HOUSTON, Feb. 24 /PRNewswire/ -- R&B Falcon Corporation (NYSE: FLC)
reported net income per diluted share of $.61 for the year ended
December 31, 1998 compared to a net loss per diluted share of $.04 for the
year ended December 31, 1997. Included in 1998 earnings is an extraordinary
loss of $24.2 million, $.14 per share, due to the early extinguishment of debt
and the reversal of the 1997 loss from discontinued operations of
$36.0 million, $.21 per share in 1998. In 1997, the Company discontinued its
oil and gas operations and accrued a $36.0 million charge, $.22 per share,
relating to the disposal. The Company did not sell the oil and gas operations
and, in accordance with accounting rules, has recontinued the operations in
its financial statements. 1997 results have been restated to reflect the
recontinuance, although it is still the Company's intent to dispose of the oil
and gas operations.
Operating income for 1998 was $215.8 million which included a
$118.3 million charge for cancellation of conversion projects; a $17.4 million
charge relating to disposals, impairments and dryhole costs of oil and gas
properties; and a reversal of merger expenses of $8.0 million. Operating
income for 1997 was $160.4 million which included a $109.0 million charge
relating to dryhole and impairment costs of oil and gas properties and
$66.4 million of merger expenses. Revenues for 1998 were $1,032.6 million
compared to revenues of $933.0 million in 1997.
For the fourth quarter of 1998 net income was $15.1 million, $.09 per
diluted share, on revenues of $228.7 million as compared to a net loss of
$124.1 million, $.75 per diluted share, on revenues of $266.7 million for the
same period in 1997. The fourth quarter of 1998 included an extraordinary
loss of $2.2 million due to the early extinguishment of debt and the reversal
of a $19.5 million charge associated with the recontinuance of the oil and gas
operations. Also included in the current quarter is a charge for the
cancellation of conversion projects of $32.5 million, the reversal of
$7.0 million of merger costs that were accrued in 1997 but will not now be
incurred, $10.6 million for impairment of oil and gas properties and a
$5.7 million gain from the sale of an interest in a foreign offshore
concession. The fourth quarter of 1997 included a loss from discontinued
operations of $36.0 million, merger expenses of $66.4 million, and dryhole and
impairment charges of $56.7 million.
Fleet utilization and average dayrates both declined when comparing the
fourth quarter of 1998 to the third quarter of 1998. The drop and continued
downward pressure on the price of oil has contributed to the results of
operations. This has resulted in a decline in the contribution for our
domestic business units. We have included one month of actuals from Cliffs
Drilling in the fourth quarter results in accordance with the purchase method
of accounting for business combinations.
Steven Webster, the Company's President and CEO, said, "Our fourth quarter
results reflect a weakness in our domestic business units as a result of
cutbacks in industry drilling activity. In addition, during the quarter we
recognized one time expenses related to the cancellation of our Peregrine VI
and Peregrine VIII projects and other non-recurring items which together
negatively impacted operating income by $29.1 million. Cliffs' operations
were included for only one month.
"There have been several positive developments in recent months including
A) the delivery and initiation of work for the Deepwater Pathfinder, B) the
recent christening of the Deepwater Frontier, C) commencement during the
fourth quarter of a six year contract for the FPSO Seillean, D) the execution
of a three year contract for the Deepwater IV and E) closing of the Cliffs
Drilling merger. Integration of Cliffs' operations is proceeding well. In
the next several quarters we should benefit from lower costs due to recent
steps to significantly scale back marketed capacity in our domestic barge and
jackup businesses.
"We remain optimistic that our domestic business units will benefit from
increased drilling for natural gas in the latter part of 1999. Our deepwater
business remains a strong earnings contributor and will benefit over the year
from the delivery of two units as our construction program winds down."
R&B Falcon 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 fleet of
barge rigs and jackup rigs and a fleet of semisubmersibles and drillships
which is among the most capable in the world. It also operates a leading
fleet of towing vessels. Cliffs Drilling Company is an international offshore
and land contract drilling company which provides daywork and turnkey drilling
services, mobile offshore production units and well engineering and management
services.
