Monday May 3, 9:25 am Eastern Time
Company Press Release
SOURCE: R&B Falcon Corporation
R&B Falcon Reports First Quarter 1999 Results
HOUSTON, May 3 /PRNewswire/ -- R&B Falcon Corporation (NYSE: FLC - news) reported income from continuing operations of $3.3 million ($.02 per share) for the three months ended March 31, 1999, compared with income from continuing operations of $61.5 million ($.37 per share) for the three months ended March 31, 1998. Net income for the current quarter, $1.6 million, includes an extraordinary loss of $1.7 million ($.01 per share) for charges relating to the early extinguishment of debt. Net income for the comparable quarter of the prior year, $69.8 million, includes $8.3 million ($.05 per share) income due to the recontinuance of discontinued operations. Operating income for the quarter ended March 31, 1999 was $32.7 million on revenues of $243.8 million, compared to operating income for the quarter ended March 31, 1998 of $116.8 million on revenues of $279.3 million.
Revenues were $35.5 million lower in the current quarter in spite of $79.7 million from newly acquired Cliffs Drilling Company ($55.7 million from engineering services and land operations and $24.0 million from shallow water). Revenue decreases were primarily related to the shallow water and inland water segments and resulted from lower dayrates and utilization across the board.
Operating expenses were $48.6 million higher in the current period than the same period of the prior year. The acquisition of Cliffs Drilling accounted for $65.3 million of the increase while inland water and shallow water operating expense decreased $18.3 million due to lower utilization. Average fleet utilization for the current quarter was 48% compared to 87% for the same quarter in the preceding year.
Interest expense, net of capitalized interest for the three months ended March 31, 1999, increased $15.0 million compared to the three months ended March 31, 1998 due to higher debt levels and increased average interest rates. There was also an $8.4 million increase in capitalized interest due to increased investments in the Company's construction program.
Paul B. Loyd, Jr., the Company's Chairman, said, ''Industry conditions, particularly in the shallow water and marine segments remained depressed in the first quarter. We believe that increased oil and natural gas prices should drive improvements in these segments later in the year. With the largest jackup and inland water fleets in the industry, the Company is well positioned to take advantage of these expected improvements in drilling activity; alternatively, with the dramatically improved liquidity resulting from our recent capital transactions, we are also well prepared to weather a more extended downturn. Either way, we believe patient shareholders will be amply rewarded when industry conditions normalize.''
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 136 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
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
3/31/99 12/31/98
ASSETS:
Cash, cash equivalents and
short-term investments $ 545.1 $ 177.4
Other current assets 349.9 349.7
Net property and equipment 3,228.9 3,030.6
Other assets 318.3 151.6
TOTAL ASSETS $4,442.2 $3,709.3
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 255.9 $ 351.8
Long-term obligations 2,714.3 1,866.2
Other noncurrent liabilities 174.4 178.3
Minority interest 44.6 62.8
Stockholders' equity 1,253.0 1,250.2
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $4,442.2 $3,709.3
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions except per share amounts)
THREE MONTHS ENDED
MARCH 31,
1999 1998
OPERATING REVENUES:
Deepwater $ 90.2 $ 99.6
Shallow water 66.8 106.9
Inland water 31.0 72.7
Engineering services and
land operations 55.8 0.1
Total operating revenues 243.8 279.3
COSTS AND EXPENSES:
Deepwater 43.3 42.0
Shallow water 48.3 39.0
Inland water 27.9 39.1
Engineering services and
land operations 38.3 0.1
Development 1.0 7.8
Depreciation and amortization 36.5 21.4
General and administrative 15.8 14.1
Merger expenses --- (1.0)
Total costs and expenses 211.1 162.5
OPERATING INCOME 32.7 116.8
OTHER INCOME (EXPENSE):
Interest expense, net of
capitalized interest (28.4) (13.4)
Interest income 4.6 1.7
Income from equity investees
plus related income 0.6 ---
Other, net (0.2) 0.1
Total other income (expense) (23.4) (11.6)
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAX EXPENSE, MINORITY
INTEREST AND EXTRAORDINARY LOSS 9.3 105.2
INCOME TAX EXPENSE (BENEFIT):
Current 7.8 6.8
Deferred (4.5) 34.6
Total income tax expense (benefit) 3.3 41.4
MINORITY INTEREST (2.7) (2.3)
INCOME FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY LOSS 3.3 61.5
INCOME FROM DISCONTINUED OPERATIONS --- 8.3
EXTRAORDINARY LOSS, NET OF TAX BENEFIT (1.7) ---
NET INCOME $ 1.6 $ 69.8
NET INCOME PER SHARE:
BASIC:
Continuing operations $ 0.02 $ 0.37
Discontinued operations --- 0.05
Extraordinary loss (0.01) ---
Net income $ 0.01 $ 0.42
DILUTED:
Continuing operations $ 0.02 $ 0.37
Discontinued operations --- 0.05
Extraordinary loss (0.01) ---
Net income $ 0.01 $ 0.42
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING:
BASIC 192.5 164.9
DILUTED 193.5 166.4
SOURCE: R&B Falcon Corporation
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