Page No.
PART I FINANCIAL INFORMATION
	Item 1.			Financial Statements (Unaudited)			2
				Consolidated Balance Sheets as of March 31, 2006 and December 31, 2005			2
				Consolidated Statements of Income for the Three Months Ended March 31, 2006 and 2005			3
				Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2006 and 2005			4
				Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2006 and 2005			5
				Notes to Consolidated Financial Statements			7
				Report of Independent Registered Public Accounting Firm			26
	Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			27
	Item 3.			Quantitative and Qualitative Disclosures About Market Risk			39
	Item 4.			Controls and Procedures			40
PART II OTHER INFORMATION
	Item 1.			Legal Proceedings			40
	Item 1A.			Risk Factors			41
	Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities			41
	Item 4.			Submission of Matters to a Vote of Security Holders			41
	Item 6.			Exhibits			42
Signatures							43
Awareness Letter of Independent Accountants
Certification of Chairman and CEO pursuant to Section 302
Certification of Vice President and CFO pursuant to Section 302
Certification of Chairman and CEO, Vice President and CFO pursuant to Section 906

 

PART I FINANCIAL INFORMATION

 

Item 1.	Financial Statements

 

CONSOLIDATED BALANCE SHEETS

		March 31,				December 31,
(In thousands, except per share amounts)		2006				2005
ASSETS
Current assets:
Cash and cash equivalents		$	293,302			$	565,001
Short-term investments			181,554				858,524
Accounts receivable, net			949,524				822,104
Inventory			58,238				51,292
Deferred income taxes			201,230				199,196
Other current assets			72,222				121,191
Total current assets			1,756,070				2,617,308
Long-term investments			250,413				222,802
Property, plant and equipment, net			4,156,554				3,886,924
Goodwill, net			359,955				341,939
Other long-term assets			167,547				161,434
Total assets		$	6,690,539			$	7,230,407
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt		$	—			$	767,912
Trade accounts payable			390,029				336,589
Accrued liabilities			227,717				224,336
Income taxes payable			71,219				23,619
Total current liabilities			688,965				1,352,456
Long-term debt			1,252,384				1,251,751
Other long-term liabilities			158,220				151,415
Deferred income taxes			777,820				716,645
Total liabilities			2,877,389				3,472,267
Commitments and contingencies (Note 8)
Shareholders’ equity:
Common shares, par value $.001 per share:
Authorized common shares 800,000; issued and outstanding 310,047 and 315,393, respectively			309				315
Capital in excess of par value			1,560,945				1,590,968
Unearned compensation			—				(15,649	)
Accumulated other comprehensive income			195,833				192,980
Retained earnings			2,056,063				1,989,526
Total shareholders’ equity			3,813,150				3,758,140
Total liabilities and shareholders’ equity		$	6,690,539			$	7,230,407

2

 

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)		Three Months Ended March 31,
		2006				2005
Revenues and other income:
Operating revenues		$	1,163,926			$	783,728
Earnings from unconsolidated affiliates			4,399				2,003
Investment income			13,870				11,788
Total revenues and other income			1,182,195				797,519
Costs and other deductions:
Direct costs			614,617				474,626
General and administrative expenses			88,797				58,641
Depreciation and amortization			81,389				68,188
Depletion			13,017				12,353
Interest expense			8,055				10,737
Losses on sales of long-lived assets, impairment charges and other expense (income), net			4,029				3,871
Total costs and other deductions			809,904				628,416
Income before income taxes			372,291				169,103
Income tax expense:
Current			61,425				12,215
Deferred			54,103				29,474
Total income tax expense			115,528				41,689
Net income		$	256,763			$	127,414
Earnings per share:
Basic		$	.82			$	.42
Diluted		$	.79			$	.40
Weighted-average number of common shares outstanding:
Basic			312,990				304,330
Diluted			324,536				317,554

