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<SEC-DOCUMENT>0000950134-02-005649.txt : 20020515
<SEC-HEADER>0000950134-02-005649.hdr.sgml : 20020515
<ACCEPTANCE-DATETIME>20020515123216
ACCESSION NUMBER:		0000950134-02-005649
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20020331
FILED AS OF DATE:		20020515

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HELMERICH & PAYNE INC
		CENTRAL INDEX KEY:			0000046765
		STANDARD INDUSTRIAL CLASSIFICATION:	DRILLING OIL & GAS WELLS [1381]
		IRS NUMBER:				730679879
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-04221
		FILM NUMBER:		02649791

	BUSINESS ADDRESS:	
		STREET 1:		UTICA AT 21ST ST
		CITY:			TULSA
		STATE:			OK
		ZIP:			74114
		BUSINESS PHONE:		9187425531

	MAIL ADDRESS:	
		STREET 1:		UTICA AT 21ST ST
		CITY:			TULSA
		STATE:			OK
		ZIP:			74114
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d96964e10-q.txt
<DESCRIPTION>FORM 10-Q FOR QUARTER ENDED MARCH 31, 2002
<TEXT>
<PAGE>
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For quarterly period ended: March 31, 2002

                                       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: 1-4221

                             HELMERICH & PAYNE, INC.
             (Exact name of registrant as specified in its charter)

                                    DELAWARE
         (State or other jurisdiction of incorporation or organization)

                                   73-0679879
                          (I.R.S. Employer I.D. Number)

UTICA AT TWENTY-FIRST STREET, TULSA, OKLAHOMA           74114
(Address of principal executive office)              (Zip Code)

Registrant's telephone number, including area code: (918) 742-5531

Former name, former address and former fiscal year, if changed since last
report:
                                      NONE

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
                                                ---     ---

           CLASS                                  OUTSTANDING AT MARCH 31, 2002
Common Stock, $0.10 par value                               49,896,735



                                                      TOTAL NUMBER OF PAGES - 24

<PAGE>

                             HELMERICH & PAYNE, INC.

                                      INDEX


<Table>
<S>                                                                        <C>
PART  I.      FINANCIAL INFORMATION

     Item 1.  Financial Statements

              Consolidated Condensed Balance Sheets as of March 31,
              2002 and September 30, 2001 ............................        3

              Consolidated Condensed Statements of Income for the
              Three Months and Six Months Ended March 31, 2002 and
              2001 ...................................................        4

              Consolidated Condensed Statements of Cash Flows for the
              Six Months Ended March 31, 2002 and 2001 ...............        5

              Consolidated Condensed Statement of Shareholders'
              Equity For the Six Months Ended March 31, 2002 .........        6

              Notes to Consolidated Condensed Financial Statements ...   7 - 14

     Item 2.  Management's Discussion and Analysis of Results
              of Operations and Financial Condition ..................  15 - 21

     Item 3.  Quantitative and Qualitative Disclosures about
              Market Risk ............................................       21

PART II. OTHER INFORMATION ...........................................       22

     Item 1.  Legal Proceedings ......................................       22

     Item 6.  Exhibits and Reports on Form 8-K .......................  22 - 23

     Signatures ......................................................       23

     Exhibit Index ...................................................       24
</Table>


                                       -2-
<PAGE>

                          PART I. FINANCIAL INFORMATION
                             HELMERICH & PAYNE, INC.

                          Item 1. FINANCIAL STATEMENTS
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (in thousands)


<Table>
<Caption>
                                                    (Unaudited)
                                                      March 31,    September 30,
                                                        2002           2001
                                                    -----------    -------------
<S>                                                 <C>            <C>
ASSETS
Current assets:
      Cash and cash equivalents                     $    44,899     $   122,962
      Accounts receivable, net                          128,105         147,235
      Inventories                                        27,349          28,934
      Prepaid expenses and other                         22,716          32,281
                                                    -----------     -----------
         Total current assets                           223,069         331,412
                                                    -----------     -----------

Investments                                             231,823         200,286
Property, plant and equipment, net                      919,301         818,404
Other assets                                             15,153          14,405
                                                    -----------     -----------
          Total assets                              $ 1,389,346     $ 1,364,507
                                                    ===========     ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
      Accounts payable                              $    29,012     $    67,595
      Accrued liabilities                                47,068          53,626
                                                    -----------     -----------
          Total current liabilities                      76,080         121,221
                                                    -----------     -----------

Noncurrent liabilities:
      Long-term notes payable                            50,000          50,000
      Deferred income taxes                             170,683         144,439
      Other                                              24,549          22,370
                                                    -----------     -----------
          Total noncurrent liabilities              $   245,232     $   216,809
                                                    -----------     -----------

SHAREHOLDERS' EQUITY
      Common stock, par value $.10 per
       share                                              5,353           5,353
      Preferred stock, no shares issued                      --              --
      Additional paid-in capital                         80,704          80,324
      Retained earnings                                 962,092         943,105
      Unearned compensation                              (1,079)         (1,812)
      Accumulated other comprehensive income             70,171          49,309
                                                    -----------     -----------
                                                      1,117,241       1,076,279
      Less treasury stock, at cost                       49,207          49,802
                                                    -----------     -----------
          Total shareholders' equity                  1,068,034       1,026,477
                                                    -----------     -----------

Total liabilities and shareholders' equity          $ 1,389,346     $ 1,364,507
                                                    ===========     ===========
</Table>


See accompanying notes to financial statements.

                                       -3-
<PAGE>


                             HELMERICH & PAYNE, INC.
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)
                      (in thousands, except per share data)


<Table>
<Caption>
                                           Three Months Ended    Six Months Ended
                                                March 31,            March 31,
                                            2002       2001       2002       2001
                                          --------   --------   --------   --------
<S>                                       <C>        <C>        <C>        <C>
REVENUES:
     Sales and other operating revenues   $153,959   $218,817   $326,756   $408,565
     Income from investments                 1,617      2,752      2,967      5,554
                                          --------   --------   --------   --------
                                           155,576    221,569    329,723    414,119
                                          --------   --------   --------   --------

COST AND EXPENSES:
     Operating costs                        96,919    107,076    199,250    201,122
     Depreciation, depletion and
       amortization                         21,893     22,784     48,886     40,762
     Dry holes and abandonments              4,311      6,704     10,123     18,748
     Taxes, other than income taxes          9,154     12,066     18,113     20,934
     General and administrative              5,358      4,646      9,926      8,213
     Interest                                  342         68        716        675
                                          --------   --------   --------   --------
                                           137,977    153,344    287,014    290,454
                                          --------   --------   --------   --------
INCOME BEFORE INCOME TAXES AND
EQUITY IN INCOME OF AFFILIATES              17,599     68,225     42,709    123,665

PROVISION FOR INCOME TAXES                   7,497     27,118     18,095     49,153

EQUITY IN INCOME OF AFFILIATES,
 net of income taxes                           770        642      1,862      1,077
                                          --------   --------   --------   --------

NET INCOME                                $ 10,872   $ 41,749   $ 26,476   $ 75,589
                                          ========   ========   ========   ========

EARNINGS PER COMMON SHARE:
     Basic                                $   0.22   $   0.83   $   0.53   $   1.51
     Diluted                                  0.22   $   0.82   $   0.53   $   1.49

CASH DIVIDENDS (Note 2)                   $  0.075   $  0.075   $   0.15   $   0.15

AVERAGE COMMON SHARES OUTSTANDING:
     Basic                                  49,788     50,197     49,762     50,005
     Diluted                                50,265     51,139     50,171     50,783
</Table>


The accompanying notes are an integral part of these statements.

                                       -4-
<PAGE>

                            HELMERICH & PAYNE, INC.
                 CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
                                  (Unaudited)
                                 (in thousands)

<Table>
<Caption>
                                                            Six Months Ended
                                                               March 31,
                                                            2002        2001
                                                         ---------    ---------
<S>                                                      <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net Income                                              $  26,476    $  75,589
 Adjustments to reconcile net income to net cash
 provided by operating activities:
     Depreciation, depletion and amortization               48,886       40,762
     Dry holes and abandonments                             10,123       18,748
     Equity in income of affiliate before income taxes      (3,420)      (2,152)
     Amortization of deferred compensation                     733          746
     Gain on sale of securities                               (539)        (138)
     Gain on sale of property, plant & equipment              (727)      (3,949)
     Other, net                                                922          327
     Change in assets and liabilities-
         Accounts receivable                                19,130      (14,799)
         Inventories                                         1,585       (2,544)
         Prepaid expenses and other                          8,817        1,475
         Accounts payable                                  (34,770)        (213)
         Accrued liabilities                                (7,531)       8,625
         Deferred income taxes                              13,458       10,474
         Other noncurrent liabilities                        3,770          788
                                                         ---------    ---------

NET CASH PROVIDED BY OPERATING ACTIVITIES                   86,913      133,739
                                                         ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures, including dry hole costs          (165,653)    (110,503)
  Proceeds from sales of property, plant and equipment       2,658        7,395
  Proceeds from sale of investments                          4,670        2,159
                                                         ---------    ---------

NET CASH USED IN INVESTING ACTIVITIES                     (158,325)    (100,949)
                                                         ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Dividends paid                                            (7,489)      (7,572)
  Proceeds from exercise of stock options                      838       13,336
                                                         ---------    ---------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES         (6,651)       5,764
                                                         ---------    ---------

NET INCREASE (DECREASE)IN CASH AND CASH EQUIVALENTS        (78,063)      38,554
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD             122,962      108,087
                                                         ---------    ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD                 $  44,899    $ 146,641
                                                         =========    =========
</Table>


                                       -5-
<PAGE>

                             HELMERICH & PAYNE, INC.
            CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
                     (in thousands - except per share data)

