<PAGE> 1
CONFORMED
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, 1996
--------------------------------------------------
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, 1996
totaled 85,366,913.
<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, 1996 and September 30, 1995 2
Condensed Consolidated Statements of
Income and Retained Earnings for the Three
Months and Six Months Ended March 31, 1996
and 1995 3
Condensed Consolidated Statements of Cash
Flows for the Six Months Ended March
31, 1996 and 1995 4
Notes to Condensed Consolidated
Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
Part II Other Information
Item 4. Submission of Matters to a Vote of Security
Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 12
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>
March 31, September 30,
1996 1995
--------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,980 $ 12,038
Marketable securities 9,942 3,296
Accounts receivable, net 134,237 132,482
Inventory and supplies 17,666 14,079
Prepaid expenses and other current assets 23,027 21,550
--------- ---------
Total current assets 187,852 183,445
Property, plant and equipment, net 422,784 393,464
Marketable securities 10,551 9,645
Other long-term assets 12,210 6,718
--------- ---------
Total assets $ 633,397 $ 593,272
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $ 11,245 $ 11,158
Short-term borrowings 34,900 30,684
Trade accounts payable 39,002 53,891
Accrued liabilities 54,384 48,944
Income taxes payable 6,142 4,876
--------- ---------
Total current liabilities 145,673 149,553
Long-term obligations 60,568 51,478
Other long-term liabilities 5,718 7,643
Deferred income taxes 16,599 15,848
--------- ---------
Total liabilities 228,558 224,522
--------- ---------
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 85,805 and 85,017 8,581 8,502
Authorized Class B shares 8,000, none issued or outstanding -- --
Capital in excess of par value 236,210 229,267
Cumulative translation adjustment (3,073) (2,670)
Net unrealized gain on marketable securities 2,440 354
Retained earnings since May 1, 1988 165,475 138,091
Less treasury stock, at cost, 755 common shares (4,794) (4,794)
--------- ---------
Total stockholders' equity 404,839 368,750
--------- ---------
Total liabilities and stockholders' equity $ 633,397 $ 593,272
========= =========
</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, 1996 AND 1995
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Six Months
---------------------- ----------------------
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $ 163,319 $ 143,335 $ 327,657 $ 269,337
--------- --------- --------- ---------
Operating expenses:
Direct costs 120,020 108,825 244,479 202,570
General and administrative expenses 14,117 12,974 26,655 24,613
Depreciation and amortization 10,993 7,373 21,002 14,336
--------- --------- --------- ---------
Operating expenses 145,130 129,172 292,136 241,519
--------- --------- --------- ---------
Operating income 18,189 14,163 35,521 27,818
--------- --------- --------- ---------
Other income (expense):
Interest expense (2,147) (2,146) (4,114) (4,094)
Interest income 191 264 441 850
Gain on sales of long-term assets 1,357 824 1,516 745
Other income, net 1,785 1,342 3,231 2,679
--------- --------- --------- ---------
Other income 1,186 284 1,074 180
--------- --------- --------- ---------
Income before income taxes 19,375 14,447 36,595 27,998
--------- --------- --------- ---------
Income taxes:
Current 2,264 907 3,781 2,738
Deferred 289 1,256 730 1,903
--------- --------- --------- ---------
Total income taxes 2,553 2,163 4,511 4,641
--------- --------- --------- ---------
Net income 16,822 12,284 32,084 23,357
Reclassification of pre-quasi-
reorganization tax benefit (1,100) (3,325) (4,700) (6,428)
Retained earnings, beginning of period 149,753 103,135 138,091 95,165
--------- --------- --------- ---------
Retained earnings, end of period $ 165,475 $ 112,094 $ 165,475 $ 112,094
========= ========= ========= =========
Earnings per share:
Primary $ .18 $ .14 $ .35 $ .27
========= ========= ========= =========
Fully diluted $ .18 $ .14 $ .34 $ .27
========= ========= ========= =========
Weighted average number of shares outstanding:
Primary 92,463 86,620 91,460 86,673
========= ========= ========= =========
Fully diluted 93,692 87,459 93,465 87,841
========= ========= ========= =========
</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, 1996 AND 1995
(In thousands)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Net cash provided by operating activities $ 27,986 $ 27,384
-------- --------
Cash flows from investing activities:
Purchases of marketable securities, trading (6,585) --
Sales of marketable securities, trading 2,808 --
Sales of marketable securities, available-for-sale 1,699 --
Purchases of marketable securities, held-to-maturity -- (8,491)
Maturities of marketable securities, held-to-maturity -- 22,328
Sales of marketable securities, held-to-maturity -- 12,416
Payments received on notes receivable 7 59
Cash paid for acquisitions, net (5,768) (20,000)
Capital expenditures (54,013) (40,822)
Proceeds from sales of long-term assets and insurance claims 8,267 1,850
-------- --------
Net cash used for investing activities (53,585) (32,660)
-------- --------
Cash flows from financing activities:
Increase in restricted cash 889 269
Increase (decrease) in long-term borrowings, net 9,177 (11,026)
Increase in short-term borrowings, net 4,216 9,022
Common and treasury stock transactions 2,259 (1,352)
-------- --------
Net cash provided by (used for) financing activities 16,541 (3,087)
-------- --------
Net decrease in cash and cash equivalents (9,058) (8,363)
Cash and cash equivalents, beginning of period 12,038 22,563
-------- --------
Cash and cash equivalents, end of period $ 2,980 $ 14,200
======== ========
</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
Nabors Industries, Inc. (the "Company" or "Nabors") 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 1995 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, 1996 and the results of its operations and its cash
flows for the respective periods ended March 31, 1996 and 1995. Interim
results for the six months ended March 31, 1996 are not necessarily indicative
of results which will be realized for the full year ending September 30, 1996.
