<PAGE>
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 JUNE 30, 1997
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________________ to _________________
Commission File Number 0-22078
DUAL HOLDING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 51-0327704
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2700 Fountain Place
1445 Ross Avenue, Dallas Texas 75202 - 2792
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 922-1500
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 twelve 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 [ ]
There were 1,000 shares of Common Stock, $.10 par value, of the registrant
outstanding as of July 31, 1997.<PAGE>
DUAL HOLDING COMPANY
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1997
PAGE
------
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheet
June 30, 1997 and December 31, 1996 3
Consolidated Statement of Operations
Three months ended June 30, 1997, April 1, 1996 to
June 12, 1996 and June 13, 1996 to June 30, 1996 4
Consolidated Statement of Operations
Six months ended June 30, 1997, January 1, 1996 to
June 12, 1996 and June 13, 1996 to June 30, 1996 5
Consolidated Statement of Cash Flows
Six months ended June 30, 1997, January 1, 1996 to
June 12, 1996 and June 13, 1996 to June 30, 1996 6
Notes to Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURES 14
Separate financial statements of the subsidiaries of Dual Holding Company
(the "Company") that guarantee the Company's Senior Subordinated Notes due
2004 (the "Notes") are not included herein. Such subsidiary guarantors are
jointly and severally liable with respect to the Company's obligations
pursuant to such Notes, and the aggregate total assets, equity and net
income (loss) of such subsidiary guarantors are substantially equivalent to
the total assets, equity and net income (loss) of the Company on a
consolidated basis. The total assets, equity and net income (loss) of
subsidiaries of the Company not guaranteeing the Notes on a combined basis
are not significant compared to the respective amounts reported in the
Consolidated Financial Statements of the Company and its subsidiaries.<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
DUAL HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In thousands, except for share amounts)
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
------
CURRENT ASSETS
Cash and cash equivalents. . . . . . . . . . $ 17,057 $ 9,397
Accounts and notes receivable, net . . . . . 12,249 11,713
Prepaid expenses and other . . . . . . . . . 6,573 10,009
-------- --------
Total current assets . . . . . . . . . 35,879 31,119
-------- --------
PROPERTY AND EQUIPMENT, AT COST. . . . . . . . 320,879 285,536
Less accumulated depreciation. . . . . . . . 23,078 12,053
-------- --------
Property and equipment, net. . . . . . 297,801 273,483
-------- --------
OTHER ASSETS, NET. . . . . . . . . . . . . . . 112,938 99,655
-------- --------
$446,618 $404,257
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable . . . . . . . . . . . . . . $ 11,812 $ 1,267
Accrued liabilities. . . . . . . . . . . . . 19,084 15,633
-------- --------
Total current liabilities. . . . . . . 30,896 16,900
-------- --------
LONG-TERM DEBT . . . . . . . . . . . . . . . . 149,074 134,387
DEFERRED INCOME TAXES. . . . . . . . . . . . . 21,162 19,485
OTHER LIABILITIES. . . . . . . . . . . . . . . 16,873 10,990
STOCKHOLDER'S EQUITY
Common stock, $.10 par value, 10,000
shares authorized and 1,000 shares
issued . . . . . . . . . . . . . . . . . . - -
Additional paid-in capital . . . . . . . . . 218,431 218,431<PAGE>
Retained earnings. . . . . . . . . . . . . . 10,182 4,064
-------- --------
Total stockholder's equity . . . . . . 228,613 222,495
-------- --------
$446,618 $404,257
