<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 December 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)
281-874-0035
- --------------------------------------------------------------------------------
(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 January 31, 1997 totaled 94,805,106.
<PAGE> 2
NABORS INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
Part I Financial Information
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at
December 31, 1996 and September 30, 1996 2
Condensed Consolidated Statements of
Income and Retained Earnings for the Three
Months Ended December 31, 1996 and 1995 3
Condensed Consolidated Statements of Cash
Flows for the Three Months Ended December
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 6. Exhibits and Reports on Form 8-K 10
Signatures 10
</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>
December 31, September 30,
1996 1996
--------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 86,681 $ 95,867
Marketable securities 5,429 8,160
Accounts receivable, net 169,314 172,720
Inventory and supplies 20,114 18,528
Prepaid expenses and other current assets 26,595 33,259
--------- ---------
Total current assets 308,133 328,534
Property, plant and equipment, net 592,923 511,203
Marketable securities 14,969 11,839
Other long-term assets 22,689 19,698
--------- ---------
Total assets $ 938,714 $ 871,274
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $ 8,297 $ 7,738
Short-term borrowings 8,728 10,235
Trade accounts payable 50,185 64,955
Accrued liabilities 81,531 64,063
Income taxes payable 7,151 9,452
--------- ---------
Total current liabilities 155,892 156,443
Long-term obligations 231,055 229,504
Other long-term liabilities 13,241 9,139
Deferred income taxes 21,809 18,366
--------- ---------
Total liabilities 421,997 413,452
--------- ---------
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 91,871 and 87,470 9,188 8,747
Authorized Class B shares 8,000; none issued or outstanding -- --
Capital in excess of par value 286,202 250,995
Cumulative translation adjustment (1,842) (2,692)
Net unrealized gain on marketable securities 6,290 3,728
Retained earnings since May 1, 1988 220,043 200,208
Less treasury stock, at cost, 489 common shares (3,164) (3,164)
--------- ---------
Total stockholders' equity 516,717 457,822
--------- ---------
Total liabilities and stockholders' equity $ 938,714 $ 871,274
--------- ---------
</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
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months ended December 31,
1996 1995
--------- ---------
<S> <C> <C>
Revenues $ 204,140 $ 164,338
--------- ---------
Operating expenses:
Direct costs 151,818 124,459
General and administrative expenses 14,560 12,538
Depreciation and amortization 13,664 10,009
--------- ---------
Operating expenses 180,042 147,006
--------- ---------
Operating income 24,098 17,332
--------- ---------
Other income (expense):
Interest expense (3,961) (1,967)
Interest income 1,579 250
Other income, net 14,538 1,605
--------- ---------
Other income (expense) 12,156 (112)
--------- ---------
Income before income taxes 36,254 17,220
--------- ---------
Income taxes:
Current 1,289 1,517
Deferred 14,401 441
--------- ---------
Income taxes 15,690 1,958
--------- ---------
Net income 20,564 15,262
Reclassification of pre-quasi-
reorganization tax benefit (729) (3,600)
Retained earnings, beginning of period 200,208 138,091
--------- ---------
Retained earnings, end of period $ 220,043 $ 149,753
--------- ---------
Earnings per share:
Primary $ .21 $ .17
--------- ---------
Fully diluted $ .21 $ .17
--------- ---------
Weighted average number of shares outstanding:
Primary 96,490 90,457
--------- ---------
Fully diluted 106,631 91,671
--------- ---------
</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
(In thousands)
<TABLE>
<CAPTION>
Three months ended December 31,
1996 1995
-------- --------
<S> <C> <C>
Net cash provided by operating activities $ 15,509 $ 15,967
-------- --------
Cash flows from investing activities:
Purchases of marketable securities, trading -- (5,585)
Sales of marketable securities, trading 3,653 --
Cash paid for acquisitions, net (62,500) (5,768)
Capital expenditures (33,704) (21,061)
Cash received from disposition of assets and insurance claims 46,567 989
Investment in affiliates (502) --
-------- --------
Net cash used for investing activities (46,486) (31,425)
-------- --------
Cash flows from financing activities:
Decrease in restricted cash -- 575
(Decrease) increase in long-term borrowings, net (390) 6,570
(Decrease) increase in short-term borrowings, net (1,507) 3,240
Common and treasury stock transactions 23,688 (211)
-------- --------
Net cash provided by financing activities 21,791 10,174
-------- --------
Net decrease in cash and cash equivalents (9,186) (5,284)
Cash and cash equivalents, beginning of period 95,867 12,038
-------- --------
Cash and cash equivalents, end of period $ 86,681 $ 6,754
======== ========
</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 Summary of Significant Accounting Policies
Interim Financial Information
The unaudited condensed consolidated financial statements of
Nabors Industries, Inc. (collectively with its subsidiaries, "Nabors" or 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
1996 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 December 31, 1996 and the results of its operations and its
cash flows for the respective periods ended December 31, 1996 and 1995.
