-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R1xrIXsulO7H2cMzrL3fk64bfp2VZ6FptnKTAT+u698hMyFlmlNnWiDTKKkGjIkT tPpWc+d4EpqnSAklaYJZNA== 0000833320-96-000003.txt : 19960514 0000833320-96-000003.hdr.sgml : 19960514 ACCESSION NUMBER: 0000833320-96-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BURLINGTON RESOURCES INC CENTRAL INDEX KEY: 0000833320 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 911413284 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09971 FILM NUMBER: 96561063 BUSINESS ADDRESS: STREET 1: 5051 WESTHEIMER STREET 2: SUITE 1400 CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: 7136249500 MAIL ADDRESS: STREET 1: 5051 WESTHEIMER STREET 2: STE 1400 CITY: HOUSTON STATE: TX ZIP: 77056 10-Q 1 FORM 10-Q FOR THE QUARTERLY PERIOD ENDED 03/31/96 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (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 Commission File Number 1-9971 BURLINGTON RESOURCES INC. (Exact name of registrant as specified in its charter) Delaware 91-1413284 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 5051 Westheimer, Suite 1400, Houston, Texas 77056 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (713) 624-9500 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 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding Common Stock, par value $.01 per share, as of March 31, 1996 126,125,935 PART 1 - FINANCIAL INFORMATION ITEM 1. Financial Statements
BURLINGTON RESOURCES INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) FIRST QUARTER --------------------------------- 1996 1995 ------------ ------------ (Dollars in Millions, Except per Share Amounts) Revenues ......................................... $ 255 $ 215 Costs and Expenses ............................... 192 213 ----- ----- Operating Income ................................. 63 2 Interest Expense ................................. 28 26 ----- ----- Income (Loss) Before Income Taxes ................ 35 (24) Income Tax Benefit ............................... (3) (19) ----- ----- Net Income (Loss) ................................ $ 38 $ (5) ----- ----- ----- ----- Earnings (Loss) per Common Share ................. $ .30 $(.04) ----- ----- ----- ----- See accompanying Notes to Consolidated Financial Statements.
-2- BURLINGTON RESOURCES INC. CONSOLIDATED BALANCE SHEET (UNAUDITED)
March 31, December 31, 1996 1995 ------------ ------------ (Dollars in Millions) Current Assets Cash and Short-term Investments ................................... $ 22 $ 20 Accounts Receivable ............................................... 187 210 Inventories ....................................................... 27 18 Other Current Assets .............................................. 17 17 ------ ------ 253 265 ------ ------ Oil & Gas Properties (Successful Efforts Method) .................... 5,890 5,870 Other Properties .................................................... 507 499 ------ ------ 6,397 6,369 Accumulated Depreciation, Depletion and Amortization .............. 2,621 2,602 ------ ------ Properties - Net ................................................ 3,776 3,767 ------ ------ Other Assets ........................................................ 133 133 ------ ------ Total Assets .................................................. $4,162 $4,165 ------ ------ ------ ------ LIABILITIES Current Liabilities Accounts Payable .................................................. $ 209 $ 214 Taxes Payable ..................................................... 68 59 Accrued Interest .................................................. 35 20 Dividends Payable ................................................. 18 17 Other Current Liabilities ......................................... 31 12 ------ ------ 361 322 ------ ------ Long-term Debt ...................................................... 1,350 1,350 ------ ------ Deferred Income Taxes ............................................... 93 110 ------ ------ Other Liabilities and Deferred Credits .............................. 134 163 ------ ------ Commitments and Contingent Liabilities STOCKHOLDERS' EQUITY Common Stock, Par Value $.01 Per Share (Authorized 325,000,000 shares; Issued 150,000,000 shares) ....... 2 2 Paid-in Capital ..................................................... 2,935 2,935 Retained Earnings ................................................... 222 202 ------ ------ 3,159 3,139 Cost of Treasury Stock (23,874,065 and 23,425,621 shares for 1996 and 1995, respectively) 935 919 ------ ------ Common Stockholders' Equity ......................................... 2,224 2,220 ------ ------ Total Liabilities and Common Stockholders' Equity ............. $4,162 $4,165 ------ ------ ------ ------ See accompanying Notes to Consolidated Financial Statements.