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3<PAGE>
<TABLE>
DUAL HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<CAPTION>
SUCCESSOR | PREDECESSOR
------------------------ | -----------
THREE MONTHS JUNE 13, | APRIL 1,
ENDED 1996 TO | 1996 TO
JUNE 30, JUNE 30, | JUNE 12,
1997 1996 | 1996
------------ -------- | -----------
<S> <C> <C> | <C>
OPERATING REVENUES . . . . . . . . . $ 21,877 $ 3,634 | $ 24,081
|
OPERATING EXPENSES |
Operating costs. . . . . . . . . . 8,041 1,534 | 18,757
Depreciation and amortization. . . 6,989 1,032 | 3,955
Change in control. . . . . . . . . - - | 22,005
General and administrative . . . . 1,200 168 | 1,717
Gain on sale of jackup rig . . . . (9,150) - | -
---------- ------- | --------
7,080 2,734 | 46,434
---------- ------- | --------
|
OPERATING INCOME (LOSS). . . . . . . 14,797 900 | (22,353)
|
OTHER INCOME (EXPENSE) |
Interest income. . . . . . . . . . 238 24 | 319
Interest expense . . . . . . . . . (2,952) (652) | (2,850)
Other, net. . . . . . . . . . . . 10 (8) | 176
---------- ------- | --------
(2,704) (636) | (2,355)
---------- ------- | --------
|
INCOME (LOSS) BEFORE INCOME TAXES. . 12,093 264 | (24,708)
|
PROVISION FOR INCOME TAXES . . . . . 1,530 83 | 598
---------- ------- | --------
|
NET INCOME (LOSS). . . . . . . . . . $ 10,563 $ 181 | $(25,306)
========== ======= | ========
|
EARNINGS (LOSS) PER SHARE. . . . . . $10,563.00 $181.00 | $ (1.59)
========== ======= | ========
|
WEIGHTED AVERAGE SHARES OUTSTANDING. 1 1 | 15,866
========== ======= | ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4<PAGE>
<TABLE>
DUAL HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<CAPTION>
SUCCESSOR |PREDECESSOR
------------------------ |-----------
SIX MONTHS JUNE 13, | JANUARY 1,
ENDED 1996 TO | 1996 TO
JUNE 30, JUNE 30, | JUNE 12,
1997 1996 | 1996
---------- --------- |-----------
<S> <C> <C> | <C>
|
OPERATING REVENUES . . . . . . . . . . $ 39,751 $ 3,634 | $ 53,542
|
OPERATING EXPENSES |
Operating Costs. . . . . . . . . . . 19,614 1,534 | 37,346
Depreciation and amortization. . . . 13,347 1,032 | 8,768
Change in control. . . . . . . . . . - - | 22,005
General and administrative . . . . . 2,400 168 | 3,757
Gain on sale of jackup rig . . . . . (9,150) - | -
--------- ------- | --------
26,211 2,734 | 71,876
--------- ------- | --------
|
OPERATING INCOME (LOSS). . . . . . . . 13,540 900 | (18,334)
|
OTHER INCOME (EXPENSE) |
Interest income . . . . . . . . . . 561 24 | 846
Interest expense . . . . . . . . . . (5,899) (652) | (6,484)
Other, net . . . . . . . . . . . . . (1) (8) | 268
--------- ------- | --------
(5,339) (636) | (5,370)
--------- ------- | --------
|
INCOME (LOSS) BEFORE INCOME TAXES. . . 8,201 264 | (23,704)
|
PROVISION FOR INCOME TAXES . . . . . . 2,083 83 | 628
--------- ------- | --------
|
NET INCOME (LOSS). . . . . . . . . . . $ 6,118 $ 181 | $(24,332)
========== ======= | ========
|
EARNINGS (LOSS) PER SHARE. . . . . . . $6,118.00 $181.00 | $ (1.54)
========= ======= | ========
|
WEIGHTED AVERAGE SHARES OUTSTANDING. . 1 1 | 15,810
========= ======= | ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5<PAGE>
<TABLE>
DUAL HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<CAPTION>
SUCCESSOR | PREDECESSOR
---------------------- | -----------
SIX MONTHS JUNE 13 | JANUARY 1,
ENDED 1996 TO | 1996 TO
JUNE 30, JUNE 30, | JUNE 12,
1997 1996 | 1996
---------- --------- | -----------
<S> <C> <C> | <C>
OPERATING ACTIVITIES |
Net income (loss) . . . . . . . . . . . $ 6,118 $ 181 | $(24,332)
Adjustments to reconcile net income |
(loss) to net cash provided by |
operating activities: |
Depreciation and amortization . . . 13,347 1,032 | 8,768
Deferred income taxes . . . . . . . 104 - | (426)
Gain on disposition of assets . . . . (9,150) - | -