Note 2 Reclassification
Certain prior year amounts were reclassified to conform to the
presentation in the current year.
Note 3 Capital Stock
During the six month period ended March 31, 1996, 756,300
options were exercised at prices ranging from $0.75 to $6.875 per share. In
addition, 31,768 common shares were issued upon vesting under a stock award
plan.
During October 1995, the Company purchased for $1.0 million
650,000 warrants that the Company had previously issued in connection with the
purchase of several drilling rigs in April 1994. The warrants were
excercisable until April 1996 at $7.92 per share.
Note 4 Commitments and Contingencies
Capital Expenditures
As of March 31, 1996, the Company had capital expenditure
commitments totaling approximately $10.1 million.
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 Offshore Services, Inc. ("Sundowner"), asserting that Nealwell
breached a contract, and Sundowner tortiously interfered with alleged contract
rights of Primrose Drilling Ventures, Ltd., when Sundowner purchased a jackup
workover rig from Nealwell for $2.0 million in cash. Sundowner was merged with
Nabors during October 1994. Primrose has alleged approximately $34.5 million
in actual damages, as well as 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. The case is in the discovery stages.
5
<PAGE> 7
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.
Note 5 Subsequent Events
On April 30, 1996, the Company completed the acquisition of
Exeter Drilling Company ("Exeter") and it's subsidiary, J.W. Gibson Well
Service Company ("Gibson"), from Occidental Oil and Gas Corporation. The
consideration consisted of $18.0 million in cash, $4.0 million (266,223 shares)
of Nabors common stock, and $10.6 million paid in cash for Exeter's and
Gibson's working capital. Exeter's drilling fleet consists of 49 actively
marketed rigs. The majority of its active fleet is composed of rigs operating
in the Rocky Mountains. Gibson, currently operates 78 workover and well
servicing rigs in the Rocky Mountains, the mid-continent region of North
America and New Mexico. 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. The results of Exeter's and
Gibson's operations will be included in the consolidated financial statements
of the Company commencing on the effective date of the acquisition.
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 1996 Compared to Second Quarter
and First Six Months of Fiscal 1995
Company revenues for the second quarter of fiscal 1996
("Current Quarter") and the first six months of fiscal 1996 ("Current Period")
totaled $163.3 million and $327.7 million, respectively, representing a 14% and
22% increase over the prior year comparable period amounts. Operating income
during the Current Quarter and Current Period totaled $18.2 million and $35.5
million, respectively, compared to $14.2 million and $27.8 million in the prior
year. Net income totaled $16.8 million ($.18 per share) and $32.1 million
($.34 per share) during the Current Quarter and Current Period, respectively,
compared to $12.3 million ($.14 per share) and $23.4 million ($.27 per share)
during the prior year comparable periods. The significant improvement in
operating results during the Current Quarter and Current Period was due
primarily to improved results of the Company's operations in Alaska, the Gulf
of Mexico, Yemen and Trinidad.
