R&B Falcon Corporation
Reports Third Quarter 1999 Results
HOUSTON, Nov. 1 /PRNewswire/ -- R&B Falcon Corporation (NYSE: FLC -
news) reported a loss from continuing operations of $22.4 million for the three
months ended September 30, 1999, compared with a loss from continuing
operations of $28.2 million for the three months ended September 30, 1998. The
net loss applicable to common stockholders for the current quarter of $34.5 million
($.18 per diluted share) includes dividends of $12.1 million on the redeemable
preferred stock that was issued in April. Net loss applicable to common
stockholders for the comparable quarter of the prior year, $20.5 million ($.12 per
diluted share), includes $7.7 million ($.05 per diluted share) of income due to the
recontinuance of discontinued operations. Operating income for the quarter ended
September 30, 1999 was $3.9 million on revenues of $214.2 million compared to
an operating loss for the quarter ended September 30, 1998 of $23.2 million on
revenues of $243.5 million. Operating income for the third quarter of 1999 includes
non-recurring charges of $25.6 million for asset impairment write-down and a $6.1
million loss on the sale of assets following cancellation of conversion projects,
partially offset by a gain of $16.1 million on an insurance settlement related to the
physical loss of an inland barge drilling rig.
The loss applicable to common stockholders for the nine months ended September
30, 1999 of $56.2 million ($.29 per diluted share) includes dividends of $21.2
million on the redeemable preferred stock that was issued in April and a $1.7
million ($.01 per diluted share) extraordinary loss related to the early extinguishment
of debt. Net income applicable to common stockholders for the comparable period
of the prior year, $87.7 million ($.53 per diluted share), includes a $22.0 million
($.13 per diluted share) extraordinary loss relating to the early extinguishment of
debt and $16.5 million ($.10 per diluted share) income due to the recontinuance of
discontinued operations. Operating income for the nine months ended September
30, 1999 was $45.6 million on revenues of $684.5 million compared to operating
income for the nine months ended September 30, 1998 of $204.7 million on
revenues of $803.9 million.
The loss for the quarter is directly attributable to reduced demand for drilling
services, particularly in the shallow and inland water segments. Average fleet
utilization for the third quarter of 1999 was 39% compared to 64% for the same
quarter in the preceding year. For the nine months ended September 30, 1999
average fleet utilization was 40% compared to 77% for the same period in 1998.
Revenues were $29.3 million lower in the third quarter of 1999 compared to the
same quarter in the preceding year despite contributions of $62.0 million from Cliffs
Drilling Company which was acquired in December, 1998. Revenue decreases were
primarily related to the shallow water and inland water segments and resulted from
lower dayrates and rig utilization.
Operating expenses were $56.4 million lower in the current quarter than in the same
quarter of the prior year. Excluding $57.4 million of third quarter operating
expenses attributable to Cliffs Drilling Company, operating expenses were $113.8
million lower in the third quarter of 1999 compared to the same quarter of the prior
year and reflects cost reductions, lower rig utilization and the cold stacking of some
units, primarily in the shallow water and inland water segments.
Interest expense, net of capitalized interest for the three months ended September
30, 1999, increased $31.3 million compared to the three months ended September
30, 1998 due to higher debt levels and increased average interest rates. There was
also a $10.3 million increase in capitalized interest due to increased investments in
the Company's construction program.
Paul B. Loyd, Jr., the Company's Chairman and Chief Executive Officer, said,
''The industry's depressed condition this quarter was reflected in our reporting a
loss for the period. Net of non-recurring items, the earnings per share this quarter
would have been a loss of $.13 per share. However, we are starting to see some
improvements in day rates and utilization, particularly in the shallow water market
in the Gulf of Mexico. These increases are very encouraging and continued strength
in commodity prices should ultimately lead to a substantial improvement in demand
for drilling rigs. We believe R&B Falcon, with the largest fleet of drilling rigs in the
industry, will be the leading beneficiary as the demand for drilling improves. While
it will take several more quarters before current and projected improved dayrates
and utilization flow through our income statement, we believe patient investors will
be well rewarded.''