<Table>
<Caption>
                                                                                                                      Accumulated
                                           Common Stock    Additional                               Treasury Stock        Other
                                          --------------    Paid-In     Unearned      Retained     ----------------   Comprehensive
                                          Shares  Amount    Capital   Compensation    Earnings     Shares    Amount       Income
                                          ------  ------   ---------- ------------    --------     ------    ------   -------------
<S>                                       <C>     <C>      <C>        <C>             <C>          <C>      <C>       <C>
Balance, September 30, 2001               53,529  $5,353    $80,324     $(1,812)      $943,105      3,676   $(49,802)    $49,309

Comprehensive Income:

  Net Income                                                                            26,476
  Other comprehensive income,
   Unrealized gains on available-
     for-sale securities, net
     of deferred taxes of $12,552                                                                                         20,479
   Derivatives instruments gains, net
     of deferred taxes of $235                                                                                               383
                                                                                                                         -------
  Total other comprehensive income                                                                                        20,862
                                                                                                                         -------
Comprehensive income

Cash dividends ($0.15 per share)                                                        (7,489)
Exercise of stock options                                       243                                   (44)       595
Tax benefit of stock-based awards                               137
Amortization of deferred compensation                                       733
                                          ------  ------    -------     -------       --------      -----   --------     -------
Balance, March 31, 2002                   53,529  $5,353    $80,704     $(1,079)      $962,092      3,632   $(49,207)    $70,171
                                          ======  ======    =======     =======       ========      =====   ========     =======

<Caption>


                                              Total
                                           Shareholders'
                                              Equity
                                           -------------
<S>                                        <C>
Balance, September 30, 2001                 $1,026,477

Comprehensive Income:

  Net Income                                    26,476
  Other comprehensive income,
   Unrealized gains on available-
     for-sale securities, net
     of deferred taxes of $12,552               20,479
   Derivatives instruments gains, net
     of deferred taxes of $235                     383
                                            ----------
  Total other comprehensive income              20,862
                                            ----------
Comprehensive income                            47,338

Cash dividends ($0.15 per share)                (7,489)
Exercise of stock options                          838
Tax benefit of stock-based awards                  137
Amortization of deferred compensation              733
                                            ----------
Balance, March 31, 2002                     $1,068,034
                                            ==========
</Table>


                                       -6-
<PAGE>

                             HELMERICH & PAYNE, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

1.       In the opinion of the Company, the accompanying unaudited condensed
         consolidated financial statements contain all adjustments, which
         consists only of those of a normal recurring nature, necessary to
         present fairly the results of the periods presented. The results of
         operations for the three and six months ended March 31, 2002, and March
         31, 2001, are not necessarily indicative of the results to be expected
         for the full year. These condensed consolidated financial statements
         should be read in conjunction with the consolidated financial
         statements and notes thereto in the Company's 2001 Annual Report on
         Form 10-K and the Company's 2002 First Quarter Report on Form 10-Q.

2.       The $.075 cash dividend declared in December, 2001, was paid March 1,
         2002. On March 6, 2002, a cash dividend of $.075 per share was declared
         for shareholders of record on May 15, 2002, payable June 3, 2002.

3.       Inventories consist of materials and supplies.

4.       Income from investments includes $324,000 after-tax gains from sales of
         available-for-sale securities during the second quarter and first six
         months of fiscal 2002. After-tax gains from security sales were $74,000
         for the same periods in fiscal 2001.


5.       The following is a summary of available-for-sale securities, which
         excludes those accounted for under the equity method of accounting. At
         March 31, 2002, the Company's investment in securities accounted for
         under the equity method is $58,807,000.

<Table>
<Caption>
                                                     Unrealized  Unrealized   Fair
                                             Cost       Gains      Losses     Value
                                             ----    ----------  ----------   -----
                                             (in thousands)
<S>                                         <C>       <C>        <C>         <C>
              Equity Securities 03/31/02    $58,864   $114,185     $   33    $173,016
              Equity Securities 09/30/01    $63,778   $ 84,257     $3,136    $144,899
</Table>


                                       -7-
<PAGE>

                             HELMERICH & PAYNE, INC.
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - Continued
                                   (Unaudited)

6.   Comprehensive Income -

     The components of comprehensive income, net of related tax, are as follows
(in thousands):

<Table>
<Caption>
                                         Three Months Ended      Six Months Ended
                                              March 31,             March 31,
                                          2002       2001        2002       2001
                                        --------   --------    --------   --------
<S>                                     <C>        <C>         <C>        <C>
Net Income                              $ 10,872   $ 41,749    $ 26,476   $ 75,589

Other comprehensive income:
    Net unrealized gain (loss) on
      securities                           3,224    (27,265)     20,479    (35,710)
    Net unrealized gain (loss) on
     derivative instruments                  309       (726)        383        (28)
                                        --------   --------    --------   --------
    Other comprehensive income (loss)      3,533    (27,991)     20,862    (35,738)
                                        --------   --------    --------   --------
Comprehensive income                    $ 14,405   $ 13,758    $ 47,338   $ 39,851
                                        ========   ========    ========   ========
</Table>

     The components of accumulated other comprehensive income, net of related
taxes, are as follows (in thousands):

<Table>
<Caption>
                                                              March 31,     Sept.30,
                                                                2002          2001
                                                              --------      -------
<S>                                                           <C>           <C>
     Unrealized gains on securities, net                      $70,774       $50,295
     Unrealized loss on derivative instruments                   (603)         (986)
                                                              -------       -------
     Accumulated other comprehensive income                   $70,171       $ 9,309
                                                              =======       =======
</Table>

7.   At March 31, 2002, the Company had committed bank lines of credit totaling
     $100 million; $50 million expires in February 2003 and $50 million expires
     in October 2003. Additionally, the Company had uncommitted credit
     facilities totaling $10 million. Collectively, the Company had $50 million
     in outstanding borrowings and outstanding letters of credit totaling $10.6
     million against these lines at March 31, 2002. Concurrent with a $50
     million borrowing under the facility that expires October 2003, the Company
     entered into an interest rate swap with a notional value of $50 million and
     an expiration date of October 2003. The swap effectively converts this $50
     million facility from a floating rate of LIBOR plus 50 basis points to a
     fixed effective rate of 5.38 percent. Excluding the impact of the interest
     rate swap, the average interest rate for the borrowings at March 31, 2002,
     was approximately 2.40 percent on a 360-day basis.

     Under the various credit agreements, the Company must meet certain
     requirements regarding levels of debt, net worth and earnings. The Company
     met all requirements at March 31, 2002.


                                       -8-
<PAGE>

                             HELMERICH & PAYNE, INC.
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - Continued
                                   (Unaudited)

8.   Earnings per Share -

     Basic earnings per share is based on the weighted-average number of common
     shares outstanding during the period. Diluted earnings per share include
     the dilutive effect of stock options and restricted stock.

     A reconciliation of the weighted-average common shares outstanding on a
     basic and diluted basis is as follows (in thousands):

<Table>
<Caption>
                                                         Three Months Ended   Six Months Ended
                                                              March 31,          March 31,
                                                            2002    2001      2002        2001
                                                           ------  ------    ------     ------
<S>                                                        <C>     <C>       <C>        <C>
         Basic weighted-average shares                     49,788  50,197    49,762     50,005
         Effect of dilutive shares:
              Stock options                                   469     889       402        746
              Restricted stock                                  8      53         7         32
                                                           ------  ------    ------     ------
                                                              477     942       409        778
                                                           ------  ------    ------     ------
         Diluted weighted-average
            shares                                         50,265  51,139    50,171     50,783
                                                           ======  ======    ======     ======
</Table>

9.   Income Taxes -

     The Company's effective tax rate was 42.4% in the first six months of
     fiscal 2002 compared to 39.7% in the same period of fiscal 2001. Costs and
     expenses, related to certain foreign locations for which the Company does
     not receive a tax benefit, resulted in the current year estimated effective
     tax rate of 42.4%. The two major reasons for the effective tax rate
     increase are that the Company had larger net operating loss carry forwards
     from Venezuela in fiscal 2001, and the Company does not receive a tax
     benefit from the devaluation losses in Argentina and Venezuela.

10.  Interest Rate Risk Management -

     The Company uses derivatives as part of an overall operating strategy to
     moderate certain financial market risks and its exposure to interest rate
     risk from long-term debt. To manage this risk, the Company has entered into
     an interest rate swap to exchange floating rate for fixed rate interest
     payments over the remaining life of the debt. As of March 31, 2002, the
     Company had an interest rate swap outstanding with a notional principal
     amount of $50 million. (See Note 7)

     The Company's accounting policy for these instruments is based on its
     designation of such instruments as hedging transactions. An instrument is
     designated as a hedge based in part on its effectiveness in risk reduction
     and one-to-one matching of derivative instruments to underlying
     transactions. The Company records all derivatives on the balance sheet at
     fair value.


                                       -9-
<PAGE>

                             HELMERICH & PAYNE, INC.
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - Continued
                                   (Unaudited)

     For derivative instruments that are designated and qualify as a cash flow
     hedge (i.e., hedging the exposure of variability in expected future cash
     flows that is attributable to a particular risk), the effective portion of
     the gain or loss on the derivative instrument is reported as a component of
     other comprehensive income in stockholders' equity and reclassified into
     earnings in the same period or periods during which the hedged transaction
     affects earnings. The change in value of the derivative instrument in
     excess of the cumulative change in the present value of the future cash
     flows of the risk being hedged, if any, is recognized in the current
     earnings during the period of change.

     The Company's interest rate swap has been designated as a cash flow hedge
     and is expected to be 100% effective in hedging the exposure of variability
     in the future interest payments attributable to the debt because the terms
     of the interest swap correlate with the terms of the debt.