3

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

		Three Months Ended March 31,
(In thousands)		2006				2005
Cash flows from operating activities:
Net income		$	256,763			$	127,414
Adjustments to net income:
Depreciation and amortization			81,389				68,188
Depletion			13,017				12,353
Deferred income tax expense			54,103				29,474
Deferred financing costs amortization			867				1,221
Pension liability amortization			105				120
Discount amortization on long-term debt			2,409				5,134
Amortization of loss on hedges			139				38
Losses on long-lived assets, net			3,173				1,888
Gains on investments, net			(5,700	)			(1,448	)
Gains on derivative instruments			(959	)			(928	)
Stock based compensation			7,700				483
Tax benefit related to the exercise of stock options			(1,815	)			—
Foreign currency transaction (gains) losses			(219	)			271
Equity in earnings from unconsolidated affiliates, net of dividends			(4,399	)			(503	)
Increase (decrease) from changes in:
Accounts receivable			(121,111	)			(106,471	)
Inventory			(7,016	)			(3,140	)
Other current assets			13,272				3,558
Other long-term assets			7,617				(227	)
Trade accounts payable and accrued liabilities			40,520				14,040
Income taxes payable			48,002				9,314
Other long-term liabilities			8,109				2,395
Net cash provided by operating activities			395,966				163,174
Cash flows from investing activities:
Purchases of investments			(38,769	)			(179,700	)
Sales and maturities of investments			701,158				120,740
Cash paid for acquisitions of businesses, net			(13,465	)			(6,775	)
Capital expenditures			(346,211	)			(173,780	)
Proceeds from sales of assets and insurance claims			2,416				3,203
Net cash provided by (used for) investing activities			305,129				(236,312	)
Cash flows from financing activities:
Increase in short-term borrowings			—				1,684
Increase in cash overdrafts			9,898				13,376
Reduction of long-term debt			(769,789	)			—
Proceeds from issuance of common shares			8,263				136,938
Repurchase of common shares			(222,384	)			—
Tax benefit related to the exercise of stock options			1,815				—
Net cash (used for) provided by financing activities			(972,197	)			151,998
Effect of exchange rate changes on cash and cash equivalents			(597	)			(644	)
Net (decrease) increase in cash and cash equivalents			(271,699	)			78,216
Cash and cash equivalents, beginning of period			565,001				384,709
Cash and cash equivalents, end of period		$	293,302			$	462,925

4

 

CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS’ EQUITY

																		Accumulated Other Comprehensive Income (Loss)
																		Unrealized
		Common																Gains				Minimum				Unrealized
		Shares								Capital in								(Losses) on				Pension				Loss on				Cumulative								Total
						Par				Excess of				Unearned				Marketable				Liability				Cash Flow				Translation				Retained				Shareholders’
(In thousands)		Shares				Value				Par Value				Compensation				Securities				Adjustment				Hedges				Adjustment				Earnings				Equity
Balances, December 31, 2005			315,393			$	315			$	1,590,968			$	(15,649	)		$	18,865			$	(3,002	)		$	(992	)		$	178,109			$	1,989,526			$	3,758,140
Comprehensive Income:
Net income																																			256,763				256,763
Translation adjustment																															(4,093	)							(4,093	)
Unrealized gains on marketable securities, net of income taxes of $406																			6,042																				6,042
Less: reclassification adjustment for (gains) losses included in net income, net of income tax benefit of $11																			800																				800
Pension liability amortization, net of income taxes of $39																							66																66
Amortization of loss on cash flow hedges																											38												38
Total comprehensive income			—				—				—				—				6,842				66				38				(4,093	)			256,763				259,616
Adoption of SFAS 123-R											(15,649	)			15,649																								—
Issuance of common shares for stock options exercised			405								8,263																												8,263
Nabors Exchangeco shares exchanged			29																																				—
Repurchase of common shares			(6,400	)			(6	)			(32,152	)																							(190,226	)			(222,384	)
Tax effect of stock option deductions											1,815																												1,815
Grants of restricted stock awards			640																																				—
Forfeitures of restricted stock awards			(20	)																																			—
Stock based compensation											7,700																												7,700
Subtotal			(5,346	)			(6	)			(30,023	)			15,649				—				—				—				—				(190,226	)			(204,606	)
Balances, March 31, 2006			310,047			$	309			$	1,560,945			$	—			$	25,707			$	(2,936	)		$	(954	)		$	174,016			$	2,056,063			$	3,813,150