R&B Falcon Corporation operates the world's largest fleet of marine-based drilling
rigs servicing the international oil and gas industry. Its fleet is composed of 135
marine-based drilling units including the industry's largest fleets of barge and jackup
rigs, and a fleet of semisubmersibles and drillships which is among the most capable
in the world. R&B Falcon also provides turnkey and integrated services and
operates mobile production units, internationally-based land drilling rigs and an
offshore towing business.
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999 1998
OPERATING REVENUES:
Deepwater $93.6 $100.9 $270.1 $297.9
Shallow water 41.0 88.8 156.1 306.0
Inland water 28.3 53.7 84.7 199.7
Engineering services and land
operations 51.2 0.1 173.4 0.3
Development 0.1 --- 0.2 ---
Total operating revenues 214.2 243.5 684.5 803.9
COSTS AND EXPENSES:
Deepwater 43.0 52.2 126.4 140.3
Shallow water 34.2 40.0 116.2 119.6
Inland water 9.6 41.8 65.6 126.0
Engineering services and land
operations 37.9 0.2 126.9 0.4
Development 0.2 7.6 2.5 15.6
Cancellation of conversion
projects 31.7 85.8 31.7 85.8
Depreciation and amortization 39.7 24.1 114.3 68.1
General and administrative 14.0 15.0 55.3 44.4
Merger expenses --- --- --- (1.0)
Total costs and expenses 210.3 266.7 638.9 599.2
OPERATING INCOME (LOSS) 3.9 (23.2) 45.6 204.7
OTHER INCOME (EXPENSE):
Interest expense, net of
capitalized interest (45.2) (13.9) (116.5) (43.0)
Interest income 9.7 2.6 24.6 7.6
Income from equity investees
plus related income 2.7 --- 9.0 ---
Other, net (0.4) (0.3) (0.7) (0.1)
Total other income (expense) (33.2) (11.6) (83.6) (35.5)
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES,
MINORITY INTEREST AND
EXTRAORDINARY LOSS (29.3) (34.8) (38.0) 169.2
INCOME TAX EXPENSE (BENEFIT):
Current 11.4 16.5 30.0 28.9
Deferred (22.1) (26.2) (43.8) 38.9
Total income tax expense
(benefit) (10.7) (9.7) (13.8) 67.8
MINORITY INTEREST (3.8) (3.1) (9.1) (8.2)
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE EXTRAORDINARY
LOSS (22.4) (28.2) (33.3) 93.2
INCOME FROM DISCONTINUED
OPERATIONS --- 7.7 --- 16.5
EXTRAORDINARY LOSS, NET OF TAX
BENEFIT --- --- (1.7) (22.0)
NET INCOME (LOSS) (22.4) (20.5) (35.0) 87.7
DIVIDENDS AND ACCRETION ON
PREFERRED STOCK 12.1 --- 21.2 ---
NET INCOME (LOSS) APPLICABLE TO
COMMON STOCKHOLDERS $(34.5) $(20.5) $(56.2) $87.7
NET INCOME (LOSS) PER COMMON SHARE:
BASIC:
Continuing operations $(0.18) $(0.17) $(0.28) $0.56
Discontinued operations --- 0.05 --- 0.10
Extraordinary loss --- --- (0.01) (0.13)
Net income (loss) $(0.18) $(0.12) $(0.29) $0.53
DILUTED:
Continuing operations $(0.18) $(0.17) $(0.28) $0.56
Discontinued operations --- 0.05 --- 0.10
Extraordinary loss --- --- (0.01) (0.13)
Net income (loss) $(0.18) $(0.12) $(0.29) $0.53
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING:
BASIC 192.8 165.3 192.6 165.2
DILUTED 192.8 165.3 192.6 166.4
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
9/30/99 12/31/98
ASSETS:
Cash, cash equivalents and short-term investments $862.8 $177.4
Less cash dedicated to capital projects(A) (184.8) ---
Other current assets 321.9 361.1
Net property and equipment 3,489.9 3,030.9
Other assets 423.0 144.6
TOTAL ASSETS $4,912.8 $3,714.0
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $276.2 $353.2
Long-term obligations 2,942.6 1,866.2
Other noncurrent liabilities 135.8 181.6
Minority interest 52.5 62.8
Preferred stock 256.3 ---
Stockholders' equity 1,249.4 1,250.2
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,912.8 $3,714.0
(A) Classified as other assets
SOURCE: R&B Falcon Corporation |