11.  Currency Devaluation -

     The uncertainty regarding economic, banking and currency stability
     continues without improvement in Argentina. The development of a solution
     to the crisis is uncertain, increasing the potential for additional
     currency declines in the near term. The Argentine peso currently trades in
     the range of 3 to 3.5 pesos to one U.S. dollar. The Company has recorded
     $1.2 million in pre-tax currency devaluation losses related to the peso
     during the first quarter of fiscal 2002. The Company could be exposed to
     additional currency losses of between $2 million and $4 million during the
     remainder of fiscal 2002. The Company currently has one rig under contract
     and working in Argentina.

     Also, as a result of a severe decline in the value of the Venezuelan
     bolivar due to political instability and a change in the Venezuelan
     government's exchange policy, pre-tax currency devaluation losses of $2.3
     million were recorded in the second quarter of fiscal 2002. Subsequent to
     March 31, 2002, the bolivar has improved in value relative to the U.S.
     dollar. Should an additional devaluation of the bolivar occur, the Company
     could be exposed to additional currency losses of between $0.5 million and
     $1.4 million during the remainder of fiscal 2002. The Company currently has
     three rigs under contract and working in Venezuela.

12.  Contingent Liabilities and Commitments -

     Litigation Settlement -

     The Company is a defendant in Verdin v. R&B Falcon Drilling USA, Inc., et
     al., a civil action in the United States District Court, Galveston, Texas.
     In May 2001, the Company reached an agreement in principle with Plaintiff's
     counsel to settle all claims pending court approval of the settlement. In
     the third quarter of fiscal 2001, the Company incurred a net charge of
     $3.25 million to contract drilling expense based on the pending settlement.
     The total settlement liability is $10 million of which $6.75 million will
     be paid by the Company's insurer. The Court approved the settlement on
     April 25, 2002. Payment of the settlement proceeds is expected in June
     2002.


                                      -10-
<PAGE>

                             HELMERICH & PAYNE, INC.
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - Continued
                                   (Unaudited)

     Other Matters -

     The Company is the defendant to claims of drainage of oil and gas from
     properties offsetting oil and gas wells it operates. The plaintiffs have
     filed suit on behalf of themselves and a class of similarly situated
     owners. The Company is in the early stages of its response to the claim,
     and is unable to estimate the loss, if any, that it might incur related to
     this matter.

     The Company, on a regular basis, makes commitments for the purchase of
     contract drilling equipment. At March 31, 2002, the Company had commitments
     outstanding of approximately $200 million for the purchase of drilling
     equipment.

13.  Segment Information -

     The Company evaluates performance of its segments based upon operating
     profit or loss from operations before income taxes, which includes revenues
     from external and internal customers; operating costs; depreciation,
     depletion and amortization; dry holes and abandonments and taxes other than
     income taxes. Intersegment sales are accounted for in the same manner as
     sales to unaffiliated customers. Other includes investments in
     available-for-sale securities, equity owned investments, as well as
     corporate operations.


                                      -11-
<PAGE>


                             HELMERICH & PAYNE, INC.
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - Continued
                                   (Unaudited)

         Summarized financial information of the Company's reportable segments
         for the six months ended March 31, 2002, and 2001, is shown in the
         following table:

<Table>
<Caption>
                             External    Inter-        Total      Operating
(in thousands)                Sales      Segment       Sales       Profit
- -------------               ---------   ---------    ---------    ---------
<S>                         <C>         <C>          <C>          <C>
MARCH 31, 2002

Contract Drilling
 Domestic                   $ 170,793   $     538    $ 171,331    $  41,349
 International                 78,263          --       78,263        8,293
                            ---------   ---------    ---------    ---------
                              249,056         538      249,594       49,642
                            ---------   ---------    ---------    ---------
Oil & Gas Operations
 Exploration & Production      47,847          --       47,847         (953)
 Natural Gas Marketing         25,802          --       25,802        1,439
                            ---------   ---------    ---------    ---------
                               73,649          --       73,649          486
                            ---------   ---------    ---------    ---------

Real Estate                     4,460         760        5,220        2,733
Other                           2,558          --        2,558           --
Eliminations                       --      (1,298)      (1,298)          --
                            ---------   ---------    ---------    ---------
   Total                    $ 329,723   $      --    $ 329,723    $  52,861
                            =========   =========    =========    =========
</Table>

<Table>
<Caption>
                             External     Inter-       Total      Operating
(in thousands)                Sales      Segment       Sales       Profit
- -------------               ---------   ---------    ---------    ---------
<S>                         <C>         <C>          <C>          <C>
MARCH 31, 2001

Contract Drilling
 Domestic                   $ 135,453   $   1,612    $ 137,065    $  37,690
 International                 73,819          --       73,819       11,353
                            ---------   ---------    ---------    ---------
                              209,272       1,612      210,884       49,043
                            ---------   ---------    ---------    ---------
Oil & Gas Operations
 Exploration & Production     132,563          --      132,563       71,115
 Natural Gas Marketing         60,153          --       60,153        4,666
                            ---------   ---------    ---------    ---------
                              192,716          --      192,716       75,781
                            ---------   ---------    ---------    ---------

Real Estate                     6,576         776        7,352        4,304
Other                           5,555          --        5,555           --
Eliminations                       --      (2,388)      (2,388)          --
                            ---------   ---------    ---------    ---------
   Total                    $ 414,119   $      --    $ 414,119    $ 129,128
                            =========   =========    =========    =========
</Table>


                                      -12-
<PAGE>


                             HELMERICH & PAYNE, INC.
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - Continued
                                   (Unaudited)

         Summarized financial information of the Company's reportable segments
         for the quarters ended March 31, 2002, and 2001, is shown in the
         following table:

<Table>
<Caption>
                             External    Inter-        Total       Operating
(in thousands)                Sales      Segment       Sales        Profit
- -------------               ---------   ---------    ---------    ---------
<S>                         <C>         <C>          <C>          <C>
MARCH 31, 2002

Contract Drilling
 Domestic                   $  78,670   $     196    $  78,866    $  13,533
 International                 39,210          --       39,210        4,416
                            ---------   ---------    ---------    ---------
                              117,880         196      118,076       17,949
                            ---------   ---------    ---------    ---------
Oil & Gas Operations
 Exploration & Production      23,056          --       23,056        3,006
 Natural Gas Marketing         11,481          --       11,481          979
                            ---------   ---------    ---------    ---------
                               34,537          --       34,537        3,985
                            ---------   ---------    ---------    ---------

Real Estate                     1,965         381        2,346        1,336
Other                           1,194          --        1,194           --
Eliminations                       --        (577)        (577)          --
                            ---------   ---------    ---------    ---------
   Total                    $ 155,576   $      --    $ 155,576    $  23,270
                            =========   =========    =========    =========
</Table>

<Table>
<Caption>
                             External    Inter-        Total       Operating
(in thousands)                Sales      Segment       Sales        Profit
- -------------               ---------   ---------    ---------    ---------
<S>                         <C>         <C>          <C>          <C>
MARCH 31, 2001

Contract Drilling
 Domestic                   $  73,159   $     671    $  73,830    $  20,644
 International                 35,128          --       35,128        3,805
                            ---------   ---------    ---------    ---------
                              108,287         671      108,958       24,449
                            ---------   ---------    ---------    ---------
Oil & Gas Operations
 Exploration & Production      74,835          --       74,835       44,095
 Natural Gas Marketing         31,474          --       31,474          (33)
                            ---------   ---------    ---------    ---------
                              106,309          --      106,309       44,062
                            ---------   ---------    ---------    ---------

Real Estate                     4,245         387        4,632        2,929
Other                           2,728          --        2,728           --
Eliminations                       --      (1,058)      (1,058)          --
                            ---------   ---------    ---------    ---------
   Total                    $ 221,569   $      --    $ 221,569    $  71,440
                            =========   =========    =========    =========
</Table>


                                      -13-
<PAGE>

                             HELMERICH & PAYNE, INC.
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - Continued
                                  (Unaudited)

The following table reconciles segment-operating profit per the table above to
income before income taxes and equity in income of affiliate as reported on the
Consolidated Condensed Statements of Income (in thousands).

<Table>
<Caption>
                                      Quarter Ended          Six Months Ended
                                        March 31,               March 31,
                                   2002        2001          2002        2001
                                ---------    ---------    ---------    ---------
<S>                             <C>          <C>          <C>          <C>
Segment operating profit        $  23,270    $  71,440    $  52,861    $ 129,128

Unallocated amounts:
 Income from investments            1,617        2,752        2,967        5,554
 General corporate expense         (5,358)      (4,646)      (9,926)      (8,213)
 Interest expense                    (342)         (68)        (716)        (675)
 Corporate depreciation              (506)        (505)        (989)        (976)
 Other corporate expense           (1,082)        (748)      (1,488)      (1,153)
                                ---------    ---------    ---------    ---------
    Total unallocated amounts      (5,671)      (3,215)     (10,152)      (5,463)
                                ---------    ---------    ---------    ---------

Income before income taxes
and equity in income of
affiliates                      $  17,599    $  68,225    $  42,709    $ 123,665
                                =========    =========    =========    =========
</Table>

The following table presents revenues from external customers by country based
on the location of service provided (in thousands).