Interim results for the three months ended December 31, 1996 are not
necessarily indicative of results which will be realized for the full year
ending September 30, 1997.
Property, Plant and Equipment
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121 ("SFAS 121"), Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of. The Company's adoption of SFAS 121 at the beginning of 1997 did
not have a material effect on the financial statements.
Capital Stock
Common shares issued through the exercise of stock options
results in a tax deduction for the Company equivalent to the taxable gain
recognized by the optionee. For financial reporting purposes, the tax effect of
this deduction is accounted for as a credit to capital in excess of par value
rather than as a reduction of income tax expense.
Earnings Per Share
Primary earnings per share equals net income divided by the
weighted average number of common shares outstanding, after giving effect to
dilutive stock options. Fully diluted earnings per share for the three months
ended December 31, 1996, equals net income plus $1.4 million of after tax
interest incurred on the $172.5 million 5% Convertible Subordinated Notes,
issued on May 28, 1996, divided by weighted average common shares outstanding
after giving effect to dilutive stock options and 9.5 million shares assumed to
be issued on conversion of the Company's convertible securities. The
convertible securities are not included in the fully diluted earnings per share
calculation for the three months ended December 31, 1995 because they had not
been issued at that time.
5
<PAGE> 7
Note 2 Acquisitions and Dispositions
During November 1996, the Company completed the sale of its
wholly owned subsidiary Nabors Drilling & Energy Services UK Ltd. to a wholly
owned subsidiary of Abbot Group plc, a diversified holding company listed on
the London stock exchange. The Company received approximately $36.0 million
plus the value of working capital in cash, as well as 10.8 million four year
warrants to acquire stock in Abbot Group plc.
During December 1996, the Company purchased 47 land drilling
rigs from Noble Drilling Corporation and certain of its subsidiaries for $60.0
million in cash. The fleet of rigs consists of 19 operating rigs and 28
stacked rigs in various stages of completeness; 38 of the rigs are located in
the United States and nine are located in Canada. 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 operations associated with the purchased rigs have been included in
the condensed consolidated financial statements of the Company commencing on
the effective date of the acquisition.
Note 3 Capital Stock
During the three month period ended December 31, 1996,
4,381,750 options were exercised at prices ranging from $0.75 to $10.375 per
share. In addition, 19,268 common shares were issued upon vesting under a
stock award plan.
Note 4 Commitments and Contingencies
Capital Expenditures
As of December 31, 1996, the Company had capital expenditure
purchase commitments outstanding of approximately $13.3 million.
Contingencies
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
During January 1997, the Company completed the acquisition of
Adcor-Nicklos Drilling Company ("Adcor') through a merger of a wholly owned
subsidiary with and into Adcor. In the merger, all of the stock of Adcor was
exchanged for 3,354,175 shares of Nabors common stock. The transaction will be
accounted for as a pooling-of-interests. The results of operations of Adcor
will be included in the Company's fiscal 1997 results commencing January 1997.
The historical consolidated financial statements of the Company presented in
the future will be restated retroactively to October 1, 1996 to include Adcor.
The Adcor fleet consists of 30 active and six stacked rigs located in the
United States. The assets also include drill pipe, spare drilling equipment,
yards, vehicles and other support equipment.
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
First Quarter of Fiscal Year 1997 Compared to First Quarter of Fiscal Year 1996
Company revenues for the first quarter of fiscal year 1997
("Current Quarter") totaled $204.1 million, representing a $39.8 million, or
24% increase over the prior year comparable quarter. Operating income during
the Current Quarter totaled $24.1 million compared to $17.3 million in the
prior year quarter. Net income totaled $20.6 million ($.21 per share) during
the Current Quarter compared to $15.3 million ($.17 per share) during the prior
year comparable quarter. The significant improvement in operating results
during the Current Quarter was due primarily to improved results for the
Company's operations in the US Lower 48 and the Gulf of Mexico, partially
offset by a lower level of activity in Alaska. Net income was also positively
affected by the sale of the Company's UK North Sea operation. However, an
increase in the Company's effective tax rate, resulting from non-cash US
federal deferred income taxes and higher tax rates applicable to the sale of
the UK operation, reduced net income.