The following tables set forth financial information with
respect to the Company and its subsidiaries on a consolidated basis by
geographical area :
<TABLE>
<CAPTION>
Second Quarter First Six Months
-------------------------------------------- --------------------------------------------
Favorable Favorable
(Unfavorable) (Unfavorable)
1996 1995 Variance 1996 1995 Variance
-------------- -------------- --------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
North America 116,393 71% 107,151 75% 9,242 9% 239,592 73% 196,855 73% 42,737 22%
International 46,926 29% 36,184 25% 10,742 30% 88,065 27% 72,482 27% 15,583 21%
-------------------------------------------------------------------------------------------
$163,319 100% $143,335 100% $19,984 14% $327,657 100% $269,337 100% $58,320 22%
===========================================================================================
Operating Income:
North America 13,946 66% 12,227 70% 1,719 14% 28,001 68% 24,019 72% 3,982 17%
International 7,257 34% 5,152 30% 2,105 41% 13,229 32% 9,563 28% 3,666 38%
-------------------------------------------------------------------------------------------
21,203 100% 17,379 100% 3,824 22% 41,230 100% 33,582 100% 7,648 23%
Corporate
Expenses (3,014) (3,216) 202 6% (5,709) (5,764) 55 1%
-------------------------------------------------------------------------------------------
$18,189 $14,163 $4,026 28% $35,521 $27,818 $7,703 28%
-------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Second Quarter First Six Months
--------------------------------------------- --------------------------------------------
1996 1995 1996 1995
--------------------- ---------------------- --------------------- -----------------------
Rig Rig Rig Rig Rig Rig Rig Rig Rig
activity (1): Years Utilization Years Utilization Years Utilization Years Utilization
--------------------- ---------------------- --------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
North America 141.3 57% 132.1 54% 144.6 59% 126.3 56%
International 27.7 63% 26.3 59% 27.3 61% 24.8 59%
--------------------------------------------- --------------------------------------------
169.0 58% 158.4 55% 171.9 59% 151.1 56%
============================================= ============================================
</TABLE>
- -------------------
(1) Excludes labor contracts.
North America (including Canada) revenues totaled $116.4
million and $239.6 million during the Current Quarter and Current Period,
respectively, representing a 9% and 22% increase over the prior year comparable
periods. Alaska operation revenues increased by 32% and 36% during the Current
Quarter and Current Period, respectively, as a result of increased drilling
activity as 1.2 and 2.7 additional rigs worked during the Current Quarter and
Current Period, respectively, as compared to the prior year periods.
Additionally, increased activity for Peak Oilfield Servives, the Company's
Alaskan construction and logisitics joint venture, resulted from the October
1995 acquisition of Alaska Interstate Construction. Gulf of Mexico operation
revenues increased during the Current Quarter and Current Period by 27% and
25%, respectively. Gulf of Mexico revenues increased during both the Current
Quarter and Current Period as a result of increased equivalent rig years and
higher dayrates for the Company's platform drilling rigs, jackup rigs and
platform workover rigs as compared to the prior year comparable periods.
Platform drilling rig equivalent rig years
7
<PAGE> 9
increased in part as a result of the purchase of rig 85 from Mayronne
Enterprises, Inc. during fiscal 1995, as this rig commenced operations in the
first quarter of fiscal 1996. Platform workover rig equivalent rig years
increased due to the addition of the newly constructed Super Sundowner XV and
XVI rigs, which commenced operations in February and September 1995,
respectively. Additionally, Sundowner XII was redeployed from Australia to the
Gulf of Mexico in May 1995. Revenues for the Company's US Lower 48 operations
were flat during the Current Quarter, while increasing by 20% during the Current
Period as a result of increased equivalent rig years associated with the
addition of the Delta Drilling Company rigs, which were acquired in January
1995. Equivalent North America rig years during the Current Quarter and Current
Period totaled 141.3 years and 144.6 years, respectively, as compared to 132.1
years and 126.3 years during the prior year comparable periods.
International revenues totaled $46.9 million and $88.1 million
during the Current Quarter and Current Period, respectively, representing a 30%
and 21% increase over the prior year comparable periods. Revenues for the
Company's South and Central America operations increased during the Current
Quarter and Current Period by 31% and 34%, respectively, primarily due to
increased activity in Venezuela, where equivalent rig years totaled 14.1 years
and 14.0 years as compared to 12.7 years and 11.0 years during the prior year
comparable periods. Additionally, South and Central America revenues were
positively impacted during the Current Quarter and Current Period by a one rig
drilling contract in Colombia, which commenced during the first quarter of
fiscal 1996. Revenues for the Company's Middle Eastern, CIS and other
international operations increased during the Current Quarter and Current
Period by 39% and 18%, respectively, as a result of increased drilling activity
in Yemen as well as from the addition of the newly constructed platform
drilling rig 801 in Trinidad, which began operations in January 1996. UK North
Sea revenues increased during the Current Quarter and Current Period by 18% and
13%, respectively, as a result of three additional labor contracts as compared
to the prior year comparable periods. Equivalent international rig years
during the Current Quarter and Current Period totaled 27.7 years and 27.3
years, respectively, as compared with 26.3 years and 24.8 years in the prior
year comparable periods.