<Table>
<Caption>
                                   Quarter Ended            Six Months Ended
                                     March 31,                  March 31,
                                 2002        2001          2002         2001
                              ---------    ---------    ---------    ---------
<S>                           <C>          <C>          <C>          <C>
Revenues:
  United States                $116,366    $186,441      $251,460     $340,300
  Venezuela                      14,929       9,150        30,218       17,831
  Ecuador                        11,059       6,952        22,210       15,797
  Colombia                        2,250       6,299         6,031       14,066
  Other Foreign                  10,972      12,727        19,804       26,125
                               --------    --------      --------     --------
   Total                       $155,576    $221,569      $329,723     $414,119
                               ========    ========      ========     ========
</Table>

14.  Impairment -

     Included in depreciation, depletion and amortization for the three and six
     month periods ended March 31, 2002 were impairment charges of $19,000 and
     $5,444,000, respectively for proved Exploration and Production properties.
     After tax, the impairment charges reduced net income by approximately
     $12,000 and $3,375,000 ($0.00 and $0.07 per share) for the three and six
     month periods ended March 31, 2002, respectively. Included in depreciation,
     depletion and amortization for both the three and six month periods ended
     March 31, 2001 were impairment charges of $3,808,000 for proved Exploration
     and Production properties. After tax, the impairment charges reduced net
     income by approximately $2,400,000($0.05 per share) for the three and six
     month periods ended March 31, 2001, respectively.


                                      -14-
<PAGE>


             Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                      OF OPERATIONS AND FINANCIAL CONDITION
                                 MARCH 31, 2002

RISK FACTORS AND FORWARD-LOOKING STATEMENTS

The following discussion should be read in conjunction with the consolidated
financial statements, notes and management's narrative analysis contained in the
Company's 2001 Annual Report on Form 10-K and the Company's fiscal 2002 First
Quarter Report on Form 10-Q and the condensed consolidated financial statements
and related notes included elsewhere herein. The Company's future operating
results may be affected by various trends and factors, which are beyond the
Company's control. These include, among other factors, fluctuations in natural
gas and crude oil prices, expiration or termination of drilling contracts,
currency exchange losses, changes in general economic and political conditions,
rapid or unexpected changes in technologies and uncertain business conditions
that affect the Company's businesses. Accordingly, past results and trends
should not be used by investors to anticipate future results or trends.

With the exception of historical information, the matters discussed in
Management's Discussion & Analysis of Results of Operations and Financial
Condition includes forward-looking statements. These forward-looking statements
are based on various assumptions. The Company cautions that, while it believes
such assumptions to be reasonable and makes them in good faith, assumed facts
almost always vary from actual results. The differences between assumed facts
and actual results can be material. The Company is including this cautionary
statement to take advantage of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995 for any forward-looking statements made
by, or on behalf of, the Company. The factors identified in this cautionary
statement are important factors (but not necessarily all important factors) that
could cause actual results to differ materially from those expressed in any
forward-looking statement made by, or on behalf of, the Company.

RESULTS OF OPERATIONS

SECOND QUARTER 2002 VS SECOND QUARTER 2001

The Company reported net income of $10,872,000 ($0.22 per share) from revenues
of $155,576,000 for the second quarter ended March 31, 2002, compared to net
income of $41,749,000 ($0.82 per share) from revenues of $221,569,000 for the
second quarter of the prior fiscal year. Net income in the second quarter of
fiscal 2002 and 2001 included $324,000 ($0.01 per share) and $74,000,
respectively, from the sale of investment securities.

OIL & GAS DIVISION

EXPLORATION and PRODUCTION reported operating profit of $3.0 million for the
second quarter compared to $44.1 million for the same period of fiscal 2001. Oil
& gas revenues decreased to $23.1 million from $74.8 million as commodity prices
were significantly lower than in the second quarter of fiscal 2001.


                                      -15-
<PAGE>

                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                      OF OPERATIONS AND FINANCIAL CONDITION
                                 MARCH 31, 2002
                                   (Continued)

Natural gas revenues decreased $49.8 million to $19.2 million for the current
quarter, due primarily to lower gas prices. Oil revenues decreased $1.8 million,
or 33.2 percent, as both volumes and price decreased compared to last year.

Natural gas prices averaged $2.03 per mcf and $6.46 per mcf for the second
quarter of fiscal 2002 and 2001, respectively. Natural gas volumes averaged
104.5 mmcf/d and 118.4 mmcf/d, respectively. Crude oil prices averaged $19.86
per bbl and $27.78 per bbl for the second quarter of fiscal 2002 and 2001,
respectively. Crude oil volumes averaged 2,018 bbls/d and 2,258 bbls/d,
respectively.

Exploration expenses decreased to $2.5 million for the second quarter of 2002
from $5.3 million in the second quarter of fiscal 2001. The decrease was
primarily the result of a $1.9 million decrease in dry hole costs and a $.6
million decrease in geophysical expenses, as the result of reduced exploration
activity compared to the second quarter of fiscal 2001.

Production expenses were $7.6 million for the second quarter of fiscal 2002
compared with $11.0 million in the same period of fiscal 2001. The $3.4 million
decrease was primarily the result of lower production taxes resulting from
significantly lower gas prices in the second quarter of fiscal 2002 compared
with the same period in 2001.

Depreciation, depletion and amortization expense was $7.0 million for the second
quarter of fiscal 2002 compared with $11.0 million in the same period of 2001.
The $4.0 million decrease is due primarily to a $3.8 million impairment charge
for producing properties in the second quarter of fiscal 2001. After-tax, the
impairment charge reduced net income by approximately $2.4 million, $0.05 per
share, on a diluted basis.

During the second quarter, the Company participated in the drilling of 8 wells,
6 of which are producing, completing or waiting on pipeline connections, and 2
are temporarily abandoned.

NATURAL GAS MARKETING segment reported an operating profit of $1.0 million in
the current quarter compared to an operating loss of $33 thousand in the second
quarter of fiscal 2001. The operating loss in the second quarter of 2001 was the
result of selling higher priced inventory in January of 2001 as spot gas prices
declined rapidly. In the second quarter of 2002, steadily rising prices
benefited the marketing segment.

OIL AND GAS DIVISION SPINOFF AND MERGER

As announced on February 25, 2002, the Company and Key Production Company, Inc.
(Key) have signed a definitive agreement that provides for Helmerich & Payne to
contribute the assets and liabilities of the Oil and Gas Division to a newly
formed subsidiary, Cimarex Energy Co., and distribute on a pro-rata basis all of
the shares of stock of Cimarex to the shareholders of Helmerich & Payne. Cimarex
would then merge with Key. Cimarex Energy Co. will be a new publicly traded
exploration and production company. The transaction will close after receipt of
necessary Key shareholder and regulatory approvals, including the receipt of a
favorable letter ruling from the Internal Revenue Service. Closing will likely
occur in the third calendar quarter of 2002.


                                      -16-
<PAGE>

                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                      OF OPERATIONS AND FINANCIAL CONDITION
                                 MARCH 31, 2002
                                   (Continued)

DOMESTIC DRILLING

DOMESTIC DRILLING'S operating profit decreased to $13.5 million from $20.6
million in the second quarter of fiscal 2001. The decrease is mainly due to a
significant decline in the Company's land operations results. Average U.S. land
rig revenue per day for the second quarter was $12,386, down 6% from $13,154 in
the second quarter of fiscal 2001. Margins also declined, with expenses rising
slightly during the quarter, as the Company started to incur costs associated
with placing into service new rigs from the FlexRig3 construction program. U.S.
land rig utilization for the second quarter of 2002 was 76%, compared with 96%
in the same period of 2001. The rig utilization rate was impacted by the
inclusion of an additional four rigs that recently became available after
significant modifications. The Company currently has 58 U.S. land rigs.

Depreciation expense increased $3.0 million to $8.8 million in the second
quarter of fiscal 2002. The 53% increase is the result of capital expenditures
made in the last six months of fiscal 2001 and in the first six months of fiscal
2002.

As previously announced, the Company is currently in its FlexRig3 construction
program wherein a total of 25 new rigs are expected to be built over the next 18
months. It is anticipated that the Company will commence operations on ten of
the 25 rigs prior to the end of the fiscal year 2002, and that the remainder
will commence operations during fiscal year 2003. The first rig from the
FlexRig3 project is scheduled to be completed next month.

Dayrates for the Company's U.S. offshore platform rigs remained steady, but
utilization dropped to 89% in the second quarter of fiscal 2002 compared with
100% in the second quarter of fiscal 2001 as work on two rigs ended in February
2002 without replacement contracts. The Company anticipates that its newly
constructed platform rigs, 205 and 206, will commence operations in May and
June, respectively.

INTERNATIONAL DRILLING

INTERNATIONAL DRILLING'S operating profit increased to $4.4 million in the
second quarter of fiscal 2002 from $3.8 million in the same period of 2001.
Revenues increased to $39.2 million from $35.1 million for the same periods. The
increase in operating profit was the result of improved profitability in Ecuador
and Argentina, partially offset by reduced operating profit in Venezuela and
Bolivia. Venezuela's second quarter results were negatively impacted by
$2,379,000 of currency devaluation losses resulting from a severe decline in the
value of the Venezuelan bolivar due to a change in its government exchange rate
policy. The value of the bolivar has improved relative to the dollar since the
end of the quarter but there is still uncertainty as to the direction of the
Venezuelan government, regarding currency policies (See Note 11).

Rig utilization for the international operations averaged 58% for the second
quarter of fiscal 2002 compared to 49% for the second quarter of 2001.


                                      -17-
<PAGE>

                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                      OF OPERATIONS AND FINANCIAL CONDITION
                                 MARCH 31, 2002
                                   (Continued)

OTHER

Other revenues decreased approximately $1.5 million from last year, with $.4
million due to reduced dividend income and $1.1 million due to decreased
interest income. The decrease in dividend income is the result of reduced equity
holdings of Occidental Petroleum and Kerr-McGee in the second quarter of fiscal
2002 compared to fiscal 2001. Interest income decreased as the result of reduced
cash balances and significantly reduced interest rates in the second quarter of
fiscal 2002.

Corporate general and administrative expenses increased to $5.4 million in the
second quarter of 2002 from $4.6 million in the same period of 2001. The $0.8
million increase is related to labor and benefits, higher pension expense and
aircraft maintenance.