5

																		Accumulated Other Comprehensive Income (Loss)
																		Unrealized
		Common																Gains				Minimum				Unrealized
		Shares								Capital in								(Losses) on				Pension				Loss on				Cumulative								Total
						Par				Excess of				Unearned				Marketable				Liability				Cash Flow				Translation				Retained				Shareholders’
(In thousands)		Shares				Value				Par Value				Compensation				Securities				Adjustment				Hedges				Adjustment				Earnings				Equity
Balances, December 31, 2004			299,722			$	300			$	1,358,224			$	—			$	271			$	(2,419	)		$	(1,143	)		$	151,520			$	1,422,640			$	2,929,393
Comprehensive income:
Net income																																			127,414				127,414
Translation adjustment																															(4,573	)							(4,573	)
Unrealized gains on marketable securities, net of income taxes of $643																			6,778																				6,778
Less: reclassification adjustment for gains included in net income, net of income taxes of $23																			(2,281	)																			(2,281	)
Pension liability amortization, net of income taxes of $44																							76																76
Amortization of loss on cash flow hedges																											38												38
Total comprehensive income			—				—				—				—				4,497				76				38				(4,573	)			127,414				127,452
Issuance of common shares for stock options exercised			15,522				16				136,922																												136,938
Nabors Exchangeco shares exchanged			22																																				—
Tax effect of stock option deductions											24,165																												24,165
Grants of restricted stock awards											17,447				(17,447	)																							—
Amortization of unearned compensation															483																								483
Subtotal			15,544				16				178,534				(16,964	)			—				—				—				—				—				161,586
Balances, March 31, 2005			315,266			$	316			$	1,536,758			$	(16,964	)		$	4,768			$	(2,343	)		$	(1,105	)		$	146,947			$	1,550,054			$	3,218,431

6

Note 1	Nature of Operations

Note 2	Summary of Significant Accounting Policies

7

Note 3	Share-Based Compensation

8

		Three Months Ended
		March 31,
(In thousands, except per share amounts)		2005
Net income, as reported		$	127,414
Add: Stock-based compensation expense, relating to restricted stock awards, included in reported net income, net of related tax effects			304
Deduct: Total stock-based employee compensation expense determined under the fair value method for all awards, net of related tax effects			(9,077	)
Pro forma net income — basic		$	118,641
Add: Interest expense on assumed conversion of our zero coupon senior convertible/exchangeable debentures/notes, net of tax			—
Adjusted pro forma net income — diluted		$	118,641
Earnings per share:
Basic — as reported		$	.42
Basic — pro forma		$	.39
Diluted — as reported		$	.40
Diluted — pro forma		$	.37

9

										Weighted Average				Aggregate
						Weighted Average				Remaining				Intrinsic
Options		Shares				Exercise Price				Contractual Term				Value
(In thousands, except exercise price)
Options outstanding as of December 31, 2005			38,559			$	21.87
Granted			—				—
Exercised			(405	)			20.41
Forfeited			(79	)			23.79
Options outstanding as of March 31, 2006			38,075			$	21.88				5.72 years			$	529,789
Options exercisable as of March 31, 2006			34,897			$	21.84				5.54 years			$	486,713

						Weighted Average
Restricted Shares		Shares				Grant-Date Fair Value
(In thousands, except fair values)
Nonvested as of December 31, 2005			710			$	28.78
Granted			743				32.37
Vested			(140	)			28.71
Forfeited			(20	)			28.83
Nonvested as of March 31, 2006			1,293			$	30.85

10

Note 4	Acquisitions

Note 5	Debt

Note 6	Income Taxes

Note 7	Common Shares

Note 8	Commitments and Contingencies

11

12

would have been entitled to a payment of approximately $204 million, subject to a “true-up” equal to the amount of cash bonus he would have earned under the formula during the remaining term of the agreement, based upon actual results, but would not be less than approximately $204 million. Similarly, with respect to Mr. Petrello, had these provisions applied at March 31, 2006, Mr. Petrello would have been entitled to a payment of approximately $104 million, subject to a “true-up” equal to the amount of cash bonus he would have earned under the formula during the remaining term of the agreement, based upon actual results, but would not be less than approximately $104 million. These payment amounts are based on historical data and are not intended to be estimates of future payments required under the agreements. Depending upon future operating results, the true-up could result in the payment of amounts which are significantly higher. In addition, the affected individual is entitled to receive (a) any unvested restricted stock outstanding, which shall immediately and fully vest; (b) any unvested outstanding stock options, which shall immediately and fully vest; (c) any amounts earned, accrued or owing to the executive but not yet paid (including executive benefits, life insurance, disability benefits and reimbursement of expenses and perquisites), which shall be continued through the later of the expiration date or three years after the termination date; (d) continued participation in medical, dental and life insurance coverage until the executive receives equivalent benefits or coverage through a subsequent employer or until the death of the executive or his spouse, whichever is later; and (e) any other or additional benefits in accordance with applicable plans and programs of Nabors. For Mr. Isenberg, as of March 31, 2006, the value of unvested restricted stock was approximately $11.9 million and the value of in-the-money unvested stock options was approximately $8.1 million. For Mr. Petrello, as of March 31, 2006, the value of unvested restricted stock was approximately $5.7 million and the value of in-the-money unvested stock options was approximately $4.1 million. Estimates of the cash value of Nabors’ obligations to Messrs. Isenberg and Petrello under (c), (d) and (e) above are included in the payment amounts above.