Provision for cashless exercise of |
stock options . . . . . . . . . . . - - | 9,667
Other . . . . . . . . . . . . . . . . (314) (13) | (1,912)
Changes in assets and liabilities: |
Accounts receivable. . . . . . . . (541) 3,351 | (3,985)
Prepaid expenses and other . . . . 3,424 216 | 5,584
Accounts payable . . . . . . . . . 10,546 52 | (4,777)
Accrued liabilities. . . . . . . . (4,400) (1,074) | 11,770
-------- -------- | --------
Net cash provided by operating |
activities . . . . . . . . . . . 19,134 3,745 | 357
-------- -------- | --------
|
INVESTING ACTIVITIES |
Additions to property and equipment . . (48,293) (7) | (23,149)
Proceeds from sale of assets. . . . . . 20,994 - | 208
Other . . . . . . . . . . . . . . . . . - - | (1,688)
-------- -------- | --------
Net cash used by investing |
activities. . . . . . . . . . . . . (27,299) (7) | (24,629)
-------- -------- | --------
FINANCING ACTIVITIES |
Proceeds from long-term borrowings. . . 15,000 45,000 | -
Reduction of long-term borrowings . . . (250) (41,754) | (2,586)
Cash (pledged) received for letters of |
credit. . . . . . . . . . . . . . . . 1,075 - | (7,443)
-------- -------- | --------
Net cash provided (used) by financing |
activities. . . . . . . . . . . . . 15,825 3,246 | (10,029)
-------- -------- | --------
INCREASE (DECREASE) IN CASH AND CASH |
EQUIVALENTS . . . . . . . . . . . . . . 7,660 6,984 | (34,301)
|
CASH AND CASH EQUIVALENTS, BEGINNING |
OF PERIOD . . . . . . . . . . . . . . . 9,397 8,529 | 42,830
-------- -------- | --------<PAGE>
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 17,057 $ 15,513 | $ 8,529
======== ======== | ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6<PAGE>
DUAL HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Unaudited Financial Statements
The consolidated financial statements included herein have been prepared by
Dual Holding Company (the "Company"), without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission and in accordance
with generally accepted accounting principles and, in the opinion of
management, reflect all adjustments (which consist of normal recurring
adjustments) which are necessary for a fair presentation of the financial
position, results of operations, and of cash flows for the interim periods
presented.
In addition, the consolidated financial statements included herein present
the results of the Company during the period prior to its acquisition
("Predecessor" entity) by ENSCO International Incorporated ("ENSCO") as
well as the period subsequent to its acquisition ("Successor" entity).
(See Note 2 - "Merger"). The financial statements of the Predecessor and
Successor are not comparable in certain respects because of change in
control expenses resulting from the acquisition by ENSCO and differences
between the cost bases of the assets held by the Predecessor compared to
that of the Successor, as well as the effect on the Successor's operations
for adjustments to depreciation, amortization, interest income, interest
expense and income taxes.
It is recommended that these financial statements be read in conjunction
with the Company's consolidated financial statements and notes thereto for
the year ended December 31, 1996 included in the Company's Annual Report on
Form 10-K.
Note 2 - Merger
On June 12, 1996, the Company was acquired by ENSCO in a purchase
acquisition (the "Merger"). The Merger was approved on that date by the
stockholders of the Company who received 0.625 shares of ENSCO common stock
for each share of the Company's common stock. The Company's stockholders
of record as of June 12, 1996 received, in the aggregate, approximately
10.1 million shares of ENSCO common stock in connection with the
acquisition, resulting in an acquisition price of approximately $218.4
million.