The Company's effective income tax rate increased to 42.6% for the second
quarter of fiscal 2002 compared to 39.7% for the same period of 2001. The
increase is due primarily to certain costs and expenses related to foreign
locations for which the Company does not receive a tax benefit, including
currency devaluation losses.

SIX MONTHS ENDED MARCH 31, 2002 VS SIX MONTHS ENDED MARCH 31, 2001

The Company reported net income of $26,476,000 ($0.53 per share) from revenues
of $329,723,000 for the six months ended March 31, 2002, compared to net income
of $75,589,000 ($1.49 per share) from revenues of $414,119,000 for the first six
months of the prior fiscal year. Net income in the first six months of fiscal
2002 and 2001 included $324,000 ($0.01 per share) and $155,000, respectively,
from the sale of investment securities.

OIL AND GAS DIVISION

EXPLORATION AND PRODUCTION reported an operating loss of $1.0 million for the
first six months of fiscal 2002 compared to an operating profit of $71.1 million
for the same period of fiscal 2001. Oil & gas revenues decreased to $47.8
million from $132.6 million in 2001.

Natural gas revenues were $39.9 million for the first six months of fiscal 2002
compared to $119.5 million for the same period of fiscal 2001, as gas prices
decreased significantly. Oil revenues decreased to $7.4 million compared to
$12.7 million for the first six months of fiscal 2001, as both oil prices and
volumes decreased. Natural gas prices averaged $2.05 per mcf and $5.59 per mcf
for the first six months of fiscal 2002 and 2001, respectively. Natural gas
volumes averaged 106.7 mmcf/d and 117.4 mmcf/d, respectively. Crude oil prices
averaged $19.72 per bbl and $29.70 per bbl for the first six months of fiscal
2002 and 2001, respectively. Crude oil volumes averaged 2,064 bbls/d and 2,345
bbls/d, respectively.


                                      -18-
<PAGE>

                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                      OF OPERATIONS AND FINANCIAL CONDITION
                                 MARCH 31, 2002
                                   (Continued)

During the first six months of fiscal 2002, exploration related expenses
decreased significantly from the same period of fiscal 2001. Geophysical, dry
hole and abandonment expenses were $11.1 million for the first six months of
fiscal 2002, $10.7 million lower than in the same period of last year with
reduced dry holes of $7.8 million being the primary item. Reduced exploration
activity and exploratory drilling is the primary reason for the decrease in
exploration expenses.

Production expenses decreased to $15.3 million for the first six months of
fiscal 2002 compared with $19.2 million in the same period of fiscal 2001. Lower
production taxes was the primary reason for the decrease as the result of
significantly lower natural gas prices in the first six months of fiscal 2002.

During the first six months of fiscal 2002, the Company participated in the
drilling of 22 wells, 15 of which are producing, completing or waiting on
pipeline connections, and 2 are temporarily abandoned and 5 are dry holes. With
the current increase in product prices, drilling expenditures will increase with
anticipated drilling of 94 gross wells for fiscal 2002 for a net expenditure of
approximately $47 million.

NATURAL GAS MARKETING segment reported an operating profit of $1.4 million in
the first six months of fiscal 2002 compared to $4.7 million in the same period
of fiscal 2001. The significant decrease was the result of very favorable spot
market gas prices in both November and December of 2000, as gas prices were
increasing to record levels. Those same conditions did not occur during the
first six months of fiscal 2002.

DOMESTIC DRILLING

DOMESTIC DRILLING'S operating profit increased to $41.3 million in the first six
months of 2002 from $37.7 million in the first six months of fiscal 2001.
Average U.S. land rig revenue per day for the first six months of 2002 was
$13,245 per day compared to $11,884 per day for the same period of 2001. Rig
utilization for U.S. land rigs was 83% for the first six months of fiscal 2002
compared to 94% in the same period of 2001 as demand for land rigs decreased in
2002 as the result of lower natural gas prices. In March 2002, land rig revenue
per day was $12,197 and rig utilization was 79% as dayrates were still drifting
lower.

The Company's U.S. offshore platform rigs operating results were slightly
improved in the six months ended March 31, 2002 compared with the same period of
fiscal 2001. Rig utilization was 95% for the first six months of fiscal 2002
compared to 96% in the same period of 2001. Two newly constructed platform rigs,
205 and 206, are scheduled to commence operations in the Gulf of Mexico in May
and June, respectively.

Depreciation expense was $16.8 million in the first six months of fiscal 2002
compared to $10.9 million in the same period of fiscal 2001. The $5.9 million
increase is the result of new rig investment during the period April, 2001 to
March 2002.


                                      -19-
<PAGE>

                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                      OF OPERATIONS AND FINANCIAL CONDITION
                                 MARCH 31, 2002
                                   (Continued)

Although difficult to predict, the Company's estimated revenue per day for U.S.
land rigs in the last six months of fiscal 2002 is approximately $10,600 per day
and rig utilization is 85%. Margins will be somewhat lower in the second half of
2002, as expenses have not decreased with lower revenues. As previously stated,
ten new FlexRigs will be added in the last six months of fiscal 2002.

INTERNATIONAL DRILLING

INTERNATIONAL DRILLING'S operating profit decreased to $8.3 million from $11.3
million. Revenues increased to $78.3 million from $73.8 million. Improved
profitability in Ecuador and Argentina helped offset reduced operating profit in
Colombia and Bolivia. In the first six months of fiscal 2002, devaluation losses
in both Argentina and Venezuela negatively impacted operating profit. Venezuela
recorded devaluation losses of $2.3 million resulting from a severe decline in
the value of the Venezuelan bolivar due to a change in its government exchange
policy. Subsequent to March 31, 2002, the bolivar has improved in value relative
to the U.S. dollar. Should an additional devaluation of the bolivar occur, the
Company could be exposed to additional currency losses of between $0.5 million
and $1.4 million during the remainder of fiscal 2002.

Argentina also recorded a devaluation loss of $1.2 million in the first six
months of 2002 due to devaluation of the Argentina peso. With current conditions
in Argentina, there is still significant uncertainty regarding economic, banking
and currency stability. Based on a peso exchange of 3.0 and 3.5, the Company
could be exposed to additional losses of between $2 and $4 million during this
fiscal year due to currency devaluation.

OTHER

Interest income was $1.1 million in the first six months of 2002 compared to
$3.1 million in the same period of 2001. The decrease is the result of lower
interest rates and decreased cash balances in 2002. Dividend income was $1.4
million in the first six months of fiscal 2002 compared to $2.2 million in 2001.
The decrease is the result of reduced equity holdings in Kerr-McGee and
Occidental Petroleum and in money market investments in fiscal 2002.

Interest expense for the first six months of fiscal 2002 was $0.7 million
compared with $0.7 million for the same period in fiscal 2001. Corporate general
and administrative expense was $9.9 million in the first six months of fiscal
2002 compared to $8.2 million for the same period of 2001. The $1.7 million
increase is related to labor and benefits, higher pension and insurance costs
and legal and professional services related to efforts to establish the Oil and
Gas Division as a separate public entity.

The Company's effective income tax rate increased to 42.4% for the first six
months of fiscal 2002 compared to 39.7% for the same period of 2001. The
increase is due primarily to certain costs and expenses related to foreign
locations for which the Company does not receive a tax benefit.


                                      -20-
<PAGE>

                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                      OF OPERATIONS AND FINANCIAL CONDITION
                                 MARCH 31, 2002
                                   (Continued)

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $86.9 million for the first six
months of fiscal 2002, compared to $133.7 million for the same period in 2001.
The decrease in cash flows was the result of significantly lower cash flow from
the Exploration and Production segment due to decreased gas prices. Capital
expenditures were $165.7 million and $110.5 million for the first six months of
fiscal 2002 and 2001, respectively.

The Company anticipates capital expenditures to be approximately $357 million
for fiscal 2002. Internally generated cash flows are projected to be
approximately $165 million for fiscal 2002 and cash balances were $45 million at
March 31, 2002. The Company's indebtedness totaled $50,000,000 as of March 31,
2002, as described in note 7 to the Consolidated Condensed Financial Statements.
It is anticipated that the Company will secure additional borrowing in the last
six months of fiscal 2002 and possibly sell a portion of its investment
portfolio to fund projected capital expenditures.

In the second quarter of fiscal 2002, the Company sold its remaining 150,000
shares of Occidental Petroleum for approximately $4.2 million.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

For a description of the Company's market risks, see "Item 7 (a). Quantitative
and Qualitative Disclosures About Market Risk" in the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 2001, and Note 10 to the
Consolidated condensed Financial Statements contained in Part I hereof.


                                      -21-
<PAGE>

                           PART II. OTHER INFORMATION
                             HELMERICH & PAYNE, INC.
                                 March 31, 2002
                                   (continued)

PART II.  OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS

The discussion of legal proceedings under the heading "Litigation Settlement" as
disclosed in Note 12 to the Consolidated Condensed Financial Statements
contained in Part I hereof is hereby incorporated by reference.

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

    (a)   Exhibits

                  The following documents are included as exhibits to this Form
         10-Q. Those exhibits below incorporated by reference herein are
         indicated as such. If not so indicated, such exhibits are filed
         herewith.

         Exhibit
         Number            Description

          2.1              Agreement and Plan of Merger, dated as of February
                           23, 2002, by and among Helmerich & Payne, Inc.,
                           Cimarex Energy Co., Mountain Acquisition Co. and Key
                           Production Company, Inc. is incorporated herein by
                           reference to Exhibit 2.1 to the Cimarex Energy Co.
                           Registration Statement No. 333-87948 on Form S-4
                           filed May 9, 2002.

          3.2              Amended and Restated By-laws of the Registrant.

         10.1              Distribution Agreement, dated as of February 23,
                           2002, by and between Helmerich & Payne, Inc. and
                           Cimarex Energy Co. is incorporated herein by
                           reference to Exhibit 10.1 to the Cimarex Energy Co.
                           Registration Statement No. 333-87948 on Form S-4
                           filed May 9, 2002.

