UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): February
22, 2007
Unit
Corporation
(Exact
name of registrant as specified in its charter)
Delaware
|
1-9260
|
73-1283193
|
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer Identification No.)
|
7130
South Lewis, Suite 1000, Tulsa, Oklahoma
|
74136
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: (918)
493-7700
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
___
Written communications pursuant to Rule 425 under the Securities Act
(17 CFR
230.425)
___
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR
240.14a-12)
___
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange
Act
(17
CFR
240.14d-2(b))
___
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
(17
CFR
240.13e-4(c))
Section
2 - Financial Information.
Item
2.02 Results of Operations and Financial Condition.
On February
22, 2007, the Company issued a press release announcing its results
of
operations for the three and twelve month periods ending December
31, 2006. A copy of that release is furnished with this filing as Exhibit
99.1.
The
press
release furnished as an exhibit to this report includes forward-looking
statements within the meaning of the Securities Act of 1933 and the
Securities
Exchange Act of 1934. Such forward-looking statements are subject to
certain
risks and uncertainties, as disclosed by the Company from time to time
in its
filings with the Securities and Exchange Commission. As a result of
these
factors, the Company's actual results may differ materially from those
indicated
or implied by such forward-looking statements. Except as required by
law, we
disclaim any obligation to publicly update or revise forward looking
statements
after the date of this report to conform them to actual results.
Section
9 - Financial Statements and Exhibits.
Item
9.01 Financial Statements and Exhibits.
(a)
Financial
Statements of Businesses Acquired.
Not
Applicable.
(b)
Pro
Forma Financial Information.
Not
Applicable.
(c)
Shell Company Transactions.
Not
Applicable.
(d)
Exhibits.
99.1
|
Press
release dated February 22, 2007
|
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
hereunto
duly authorized.
Unit
Corporation
|
|||
Date: February
22, 2007
|
By:
|
/s/
David T. Merrill
|
|
David
T. Merrill
Chief
Financial Officer
and
Treasurer
|
1
EXHIBIT
INDEX
Exhibit
No.
Description.
99.1
|
Press
release dated February 22, 2007
|
news
|
UNIT CORPORATION
|
|
7130
South Lewis Avenue, Tulsa, Oklahoma 74136
|
|
Telephone
918 493-7700, Fax 918 493-7714
|
Contact:
|
David
T. Merrill
|
|
Chief
Financial Officer & Treasurer
|
|
(918)
493-7700
|
For
Immediate Release…
February
22, 2007
UNIT
CORPORATION REPORTS 2006 FOURTH QUARTER & YEAR-END
RESULTS
With
All-time Annual Records Set in Revenue, Operating Margins and
Production
Tulsa,
Oklahoma . . . Unit Corporation (NYSE - UNT) announced today its financial
and
operational results for the fourth quarter and year-end 2006. Net income
for the
three months ended December 31, 2006 was $81.2 million, or $1.75 per diluted
share, on fourth quarter revenues of $299.3 million, compared with net income
of
$84.5 million, or $1.82 per diluted share, on revenues of $293.1 million
for the
fourth quarter of 2005. Net cash provided by operating activities in the
fourth
quarter was $157.1 million compared to $127.9 million reported during the
same
time period in 2005. The quarter-over-quarter results were primarily impacted
by
a 40% lower natural gas price received for Unit’s record-setting fourth quarter
2006 production.
For
the
year ended 2006, Unit posted a company-record $1,162.4 million total revenues,
31% higher than the $885.6 million reported for 2005. Net income for 2006
was
$312.2 million, or $6.72 per diluted share, a significant increase compared
to
2005’s year end net income of $212.4 million, or $4.60 per diluted share. Net
cash provided by operating activities for 2006 was $506.7 million compared
to
$317.8 million recorded in 2005. Increased oil and natural gas production
and
strong dayrates for Unit’s growing rig fleet, partially offset by lower natural
gas prices and higher operating costs, all contributed to increases in Unit’s
year-end 2006 results.
Larry
Pinkston, Unit Corporation’s Chief Executive Officer and President said:
"Despite a downward shift in natural gas prices during the last half of the
year, we are pleased with our results and with the records we have achieved
in
company revenues, contract drilling operating margins, and oil and natural
gas
production. Based on current market conditions, we believe that in 2007 Unit
will set new operating marks in reserves and production levels for our oil
and
natural gas operations, Superior Pipeline, our mid-stream subsidiary, will
gather record-levels of natural gas and add to its 600-plus mile system,
Unit
Drilling will expand its very active and very profitable rig fleet, and that
Unit should report for the 24th consecutive year our replacing more than
150% of
its annual production. I believe our commitment to excellence and consistent
carrying out of our growth strategies will continue to provide good returns
for
our shareholders.”