The following tables set forth certain financial information with
respect to the Company and its subsidiaries on a consolidated basis by
geographical area :
<TABLE>
<CAPTION>
Three months ended December 31,
1996 1995 Increase (Decrease)
--------- --------- -----------------------
(In thousands, except percentages)
<S> <C> <C> <C> <C>
Revenues:
North America $ 160,761 $ 123,199 $ 37,562 30%
International 43,379 41,139 2,240 5%
--------- --------- --------- ---------
Total revenues 204,140 164,338 39,802 24%
--------- --------- --------- ---------
Operating income:
North America 20,490 14,055 6,435 46%
International 6,801 5,972 829 14%
Corporate expenses (3,193) (2,695) (498) (18%)
--------- --------- --------- ---------
Total operating income $ 24,098 $ 17,332 $ 6,766 39%
--------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
1996 1995
------------------------ ------------------------
Rig Rig Rig Rig
Years Utilization Years Utilization
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Rig activity (1):
North America 181.1 60% 147.8 60%
International 28.9 58% 26.9 60%
--------- --------- --------- ---------
210.0 60% 174.7 60%
--------- --------- --------- ---------
</TABLE>
(1) Excludes labor contracts and Gibson workover and well servicing rigs.
North America revenues (including Canada) totaled $160.8 million
during the Current Quarter representing a 30% increase over the prior year
quarter. The increase was primarily attributable to a significant increase in
revenues for the Company's US Lower 48 operations during the Current Quarter
resulting primarily from the acquisition of Exeter Drilling Company and its
subsidiary, JW Gibson Well Service Company in April 1996, partially offset by
lower turnkey revenues resulting from the completion of a fewer number of
turnkey contracts in the US Lower 48 during the Current Quarter. Revenues for
the Gulf of Mexico operation also increased significantly during the Current
Quarter, as a result of increased equivalent rig years and higher dayrates for
the Company's platform drilling rigs, as well as higher dayrates for the
Company's platform workover rigs and jackup workover rigs as compared to the
prior year quarter. Platform drilling rig equivalent rig years increased in
part as a result of the newly constructed MASE(TM) rigs 802 and 803 which began
working in June 1996 and November 1996, respectively. Additionally, rig 269,
an adapted land rig, began
7
<PAGE> 9
working in the Gulf of Mexico in June 1996. Alaska operation revenues
decreased during the Current Quarter primarily as a result of reduced rig
activity as compared to the prior year quarter. Equivalent North America rig
years during the Current Quarter totaled 181.1 years as compared to 147.8 years
during the prior year quarter.
International revenues totaled $43.4 million during the Current
Quarter, representing a 5% increase over the prior year quarter. Middle
Eastern and CIS revenues increased significantly during the Current Quarter.
The increase resulted from new contracts in Saudi Arabia for three rigs which
commenced operations in the third quarter of 1996, as well as a one rig
contract on Sakhalin Island in the CIS, which commenced in June 1996. These
increases were partially offset, however, by lower rig activity in Africa.
Revenues for the Company's South and Central America operations increased
during the Current Quarter due to the newly constructed MASE(TM) rig 801, which
began operations in Trinidad during January 1996. UK North Sea revenues
decreased during the Current Quarter, as the Company completed the sale of its
UK North Sea operation during November 1996 (Note 2). Equivalent international
rig years during the Current Quarter totaled 28.9 years as compared with 26.9
years in the prior year quarter.
The following table sets forth selected consolidated financial
information of the Company expressed as a percentage of total operating
revenues:
<TABLE>
<CAPTION>
Three months ended December 31,
1996 1995
-------- --------
<S> <C> <C>
Revenues 100.0% 100.0%
-------- --------
Operating expenses:
Direct costs 74.4% 75.8%
General and administrative expenses 7.1% 7.6%
Depreciation and amortization 6.7% 6.1%
-------- --------
Operating expenses 88.2% 89.5%
-------- --------
Operating income 11.8% 10.5%
Other income (expense) 6.0% (0.0%)
-------- --------
Income before income taxes 17.8% 10.5%
Income taxes 7.7% 1.2%
-------- --------
Net income 10.1% 9.3%
-------- --------
</TABLE>
Direct costs as a percentage of revenues decreased during the
Current Quarter as compared to the prior year quarter. The increase in
operating margins is largely due to improved margins for the Company's US Lower
48 operations and the contribution of MASE(TM) rig 801 in Trinidad. These
improved margins were partially offset, however, by a decline in margins earned
by the Company's Alaskan construction and logistics joint venture, and from
higher than expected costs related to the deployment of three rigs to Saudi
Arabia during the third quarter of 1996, which are returning to budgeted
levels. Depreciation and amortization expense as a percentage of revenues
increased during the Current Quarter as a result of capital expenditures and
acquisitions made during fiscal years 1996 and 1997.