The following table sets forth selected consolidated financial
information of the Company expressed as a percentage of total operating
revenues:
<TABLE>
<CAPTION>
Second Quarter First Six Months
---------------- ------------------
1996 1995 1996 1995
------ ------ ------- -------
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
------ ------ ------ ------
Operating expenses:
Direct costs 73.5% 75.9% 74.7% 75.2%
General and administrative
expenses 8.7% 9.1% 8.1% 9.2%
Depreciation and amortization 6.7% 5.1% 6.4% 5.3%
------ ------ ------ ------
Operating expenses 88.9% 90.1% 89.2% 89.7%
------ ------ ------ ------
Operating income 11.1% 9.9% 10.8% 10.3%
------ ------ ------ ------
Other income 0.8% 0.2% 0.4% 0.1%
------ ------ ------ ------
Income before income taxes 11.9% 10.1% 11.2% 10.4%
Income taxes 1.6% 1.5% 1.4% 1.7%
------ ------ ------ ------
Net income 10.3% 8.6% 9.8% 8.7%
====== ====== ====== ======
</TABLE>
Direct costs as a percentage of revenues decreased during the
Current Quarter and Current Period as compared to the prior year comparable
periods. The increase in operating margins is largely due to lower costs for
the Company's US lower 48 operations. Selling, general and administrative
expenses as a percentage of revenues decreased during the Current Quarter and
Current Period due to the increase in revenues, as these expenses were spread
over a larger revenue base. Depreciation expense as a percentage of revenues
increased during the Current Quarter and Current Period as a result of capital
expenditures and acquisitions made during fiscal 1995 and 1996.
In December 1995, the Venezuela bolivar devalued by
approximately 71%, from an official fixed exchange rate of 170 bolivars to the
US dollar, to 290 bolivars to the US dollar, due to the deterioration in that
country's economic condition. As a result of the devaluation, the Company
recognized a translation gain of $.3 million during the Current Period as the
Company had a bolivar denominated net monetary liability position. In April
1996, the Venezuelan
8
<PAGE> 10
government, as a part of moving towards a free market economy, eliminated
exchange rate control policies that had been established in June 1994. As a
result, the bolivar was allowed to float, and devalued by an additional 55% to
70% as the exchange rate ranged from 450 to 500 bolivars to the US dollar. The
Company does not expect to recognize either a significant gain or loss from the
devaluation, as the Company's bolivar denominated net monetary position is
immaterial.
The current and deferred income tax provision for all the
periods presented primarily relate to foreign operations including Canada, as
substantially all of the US taxable income is offset by available net operating
loss carryforwards ("US NOL"). As a result of the Company's available US NOL,
the Company does not expect to pay any regular US federal income taxes until
the Company's US NOL has been fully utilized, or expires unutilized.
For US federal income tax purposes, the Company has net operating loss
carryforwards of approximately $180.0 million that, if not utilized will
expire from 1999 to 2009. For accounting purposes, the Company may begin
sometime during fiscal year 1997 to record non-cash US federal deferred income
taxes depending on the relationship between the amount of the Company's unused
US federal net operating loss carryforward and the temporary differences
between the book and tax basis in the Company's assets.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased by $9.1 million during the
Current Period as compared to a decrease of $8.4 million during the prior year
comparable period.
Net cash provided by operating activities totaled $28.0
million during the Current Period compared to $27.4 million during the prior
year comparable period. During the Current Period and prior year comparable
period, 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 $53.6 million
during the Current Period compared to $32.7 million during the prior year
comparable period. Capital expenditures, cash paid for an acquisition in
Alaska and purchases of marketable securities represented the primary uses of
cash during the Current Period, partially offset by cash provided from the
sales of marketable securities and fixed assets. During the prior year
comparable period, capital expenditures, cash paid for the acquisition of Delta
Drilling Company and the purchase of marketable securities represented the
primary uses of cash, partially offset by maturities and sales of marketable
securities.
Financing activities provided cash totaling $16.5 million
during the Current Quarter compared to $3.1 million in cash used during the
prior year comparable period. During the Current Period cash was provided by
long-term and short-term borrowings, common stock transactions, and a decrease
in restricted cash. In the prior year period, cash was used for scheduled
principal payments on long-term obligations, and treasury stock transactions,
while cash was provided by short-term borrowings.
The Company's cash and cash equivalents and short-term
investments in marketable securities totaled $12.9 million as of March 31,
1996. In addition, the Company had long-term investments in marketable
securities of $10.5 million as of March 31, 1996. The Company currently has
credit facility arrangements with a number of banks totaling $90.6 million.