The Company used the purchase method to record the Merger. The excess of
purchase price over net assets acquired approximated $115.3 million and is
being amortized over 40 years.
7<PAGE>
The following unaudited pro forma information shows the consolidated
results of operations for the six months ended June 30, 1996 based upon
adjustments to the historical financial statements of the Company to give
effect to the Merger as if such Merger had occurred on January 1, 1996 (in
thousands, except per share data):
1996
--------
Operating revenues $57,176
Operating income 3,975
Net loss (1,317)
Net loss per share (1,317)
The pro forma consolidated results of operations are not necessarily
indicative of the actual results that would have occurred had the
acquisition occurred on January 1, 1996, or of results that may occur in
the future.
Note 3 - Debt
The Company has a revolving credit facility which is structured as a "Sub-
Facility" of ENSCO's revolving credit facility with a group of
international banks (the "Facility"). On February 27, 1997, ENSCO amended
and restated its revolving credit facility which increased the availability
under the Facility from $150.0 million to $200.0 million and reduced the
interest rate margin and commitment fee. Also, the availability of the
Company's Sub-Facility was increased to $50.0 million from $35.0 million.
The Facility provides the option to increase or decrease the availability
under the Sub-Facility by transferring between sub-facilities available
amounts up to $15.0 million at the discretion of ENSCO and the Company.
The interest rate on the Facility continues to be tied to the London
Interbank Offered Rate and the maturity date remains October 2001. In
April 1997, the Company borrowed an additional $15.0 million under the Sub-
Facility, increasing the Company's total borrowings under the Sub-Facility
to $50.0 million.
Note 4 - Related Party Transactions
At June 30, 1997, the Company's four jackup rigs and seven platform rigs in
the Gulf of Mexico were under bareboat charter to a wholly owned subsidiary
of ENSCO to achieve certain operating and marketing efficiencies. The
terms of the bareboat charter agreements with ENSCO provide for fixed daily
rates to be paid to the Company, which the Company believes are reasonable
and representative of the environment in which the rigs operate. Each
respective bareboat charter rate is increased for any capital additions
made by the Company for a chartered rig and the rate is reduced to 50% of
the normal rate if a rig is idle more than 30 consecutive days. The term
of the bareboat charter agreements is one year, with automatic one year
extensions, unless either party gives at least one month's prior notice of
termination. Revenues from the charter agreements were approximately $7.0
million and $10.8 million, respectively, for the three and six months ended
June 30, 1997.
8<PAGE>
The Company has a Master Services Agreement with ENSCO. Under the terms of
the Master Services Agreement, ENSCO provides certain shorebase and
corporate support services for the Company's domestic and foreign
operations. The Company pays ENSCO a monthly fee of $400,000 for these
services, which the Company believes is reasonable for the services
provided.
In May 1997, ENSCO acquired a third party's 51% interest in a jackup rig
that was 49% owned by the Company. In June 1997, the Company sold its 49%
interest in the rig to ENSCO for $20.8 million. The sales price of the rig
was based on a fair market appraisal by a third party and is comparable in
value to the 51% interest in the rig purchased by ENSCO in May 1997. The
Company recorded a gain of approximately $9.2 million on the sale.
At June 30, 1997, the Company had a net liability due to ENSCO of
approximately $10.7 million which is recorded in Accounts Payable.
9<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Dual Holding Company (the "Company") contracts its offshore drilling
equipment for use in the Gulf of Mexico and Asia. Worldwide offshore
drilling activity remained strong in the first six months of 1997 with
current demand absorbing substantially all offshore drilling rigs that are
in working condition and being actively marketed in the major offshore
drilling markets throughout the world.
