased during the current year periods
due to increased overall activity.
US Lower 48 and Canada revenues totaled $73.4 million and
$130.3 million during the Current Quarter and Current Period, respectively,
representing a 57% and 25% increase over the prior year comparable period
amounts. US Lower 48 and Canada equivalent rig years during the Current
Quarter and Current Period totaled 112.8 and 106.2 years, respectively,
compared to 78.5 and 84.8 years during the comparable prior year periods. The
increase in equivalent rig years for the US Lower 48 was attributable to the
addition of the Delta Drilling Company rigs, acquired in January 1995, and the
Mitchell Energy Development Corp. rigs, acquired in April 1994. The Company's
increasing market share resulting from incremental activity under various
customer alliance relationships, as well as a broadening customer base, further
contributed to this increase. This increase in activity occurred despite lower
natural gas prices in the US and an overall decline in the Baker Hughes US land
rig count. Canadian utilization reached a record level but declined late in
the Current Quarter with the arrival of the spring thaw and an overall decline
in activity due to lower natural gas prices.
International revenues totaled $23.3 million and $45.4 million
during the Current Quarter and Current Period, respectively, representing a
decrease of 17% and 19% compared to the prior year comparable period amounts.
The decrease was primarily attributable to decreased logistical and drilling
activity in Yemen due to political turmoil and diminished exploration
prospects. Partially offsetting the lower activity in Yemen, was the increased
activity for the Company's Venezuela operations. Venezuela revenues
represented approximately 47% and 44% of total International revenues during
the Current Quarter and Current Period, respectively. Equivalent International
rig years, excluding labor contracts, totaled 25.1 years and 22.7 years during
the Current Quarter and Current Period, respectively, compared to 23.5 and 24.2
years during the comparable prior year periods. Labor contracts totaled 4.0
years during the Current Quarter and Current Period as compared to 4.0 and 3.5
years during the comparable prior year periods.
Sundowner revenues totaled $14.5 million and $30.6 million
during the Current Quarter and Current Period, respectively, representing a
decrease of 4% and 2% compared to the prior year comparable period amounts.
Revenues for the Gulf of Mexico operations increased by $.3 million, or 2.8%,
and decreased by $.6 million, or 2.4%, during the Current Quarter and Current
Period, respectively, as compared to the comparable prior year periods. The
increase in Gulf of Mexico revenues associated with increased utilization of
the Company's platform workover rigs as compared to the prior year comparable
periods, was partially offset during the Current Quarter, and more than offset
during the Current Period by lower utilization of the Company's jackup workover
rigs and lower plugging and abandonment revenues. International operations
revenues decreased by $.9 million, or 30.9%, and $.1 million, or 3.0%, during
the Current Quarter and Current Period, respectively. Decreased international
revenues resulted primarily from the loss of a contract in Australia during
September 1994.
8
<PAGE> 10
UK North Sea revenues totaled $10.8 million and $22.7 million
during the Current Quarter and Current Period, respectively, representing a
decrease of 12% and 15% compared to the prior year comparable period amounts.
Total equivalent rig years, including labor contracts, totaled 7.7 and 7.3
years during the Current Quarter and Current Period, respectively, compared to
7.0 years during the comparable prior year periods. The decrease in revenues
resulted from reduced incentive contracts, partially offset by an increase in
equivalent rig years resulting from the award of two new labor contracts during
March 1995.
The following table sets forth selected consolidated financial
information of the Company expressed as a percentage of total operating
revenues for the periods indicated:
<TABLE>
<CAPTION>
Second Quarter First Six Months
--------------- ----------------
1995 1994 1995 1994
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
------ ------ ------ ------
Operating expenses:
Direct costs 75.9% 75.7% 75.3% 76.7%
General and administrative expenses 9.1% 9.9% 9.1% 9.5%
Depreciation and amortization 5.1% 5.5% 5.3% 5.3%
------ ------ ------ ------
Operating expenses 90.1% 91.1% 89.7% 91.5%
------ ------ ------ ------
Operating income 9.9% 8.9% 10.3% 8.5%
------ ------ ------ ------
Other income (expense):
Interest expense -1.5% -1.8% -1.5% -1.8%
Interest income 0.2% 0.4% 0.3% 0.5%
Gain on sale of long-term assets 0.6% 0.1% 0.3% 0.7%
Other income, net 0.9% 0.4% 1.0% -0.1%
------ ------ ------ ------
Other income (expense) 0.2% -0.9% 0.1% -0.7%
------ ------ ------ ------
Income before income taxes 10.1% 8.0% 10.4% 7.8%
Income taxes 1.5% 1.0% 1.7% 0.9%
------ ------ ------ ------
Net income 8.6% 7.0% 8.7% 6.9%
====== ====== ====== ======
</TABLE>
Operating expenses during the Current Quarter and Current
Period were comparable to the prior year comparable period amounts.