-3- BURLINGTON RESOURCES INC. CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
THREE MONTHS ------------------------------- 1996 1995 ------------ ------------ (Dollars in Millions) Cash Flows From Operating Activities Net Income (Loss) ...................................................... $ 38 $ (5) Adjustments to Reconcile Net Income (Loss) to Net Cash Provided By Operating Activities Depreciation, Depletion and Amortization ............................. 81 96 Deferred Income Taxes ................................................ (17) (24) Exploration Costs .................................................... 10 7 Working Capital Changes Accounts Receivable ................................................ 23 33 Inventories ........................................................ (9) 16 Other Current Assets ............................................... -- (6) Accounts Payable ................................................... (5) (63) Taxes Payable ...................................................... 9 (9) Accrued Interest ................................................... 15 17 Other Current Liabilities .......................................... 20 (1) Other ................................................................. (34) 40 ----- ----- Net Cash Provided By Operating Activities ...................... 131 101 ----- ----- Cash Flows From Investing Activities Additions to Properties ................................................ (122) (141) Proceeds from Sales and Other .......................................... 37 85 ----- ----- Net Cash Used In Investing Activities .......................... (85) (56) ----- ----- Cash Flows From Financing Activities Proceeds from Long-term Financing ...................................... 150 150 Reduction in Long-term Debt ............................................ (149) (107) Dividends Paid ......................................................... (17) (17) Treasury Stock Transactions - Net ...................................... (16) 1 Other .................................................................. (12) (47) ----- ----- Net Cash Used In Financing Activities .......................... (44) (20) ----- ----- Increase in Cash and Short-term Investments .............................. 2 25 Cash and Short-term Investments Beginning of Year ...................................................... 20 20 ----- ----- End of Period .......................................................... $ 22 $ 45 ----- ----- ----- ----- See accompanying Notes to Consolidated Financial Statements.
-4- BURLINGTON RESOURCES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION The 1995 Annual Report on Form 10-K of Burlington Resources Inc. (the "Company") includes certain definitions and a summary of significant accounting policies and should be read in conjunction with this Quarterly Report on Form 10-Q. The statements for the periods presented herein are unaudited, condensed and do not contain all information required by generally accepted accounting principles to be included in a full set of financial statements. In the opinion of management, all material adjustments necessary to present fairly the results of operations have been included. All such adjustments are of a normal, recurring nature. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year. Earnings (loss) per common share is based on the weighted average number of common shares outstanding during the year. The weighted average number of common shares outstanding was 127 million for the first three months of 1996 and 1995. 2. COMMITMENTS AND CONTINGENT LIABILITIES On May 25, 1995, the 270th Judicial District Court of Harris County, Texas entered an order in a lawsuit styled Caroline Altheide, et al. v. Meridian Oil Inc., et al. which allows the suit to be maintained as a class action on behalf of all royalty and overriding royalty interest owners in all Meridian properties and all working interest owners in properties operated by Meridian who have received payments from Meridian at any time from and after December 1, 1986 based upon wellhead sales of natural gas to Meridian Oil Trading Inc. The lawsuit involves claims for unspecified actual and punitive damages based upon alleged breaches of duties owed to interest owners because of the use of Meridian corporate affiliates to gather, treat and market natural gas. The plaintiffs allege that Meridian's gas producing affiliates have sold natural gas to marketing affiliates at low inter-affiliate settlement prices which are then used as the basis for accounting to interest owners. Plaintiffs also allege that Meridian's pricing includes inappropriate deductions of inflated gathering and transportation costs. Meridian is vigorously defending this litigation and perfected an interlocutory appeal of the class certification order on May 30, 1995. This appeal effectively stays class action proceedings in the trial court until the appeal is completed. Oral argument in this appeal was held February 28, 1996, however, no ruling has been made. The Company and its subsidiaries are named defendants in numerous lawsuits and named parties in numerous governmental proceedings arising in the ordinary course of business. While the outcome of lawsuits