These credit facilities are limited at any given time to receivables of certain
of the Company's subsidiaries. As of March 31, 1996, remaining availability,
after borrowings on the facilities and outstanding letters of credit, totaled
approximately $33.5 million.
As of March 31, 1996, the Company had capital expenditure
commitments totaling approximately $10.1 million. In addition, on April 30,
1996, the Company completed the acquisition of Exeter and Gibson (Note 5). The
cash consideration paid as part of the acquisition totaled $28.6 million and
was funded by using the Company's credit facilities.
The Company currently has authorization from the Board of
Directors to repurchase $40.0 million of its common stock in the open market by
privately negotiated transactions.
On April 12, 1996, Nabors filed a universal shelf registration
statement on Form S-3 with the Securities and Exchange Commission to allow for
offerings from time to time of up to $250 million in debt securities,
preferred stock, common stock, depository shares, or warrants. On May 10,
1996 the Company announced its plans to offer $125 million of Convertible
Subordinated Notes due 2006 in a public offering.
9
<PAGE> 11
The current cash and cash equivalents, short-term investments,
credit facility position, and projected cash flow generated from current
operations are 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,
Gulf of Mexico, and Canadian operations.
10
<PAGE> 12
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the 1996 Annual Meeting of Shareholders held on March 5, 1996,
79,188,669 shares were present in person and by proxy, constituting
93.6% of the outstanding common stock of the Company entitled to vote.
The matters voted upon at the Annual Meeting were as follows:
Election of Directors: Three Class II directors were elected to the
Board of Directors of the Company to serve for a three year term:
Anthony G. Petrello
-------------------
Votes Cast in favor: 77,528,739
Votes Withheld: 1,659,930
Myron M. Sheinfeld
------------------
Votes Cast in favor: 78,657,301
Votes Withheld: 531,368
Martin J. Whitman
-----------------
Votes Cast in favor: 78,649,615
Votes Withheld: 539,054
Class I Directors, Messrs. Hans W. Schmidt and Richard A. Stratton
terms of office as a director continued after the meeting with terms
expiring in 1998.
Class III Directors, Messrs: Gary T. Hurford, Eugene M. Isenberg and
Jack Wexler, terms of office as a director continued after the meeting
with terms expiring in 1998.
Incentive Compensation Plan. The performance-based plan for officers
and other management that provides annual incentive opportunities
linked to specific performance measures was passed at the annual
meeting and received the following votes:
For: 74,568,296
Against: 3,656,050
Abstain: 964,323
1996 Employee Stock Plan. The plan is to provide incentives for
approximately 120 key officers and management employees of the Company
and its affiliates was passed at the annual meeting and received the
following votes:
For: 52,720,839
Against: 16,293,553
Abstain: 775,900
Non-Vote: 9,398,377
Item 5. Other Information
On April 12, 1996, Nabors filed a universal shelf registration
statement on Form S-3 with the Securities and Exchange Commission to
allow for offerings from time to time of up to $250 million in debt
securities, preferred stock, common stock, depository shares, or
warrants. On May 10, 1996 the Company announced its plans to offer
$125 million of Convertible Subordinated Notes due 2006 in a public
offering.
11
<PAGE> 13
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended
March 31, 1996.
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.
/s/ Anthony G. Petrello
-----------------------------------
Anthony G. Petrello
President and Chief Operating Officer
/s/ Bruce P. Koch
-----------------------------------
Bruce P. Koch
Vice President of Finance
Dated: May 10, 1996
12
<PAGE> 14
EXHIBIT INDEX
27 -- Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 2,980
<SECURITIES> 9,942
<RECEIVABLES> 134,237
<ALLOWANCES> 0
<INVENTORY> 17,666
<CURRENT-ASSETS> 187,852
<PP&E> 650,484
<DEPRECIATION> 227,700
<TOTAL-ASSETS> 633,397
<CURRENT-LIABILITIES> 145,673
<BONDS> 0
<COMMON> 8,581
0
0
<OTHER-SE> 396,258
<TOTAL-LIABILITY-AND-EQUITY> 633,397
<SALES> 327,657
<TOTAL-REVENUES> 327,657
<CGS> 244,479
<TOTAL-COSTS> 244,479
<OTHER-EXPENSES> 47,657
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,114
<INCOME-PRETAX> 36,595
<INCOME-TAX> 4,511
<INCOME-CONTINUING> 32,084
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,084
<EPS-PRIMARY> .35
<EPS-DILUTED> .34
</TABLE>