Other income increased during the Current Quarter and Current
Period, compared to the prior year periods, primarily due to realized and
unrealized gains totaling $1.0 million and $2.2 million recognized during
Current Quarter and Current Period, respectively, on certain equity securities.
During fiscal year 1994, the Venezuelan bolivar devalued by
approximately 75%, as compared to the U.S. dollar, due to the deterioration in
that country's economic condition. During June 1994, the Venezuelan government
imposed exchange rate control policies and an official fixed exchange rate of
170 bolivars to the U.S. dollar. As a result of the devaluation, the Company
recorded translation losses totaling $1.5 million during fiscal year 1994.
Subsequent to the June 1994 establishment of the official fixed exchange rate,
the Company has reduced its bolivar net monetary asset exposure. However, if
the Venezuela government allows the bolivar to "float" relative to the U.S.
dollar, or revises the official fixed exchange rate, the Company could incur
additional translation losses.
The income tax provision increased during the Current Quarter
and Current Period due to higher foreign taxes, primarily in Canada and
Venezuela.
9
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaled $27.4
million during the current year six month period compared to $27.0 million
during the prior year comparable period. During the current and prior six
month periods, net income as adjusted for non-cash items such as depreciation,
was partially offset by the negative impact on cash from changes in the
Company's working capital accounts.
Net cash used for investing activities totaled $32.7 million
during the current year six month period compared to $28.7 million during the
prior year period. Capital expenditures and cash paid for the acquisition of
Delta Drilling Company represented the primary use of cash during the current
year period, partially offset by maturities and sales of marketable securities.
During the prior year period, capital expenditures and the purchase of
marketable securities represented the primary uses of cash.
Financing activities used cash totaling $3.1 million during
the current year six month period compared to $1.0 million during the prior
year period. Cash used during the current year period resulted from scheduled
principal payments on long-term obligations, partially offset by cash provided
by short-term borrowings. In the prior year period, net cash was used for
scheduled principal payments on long-term obligations and a reduction in
short-term borrowings. These uses of cash were partially offset in the prior
year period, however, by cash provided by common stock transactions.
The Company's cash and cash equivalents and short-term
investments totaled $16.0 million as of March 31, 1995. In addition, the
Company had long-term investments of $11.5 million as of March 31, 1995. The
Company currently has credit facility arrangements with a number of banks
totaling $49.8 million. These credit facilities are limited at any given time
to receivables of certain of the Company's subsidiaries. As of March 31, 1995,
remaining availability, after borrowings on the facilities and outstanding
letters of credit, totaled approximately $25.8 million.
As of March 31, 1995, the Company had capital expenditure
commitments totaling approximately $15.9 million.
The current cash, short-term investments in marketable
securities and credit facility position, and the projected cash flow generated
from current operations is expected to adequately finance the Company's
non-discretionary capital and debt service requirements for the next twelve
months.
OTHER MATTERS
The Company's financial condition and results of operations
are dependent upon the level of spending by oil and gas companies for
exploration, development and production activities. Therefore, a sustained
increase or decrease in the price of oil or natural gas, which could have a
material impact on exploration, development and production activities, could
materially affect the Company's financial condition and results of operations.
Generally, a sustained change in the price of oil would have a greater impact
on the Company's Alaska and International operations, while a sustained change
in the price of natural gas would have a greater impact on the US Lower 48 and
Canada, and Sundowner operations.
10
<PAGE> 12
PART II OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the 1995 Annual Meeting of Shareholders held on March 7, 1995,
74,765,789 shares were present in person and by proxy, constituting 89% of the
outstanding common stock of the Company entitled to vote. The only matter
voted upon at the Annual Meeting was the election of directors.
Election of Directors. Two individuals were elected to the Board of
Directors of the Company as Class I directors to serve for a three year term,
until 1998. The name of the directors are as follows:
Hans W. Schmidt:
Votes Cast in Favor 74,458,688
Votes Withheld 307,101
Richard A. Stratton:
Votes Cast in Favor 74,367,414
Votes Withheld 398,375
The Class II directors whose terms of office as a director continued
after the meeting and whose terms expire in 1996 are as follows:
Anthony G. Petrello
Myron M. Sheinfeld
Martin J. Whitman
The Class III directors whose terms of office as a director continued
after the meeting and whose terms expire in 1997 are as follows:
Gary T. Hurford
Eugene M. Isenberg
Jack Wexler
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months
ended March 31, 1995.
11
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
NABORS INDUSTRIES, INC.
Anthony G. Petrello
President and Chief
Operating Officer
Bruce P. Koch
Corporate Controller
Dated: May 15, 1995
12
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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