and other proceedings cannot be predicted with certainty, management expects these matters, including the above-described Altheide litigation, will not have a materially adverse effect on the consolidated financial position or results of operations of the Company. -5- ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Condition and Liquidity The total long-term debt to capital (total long-term debt and stockholders' equity) ratio at March 31, 1996 and December 31, 1995 was 38 percent. In February 1996, the Company issued $150 million of 6.875% Debentures due February 15, 2026. The net proceeds were used for general corporate purposes, including acquisition of oil and gas properties, repayment of commercial paper, capital expenditures and repurchases of the Company's common stock. The Company's credit facilities are comprised of a $600 million revolving credit agreement that expires in July 2000 and a $300 million revolving credit agreement that expires July 1996. The $300 million revolving credit agreement is renewable annually by mutual consent and was renewed in July 1995. As of March 31, 1996, there were no borrowings outstanding under the credit facilities, although borrowing capacity is reduced by outstanding commercial paper. At March 31, 1996, the Company had outstanding commercial paper borrowings of $2 million at an average interest rate of 5.70 percent. The Company also has the capacity to issue $200 million of debt securities under shelf registration statements filed with the Securities and Exchange Commission. Net cash provided by operating activities for the first three months of 1996 was $131 million compared to $101 million in 1995. The increase was primarily due to higher operating income in 1996. Net cash provided by operating activities in 1995 included the sale of gas-in-storage inventory for approximately $20 million. The Company continues to divest marginal and non-strategic assets to maintain its high quality asset base. The Company divested over 300 working interest wells for approximately $27 million during the first three months of 1996. The Company is involved in certain environmental proceedings and other related matters. Although it is possible that new information or future developments could require the Company to reassess its potential exposure related to these matters, the Company believes, based upon available information, the resolution of these issues will not have a materially adverse effect on the consolidated financial position or results of operations of the Company. Capital Expenditures Capital expenditures for the first three months of 1996 totaled $122 million compared to $141 million in 1995. Capital expenditures are currently projected to be approximately $530 million for all of 1996 and are expected to be primarily for the development and exploration of oil and gas properties, reserve acquisitions, and plant and pipeline expenditures. Capital expenditures will be funded from internal cash flow supplemented, if needed, by external financing. -6- Dividends On April 11, 1996, the Board of Directors declared a common stock quarterly dividend of $.1375 per share, payable July 1, 1996. Results of Operations - First Quarter 1996 Compared to First Quarter 1995 The Company reported net income of $38 million or $.30 per share for the first quarter of 1996 compared to a net loss of $5 million or $.04 per share in 1995. Operating income for the first quarter of 1996 was $63 million compared to $2 million in 1995. Revenues were $255 million for the first quarter of 1996 compared to $215 million in 1995. Natural gas sales prices improved 26 percent to $1.55 per MCF and gas sales volumes improved 3 percent to 1,180 MMCF per day which increased revenues $34 million and $4 million, respectively. Average oil sales prices improved 9 percent to $17.94 per barrel and oil sales volumes improved 2 percent to 48.0 MBbls per day which increased revenues $7 million and $1 million, respectively. Gas and oil sales volumes increased primarily due to continued development of the Company's oil and gas properties and producing property acquisitions. The revenue increases were partially offset by a $6 million decrease in intrastate natural gas sales and other revenues primarily resulting from the sale of the intrastate pipeline systems in February 1995. Costs and expenses were $192 million for the first quarter of 1996 compared to $213 million in 1995. The decrease is primarily due to the Company's adoption of SFAS No. 121, effective September 30, 1995 which reduced unit-of-production depletion and depreciation costs by $12 million. Additionally, general and administrative expenses declined $6 million and intrastate natural gas purchases decreased $3 million. Interest expense was $28 million for the first quarter of 1996 compared to $26 million in 1995. The increase was primarily due to additional debt issued in March 1995 and February 1996 partially offset by lower outstanding commercial paper borrowings in 1996. The effective income tax rate was a benefit of 8 percent for the first quarter of 1996 compared to a benefit of 80 percent in 1995. The 1996 beneficial tax rate is due to the benefit of non-conventional fuel tax credits being greater than tax expense