CONTRACT
DRILLING RESULTS
Contract
drilling rig rates for the fourth quarter averaged a record $19,767 per day,
up
33% from the comparable quarter of 2005. Operating margins for the quarter
reached an all-time record averaging $11,149 per day (before elimination
of
intercompany drilling rig profit of $5.7 million) as compared to $7,283 per
day
(before elimination of intercompany drilling rig profit of $3.0 million)
for
2005, an increase of 53%. Contract drilling revenues increased 29% between
the
comparative fourth quarters to $179.6 million, primarily due to increases
in
dayrates. Average drilling rig utilization was 106.7 drilling rigs in the
fourth
quarter of 2006, which was relatively flat from 2005’s fourth quarter rate of
106.2 drilling rigs. Currently, Unit has 117 operational drilling rigs of
which
104 are under contract.
1
The
following table illustrates Unit’s rig count at the end of each quarterly period
and utilization for each quarterly period:
4th
Qtr 06
|
3rd
Qtr 06
|
2nd
Qtr 06
|
1st
Qtr 06
|
4th
Qtr 05
|
3rd
Qtr 05
|
2nd
Qtr 05
|
1st
Qtr 05
|
4th
Qtr 04
|
|
Rigs
|
117
|
116
|
115
|
111
|
112
|
111
|
103
|
102
|
100
|
Utilization
|
92%
|
96%
|
97%
|
98%
|
96%
|
98%
|
98%
|
98%
|
95%
|
Year-over-year
contract drilling revenues increased 51% to a record $699.4 million with
rig
utilization increasing to an average of 109.0 drilling rigs operating during
2006 compared to an average 102.1 drilling rigs operating during
2005.
Commenting
on Unit Drilling, Pinkston said: "During the year, we added six drilling rigs to
our fleet, which were all diesel-electric drilling rigs with horsepower ratings
from 750 to 1,500. We have been able to keep this classification of rig at
a
high utilization rate meeting our customers’ need to grow and maintain their
production levels. Current natural gas prices are higher than we saw during
the
last six months of 2006, and we believe, based on our customers’ continued
requests for our rigs and market data, that the drop in demand experienced
in
the fourth quarter should be short-lived. We’re adding a 118th rig to our fleet
in the first quarter of 2007, which will go directly to work at a dayrate
of
approximately $23,000 and we currently plan to add an additional three rigs
during 2007. We will continue to review opportunities and our customers’ needs
to determine any additional change to our drilling rig fleet during
2007.”
EXPLORATION
AND PRODUCTION RESULTS
Fourth
quarter production for Unit’s oil and natural gas operations was a
company-record 392,000 barrels of oil and a company-record 11.8 billion cubic
feet (Bcf) of natural gas, a 20% Mcfe increase from the fourth quarter of
2005.
Exiting the quarter, Unit was producing 152.1 MMcfe per day. Revenues for
the
fourth quarter were $90.1 million, 22% lower than 2005’s fourth quarter. The
decrease in revenue resulted from an 11% decrease in the average price Unit
received for its oil, as well as a 40% decrease in the average price of natural
gas. Unit’s average natural gas price for the fourth quarter of 2006 was $5.86
per thousand cubic feet (Mcf) as compared to $9.79 per Mcf for the fourth
quarter of 2005. Unit’s average oil price for the fourth quarter of 2006 was
$49.50 per barrel compared to $55.41 per barrel for the fourth quarter of
2005.
The
following table illustrates the results of Unit’s consistent production growth
and aggressive internal drilling program:
4th
Qtr 06
|
3rd
Qtr 06
|
2nd
Qtr 06
|
1st
Qtr 06
|
4th
Qtr 05
|
3rd
Qtr 05
|
2nd
Qtr 05
|
1st
Qtr 05
|
4th
Qtr 04
|
|
Production,
Bcfe
|
14.2
|
13.5
|
12.6
|
12.7
|
11.8
|
10.0
|
9.4
|
9.3
|
9.0
|
Realized
price, Mcfe
|
$6.26
|
$6.68
|
$6.41
|
$7.36
|
$9.71
|
$8.28
|
$6.49
|
$6.00
|
$5.96
|
Wells
Drilled
|
66
|
75
|
62
|
41
|
57
|
52
|
57
|
26
|
58
|
Success
Rate
|
89%
|
88%
|
85%
|
88%
|
100%
|
90%
|
89%
|
92%
|
86%
|
During
2006, Unit participated in the drilling operations on 248 wells which were
started in 2006, of which 233 were completed. In addition, 11 wells were
completed in 2006 that were spud in 2005 for a total of 244 completed wells.