 

The Board of Directors in March 2006 exercised its election to fix the expiration date of the employment agreements for Messrs. Isenberg and Petrello. Messrs. Isenberg and Petrello have informed the Board of Directors that they have reserved their rights under their employment agreements with respect to the notice setting the expiration dates of their employment agreements, including whether such notice could trigger an acceleration of certain payments pursuant to their employment agreements.

 

Termination in the event of a Change in Control.  In the event that Messrs. Isenberg’s or Petrello’s termination of employment is related to a Change in Control (as defined in their respective employment agreements), they would be entitled to receive a cash amount equal to the greater of (a) one dollar less than the amount that would constitute an “excess parachute payment” as defined in Section 280G of the Internal Revenue Code, or (b) the cash amount that would be due in the event of a termination without cause, as described above. If, by way of example, there was a change of control event that applied on March 31, 2006, then the payments to Messrs. Isenberg and Petrello would be approximately $204 million and $104 million, respectively. These payment amounts are based on historical data and are not intended to be estimates of future payments required under the agreements. Depending upon future operating results, the true-up could result in the payment of amounts which are significantly higher. In addition, they would receive (a) any unvested restricted stock outstanding, which shall immediately and fully vest; (b) any unvested outstanding stock options, which shall immediately and fully vest; (c) any amounts earned, accrued or owing to the executive but not yet paid (including executive benefits, life insurance, disability benefits and reimbursement of expenses and perquisites), which shall be continued through the later of the expiration date or three years after the termination date; (d) continued participation in medical, dental and life insurance coverage until the executive receives equivalent benefits or coverage through a subsequent employer or until the death of the executive or his spouse, whichever is later; and (e) any other or additional benefits in accordance with applicable plans and programs of Nabors. For Mr. Isenberg, as of March 31, 2006, the value of unvested restricted stock was approximately $11.9 million and the value of in-the-money unvested stock options was approximately $8.1 million. For Mr. Petrello, as of March 31, 2006, the value of unvested restricted stock was approximately $5.7 million and the value of in-the-money unvested stock options was approximately $4.1 million. The cash value of Nabors’ obligations to Messrs. Isenberg and Petrello under (c), (d) and (e) above are included in the payment amounts above. Also, they would receive additional stock options immediately exercisable for 5 years to acquire a number of shares of common stock equal to the highest number of options granted during any fiscal year in the previous three fiscal years, at an option exercise price equal to the average closing price during the 20 trading days prior to the event which resulted in the change of control. If, by way of example, there was a change of control event that applied at

March 31, 2006, Mr. Isenberg would have received 3,366,666 options valued at approximately $44 million and Mr. Petrello would have received 1,683,332 options valued at approximately $22 million, in each case based upon a Black Scholes analysis. Finally, in the event that an excise tax was applicable, they would receive a gross-up payment to make them whole with respect to any excise taxes imposed by Section 4999 of the Internal Revenue Code. With respect to the preceding sentence, by way of example, if there was a change of control event that applied on March 31, 2006, and assuming that the excise tax were applicable to the transaction, then the additional payments to Messrs. Isenberg and Petrello for the gross-up would be up to approximately $93 million and $50 million, respectively.

 

Other Obligations.  In addition to salary and bonus, each of Messrs. Isenberg and Petrello receive group life insurance at an amount at least equal to three times their respective base salaries; various split-dollar life insurance policies, reimbursement of expenses, various perquisites and a personal umbrella insurance policy in the amount of $5 million. Premiums payable under the split dollar life insurance policies were suspended as a result of the adoption of the Sarbanes — Oxley Act of 2002.