at statutory rates. The 1995 beneficial tax rate is due to a 1995 pre-tax loss and the effect of non-conventional fuel tax credits. -7- PART II - OTHER INFORMATION ITEM 1. Legal Proceedings See Note 2 of Notes to Consolidated Financial Statements. ITEM 4. Submission of Matters to a Vote of Security Holders The Annual Meeting of Stockholders was held on March 21, 1996. The following were nominated and elected to serve as Directors of Burlington Resources Inc. for a term of one year or until their successors shall have been duly elected and qualified: Nominee For Withheld J. V. Byrne 109,297,703 668,028 S. P. Gilbert 108,283,766 1,681,965 J. F. McDonald 109,337,393 628,338 T. H. O'Leary 109,309,031 656,700 D. M. Roberts 109,334,002 631,729 W. Scott, Jr. 109,302,403 663,328 B. S. Shackouls 109,327,112 638,619 W. E. Wall 109,280,500 685,231 ITEM 6. Exhibits and Reports on Form 8-K A. Exhibits The following exhibits are filed as part of this report. Exhibit Nature of Exhibit Page 4.1 The Company and its subsidiaries either * have filed with the Securities and Exchange Commission or upon request will furnish a copy of any instrument with respect to long-term debt of the Company. 11.1 Earnings (Loss) Per Share 10 12.1 Ratio of Earnings to Fixed Charges 11 27.1 Financial Data Schedule ** * Exhibit incorporated by reference. ** Exhibit required only for filings made electronically using the Securities and Exchange Commission's EDGAR System. -8- ITEM 6. Exhibits and Reports on Form 8-K, Continued B. Reports on Form 8-K During the quarter covered by this report, there were no reports filed on Form 8-K. Items 2, 3, and 5 of Part II are not applicable and have been omitted. Pursuant to the requirements of Section 13 (or 15(d)) 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. BURLINGTON RESOURCES INC. (Registrant) By /s/ John E. Hagale John E. Hagale Executive Vice President and Chief Financial Officer By /s/ Hays R. Warden Hays R. Warden Senior Vice President and Controller, and Chief Accounting Officer Date: May 13, 1996 -9- EX-11 2 EARNINGS (LOSS) PER SHARE BURLINGTON RESOURCES INC. EARNINGS (LOSS) PER SHARE EXHIBIT 11.1 (UNAUDITED)
FIRST QUARTER --------------------------------------------------------- 1996 1995 --------------------------- --------------------------- Earnings Shares Loss Shares ----------- -------------- --------- --------------- (Dollars in Millions, Except per Share Amounts) Primary earnings (loss) per common share Net earnings (loss) available for common stock and weighted average number of common shares outstanding ............................................. $ 38 126,340,882 $ (5) 126,513,332 Stock options assumed exercised - net ............................. -- 401,011 -- 461,577 ------------ ------------ ------------ ------------ Total net earnings (loss) and primary common shares ............... $ 38 126,741,893 $ (5) 126,974,909 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Primary earnings (loss) per common share .......................... $ .30 $ (.04) ------------ ------------ ------------ ------------ Fully diluted earnings (loss) per common share Net earnings (loss) available for common stock and weighted average number of common shares outstanding ............................................. $ 38 126,340,882 $ (5) 126,513,332 Stock options assumed exercised - net ............................. -- 444,218 -- 658,802 ------------ ------------ ------------ ------------ Total net earnings (loss) and fully diluted common shares ......... $ 38 126,785,100 $ (5) 127,172,134 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Fully diluted earnings (loss) per common share .................... $ .30 $ (.04) ------------ ------------ ------------ ------------ -10-
EX-12 3 RATIO OF EARNINGS TO FIXED CHARGES BURLINGTON RESOURCES INC. RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12.1 (UNAUDITED)
Three Months Ended March 31, ----------------------------- 1996 1995 ----------- ----------- (Dollars in Millions, Except Ratio Amounts) Earnings Income (Loss) Before Income Taxes ............................. $ 35 $(24) Add Interest and fixed charges ................................. 28 26 Portion of rent under long-term operating leases representative of an interest factor ............. 1 1 ---- ---- Total Earnings Available for Fixed Charges .................... $ 64 $ 3 ---- ---- ---- ---- Fixed Charges Interest and fixed charges .................................... $ 28 $ 26 Portion of rent under long-term operating leases representative of an interest factor ................ 1 1 Capitalized interest .......................................... 1 1 ---- ---- Total Fixed Charges ........................................... $ 30 $ 28 ---- ---- ---- ---- Ratio of Earnings to Fixed Charges ................................ 2.12x .12x ---- ---- ---- ---- -11-
EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BURLINGTON RESOURCES INC. CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1996, AND THE RELATED CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000000 3-MOS DEC-31-1996 MAR-31-1996 22 0 187 0 27 253 6397 2621 4162 361 1350 0 0 2 2222 4162 255 255 192 192 0 0 28 35 (3) 38 0 0 0 38 .30 .30
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