HOUSTON, Nov. 4 /PRNewswire/ -- R&B Falcon Corporation (NYSE: FLC)
reported a net loss of $20.5 million ($.12 net loss per diluted share) for the
three months ended September 30, 1998, compared with net income of
$35.0 million ($.22 net income per diluted share) for the three months ended
September 30, 1997. Included in the third quarter 1998 results is a charge of
$85.8 million in conjunction with the previously announced termination of the
Peregrine VI and Peregrine VIII conversion projects. Included in the third
quarter 1997 results is a loss from discontinued operations of $42.2 million
pertaining to the discontinuance of the Company's oil and gas operations.
Operating Income, excluding the cancellation of conversion projects charge of
$85.8 million, is $70.5 million for the three months ended September 30, 1998
compared to $103.6 million for the three months ended September 30, 1997. The
$33.1 million decrease in operating income (excluding the cancellation of
conversion projects charge) between the two quarters is primarily due to
higher operating expenses associated with the activation of two incremental
deepwater units, marine fleet additions and a decline in profitability in our
inland water operations. Further, the fleet wide utilization rate decreased
from 95% utilization for the third quarter of 1997 to 64% utilization in the
third quarter of 1998.
For the nine months ended September 30, 1998, the Company reported net
income of $87.7 million ($.53 net income per diluted share) compared with net
income of $117.9 million ($.71 net income per diluted share) for the nine
months ended September 30, 1997. Included in the nine months ended
September 30, 1998 results is a charge of $85.8 million in conjunction with
the previously announced termination of the Peregrine VI and Peregrine VIII
conversion projects and a $22.0 million extraordinary loss related to the
early extinguishment of debt. Included in the nine months ended
September 30, 1997 results is a loss from discontinued operations of
$64.7 million pertaining to the discontinuance of the Company's oil and gas
operations. Operating Income, excluding the cancellation of conversion
projects charge of $85.8 million, is $307.6 million for the nine months ended
September 30, 1998 compared to $263.1 million for the nine months ended
September 30, 1997. The fleet wide utilization rate for the nine months ended
September 30, 1998 is 77% versus 94% for the nine months ended
September 30, 1997.
Steven Webster, the Company's President and CEO, said, "Operating income
was significantly impacted by weaker utilization of our shallow water fleet,
particularly barge rig operations, and declining dayrates in our jackup fleet.
We expect softness in shallow water operations over the next several quarters.
Our deepwater backlog remains strong and will continue to account for an
increasing portion of revenues and profits. In 1999, we should benefit from
both the rollover of existing deepwater contracts at higher dayrates and the
addition to the revenue stream of new deepwater rigs currently under
construction, with term contract commitments. We also expect an improvement
in the underlying commodity price outlook which should produce better results
in shallow water in the second half of 1999.
"As previously announced, we are taking a charge against earnings for
cancellation of the two large scale conversion projects. We are confident
this restructuring has significantly improved the overall outlook for our
deepwater construction program. Our newbuilding program has been very
successful as evidenced by the christening of the "DEEPWATER PATHFINDER" in
late September."
R&B Falcon Corporation operates the world's largest fleet of 118 marine-
based drilling rigs for the international oil and gas industry consisting of
twelve drillships (including six under construction), twelve semisubmersible
rigs (including three under construction), 26 jackups, three submersible rigs,
two tender rigs, 62 barge drilling and workover rigs and a floating production
vessel. R&B Falcon actively markets 103 of these units in the offshore and
inland waters worldwide. R&B Falcon also operates a leading offshore and
inland marine towing and service business. On August 21, 1998, the Company
announced execution of a definitive merger agreement with Cliffs Drilling
Company which will result in addition of sixteen jackups, three self-contained
platform rigs, eleven international class land rigs and four mobile offshore
production units (MOPU's) to R&B Falcon's fleet.
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
9/30/98 12/31/97
ASSETS:
Cash, cash equivalents and
short-term investments $ 149.7 $ 100.9
Other current assets 278.2 219.9
Net property and equipment 2,300.4 1,583.0
Other assets 37.9 29.2
TOTAL ASSETS $ 2,766.2 $ 1,933.0
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 346.3 $ 336.0
Long-term obligations 1,374.6 692.2
Other noncurrent liabilities 142.6 121.2
Minority interest 59.7 55.6
Stockholders' equity 843.0 728.0
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 2,766.2 $ 1,933.0
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,
1998 1997 1998 1997
OPERATING REVENUES:
Deepwater $ 101.0 $ 92.7 $ 298.1 $ 253.3
Shallow water 88.8 86.8 306.0 234.4
Inland water 53.7 65.2 199.8 178.7
Total operating revenues 243.5 244.7 803.9 666.4
COSTS AND EXPENSES:
Deepwater 52.1 32.5 139.2 93.2
Shallow water 39.5 40.2 119.2 115.7
Inland water 42.1 34.9 126.2 98.2
Cancellation of conversion
projects 85.8 --- 85.8 ---
Depreciation 24.1 21.6 68.1 60.2
General and administrative 15.2 11.9 44.6 36.0
Merger expenses --- --- (1.0) ---
Total costs and expenses 258.8 141.1 582.1 403.3
OPERATING INCOME (LOSS) (15.3) 103.6 221.8 263.1
OTHER INCOME (EXPENSE):
Interest expense, net of
capitalized interest (13.9) (11.9) (43.0) (32.4)
Interest income 2.4 1.3 7.0 4.4
Other, net (0.3) 0.2 (0.1) (0.1)
Total other income
(expense) (11.8) (10.4) (36.1) (28.1)
INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAX EXPENSE,
MINORITY INTEREST AND
EXTRAORDINARY LOSS (27.1) 93.2 185.7 235.0
INCOME TAX EXPENSE (BENEFIT):
Current 16.5 14.4 28.9 33.8
Deferred (26.2) (0.9) 38.9 11.7
Total income tax expense
(benefit) (9.7) 13.5 67.8 45.5
MINORITY INTEREST (3.1) (2.5) (8.2) (6.9)
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE
EXTRAORDINARY LOSS (20.5) 77.2 109.7 182.6
LOSS FROM DISCONTINUED
OPERATIONS --- (42.2) --- (64.7)
EXTRAORDINARY LOSS,
NET OF TAXES --- --- (22.0) ---
NET INCOME (LOSS) $ (20.5) $ 35.0 $ 87.7 $ 117.9
NET INCOME (LOSS)
PER SHARE:
BASIC:
Continuing
operations $ (0.12) $ 0.47 $ 0.66 $ 1.11
Discontinued
operations --- (0.26) --- (0.39)
Extraordinary loss --- --- (0.13) ---
Net income (loss) $ (0.12) $ 0.21 $ 0.53 $ 0.72
DILUTED:
Continuing operations $ (0.12) $ 0.47 $ 0.66 $ 1.10
Discontinued operations --- (0.25) --- (0.39)
Extraordinary loss --- --- (0.13) ---
Net income (loss) $ (0.12) $ 0.22 $ 0.53 $ 0.71
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING:
BASIC 165.3 164.3 165.2 164.0
DILUTED 166.8 167.8 166.4 166.3
SOURCE R&B Falcon Corporation
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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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