 

Contingencies

 

Self-Insurance Accruals

 

We are self-insured for certain losses relating to workers’ compensation, employers’ liability, general liability, automobile liability and property damage. Effective April 1, 2006, with our insurance renewal, certain changes have been made to our insurance coverage resulting in additional loss exposure. Such changes effective April 1, 2006 are as follows:

 

Domestic workers’ compensation program continues to be subject to a $1.0 million per occurrence deductible. Employers’ liability and Jones Act cases are subject to a $2.0 million deductible. Automobile liability continues at a $.5 million deductible. We are assuming an additional $3.0 million corridor deductible for domestic workers’ compensation claims. General liability claims continue to be subject to a $5.0 million deductible. However, as a result of insurance market conditions following hurricanes Katrina and Rita, we are now subject to higher deductibles for removal of wreck and debris and collision liability claims depending on the insured value of the individual rigs.

 

In addition, we are subject to a $1.0 million deductible for all land rigs except for those located in Alaska, and a $5.0 million deductible for all Alaska and offshore rigs. This applies to all kinds of risks of physical damage except for named windstorms in the U.S. Gulf of Mexico. The deductible for named windstorms in the U.S. Gulf of Mexico is $25.0 million. Also, the maximum coverage for named windstorms in the U.S. Gulf of Mexico is $50.0 million in this policy year.

 

Litigation

 

Nabors and its subsidiaries are defendants or otherwise involved in a number of lawsuits in the ordinary course of business. We estimate the range of our liability related to pending litigation when we believe the amount and range of loss can be estimated. We record our best estimate of a loss when the loss is considered probable. When a liability is probable and there is a range of estimated loss with no best estimate in the range, we record the minimum estimated liability related to the lawsuits or claims. As additional information becomes available, we assess the potential liability related to our pending litigation and claims and revise our estimates. Due to uncertainties related to the resolution of lawsuits and claims, the ultimate outcome may differ from our estimates. In the opinion of management and based on liability accruals provided, our ultimate exposure with respect to these pending lawsuits and claims is not expected to have a material adverse effect on our consolidated financial position or cash flows, although they could have a material adverse effect on our results of operations for a particular reporting period.

 

One such lawsuit involves wage and hour claims relating primarily to meal periods and travel time of current and former rig-based employees in our California well-servicing business. Those claims were heard by an arbitrator during the fourth quarter of 2005. On February 6, 2006, we received an interim judgment against us in the amount of $25.6 million (plus an undetermined amount of attorney’s fees and costs), which was accrued for in our consolidated statements of income for the year ended December 31, 2005.

 

Additionally, on December 22, 2005, we received a grand jury subpoena from the United States Attorney’s Office in Anchorage, Alaska, seeking documents and information relating to an alleged spill, discharge, overflow or

cleanup of drilling mud or sludge involving one of our rigs during March 2003. We are cooperating with the authorities in this matter.

 

Guarantees

 

We enter into various agreements and obligations providing financial or performance assurance to third parties. Certain of these agreements serve as guarantees, including standby letters of credit issued on behalf of insurance carriers in conjunction with our workers’ compensation insurance program and other financial surety instruments such as bonds. We have also guaranteed payment of contingent consideration in conjunction with a minor acquisition completed during the first quarter of 2005, which is based on future operating results of that business. In addition, we have provided indemnifications to certain third parties which serve as guarantees. These guarantees include indemnification provided by Nabors to our stock transfer agent and our insurance carriers. We are not able to estimate the potential future maximum payments that might be due under our indemnification guarantees.

 

Management believes the likelihood that we would be required to perform or otherwise incur any material losses associated with any of these guarantees is remote. The following table summarizes the total maximum amount of financial and performance guarantees issued by Nabors:

 

 

 

A reconciliation of the numerators and denominators of the basic and diluted earnings per share computations is as follows:

 

 

 

For all periods presented, the computation of diluted earnings per share excludes outstanding stock options and warrants with exercise prices greater than the average market price of Nabors’ common shares, because the inclusion of such options and warrants would be anti-dilutive. The number of options and warrants that were excluded from diluted earnings per share that would potentially dilute earnings per share in the future were 1,000,750 shares during the three months ended March 31, 2006 and 1,284,502 shares during the three months ended March 31, 2005. In any period during which the average market price of Nabors’ common shares exceeds the exercise prices of these stock options and warrants, such stock options and warrants will be included in our diluted earnings per share computation using the treasury stock method of accounting. Restricted stock will similarly be included in our diluted earnings per share computation using the treasury stock method of accounting in any period where the amount of restricted stock to be issued in future periods exceeds the number of shares assumed repurchased in those periods.

