HOUSTON, July 26 /PRNewswire/ -- R&B Falcon Corporation (NYSE: FLC)
reported a loss from continuing operations of $14.2 million for the three
months ended June 30, 1999, compared with income from continuing operations of
$59.9 million for the three months ended June 30, 1998. The net loss
applicable to common stockholders for the current quarter of $23.3 million
($.12 per diluted share), includes dividends of $9.1 million on the redeemable
preferred stock that was issued in April. Net income applicable to common
stockholders for the comparable quarter of the prior year, $38.4 million
($.23 per diluted share), includes a $22.0 million ($.13 per diluted share)
extraordinary loss relating to the early extinguishment of debt and
$.5 million of income due to the recontinuance of discontinued operations.
Operating income for the quarter ended June 30, 1999 was $8.9 million on
revenues of $226.5 million, compared to operating income for the quarter ended
June 30, 1998 of $111.1 million on revenues of $281.1 million.
The loss applicable to common stockholders for the six months ended
June 30, 1999 of $21.7 million ($.11 per diluted share) includes dividends of
$9.1 million on the redeemable preferred stock that was issued in April. Net
income applicable to common stockholders for the comparable period of the
prior year, $108.2 million ($.66 per diluted share), includes a $22.0 million
($.13 per diluted share) extraordinary loss relating to the early
extinguishment of debt and $8.8 million ($.05 per diluted share) income due to
the recontinuance of discontinued operations. Operating income for the six
months ended June 30, 1999 was $41.6 million on revenues of $470.3 million,
compared to operating income for the six months ended June 30, 1998 of
$227.9 million on revenues of $560.4 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 current quarter was 38% compared to 81% for
the same quarter in the preceding year. For the six months ended
June 30, 1999 average fleet utilization was 40% compared to 84% for the same
period in 1998.
Revenues were $54.6 million lower in the current quarter compared to the
year ago quarter despite contributions of $79.0 million from recently
acquired Cliffs Drilling Company. 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 $21.8 million higher in the current quarter than
the same quarter of the prior year. The acquisition of Cliffs Drilling Company
accounted for $58.8 million of the increase which was partially offset by
reductions in inland water and shallow water operating expenses due to lower
utilization and the cold stacking of some units.
General and Administrative expense was $10.3 million higher in the current
quarter than the same quarter in the prior year. Of the increase,
$8.1 million consisted primarily of non-recurring corporate restructuring
costs. Cliffs Drilling Company accounted for an additional $2.0 million of
increased expense.
Interest expense, net of capitalized interest for the three months ended
June 30, 1999, increased $27.1 million compared to the three months ended
June 30, 1998 due to higher debt levels and increased average interest rates.
There was also a $12.4 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 reported loss this quarter is in line with our expectations given
the current depressed market for drilling services. Not withstanding our loss
for the quarter, we did produce positive operating income and we continued to
build cash compared to the previous quarter. We currently have approximately
$681.3 million of cash and marketable securities and can well withstand any
continued weakness in the sector. However, current commodity pricing has
improved which we believe should ultimately lead to a robust recovery in the
sector, most likely in the year 2000. With the largest fleet in the industry,
we are poised to take advantage of this increase in demand as and when it
develops. In particular, the company has very significant operating leverage
to further improvements in natural gas related drilling activity."
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
unites, 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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
1999 1998 1999 1998
OPERATING REVENUES:
Deepwater $86.3 $97.4 $176.5 $197.0
Shallow water 48.3 110.3 115.1 217.2
Inland water 25.4 73.3 56.4 146.0
Engineering services and
land operations 66.4 0.1 122.2 0.2
Development 0.1 --- 0.1 ---
Total operating revenues 226.5 281.1 470.3 560.4
COSTS AND EXPENSES:
Deepwater 38.9 46.1 82.2 88.1
Shallow water 33.7 40.6 82.0 79.6
Inland water 28.1 45.1 56.0 84.2
Engineering services and
land operations 50.7 0.1 89.0 0.2
Development 2.5 0.2 3.5 8.0
Depreciation and amortization 38.1 22.6 74.6 44.0
General and administrative 25.6 15.3 41.4 29.4
Merger expenses --- --- --- (1.0)
Total costs and expenses 217.6 170.0 428.7 332.5
OPERATING INCOME 8.9 111.1 41.6 227.9
OTHER INCOME (EXPENSE):
Interest expense, net of
capitalized interest (42.8) (15.7) (71.2) (29.1)
Interest income 10.3 3.3 14.9 5.0
Income from equity investees
plus related income 5.7 --- 6.3 ---
Other, net (0.1) 0.1 (0.3) 0.2
Total other income (expense) (26.9) (12.3) (50.3) (23.9)
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAX EXPENSE, MINORITY
INTEREST AND EXTRAORDINARY LOSS (18.0) 98.8 (8.7) 204.0
INCOME TAX EXPENSE (BENEFIT):
Current 10.8 5.6 18.6 12.4
Deferred (17.2) 30.5 (21.7) 65.1
Total income tax
expense (benefit) (6.4) 36.1 (3.1) 77.5
MINORITY INTEREST (2.6) (2.8) (5.3) (5.1)
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY LOSS (14.2) 59.9 (10.9) 121.4
INCOME FROM DISCONTINUED
OPERATIONS --- 0.5 --- 8.8
EXTRAORDINARY LOSS, NET OF TAXES --- (22.0) (1.7) (22.0)
NET INCOME (LOSS) (14.2) 38.4 (12.6) 108.2
DIVIDENDS AND ACCRETION ON
PREFERRED STOCK 9.1 --- 9.1 ---
NET INCOME (LOSS) APPLICABLE TO
COMMON STOCKHOLDERS $(23.3) $38.4 $(21.7) $108.2
NET INCOME (LOSS) PER SHARE:
BASIC:
Continuing operations $(0.12) $0.36 $(0.10) $0.74
Discontinued operations --- 0.01 --- 0.05
Extraordinary loss --- (0.13) (0.01) (0.13)
Net income (loss) $(0.12) $0.24 $(0.11) $0.66
DILUTED:
Continuing operations $(0.12) $0.36 $(0.10) $0.74
Discontinued operations --- --- --- 0.05
Extraordinary loss --- (0.13) (0.01) (0.13)
Net income (loss) $(0.12) $0.23 $(0.11) $0.66
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING:
BASIC 192.6 165.3 192.5 165.1
DILUTED 193.7 166.6 193.5 167.5
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
ASSETS:
Cash, cash equivalents and
short-term investments $ 681.3 $ 177.4
Other current assets 291.2 349.7
Net property and equipment 3,397.3 3,030.6
Other assets 337.5 151.6
TOTAL ASSETS $ 4,707.3 $ 3,709.3
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 274.7 $ 351.8
Long-term obligations 2,710.0 1,866.2
Other noncurrent liabilities 155.6 178.3
Minority interest 40.6 62.8
Preferred stock 243.8 ---
Stockholders' equity 1,282.6 1,250.2
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 4,707.3 $ 3,709.3
SOURCE R&B Falcon Corporation
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http://www.rbfalcon.com
Company News On-Call:
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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