Interest expense increased during the Current Quarter primarily
as a result of the interest associated with the $172.5 million 5% Convertible
Subordinated Notes issued on May 28, 1996 (the "5% Notes"), partially offset by
lower interest expense associated with short-term borrowings that were
substantially paid down with proceeds from the 5% Notes. Interest income
increased during the Current Quarter due to higher average cash and cash
equivalent balances that resulted from the remaining proceeds from the 5%
Notes.
Other income increased during the Current Quarter primarily as a
result of a gain recognized on the sale of the Company's UK North Sea operation
(Note 2), in which the Company received approximately $36.0 million plus the
value of working capital in cash, as well as 10.8 million four year warrants to
acquire stock in Abbot Group plc. Other income during the prior year quarter
consisted primarily of unrealized gains on marketable securities.
8
<PAGE> 10
During the Current Quarter, the Company began recording non-cash
US federal deferred income taxes based on the relationship between the amount
of the Company's unused US federal net operating loss carryforwards ("US NOL")
and the temporary differences between the book basis and tax basis in the
Company's assets. The temporary differences primarily arise from having
accelerated depreciation for tax return purposes as compared to a lower
depreciation amount recorded for financial statement purposes. Additionally,
the Company recorded higher UK taxes as a result of the sale of the UK
operation, resulting in a Current Quarter effective tax rate of 43%, compared
to an effective tax rate of 11% for the prior year quarter. The effective tax
rate for financial statement purposes for the remaining quarters of 1997 should
approximate the 35% US federal statutory rate. Non-cash US federal deferred
taxes should represent the majority of this amount until that point in time
when the US NOL has been fully utilized or expires. The current and deferred
income tax provisions for the prior year quarter relate primarily to foreign
operations, including Canada, as substantially all of the US taxable income and
temporary differences between the book basis and tax basis of the Company's
assets were offset by the available US NOL.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased by $9.2 million during the
Current Quarter as compared to a decrease of $5.3 million during the prior year
comparable quarter.
Net cash provided by operating activities totaled $15.5 million
during the Current Quarter compared to $16.0 million during the prior year
comparable quarter. During the Current Quarter and prior year quarter, net
income, as adjusted for non-cash items such as depreciation and deferred taxes,
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 $46.5 million
during the Current Quarter compared to $31.4 million during the prior year
quarter. Cash paid for the Noble land rigs and other acquisitions and capital
expenditures represented the primary uses of cash during the Current Quarter,
partially offset by cash provided from the sale of the UK North Sea operation.
During the prior year quarter, capital expenditures, cash paid for acquisitions
and the purchase of marketable securities represented the primary uses of cash.
Financing activities provided cash totaling $21.8 million during
the Current Quarter compared to $10.2 million during the prior year quarter.
During the Current Quarter cash was provided by common stock transactions,
partially offset by reductions in short-term borrowings. In the prior year
quarter, cash was provided by short-term and long-term borrowings.
The Company's cash and cash equivalents and short-term
investments in marketable securities totaled $92.1 million as of December 31,
1996. In addition, the Company had long-term investments in marketable
securities of $15.0 million as of December 31, 1996. The Company currently has
credit facility arrangements with a number of banks totaling $64.5 million. As
of December 31, 1996, remaining availability, after borrowings on the
facilities and outstanding letters of credit, totaled approximately $43.9
million.
As of December 31, 1996, the Company had capital expenditure
purchase commitments outstanding of approximately $13.3 million.
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
depend on 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.
9
<PAGE> 11
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.5 Certificate of Retirement of Shares of the Registrant filed
February 3, 1997
11 Statement Re Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended
December 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 (principal financial
and accounting officer)
Dated: February 14, 1997
10
<PAGE> 1
EXHIBIT 3.5
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 02/03/1997
971035359 - 0853632
CERTIFICATE OF RETIREMENT OF SHARES
OF
NABORS INDUSTRIES, INC.