Of
the 244 wells, 214 were completed as producing for a success rate of 88%
compared to the completion of 192 wells with a 92% success rate for 2005.
Oil
and
natural gas revenues were a record $357.6 million during 2006, an increase
of
12% over the same period in 2005. Natural gas production was a record 44.2
Bcf
during 2006, while oil production for the same period was a record 1,453,000
barrels, or a combined natural gas equivalent of 52.9 Bcfe. The 2006 figure
represents a year-over-year equivalent Mcf increase of more than 30%. The
average natural gas price received decreased 19% to $6.17 per Mcf compared
to
$7.64 per Mcf during 2005. The average oil price received was $55.11 per
barrel
in 2006 compared to $50.14 per barrel in 2005, a 10% increase.
Operating
costs in 2006 were $1.53 per Mcfe, nearly flat to 2005 while the 2006
depreciation, depletion and amortization rate was up 24% to $2.04. Unit’s
all-sources finding and development (F&D) cost in 2006 was $2.95 per Mcfe.
Excluding the negative revision of 11.2 Bcfe primarily due to the 35% decrease
in natural gas prices used to calculate Unit’s year-end 2006 reserves, the
company would have posted an F&D per Mcfe figure of $2.69. In 2006 Unit
replaced 221% of its production. Over the last 23 years, Unit has replaced
its
production at an average rate of 228%.
Pinkston
said: "We recently announced our record total proved reserves for December 31,
2006 of 475.9 Bcfe of natural gas. Had it not been for revisions to our reserves
due to lower natural gas prices, Unit would have seen its reserve base climb
more than 18%. Instead, we enjoyed an increase of 15%. Accordingly, we achieved
our goal of replacing 150% of the year’s production with new reserves for the
23rd consecutive year, an accomplishment of which we are very proud. We have
more than 1,060 drilling sites in our inventory of proved, probable and possible
locations.
2
MID-STREAM
RESULTS
Fourth
quarter 2006 gathering volumes for Unit’s mid-stream operations were 253,776
MMBtu per day, a 41% increase from the fourth quarter of 2005. The increase
in
volumes gathered per day is primarily attributable to one system that gathered
139,073 MMBtu and 97,867 MMBtu per day during the fourth quarter of 2006
and
2005, respectively. While gathering volumes increased, total revenue decreased
16% from the fourth quarter of 2005 due to lower natural gas prices. Processing
volumes for the fourth quarter of 2006 were 45,504 MMBtu per day, an 87%
increase from the fourth quarter of 2005. Operating profit (as defined below
in
the financial tables) for the fourth quarter was $3.9 million or 44% higher
than
2005’s fourth quarter.
The
following table illustrates the results of the mid-stream operations over
the
last two years:
4th
Qtr 06
|
3rd
Qtr 06
|
2nd
Qtr 06
|
1st
Qtr 06
|
4th
Qtr 05
|
3rd
Qtr 05
|
2nd
Qtr 05
|
1st
Qtr 05
|
|
Gas
gathered
MMBtu/day
|
253,776
|
276,888
|
243,399
|
215,341
|
180,098
|
159,821
|
121,611
|
107,254
|
Gas
processed
MMBtu/day
|
45,504
|
35,124
|
22,812
|
23,616
|
24,391
|
36,061
|
31,670
|
30,336
|
Natural
gas gathering volumes for 2006 were 247,537 MMBtu per day, a 74% increase
over
2005, while operating profit before depreciation for 2006 was $13.0 million
and
$8.0 million for 2005, an increase of 63%.
Unit’s
mid-stream operations are conducted through Superior Pipeline Company LLC
and
its subsidiaries, which operate three natural gas treatment plants, owns
six
processing plants, 37 active gathering systems and 600 miles of
pipeline.
Pinkston
said: "Superior is continuing to establish a significant operation in the Arkoma
and Mid-Continent basins, two of America’s important regional plays for meeting
the growing need for natural gas. We are actively reviewing opportunities
to
grow this side of our operations and look forward to telling this growth
story.”
FINANCIAL
RESULTS
In
addition to the results announced above, Unit ended the year with working
capital of $72.0 million, long-term debt of $174.3 million, and a debt to
capitalization ratio of 13%. As of December 31, 2006, Unit had $100.7 million
of
borrowing capacity based on the borrowing base associated with its current
credit facility.