         10.2              Tax Sharing Agreement, dated as of February 23, 2002,
                           by and between Helmerich & Payne, Inc. and Cimarex
                           Energy Co. is incorporated herein by reference to
                           Exhibit 10.2 to the Cimarex Energy Co. Registration
                           Statement No. 333-87948 on Form S-4 filed May 9,
                           2002.

         10.3              Employee Benefits Agreement, dated as of February 23,
                           2002, by and between Helmerich & Payne, Inc. and
                           Cimarex Energy Co. is incorporated herein by
                           reference to Exhibit 10.3 to the Cimarex Energy Co.
                           Registration Statement No. 333-87948 on Form S-4
                           filed May 9, 2002.


                                      -22-
<PAGE>

                           PART II. OTHER INFORMATION
                             HELMERICH & PAYNE, INC.
                                 March 31, 2002
                                   (continued)

    (b)      Reports on Form 8-K

For the three months ended March 31, 2002, registrant furnished, on January 23,
2002, one form 8-K reporting under Item 9, Regulation for Disclosure, attaching
a press release announcing results of operations and certain supplemental
information, including financial statements. In addition, registrant filed on
February 25, 2002 one Form 8-K reporting events under Item 5 of the Form 8-K
regarding execution of a merger agreement and a related press release and
another Form 8-K reporting events under Item 5 of the Form 8-K regarding
currency devaluation in connection with registrant's operations in Venezuela.

                                   SIGNATURES

                             HELMERICH & PAYNE, INC.

         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.

Date:         May 15         2002     /s/ DOUGLAS E. FEARS
      ----------------------          -----------------------------------------
                                      Douglas E. Fears, Chief Financial Officer


Date:         May 15         2002     /s/ HANS C. HELMERICH
      ----------------------          -----------------------------------------
                                      Hans C. Helmerich, President


                                      -23-
<PAGE>

                                  EXHIBIT INDEX

         The following documents are included as exhibits to this Form 10-Q.
Those exhibits below incorporated by reference herein are indicated as such. If
not so indicated, such exhibits are filed herewith.

<Table>
<Caption>
        EXHIBIT
         NUMBER            DESCRIPTION
         ------            -----------
<S>                        <C>
          2.1              Agreement and Plan of Merger, dated as of February
                           23, 2002, by and among Helmerich & Payne, Inc.,
                           Cimarex Energy Co., Mountain Acquisition Co. and Key
                           Production Company, Inc. is incorporated herein by
                           reference to Exhibit 2.1 to the Cimarex Energy Co.
                           Registration Statement No. 333-87948 on Form S-4
                           filed May 9, 2002.

          3.2              Amended and Restated By-laws of the Registrant.

         10.1              Distribution Agreement, dated as of February 23,
                           2002, by and between Helmerich & Payne, Inc. and
                           Cimarex Energy Co. is incorporated herein by
                           reference to Exhibit 10.1 to the Cimarex Energy Co.
                           Registration Statement No. 333-87948 on Form S-4
                           filed May 9, 2002.

         10.2              Tax Sharing Agreement, dated as of February 23, 2002,
                           by and between Helmerich & Payne, Inc. and Cimarex
                           Energy Co. is incorporated herein by reference to
                           Exhibit 10.2 to the Cimarex Energy Co. Registration
                           Statement No. 333-87948 on Form S-4 filed May 9,
                           2002.

         10.3              Employee Benefits Agreement, dated as of February 23,
                           2002, by and between Helmerich & Payne, Inc. and
                           Cimarex Energy Co. is incorporated herein by
                           reference to Exhibit 10.3 to the Cimarex Energy Co.
                           Registration Statement No. 333-87948 on Form S-4
                           filed May 9, 2002.
</Table>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>3
<FILENAME>d96964ex3-2.txt
<DESCRIPTION>AMENDED AND RESTATED BY-LAWS
<TEXT>
<PAGE>
                                                                     EXHIBIT 3.2

                          AMENDED AND RESTATED BY-LAWS

                                       OF

                             HELMERICH & PAYNE, INC.


                                  - - -oOo- - -


                                     OFFICES

         1. The principal office shall be in the City of Wilmington, County of
New Castle, State of Delaware, and the name of the resident agent in charge
thereof is The Corporation Trust Company.

         2. The corporation may also have offices at Tulsa, Oklahoma, and at
such other places as the Board of Directors may from time to time appoint or the
business of the corporation may require.

                                      SEAL

         3. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal,
Delaware". Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.



<PAGE>


                             STOCKHOLDERS' MEETINGS

         4. All meetings of the stockholders for the election of Directors shall
be held at the principal office of the corporation in Tulsa, Oklahoma. Special
meetings of stockholders for any other purpose may be held at such place and
time as shall be stated in the notice of the meeting.

         5. An annual meeting of stockholders, after the year 1940, shall be
held on the first Wednesday of March in each year if not a legal holiday, and if
a legal holiday, then on the next secular day following, at 12:00 o'clock noon,
when they shall elect by a plurality vote, by ballot, a Board of Directors, and
transact such other business as may properly be brought before the meeting.

         6. The holders of a majority of the stock issued and outstanding, and
entitled to vote thereat, present in person, or represented by proxy, shall be
requisite and shall constitute a quorum at all meetings of the stockholders for
the transaction of business except as otherwise provided by statute, by the
Certificate of Incorporation or by these By-laws. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person, or by proxy, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present, or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. Unless otherwise provided by statute, a plurality of the
votes cast at any meeting


<PAGE>



of the stockholders at which a quorum is present shall be necessary for the
authorization of any action or the transaction of any business at such meeting
and, except as provided in Section 5 above for the election of Directors, the
vote need not be by ballot unless a vote by ballot is demanded by a stockholder
present at the meeting.

         7. At any meeting of the stockholders every stockholder having the
right to vote shall be entitled to vote in person, or by proxy appointed by an
instrument in writing subscribed by such stockholder and bearing a date not more
than three years prior to said meeting, unless said instrument provides for a
longer period. Each stockholder shall have one vote for each share of stock
having voting power, registered in his name on the books of the corporation, and
except where the transfer books of the corporation shall have been closed or a
date shall have been fixed as a record date for the determination of its
stockholders entitled to vote, no share of stock shall be voted on at any
election of Directors which shall have been transferred on the books of the
corporation within twenty days next preceding such election of Directors.

         8. Written notice of the annual meeting shall be served upon or mailed
to each stockholder entitled to vote thereat at such address as appears on the
stock books of the corporation, at least ten (10) days prior to the meeting.

         9. A complete list of the stockholders entitled to vote at the ensuing
election, arranged in alphabetical order, with the residence of each and the
number of voting shares held by each, shall be prepared by the Secretary and
filed in the office where



<PAGE>



the election is to be held, at least ten days before every election, and shall
at all times during the usual hours for business and during the whole time of
said election, be open to the examination of any stockholder.

         10. Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute, may be called by the President and shall
be called by the President or Secretary at the request in writing of a majority
of the Board of Directors. Such request shall state the purpose or purposes of
the proposed meeting.

         11. Business transacted at all special meetings shall be confined to
the objects stated in the call.

         12. Written notice of a special meeting of stockholders, stating the
time and place and object thereof, shall be served upon or mailed at least ten
(10) days before such meeting to each stockholder entitled to vote thereat at
such address as appears on the books of the corporation.

         12.1 Without limiting any other notice requirements imposed by law, the
Certificate of Incorporation or these By-laws, any nomination for election to
the Board of Directors or other proposal to be presented by any stockholder at a
stockholder meeting will be properly presented only if written notice of such
stockholder's intent to make such nomination or proposal has been delivered or
mailed to and received by the Secretary, not later than (i) for an annual
meeting to be held on the first Wednesday in March or an annual meeting to be
held on any other date for which the corporation gives at least 90 days prior
notice of such date to



<PAGE>



stockholders, not less than 50 nor more than 75 days prior to such meeting, or
(ii) for any other annual meeting or a special meeting, the close of business on
the tenth day after notice of such meeting is first given to stockholders. Such
notice by the stockholder to the corporation shall set forth in reasonable
detail information concerning the nominee (in the case of a nomination for
election to the Board of Directors) or the substance of the proposal (in the
case of any other stockholder proposal), and shall include, without limiting the
foregoing: (a) the name and address of the stockholder who intends to present
the nomination or other proposal and of the person or persons, if any, to be
nominated; (b) a representation that the stockholder is a holder of record of
stock of the corporation entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to present the nomination or other proposal
specified in the notice; (c) a description of all arrangements or understandings
between the stockholder and any other person or persons (naming such person or
persons) pursuant to which the nomination or other proposal is to be made by the
stockholder; (d) such other information regarding each proposal and each nominee
as would have been required to be included in a proxy statement filed pursuant
to the proxy rules of the Securities and Exchange Commission had the nomination
or other proposal been made by the Board of Directors; and (e) the consent of
each nominee, if any, to serve as a Director of the corporation if elected. The
chairman of the meeting may, in his sole discretion, refuse to acknowledge a
nomination or other proposal



<PAGE>



presented by any person that does not comply with the foregoing procedure.

         13. A. Whenever the vote of stockholders at a meeting thereof is
required or permitted to be taken in connection with any corporate action, the
meeting and vote of stockholders may be dispensed with to the extent permitted
by law, if all the stockholders who would have been entitled to vote upon the
action if such meeting were held shall consent in writing to such corporate
action being taken. A minute of any such corporate action consented to in
writing by all the stockholders shall be inserted in the records of the
corporation as of the date such action was taken. The minute shall state that
such action was taken in lieu of an annual or a special meeting or other action
required to be taken by the stockholders, and the written consent of all the
stockholders shall either appear at the foot of such minute or be filed with the
records of the corporation with such minute.