WHEREAS, at December 9, 1993, the Corporation's Restated Certificate
of Incorporation provided authority for the Corporation to issue 35,937,500
shares of Class A Stock, par value $.10 per share. Pursuant to the
Corporation's 1988 Plan of Reorganization, all of the authorized shares of the
Class A Stock were issued in exchange for the Corporation's debt. Holders of
Class A Stock were entitled to a liquidation preference and special voting
rights. Shares of Class A Stock could be converted into a like number of
shares of Common Stock, par value $.10 per share, at any time, and effective
January 1, 1992, all Class A Stock that had not previously been exchanged,
automatically became Common Stock. Shares of Class A Stock cannot be reissued
as Class A Stock, and were retired by the Board of Directors of the Corporation
voting at a meeting held December 9, 1993.
WHEREAS, at the December 9, 1993 meeting, the Board also voted to
reduce the capital of the Corporation to reflect the retirement of the
35,937,500 shares of Class A Stock, and, subject to the approval of the
stockholders of the Corporation, to increase the authorized and outstanding
shares of Capital Stock to 208,000,000 shares, of which 200,000,000 shares were
designated Common Stock and 8,000,000 shares were designated Class B Stock.
The stockholders of the Corporation subsequently approved the increase in the
authorized shares at the annual meeting held March 1, 1994, and a Certificate
of Amendment to the Restated Certificate of Incorporation of the Corporation
was filed with the Secretary of State of the State of Delaware on March 11,
1994. However, no certificate of retirement was ever filed to reflect the
prior retirement of the Class A Stock.
WHEREAS, pursuant to Section 243 of the Delaware General Corporation
Law, the Corporation desires to file the necessary certificate to retire the
shares of Class A Stock and to eliminate from its Restated Certificate of
Incorporation all reference to the Class A Stock, but, because there has been a
change of its share capital subsequent to approval of the retirement of the
Class A Stock, but before the filing of this Certificate of Retirement of
Shares, that gave effect to the reduction in capital occasioned by the
retirement of the Class A Stock, the Corporation does not desire to reduce its
capital hereby.
NOW, THEREFORE, pursuant to Section 243 of the General Corporation Law
of the State of Delaware, Nabors Industries, Inc., a Delaware corporation (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That the Corporation, by resolutions of its Board of
Directors adopted at a meeting held December 9, 1993, retired 35,937,500
shares of Class A Stock, being all of the authorized shares of Class A Stock of
the Corporation that were at that time issued but not outstanding.
SECOND: That the Restated Certificate of Incorporation of the
Corporation prohibits the reissuance of such shares as Class A Stock.
THIRD: That no reduction in the capital of the Corporation
shall be effected hereby, such reduction having previously been effected
pursuant to a Certificate of Amendment to the Restated Certificate of
Incorporation of the Corporation filed March 11, 1994.
<PAGE> 2
FOURTH: That, upon effectiveness, this Certificate of
Retirement of Shares shall have the effect of eliminating from the Restated
Certificate of Incorporation all reference to the Class A Stock.
IN WITNESS WHEREOF,the Corporation has caused this certificate to be
signed by Anthony G. Petrello, its President, this 24th day of January, 1997.
/s/ Anthony G. Petrello
------------------------------------
Anthony G. Petrello, President
2
<PAGE> 1
EXHIBIT 11
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months ended December 31,
1996 1995
-------- --------
<S> <C> <C>
Primary:
Average shares outstanding 89,715 84,364
Net effect of dilutive stock options-based
on the treasury stock method using
average market price 6,775 6,093
-------- --------
Total 96,490 90,457
-------- --------
Net income $ 20,564 $ 15,262
-------- --------
Per share amount $ .21 $ .17
-------- --------
Fully Diluted:
Average shares outstanding 89,715 84,364
Net effect of dilutive stock options-based
on the treasury stock method using
quarter-end market price, if higher than
average market price 7,399 7,307
Assumed conversion of 5% convertible notes 9,517 -- (1)
-------- --------
Total 106,631 91,671
-------- --------
Net income $ 20,564 $ 15,262
Add 5% convertble note interest, net
of federal income tax effect 1,402 -- (1)
-------- --------
Total $ 21,966 $ 15,262
-------- --------
Per share amount $ .21 $ .17
-------- --------
</TABLE>
(1) The convertible securities are not included in the fully diluted earnings
per share calculation for the three months ended December 31, 1995 because
they had not been issued at that time.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 86,681
<SECURITIES> 5,429
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0
0
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<EPS-PRIMARY> .21
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</TABLE>