WEBCAST
Unit
will
webcast its fourth quarter and year-end earnings conference call live over
the
Internet on February 22, 2007 at 11:30 a.m. Eastern Time. To listen to the
live
call, please go to www.unitcorp.com
at least
fifteen minutes prior to the start of the call to download and install any
necessary audio software. For those who are not available to listen to the
live
webcast, a replay will be available shortly after the call and will remain
on
the site for twelve months.
_____________________________________________________
Unit
Corporation is a Tulsa-based, publicly held energy company engaged through
its
subsidiaries in oil and gas exploration, production, contract drilling and
gas
gathering and processing. Unit’s Common Stock is listed on the New York Stock
Exchange under the symbol UNT. For more information about Unit Corporation,
visit its website at http://www.unitcorp.com.
This
news
release contains forward-looking statements within the meaning of the Securities
Litigation Reform Act that involve risks and uncertainties, including the
productive capabilities of the Company’s wells, future demand for oil and
natural gas, future drilling rig utilization and dayrates, the timing of
the
completion of drilling rigs currently under construction, projected additions
and date of service to the company’s drilling rig fleet, projected growth of the
company’s oil and natural gas production, our ability to meet our consecutive
quarterly positive net income goals, oil and gas reserve information, as
well as
our ability to meet our future reserve replacement goals, anticipated gas
gathering and processing rates and throughput volumes, the prospective
capabilities of the reserves associated with the Company’s inventory of future
drilling sites, anticipated oil and natural gas prices, the number of wells
to
be drilled by the company’s exploration segment, development, operational,
implementation and opportunity risks, and other factors described from time
to
time in the company’s publicly available SEC reports, which could cause actual
results to differ materially from those expected.
3
Unit
Corporation
Selected
Financial and Operations Highlights
(In
thousands except per share and operations data)
|
Three
Months Ended
|
|
Year
Ended
|
|
||||||||
|
December
31,
|
|
December
31,
|
|
||||||||
|
2006
|
|
2005
|
|
2006
|
|
2005
|
|
||||
Statement
of Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
drilling
|
$
|
179,597
|
|
$
|
139,762
|
|
$
|
699,396
|
|
$
|
462,141
|
|
Oil
and natural gas
|
|
90,081
|
|
|
115,389
|
|
|
357,599
|
|
|
318,208
|
|
Gas gathering and | ||||||||||||
processing
|
|
29,023
|
|
|
34,569
|
|
|
101,863
|
|
|
100,464
|
|
Other
|
|
633
|
|
|
3,393
|
|
|
3,527
|
|
|
4,795
|
|
Total
revenues
|
|
299,334
|
|
|
293,113
|
|
|
1,162,385
|
|
|
885,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
drilling:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs
|
|
75,861
|
|
|
71,582
|
|
|
313,882
|
|
|
266,472
|
|
Depreciation
|
|
13,870
|
|
|
11,866
|
|
|
51,959
|
|
|
42,876
|
|
Oil
and natural gas:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs
|
|
22,266
|
|
|
19,863
|
|
|
81,120
|
|
|
60,779
|
|
Depreciation, | ||||||||||||
depletion
|
|
|
|
|
|
|
|
|
|
|
|
|
and
amortization
|
|
31,344
|
|
|
21,650
|
|
|
108,124
|
|
|
67,282
|
|
Gas gathering and | ||||||||||||
processing:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs
|
|
25,100
|
|
|
31,851
|
|
|
88,834
|
|
|
92,467
|
|
Depreciation and | ||||||||||||
amortization
|
|
2,228
|
|
|
1,012
|
|
|
6,247
|
|
|
3,279
|
|
General and | ||||||||||||
administrative
|
|
5,692
|
|
|
3,888
|
|
|
18,690
|
|
|
14,343
|
|
Interest
|
|
2,038
|
|
|
1,280
|
|
|
5,273
|
|
|
3,437
|
|
Total
expenses
|
|
178,399
|
|
|
162,992
|
|
|
674,129
|
|
|
550,935
|
|
Income
Before Income Taxes
|
|
120,935
|
|
|
130,121
|
|
|
488,256
|
|
|