 

 

Accrued liabilities include the following:

 

 

 

Our cash and cash equivalents, short-term and long-term investments consist of the following:

 

 

As of March 31, 2006 and December 31, 2005, our short-term investments consist entirely of investments in available-for-sale marketable debt and equity securities while our long-term investments consist entirely of investments in non-marketable securities.

 

 

The following tables set forth certain financial information with respect to our reportable segments:

 

 

 

 

 

 

 

Nabors has fully and unconditionally guaranteed all of the issued public debt securities of Nabors Delaware, and Nabors and Nabors Delaware have fully and unconditionally guaranteed the $225 million 4.875% senior notes due 2009 issued by Nabors Holdings 1, ULC, our indirect subsidiary.

 

The following condensed consolidating financial information is included so that separate financial statements of Nabors Delaware and Nabors Holdings are not required to be filed with the U.S. Securities and Exchange Commission. The condensed consolidating financial statements present investments in both consolidated and unconsolidated affiliates using the equity method of accounting.

 

The following condensed consolidating financial information presents: condensed consolidating balance sheets as of March 31, 2006 and December 31, 2005, statements of income and cash flows for each of the three month periods ended March 31, 2006 and 2005 of (a) Nabors, parent/guarantor, (b) Nabors Delaware, issuer of public debt securities guaranteed by Nabors and guarantor of the $225 million 4.875% senior notes issued by Nabors Holdings, (c) Nabors Holdings, issuer of the $225 million 4.875% senior notes, (d) the non-guarantor subsidiaries, (e) consolidating adjustments necessary to consolidate Nabors and its subsidiaries and (f) Nabors on a consolidated basis.

		March 31, 2006
						Nabors								Other
		Nabors				Delaware				Nabors				Subsidiaries
		(Parent/				(Issuer/				Holdings				(Non-				Consolidating				Consolidated
		Guarantor)				Guarantor)				(Issuer)				Guarantors)				Adjustments				Total
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	5,513			$	43			$	11			$	287,735			$	—			$	293,302
Short-term investments			—				—				—				181,554				—				181,554
Accounts receivable, net			—				—				—				949,524				—				949,524
Inventory			—				—				—				58,238				—				58,238
Deferred income taxes			—				—				—				201,230				—				201,230
Other current assets			162				969				376				70,715				—				72,222
Total current assets			5,675				1,012				387				1,748,996				—				1,756,070
Long-term investments			—				—				—				250,413				—				250,413
Property, plant and equipment, net			—				—				—				4,156,554				—				4,156,554
Goodwill, net			—				—				—				359,955								359,955
Intercompany receivables			201,622				768,939				—				19,943				(990,504	)			—
Investments in affiliates			3,607,053				3,045,665				275,807				2,828,922				(9,681,835	)			75,612
Other long-term assets			—				10,258				774				80,903				—				91,935
Total assets		$	3,814,350			$	3,825,874			$	276,968			$	9,445,686			$	(10,672,339	)		$	6,690,539
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long- term debt		$	—			$	—			$	—			$	—			$	—			$	—
Trade accounts payable			—				23				—				390,006				—				390,029
Accrued liabilities			1,200				1,881				1,409				223,227				—				227,717
Income taxes payable			—				8,639				1,651				60,929				—				71,219
Total current liabilities			1.200				10,543				3,060				674,162				—				688,965
Long-term debt			—				1,028,288				224,096				—				—				1,252,384
Other long-term liabilities			—				—				—				158,220				—				158,220
Deferred income taxes			—				26,115				—				751,705				—				777,820
Intercompany payable			—				—				3,109				987,395				(990,504	)			—
Total liabilities			1,200				1,064,946				230,265				2,571,482				(990,504	)			2,877,389
Shareholders’ equity			3,813,150				2,760,928				46,703				6,874,204				(9,681,835	)			3,813,150
Total liabilities and shareholders’ equity		$	3,814,350			$	3,825,874			$	276,968			$	9,445,686			$	(10,672,339	)		$	6,690,539

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