             B. The record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting shall be fixed by the
Board of Directors. Any stockholder seeking to have the stockholders authorize
or take corporate action by written consent without a meeting shall, by written
notice, request the Board of Directors to fix a record date. Within ten days
after receiving such a notice, the Board of Directors shall fix as a record date
for such proposed action by written consent such date as the Board shall
consider appropriate in the circumstances.



<PAGE>



                                    DIRECTORS

         14. A. The number of Directors which shall con-stitute the entire Board
shall be ten, which number may from time to time be increased or decreased by a
majority of the entire Board of Directors, but shall in no event be less than
three. If the number of Directors be increased, as hereinabove provided or
otherwise pursuant to law, such increase shall be deemed to create vacancies to
be filled as hereinafter prescribed. Directors need not be stockholders. No
person shall be eligible to be nominated to be a Director who will have attained
the age of 72 years on or before the Annual Meeting of Stockholders at which he
or she is to be elected nor shall any Director be eligible to be appointed by
the Board of Directors to fill a vacancy if he or she has or shall have attained
the age of 72 years at the time of appointment. No Officer of the Company, other
than a person who is or has been Chairman of the Board or President, shall
become nor may remain a Member of the Board of Directors after ceasing to be an
officer.

         B. The Board of Directors shall be divided into three classes: one
class of Directors composed of three Directors and known as the First Class
shall be those Directors elected for a three-year term at the Annual Meeting of
Stockholders held March 5, 1980; another class of Directors composed of three
Directors and known as the Second Class shall be those Directors elected for a
three-year term at the Annual Meeting of Stockholders held March 1, 1978; and
another class of Directors composed of three Directors and known as the Third
Class shall be those Directors elected for a three-year term at the Annual
Meeting of Stockholders held March



<PAGE>



7, 1979, and one additional Director elected at the Special Meeting of the Board
of Directors held May 13, 1980, as the third member of the Third Class. At each
succeeding Annual Meeting of Stockholders successors to the class of Directors
whose term expires in that year will be elected for a three-year term. Vacancies
in any class that occur prior to the expiration of the then current term of such
class if filled by the Board of Directors shall be filled for the remainder of
the full term of such class. If the number of Directors is changed, any increase
or decrease of Directors shall be apportioned among the classes so as to
establish or maintain equality in number among the classes and any additional
Director elected to any class shall hold office for a term which shall coincide
with the term of such class. Where the number of Directors constituting the
whole Board is such that it is impossible to establish or maintain complete
equality in number among the classes, the increase or decrease in Directors
shall be apportioned among the classes so as to maintain all classes as nearly
equal in number as possible, and so that the Third Class does not have more
members than either the First or Second Class and the Second Class does not have
more members than the First Class. Except as otherwise provided for filling
vacancies, the Directors of the Company shall be elected by class at the Annual
Meeting of Stockholders to serve until their successors are elected and
qualified.

         15. The Directors may hold their meetings and keep the books of the
corporation, except the original or duplicate stock ledger,



<PAGE>



outside of Delaware at such places as they may from time to time determine.

         16. If the office of any Director or Directors becomes vacant by reason
of death, resignation, retirement, disqualification, removal from office, or
otherwise, a majority of the remaining Directors, though less than a quorum,
shall choose a successor or successors, who shall hold office for the unexpired
term in respect to which such vacancy occurred or until the next election of
Directors.

         17. The property and business of the corporation shall be managed by
its Board of Directors which may exercise all such powers of the corporation and
do all such lawful acts and things as are not by statute or by the Certificate
of Incorporation or by these By-laws directed or required to be exercised or
done by the stockholders.

                             COMMITTEES OF DIRECTORS

         18. The Board of Directors may, by resolution or resolutions passed by
a majority of the whole Board, designate one or more committees, each committee
to consist of two or more of the Directors of the corporation, which, to the
extent provided in said resolution or resolutions, shall have and may exercise
the powers of the Board of Directors in the management of the business and
affairs of the corporation, and may have power to authorize the seal of the
corporation to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors.



<PAGE>



         19. The committees shall keep regular minutes of their proceedings and
report the same to the Board when required.

                            COMPENSATION OF DIRECTORS

         20. Directors, as such, shall not receive any stated salary for their
services, but by resolution of the Board, a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each regular or special
meeting of the Board; provided that nothing herein contained shall be construed
to preclude any Director from serving the corporation in any other capacity and
receiving compensation therefor.

         21. Members of special or standing committees may be allowed like
compensation for attending committee meetings.

                              MEETINGS OF THE BOARD

            22. The first meeting of each newly elected Board shall be held at
   such time and place either within or without the State of Delaware as shall
   be fixed by the vote of the stockholders at the annual meeting, and no notice
   of such meeting shall be necessary to the newly elected Directors in order
   legally to constitute the meeting; provided a majority of the whole Board
   shall be present; or they may meet at such place and time as shall be fixed
   by the consent in writing of all the Directors.

            23. Regular meetings of the Board may be held without notice at such
   time and place either within or without the State of Delaware as shall from
   time to time be determined by the Board.


<PAGE>


            24. Special meetings may be called by the Chairman of the Board, the
   President or the Secretary on no less than twenty-four (24) hours notice to
   each Director, either personally, by mail (regular or express), facsimile
   transmission, e-mail, telegram or by any combination thereof. Special
   meetings shall be called by the President or Secretary in like manner and on
   like notice on the written request of a majority of the Board of Directors.
   Notice of the calling of any special meeting may be disseminated in any
   manner set forth above by the person calling the meeting or the Secretary or
   any Assistant Secretary provided such notice indicates the person who has
   duly called the same. Each such notice shall state the time and place of the
   meeting to be so held. Except as otherwise specifically provided in these
   By-laws, no notice of the objects or purposes of any special meeting of the
   Board of Directors need be given and, unless otherwise indicated in the
   notice thereof, any and all business may be transacted at any such special
   meeting.

            25. At all meetings of the Board four (4) Directors shall constitute
   a quorum for the transaction of business, and the act of a majority of the
   Directors present at any meeting at which there is a quorum shall be the act
   of the Board of Directors, expect as may be otherwise specifically provided
   by statute or by the Certificate of Incorporation, or by these By-laws.


                                    OFFICERS


            26. The officers of the corporation shall be chosen by the
   Directors, who at any time, may elect a Chairman of the



<PAGE>



   Board, a Chief Executive Officer, a Chief Operating Officer, a President, one
   or more Vice-Presidents, a Secretary, and a Treasurer. The Directors may also
   designate any one or more Vice-Presidents, as Executive Vice-Presidents,
   Senior Vice-Presidents, Financial Vice-President or otherwise and may elect
   or appoint such additional officers, including Assistant Secretaries and
   Assistant Treasurers, and agents as the Directors may deem advisable. Any two
   or more offices may be held by the same person, except the offices of
   Chairman of the Board and Secretary and the offices of President and
   Secretary.

            27. The Board of Directors, at its first meeting after each annual
   meeting of stockholders, or as soon as conveniently possible, shall choose
   the principal officers, none of whom, except the Chairman of the Board, need
   be a member of the Board.

            28. The salaries of all officers and agents of the corporation shall
   be fixed by the Board of Directors. No officer or agent shall be ineligible
   to receive such salary by reason of the fact that he is also a Director of
   the corporation and receiving compensation therefor.

            29. The officers of the corporation shall hold office until their
   successors are chosen and qualify in their stead. Any officer elected or
   appointed by the Board of Directors may be removed at any time by the
   affirmative vote of a majority of the whole Board of Directors.

            30. If the office of any officer becomes vacant for any reason, the
   vacancy shall be filled by the Board of Directors.


<PAGE>


                              CHAIRMAN OF THE BOARD

            31. The Chairman of the Board shall preside at all meetings of the
   stockholders and the Board of Directors. Except where, by law, the signature
   of the President is required, the Chairman shall possess the same power as
   the President to sign all certificates, contracts, and other instruments of
   the corporation which may be authorized by the Board of Directors. He shall
   have such other powers and perform such other duties as the Board of
   Directors or its Executive Committee may from time to time prescribe.

                             CHIEF EXECUTIVE OFFICER

            32. The Chief Executive Officer shall have general active management
   of the business of the corporation, and in the absence of the Chairman of the
   Board, shall preside at all meetings of the shareholders and the Board of
   Directors; and shall see that all orders and resolutions of the Board of
   Directors are carried into effect. He shall have such other powers and
   perform such other duties as the Board of Directors or its Executive
   Committee may from time to time prescribe.

                             CHIEF OPERATING OFFICER

            33. In the event that the Board of Directors shall have chosen a
   Chief Executive Officer, they may choose a Chief Operating Officer. The Chief
   Operating Officer, shall have general direction of the supervision over the
   ordinary details relating to the corporation's production and exploration,
   drilling, chemicals, real estate, and administrative departments; he shall
   always proceed, however, pursuant to the



<PAGE>



   instructions of the Chief Executive Officer. It shall be the duty of the
   Chief Operating Officer to report to the Chief Executive Officer daily the
   exact nature, extent, terms and conditions of all business, contracts and
   commitments; to render promptly such statements and reports touching upon the
   business of the corporation in his charge as may be called for from time to
   time by the Chief Executive Officer or by the Board of Directors; and to
   perform such other duties as may be prescribed from time to time by the Board
   of Directors.

                                  THE PRESIDENT

            34. The President, in the absence of the Chairman of the Board and
   the Chief Executive Officer, shall preside at all meetings of the
   stockholders and the Board of Directors. He shall have, subject to the
   authority of the Chairman of the Board and/or the Chief Executive Officer,
   general supervision of the affairs of the corporation, shall sign or
   countersign all certificates, contracts, or other instruments of the
   corporation as authorized by the Board of Directors or as required by law,
   shall make reports to the Board of Directors and stockholders, and shall
   perform any and all other duties as are incident to his office or are
   properly required of him by the Board of Directors.