334,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Tax Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
23,071
|
|
|
23,380
|
|
|
112,812
|
|
|
64,565
|
|
Deferred
|
|
16,682
|
|
|
22,281
|
|
|
63,267
|
|
|
57,666
|
|
Total income | ||||||||||||
taxes
|
|
39,753
|
|
|
45,661
|
|
|
176,079
|
|
|
122,231
|
|
|
||||||||||||
Net
Income
|
$
|
81,182
|
|
$
|
84,460
|
|
$
|
312,177
|
|
$
|
212,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income per Common | ||||||||||||
Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.76
|
|
$
|
1.83
|
|
$
|
6.75
|
|
$
|
4.62
|
|
Diluted
|
$
|
1.75
|
|
$
|
1.82
|
|
$
|
6.72
|
|
$
|
4.60
|
|
Weighted
Average Common
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
46,243
|
|
|
46,140
|
|
|
46,228
|
|
|
45,940
|
|
Diluted
|
|
46,462
|
|
|
46,443
|
|
|
46,451
|
|
|
46,189
|
|
4
|
|
December
31,
|
|
|
|
December
31,
|
|
||
|
|
2006
|
|
|
|
2005
|
|
||
Balance
Sheet Data:
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
$
|
232,940
|
|
|
|
$
|
223,685
|
|
Total
assets
|
|
$
|
1,874,096
|
|
|
|
$
|
1,456,195
|
|
Current
liabilities
|
|
$
|
160,942
|
|
|
|
$
|
172,512
|
|
Long-term
debt
|
|
$
|
174,300
|
|
|
|
$
|
145,000
|
|
Other
long-term liabilities
|
|
$
|
55,741
|
|
|
|
$
|
41,981
|
|
Deferred
income taxes
|
|
$
|
325,077
|
|
|
|
$
|
259,740
|
|
Shareholders’
equity
|
|
$
|
1,158,036
|
|
|
|
$
|
836,962
|
|
|
|
Year
Ended December 31,
|
|
||||||
|
|
2006
|
|
|
|
2005
|
|
||
Statement
of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
Cash
Flow From Operations before
|
|
|
|
|
|
|
|
|
|
Changes
in Working Capital (1)
|
|
$
|
549,542
|
|
|
|
$
|
386,188
|
|
Net
Change in Working Capital
|
|
|
(42,840
|
)
|
|
|
|
(68,417
|
)
|
Net
Cash Provided by Operating Activities
|
|
$
|
506,702
|
|
|
|
$
|
317,771
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Used in Investing Activities
|
|
$
|
(540,723
|
)
|
|
|
$
|
(384,996
|
)
|
Net
Cash Provided by Financing Activities
|
$
|
33,663
|
$
|
67,507
|
|
Three
Months Ended
|
|
Year
Ended
|
|
||||||||
|
December
31,
|
|
December
31,
|
|
||||||||
|
2006
|
|
2005
|
|
2006
|
|
2005
|
|
||||
Contract
Drilling Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rigs
Utilized
|
|
106.7
|
|
|
106.2
|
|
|
109.0
|
|
|
102.1
|
|
Operating
Margins (2)
|
|
58%
|
|
|
49%
|
|
|
55%
|
|
|
42%
|
|
Operating
Profit Before
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation (2) ($MM)
|
$
|
103.7
|
|
$
|
68.2
|
|
$
|
385.5
|
|
$
|
195.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
and Natural Gas Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
- MBbls
|
|
392
|
|
|
296
|
|
|
1,453
|
|
|
1,084
|
|
Natural
Gas - MMcf
|
|
11,820
|
|
|
10,003
|
|
|
44,169
|
|
|
34,058
|
|
Average
Prices:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
- MBbls
|
$
|
49.50
|
|
$
|
55.41
|
|
$
|
55.11
|
|
$
|
50.14
|
|
Natural
Gas - MMcf
|
$
|
5.86
|
|
$
|
9.79
|
|
$
|
6.17
|
|
$
|
7.64
|
|
Operating
Profit Before
|
|
|
|
|
|
|
|
|
|
|
|
|
DD&A (2) ($MM)
|
$
|
67.8
|
|
$
|
95.5
|
|
$
|
276.5
|
|
$
|
257.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
Gathering and Processing
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
Gathering - MMBtu/day
|
|
253,776
|
|
|
180,098
|
|
|
247,537
|
|
|
142,444
|
|
Gas
Processing - MMBtu/day
|
|
45,504
|
|
|
24,391
|
|
|
31,833
|
|
|
30,613
|
|
Operating
Profit Before
|
||||||||||||
Depreciation and | ||||||||||||
Amortization (2) ($MM)
|
$
|
3.9
|
$
|
2.7
|
$
|
13.0
|
$
|
8.0
|
_____________
(1)
Unit
Corporation considers Unit’s cash flow from operations before changes in working
capital an important measure in meeting the performance goals of the
company.
(2)
Operating profit before depreciation is calculated by taking operating revenues
less operating expenses excluding depreciation, depletion,
amortization and
impairment, general and administrative and interest expense. Operating margins
are calculated by dividing operating profit by operating revenue.
5