Transocean Offshore Inc. Reports Record First Quarter 1998 Results
HOUSTON, April 28 /PRNewswire/ -- Transocean Offshore Inc. (NYSE: RIG; OSE) today announced record results for
the three months ended March 31, 1998. Net income totaled $77.6 million or $0.77 per share (diluted) on revenues of
$258.3 million. Results for the three-month period include a non-recurring, after-tax gain of $13.9 million or $0.14 per share
(diluted), arising from the settlement of a dispute with Global Marine Inc. (NYSE:GLM - news; Global Marine) under the
Company's cash flow sharing agreement with Global Marine and the termination of such agreement. Under the agreement,
the Company shared in the cash flow from three jackup drilling rigs owned and operated by Global Marine and Global
Marine participated in the cash flow from one of the Company's jackup drilling rigs, the Transocean Nordic. Excluding the
impact of the non-recurring gain, net income for the three months ended March 31, 1998 was $63.7 million or $0.63 per
share (diluted). The results compare to net income of $27.7 million or $0.27 per share (diluted) on revenues of $219.6
million during the corresponding three months of 1997.
Revenues derived from the Company's Mobile Units business segment were $221.1 million while operating income, before
depreciation and amortization and general and administrative expense, was $124.8 million. The current year business
segment results compare to revenues of $148.4 million and operating income of $67.5 million during the prior year period. A
reduction in planned and unplanned rig downtime and higher average dayrates within the Company's fleet of mobile offshore
drilling units contributed to the 85% improvement in segment operating income. Utilization was 98% in the current year
quarter compared to 93% during the corresponding period in 1997. Utilization of the Company's 19 fully owned and active
semisubmersibles and drillships was 99% in the current year quarter compared to 90% during the first quarter of 1997, while
the average dayrate among those units grew to approximately $112,800 compared to $86,900 during the corresponding
three-month period in 1997.
Revenues derived from the Company's Drilling Services business segment totaled $37.2 million with operating income,
before depreciation and amortization and general and administrative expense, amounting to $1.9 million. The results for the
current year quarter compare to revenues of $71.6 million and operating income of $7.2 million during the corresponding
three months in 1997, which include certain non-core activities divested in May 1997. Current year quarterly segment results
include the completion of the second well of a three-well turnkey project in Mexico. Turnkey operations associated with the
well were terminated prior to reaching the originally targeted well depth, with breakeven results.
J. Michael Talbert, chairman and chief executive officer of Transocean Offshore Inc. commented, ''Our Mobile Units
business segment has experienced a strong start to 1998. Average dayrates continue to increase and fleet utilization is near
100%. The Company's committed fleet time in 1998 is now 99%, while committed fleet time in the years 1999, 2000 and
2001 has grown to 69%, 44% and 31%, respectively, indicating continued long-term interest among operators for high
specification floating drilling equipment.
The information above includes forward-looking statements within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934. These statements are based on certain assumptions and analyses made by the Company in
light of its experience and its perception of historical and future trends, on general economic and business conditions and on
numerous other factors, including expected future developments, many of which are beyond the control of the Company.
Such statements are subject to numerous risks and uncertainties, including but not limited to uncertainties relating to industry
and market conditions, prices of crude oil and natural gas, foreign exchange and currency fluctuations, political instability in
foreign jurisdictions, scheduled completion of construction projects, the labor market for skilled personnel in the offshore
drilling industry, the outcome of upcoming labor negotiations with unions representing certain Norwegian offshore workers
and other factors discussed in the Company's filings with the Securities and Exchange Commission. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially
from those indicated.
Transocean Offshore Inc. is an international offshore drilling company engaged in contract drilling of oil and gas wells.
Headquartered in Houston, Texas, the Company specializes in technically demanding segments of the offshore drilling
business, including industry-leading positions in deepwater and harsh environment drilling services. The Company also
provides international turnkey, coiled tubing and integrated drilling services to customers worldwide.
TRANSOCEAN OFFSHORE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
1998 1997
(In thousands, except per share data)
Operating Revenues $ 258,313 $ 219,616
Costs and Expenses
Operating and maintenance 131,648 144,846
Depreciation and amortization 28,078 24,408
General and administrative 7,268 5,779
166,994 175,033
Operating Income 91,319 44,583
Other Income (Expense), Net
Equity in earnings of joint ventures 2,333 2,465
Interest income 868 703
Interest expense, net of amounts
capitalized (7,107) (4,802)
Other, net 22,601 (2,200)
18,695 (3,834)
Income Before Income Taxes 110,014 40,749
Income Taxes 32,454 13,040
Net Income $ 77,560 $ 27,709
Earnings Per Share of Common Stock
Basic $ 0.78 $ 0.27
Diluted $ 0.77 $ 0.27
Weighted Average Shares Outstanding
Basic 99,673 102,188
Diluted 100,683 103,610
In August 1997, the Board of Directors declared a two-for-one stock split to be effected in the form of a 100% stock
dividend. The dividend was paid September 19, 1997 to stockholders of record on September 5, 1997. The weighted
average shares outstanding for the three months ended March 31, 1997 have been retroactively restated to reflect the
increased number of shares of common stock issued and outstanding as a result of the dividend. |