                                 VICE-PRESIDENTS

            35. The Vice-Presidents, in the order designated by the Board of
   Directors, shall, in the absence or disability of the President, or at his
   request, perform the duties and exercise the powers of the President and
   shall perform such other duties



<PAGE>



   as from time to time the Board of Directors shall prescribe.

                         THE SECRETARY AND THE TREASURER

            36. The Secretary and the Treasurer shall perform those duties as
   are incident to their offices, or are properly required of them by the Board
   of Directors, or are assigned to them by the Certificate of Incorporation or
   these By-Laws. The Assistant Secretaries, in the order of their seniority,
   shall, in the absence of the Secretary perform the duties and exercise the
   powers of the Secretary, and shall perform any other duties as may be
   assigned by the Board of Directors, Chairman of the Board, Chief Executive
   Officer, President, or the Secretary. The Assistant Treasurers, in the order
   of their seniority, shall, in the absence of the Treasurer perform the duties
   and exercise the powers of the Treasurer, and shall perform any other duties
   as may be assigned by the Board of Directors, Chairman of the Board, Chief
   Executive Officer, President, or the Treasurer.

                           OTHER SUBORDINATE OFFICERS

            37. Other subordinate officers appointed by the Board of Directors
   shall exercise any powers and perform any duties as may be delegated to them
   by the resolutions appointing them, or by subsequent resolutions adopted from
   time to time.

                              ABSENCE OR DISABILITY

            38. In case of the absence or disability of any officer of the
   corporation and of any person authorized to act in his or her place during
   such period of absence or disability, the Board of Directors may from time to
   time delegate the powers



<PAGE>



   and duties of that officer to any other officer, or any director, or any
   other person whom it may select.

                         VOTING CORPORATION'S SECURITIES

            39. Unless otherwise ordered by the Board of Directors, the Chairman
   of the Board, the Chief Executive Officer, or the President, in that order,
   or in the event of their inability to act, the Vice-President designated by
   the Board of Directors to act in the absence of the Chairman of the Board,
   the Chief Executive Officer or the President, shall have full power and
   authority on behalf of the corporation to attend and to act and to vote at
   any meetings of security holders of corporations in which the corporation may
   hold securities, and at such meetings shall possess and may exercise any and
   all rights and powers incident to the ownership of such securities, and which
   as the owner thereof the corporation might have possessed and exercised, if
   present. The Board of Directors by resolution from time to time may confer
   like powers upon any other person or persons.

                              CERTIFICATES OF STOCK

            40. The certificates of stock of the corporation shall be numbered
   and shall be entered in the books of the corporation as they are issued. They
   shall exhibit the holder's name and number of shares and shall be signed by
   the chairman or vice-chairman of the board of directors or the president or
   vice-president, and by the treasurer or an assistant treasurer, or the
   secretary or an assistant secretary. If the corporation has a transfer agent
   or an assistant transfer agent or a


<PAGE>


   transfer clerk acting on its behalf and a registrar, the signature of any
   such officer may be a facsimile.

                               TRANSFERS OF STOCK

            41. Upon surrender to the corporation or the transfer agent of the
   corporation of a certificate for shares duly endorsed or accompanied by
   proper evidence of succession, assignment or authority to transfer, it shall
   be the duty of the corporation to issue a new certificate to the person
   entitled thereto, cancel the old certificate and record the transaction upon
   its books.

                            CLOSING OF TRANSFER BOOKS

            42. The board of Directors shall have power to close the stock
   transfer books of the corporation for a period not exceeding sixty days
   preceding the date of any meeting of stockholders or the date for payment of
   any dividend or the date for the allotment of rights or the date when any
   change or conversion or exchange of capital stock shall go into effect or for
   a period of not exceeding sixty days in connection with obtaining the consent
   of stockholders for any purpose; provided, however, that in lieu of closing
   the stock transfer books as aforesaid, the Board of Directors may fix in
   advance a date, not exceeding sixty days preceding the date of any meeting of
   stockholders or the date for the payment of any dividend, or the date for the
   allotment of rights, or the date when any change or conversion or exchange of
   capital stock shall go into effect, or a date in connection with obtaining
   such consent, as a record date for the determination of the



<PAGE>



   stockholders entitled to notice of, and to vote at, any such meeting, and any
   adjournment thereof, or entitled to receive payment of any such dividend, or
   to any such allotment of rights, or to exercise the rights in respect of any
   such change, conversion or exchange of capital stock, or to give such
   consent, and in such case such stockholders, and only such stockholders as
   shall be stockholders of record on the date so fixed, shall be entitled to
   such notice of, and to vote at, such meeting and any adjournment thereof, or
   to receive payment of such dividend, or to receive such allotment of rights,
   or to exercise such rights, or to give such consent, as the case may be,
   notwithstanding any transfer of any stock on the books of the corporation
   after any such record date fixed as aforesaid.

                             REGISTERED STOCKHOLDERS

            43. The corporation shall be entitled to treat the holder of record
   of any share or shares of stock as the holder in fact thereof and,
   accordingly, shall not be bound to recognize any equitable or other claim to
   or interest in such share on the part of any other person, whether or not it
   shall have express or other notice thereof, except as otherwise provided by
   the laws of Delaware.

                                LOST CERTIFICATE

            44. The Board of Directors may direct a new certificate or
   certificates to be issued in place of any certificate or certificates
   theretofore issued by the corporation alleged to have been lost or destroyed,
   upon the making of an affidavit of that fact by the person claiming the
   certificate of stock to be


<PAGE>


   lost. When authorizing such issue of a new certificate or certificates, the
   Board of Directors may, in its discretion and as a condition precedent to the
   issuance thereof, require the owner of such lost or destroyed certificate or
   certificates, or his legal representative, to advertise the same in such
   manner as it shall require and/or give the corporation a bond in such sum as
   it may direct as indemnity against any claim that may be made against the
   corporation with respect to the certificate alleged to have been lost or
   destroyed. The Board of Directors need not act specifically upon the
   replacement of each lost or destroyed certificate, but may delegate to the
   officers of the corporation the power to authorize, in writing, without
   further authority of the Board of Directors, the transfer agent of the
   corporation to issue a new certificate or certificates of stock in
   replacement of certificates alleged to have been lost, stolen, or destroyed;
   provided, however, that no replacement certificates shall be issued unless
   there shall first have been furnished to the corporation or its transfer
   agent satisfactory proof of such loss, theft, or destruction, and adequate
   protection to the corporation and its transfer agent under an appropriate
   bond of indemnity under which they shall be named as Obligee, and which bond
   shall be in an amount and form satisfactory to the officer of the corporation
   issuing the written authorization.

                                     CHECKS

            45. All checks or demands for money and notes of the corporation
   shall be signed by such officer or officers or such



<PAGE>



   other person or persons as the Board of Directors may from time to time
   designate.

                                   FISCAL YEAR

            46. The fiscal year shall begin the first day of October in each
   year.

                                    DIVIDENDS

            47. Dividends upon the capital stock of the corporation subject to
   the provisions of the Certificate of Incorporation, if any, may be declared
   by the Board of Directors at any regular or special meeting, pursuant to law.
   Dividends may be paid in cash, in property, or in shares of the capital
   stock.

            48. Before payment of any dividend there may be set aside out of any
   funds of the corporation available for dividends such sum or sums as the
   Directors from time to time, in their absolute discretion, think proper as a
   reserve fund to meet contingencies, or for equalizing dividends, or for
   repairing or maintaining any property of the corporation, or for such other
   purpose as the Directors shall think conducive to the interest of the
   corporation, and the Directors may abolish any such reserve in the manner in
   which it was created.

                           DIRECTORS' ANNUAL STATEMENT

            49. The Board of Directors shall present at each annual meeting and
   when called for by vote of the stockholders at any special meeting of the
   stockholders, a full and clear statement of the business and condition of the
   corporation.

                                     NOTICES

            50. Whenever under the provisions of these By-laws notice



<PAGE>



   is required to be given to any Director or stockholder, it shall not be
   construed to mean personal notice, but such notice may be given in writing,
   by mail, by depositing the same in the post office or letter box, in a
   post-paid sealed wrapper, addressed to such Director or stockholder at such
   address as appears on the books of the corporation, or, in default of other
   address, to such Director or stockholder at the General Post Office in the
   City of Wilmington, Delaware, and such notice shall be deemed to be given at
   the time when the same shall be thus mailed.

            51. Any notice required to be given under these By-laws may be
   waived in writing, signed by the person or persons entitled to said notice,
   whether before or after the time stated therein. Consent in writing to any
   action by all of the stockholders pursuant to By-law 13 shall be deemed a
   waiver by such stockholder of all notice in respect to such action.

                                   AMENDMENTS

            52. These By-laws may be altered or repealed at any regular meeting
   of the stockholders or at any special meeting of the stockholders at which a
   quorum is present or represented, provided notice of the proposed alteration
   or repeal be contained in the notice of such special meeting, by the
   affirmative vote of a majority of the stock entitled to vote at such meeting
   and present or represented thereat, or by the affirmative vote of a majority
   of the Board of Directors at any regular meeting of the Board or at any
   special meeting of the Board if notice of the proposed alteration or repeal
   be


<PAGE>


   contained in the notice of such special meeting; provided, however, that no
   change of the time or place for the election of Directors shall be made
   within sixty days next before the day on which such election is to be held,
   and that in case of any change of such time or place, notice thereof shall be
   given to each stockholder in person or by letter mailed to his last known
   post office address at least twenty days before the election is held.

            APPROVED by the Board of Directors of the Corporation on December 5,
   2001 and March 6, 2002.





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