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
12/31/98 12/31/97
ASSETS:
Cash, cash equivalents
and short-term investments $177.4 $100.9
Other current assets 349.7 219.9
Net property and equipment 3,030.6 1,583.0
Other assets 151.6 29.2
TOTAL ASSETS $3,709.3 $ 1,933.0
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $351.8 $336.0
Long-term obligations 1,866.2 692.2
Other noncurrent liabilities 178.3 121.2
Minority interest 62.8 55.6
Stockholders' equity 1,250.2 728.0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $3,709.3 $1,933.0
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions except per share amounts)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
OPERATING REVENUES:
Deepwater $94.6 $96.7 $392.5 $ 349.3
Shallow water 76.9 98.7 382.9 333.2
Inland water 44.5 71.3 244.3 249.9
Engineering services
and land operations 12.5 --- 12.5 ---
Development 0.2 --- 0.4 0.6
Total operating
revenues 228.7 266.7 1,032.6 933.0
COSTS AND EXPENSES:
Deepwater 45.7 47.8 184.4 140.2
Shallow water 41.8 43.0 161.5 158.7
Inland water 43.1 38.4 169.1 136.7
Engineering services
and land operations 10.5 --- 10.5 ---
Development 4.4 63.5 22.0 130.2
Cancellation of
conversion projects 32.5 --- 118.3 ---
Depreciation
and amortization 29.5 24.5 97.6 84.7
General and
administrative 17.1 19.8 61.4 55.7
Merger expenses (7.0) 66.4 (8.0) 66.4
Total costs
and expenses 217.6 303.4 816.8 772.6
OPERATING INCOME (LOSS) 11.1 (36.7) 215.8 160.4
OTHER INCOME (EXPENSE):
Interest expense, net
of capitalized
interest (20.9) (10.6) (63.9) (41.6)
Interest income 2.0 1.6 9.6 6.1
Other, net (0.2) (0.7) (0.3) (1.0)
Total other income
(expense) (19.1) (9.7) (54.6) (36.5)
INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAX EXPENSE,
MINORITY INTEREST AND
EXTRAORDINARY LOSS (8.0) (46.4) 161.2 123.9
INCOME TAX EXPENSE
(BENEFIT):
Current 9.6 5.5 38.5 39.3
Deferred (18.5) 33.7 20.4 45.4
Total income tax
expense (benefit) (8.9) 39.2 58.9 84.7
MINORITY INTEREST (3.1) (2.5) (11.3) (9.4)
INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE EXTRAORDINARY
LOSS (2.2) (88.1) 91.0 29.8
INCOME (LOSS) FROM
DISCONTINUED OPERATIONS 19.5 (36.0) 36.0 (36.0)
EXTRAORDINARY LOSS,
NET OF TAXES (2.2) --- (24.2) ---
NET INCOME (LOSS) $15.1 $ (124.1) $102.8 $(6.2)
NET INCOME (LOSS) PER SHARE:
BASIC:
Continuing
operations $(0.01) $(0.54) $0.54 $0.18
Discontinued operations 0.11 (0.21) 0.21 (0.22)
Extraordinary loss (0.01) --- (0.14) ---
Net income (loss) $0.09 $(0.75) $0.61 $(0.04)
DILUTED:
Continuing operations $(0.01) $(0.54) $0.54 $0.18
Discontinued operations 0.11 (0.21) 0.21 (0.22)
Extraordinary loss (0.01) --- (0.14) ---
Net income (loss) $0.09 $(0.75) $0.61 $(0.04)
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING:
BASIC 174.5 164.6 167.5 164.1
DILUTED 176.2 164.6 168.8 166.2
SOURCE R&B Falcon Corporation
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http://www.prnewswire.com/comp/118988.html or fax,
800-758-5804, ext. 118988
CONTACT:
Charles R. Ofner of R&B Falcon Corporation,
281-496-5000
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