On June 12, 1996, the Company was acquired by ENSCO International
Incorporated ("ENSCO") in a purchase acquisition. The following
comparisons with the prior year periods ended June 30, 1996 present the
results of the Company during the period prior to its acquisition by ENSCO
("Predecessor" entity) as well as the period subsequent to its acquisition
("Successor" entity). The financial statements of the Predecessor and
Successor are not comparable in certain respects because of change in
control expenses resulting from the Merger and differences between the cost
bases of the assets held by the Predecessor compared to that of the
Successor, as well as the effect on the Successor's operations for
adjustments to depreciation and amortization, interest income, interest
expense and income taxes.
RESULTS OF OPERATIONS
The Company's operating margin (defined as revenues less operating
expenses, exclusive of depreciation and amortization, change in control
expenses, general and administrative expenses and gain on sale of jackup
rig) increased approximately $6.4 million, or 86%, and $1.8 million, or
10%, for the three and six month periods ended June 30, 1997, respectively,
as compared to the comparable prior year periods. Operating margins
increased in the current year periods due primarily to higher day rates
from improved market conditions and modifications and enhancements to the
Company's drilling rigs, offset, in part, by a decrease in utilization from
the prior year periods due to shipyard downtime. During the first six
months of 1997, five of the Company's nine jackup rigs were in the shipyard
for a portion of the period undergoing modifications and enhancements.
Three of these jackup rigs returned to work in the mid-to-late first
quarter and the other two returned to work in the second quarter. In the
first quarter of 1997, the Company transferred one jackup rig from the Gulf
of Mexico to Asia and on June 30, 1997, sold its 49% interest in another
jackup rig to ENSCO. The Company now has four jackup rigs in the Gulf of
Mexico, two offshore India, two offshore Qatar and one offshore Malaysia.
Depreciation and amortization expense increased by approximately $2.0
million and $3.5 million for the three and six month periods ended June 30,
1997, respectively, as compared to the comparable prior year periods. The
increases were due primarily to the increase in drilling rig values and
goodwill recorded in the Merger and subsequent capital expenditures.
In June 1997, the Company sold its 49% interest in a jackup rig to ENSCO
for $20.8 million, resulting in a gain of approximately $9.2 million on the
sale.
10<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow and Capital Expenditures
- ----------------------------------
The Company's cash flow provided by operations and used for capital
expenditures for the six months ended June 30, 1997 and 1996 were as
follows (in thousands):
1997 1996
-------- --------
Cash provided by operations $19,134 $ 4,102
======= =======
Capital expenditures $48,293 $23,156
======= =======
Cash flow from operations increased by $15.0 million for the six months
ended June 30, 1997 as compared with the prior year period. The increase
in cash flow from operations is primarily a result of the net change in
various working capital accounts and the increase in operating margin for
the six months ended June 30, 1997.
Financing and Capital Resources
- -------------------------------
The Company has a revolving credit facility which is structured as a "Sub-
Facility" of ENSCO's revolving credit facility with a group of
international banks (the "Facility"). On February 27, 1997, ENSCO amended
and restated its revolving credit facility increasing the availability
under the Facility from $150.0 million to $200.0 million and reducing the
interest rate margin and commitment fee. Also, the availability of the
Company's Sub-Facility was increased to $50.0 million from $35.0 million.
The Facility provides the option to increase or decrease the availability
under the Sub-Facility by transferring between sub-facilities available
amounts up to $15.0 million at the discretion of ENSCO and the Company.
The interest rate on the Facility continues to be tied to the London
Interbank Offered Rate and the maturity date remains October 2001. In
April 1997, the Company borrowed an additional $15.0 million under the Sub-
Facility, increasing the Company's total borrowings under the Sub-Facility
to $50.0 million.
The Company's liquidity position at June 30, 1997 and December 31, 1996 is
summarized in the table below (in thousands, except ratios):
June 30, December 31,
1997 1996
---------- ------------
Cash $17,057 $ 9,397
Working capital 4,983 14,219
Current ratio 1.2 1.8
11<PAGE>
Based on current energy industry conditions, management believes that cash
flow from operations, the Company's existing credit facility and the
Company's working capital should be sufficient to fund the Company's short
and long-term liquidity needs.
OTHER MATTERS
New Accounting Pronouncement
- ----------------------------
In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No.128 "Earnings per
Share" (the "Statement") which establishes new standards for computing and
presenting earnings per share. The new Statement is intended to simplify
the standard for computing earnings per share. Under the new Statement,
the Company will no longer be required to present earnings per share
information because it is a wholly owned subsidiary of ENSCO. The
Statement is effective for financial statements issued for periods ending
after December 15, 1997, and earlier adoption is not permitted.
Forward-Looking Statements
- --------------------------
This report contains forward-looking statements based on current
expectations that involve a number of risks and uncertainties that could
cause actual results to differ materially from the results discussed in the
forward-looking statements. Generally, forward-looking statements include
words or phrases such as "management anticipates", "the Company believes",
"the Company anticipates" and words and phrases of similar impact. The
forward-looking statements are made pursuant to safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. The factors that
could cause actual results to differ materially from the forward-looking
statements include, but are not limited to: (i) industry conditions and
competition, (ii) the cyclical nature of the industry, (iii) worldwide
expenditures for oil and gas drilling, (iv) operational risks and
insurance, (v) risks associated with operating in foreign jurisdictions,
(vi) environmental liabilities which may arise in the future which are not
covered by insurance or indemnity, (vii) the impact of current and future
laws and government regulations, as well as repeal or modification of same,
affecting the oil and gas industry and the Company's operations in
particular, and (viii) the risks described from time to time in the
Company's reports to the Securities and Exchange Commission, including the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.
Demand for the Company's services is significantly affected by worldwide
expenditures for oil and gas drilling. Expenditures for oil and gas
drilling activity fluctuate based upon many factors including world
economic conditions, the legislative environment in the U.S. and other
major countries, production levels and other activities of OPEC and other
oil and gas producers and the impact that those and other events have on
the current and expected future pricing of oil and natural gas.
12<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits Filed with this Report
EXHIBIT NO.
-----------
27.1 Financial Data Schedule. (Exhibit 27.1 is being
submitted as an exhibit only in the electronic
format of this Quarterly Report on Form 10-Q being
submitted to the Securities and Exchange
Commission.)
(b) Reports on Form 8-K
None.
13<PAGE>
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.
Dual Holding Company
Date: July 31, 1997 /s/ C. CHRISTOPHER GAUT
--------------- -------------------------------
C. Christopher Gaut
President
/s/ H. E. MALONE
-------------------------------
H. E. Malone
Secretary and Chief Accounting
Officer
14<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
EXHIBIT NO. 27.1
<LEGEND>
This schedule contains summary financial information extracted from the
June 30, 1997 financial statements and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> $ 17,057
<SECURITIES> 0
<RECEIVABLES> 12,577
<ALLOWANCES> 328
<INVENTORY> 0
<CURRENT-ASSETS> 35,879
<PP&E> 320,879
<DEPRECIATION> 23,078
<TOTAL-ASSETS> 446,618
<CURRENT-LIABILITIES> 30,896
<BONDS> 149,074
<COMMON> 0
0
0
<OTHER-SE> 228,613
<TOTAL-LIABILITY-AND-EQUITY> 446,618
<SALES> 0
<TOTAL-REVENUES> 39,751
<CGS> 0
<TOTAL-COSTS> 19,614
<OTHER-EXPENSES> 6,597
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,899
<INCOME-PRETAX> 8,201
<INCOME-TAX> 2,083
<INCOME-CONTINUING> 6,118
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,118
<EPS-PRIMARY> 6,118.00
<EPS-DILUTED> 0.00<PAGE>
</TABLE>
