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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 19, 1999
REGISTRATION NO. 333-81181
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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R&B FALCON CORPORATION
(Exact name of Registrant as specified in its charter)
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DELAWARE 76-0544217
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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901 THREADNEEDLE
HOUSTON, TEXAS 77079
(281) 496-5000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
WAYNE K. HILLIN
R&B FALCON CORPORATION
901 THREADNEEDLE
HOUSTON, TEXAS 77079
(281) 496-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
W. MARK YOUNG
GARDERE WYNNE SEWELL & RIGGS, L.L.P.
1000 LOUISIANA, SUITE 3400
HOUSTON, TEXAS 77002-5007
(713) 308-5864
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this registration
statement, as determined by market conditions.
If the securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this form is filed to registered additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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R&B FALCON CORPORATION
10,500,000 SHARES OF COMMON STOCK
300,000 COMMON STOCK PURCHASE WARRANTS
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The shares of common stock and the common stock purchase warrants are being
offered by selling securityholders. We will not receive any of the proceeds from
the sale of the shares or the warrants by the selling securityholders. We will
receive proceeds from any exercise of the warrants.
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Our common stock is traded on the New York Stock Exchange (NYSE Symbol:
FLC). On November 16, 1999, the closing price of the common stock was $14.25 per
share.
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You should carefully consider the risk factors commencing on page 3 before
purchasing any of the common stock or warrants offered by the selling
securityholders.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is November 19, 1999.
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TABLE OF CONTENTS
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PAGE
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The Company................................................. 3
Risk Factors................................................ 3
Forward-Looking Statements.................................. 6
Use of Proceeds............................................. 7
Selling Securityholders..................................... 7
Plan of Distribution........................................ 10
Where You Can Find More Information......................... 12
Incorporation by Reference.................................. 12
Legal Matters............................................... 12
Experts..................................................... 13
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THE COMPANY
We own and operate the world's largest fleet of marine drilling rigs. Our
fleet is one of the most diverse in the industry, capable of drilling in shallow
to ultra-deepwater depths. We currently operate in most of the world's major
offshore hydrocarbon producing regions. We believe that our fleet diversity and
worldwide operations allow us to mitigate revenue and cash flow impacts
associated with a major downturn in any single segment of the drilling industry
or geographic region. The mailing address of our principal executive officers is
901 Threadneedle, Houston, Texas 77079, and our telephone number is (281)
496-5000.
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks described below are not the only ones facing our
company. Additional risks not presently known to us or that we currently deem
immaterial may also impair our business operations. The risk factors set forth
below are generally applicable to our common stock as well as the warrants.
This prospectus also contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of many factors,
including the risks faced by us described below and elsewhere in this
prospectus.
DEPRESSED INDUSTRY CONDITIONS, COMBINED WITH OUR SUBSTANTIAL CAPITAL
REQUIREMENTS, HAVE ADVERSELY AFFECTED OUR LIQUIDITY.
During the first nine months of 1999, we received net proceeds of
approximately $1.5 billion from the issuance of senior notes, preferred stock
and the project financing for the construction of the Deepwater Nautilus. We
used the proceeds to repay existing indebtedness of approximately $556.0 million
and will use the remainder to acquire, construct, repair and improve drilling
rigs and for general corporate purposes. Also, we are considering certain asset
sales, including the Seillean and Iolair. As of September 30, 1999, we had
$862.8 million of cash, cash equivalents, short-term investments and cash
dedicated to capital projects.
We have substantially completed or are currently constructing or
significantly upgrading nine deepwater drilling rigs. We estimate capital
expenditure commitments on these projects and other routine capital expenditures
for the remainder of 1999 and 2000 to total approximately $663.0 million.
We believe projected levels of cash flows from operations, which assumes an
industry recovery in 2000, cash on hand and potential asset sales will be
sufficient to satisfy our short-term and long-term working capital needs,
planned investments, capital expenditures, debt, lease and other payment
obligations. If we were to build excess cash balances, we will most likely use a
portion of the excess to retire debt obligations.
WE ARE DEPENDENT ON THE OIL AND GAS INDUSTRY AND MARKET PRICES. DECLINES IN OIL
AND GAS PRICES HAVE ADVERSELY AFFECTED OUR DAYRATES AND RIG UTILIZATION.
Activity in the contract drilling industry and related oil service
businesses has deteriorated significantly in the past year due to decreased
worldwide demand for drilling rigs and related services resulting from a
substantial decline in crude oil prices experienced in 1998 through the first
quarter of 1999. In recent months, crude oil prices have recovered somewhat, but
there can be no assurance that demand for drilling rigs and related services
will increase. Our and other drilling contractor's financial condition and
results of operations are dependent upon the price of oil and natural gas, as
demand for our services is primarily dependent upon the level of spending by oil
and gas companies for exploration, development and production activities. In
late 1998 and early 1999, lower crude oil prices affected exploration and
production spending, which led to significantly lower dayrates and utilization
for offshore drilling companies, particularly in the U.S. Gulf of Mexico. Crude
oil and natural gas prices have continued to fluctuate over the last several
years. If crude oil prices decline from current levels, or a weakness in crude
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oil prices continued for an extended period, there could be a further
deterioration in both rig utilization and dayrates.
Utilization of our domestic jack-up fleet has declined from approximately
75% in the third quarter of 1998 to approximately 47% in the third quarter of
1999, and dayrates have declined from an average of $33,000 during the third
quarter of 1998 to an average of $12,000 during the third quarter of 1999.
Dayrates for our domestic barge drilling rig fleet have not declined materially,
but utilization of the fleet declined from approximately 52% in the third
quarter of 1998 to approximately 27% in the third quarter of 1999. As a result,
we have experienced a decline in operating revenues from the first nine months
of 1998 to the first nine months of 1999.
WE HAVE A SIGNIFICANT AMOUNT OF DEBT.
We have a significant amount of debt. At September 30, 1999, our total
indebtedness and preferred stock obligations were approximately $3.3 billion,
which was 66% of our total book value capitalization. This substantial
indebtedness will have important consequences to you. For example, it will:
- make it more difficult for us to make our required debt payments;
- increase our vulnerability to general adverse economic and industry
conditions;
- limit our ability to fund future capital expenditures and working capital
and other general corporate requirements;
- potentially require us to sell assets or to terminate or suspend some of
our deepwater drilling construction projects;
- limit our flexibility in planning for, or reacting to, changes in our
business and our industry;
- place us at a competitive disadvantage compared to our competitors that
have less debt; and
- limit our ability to borrow additional funds because of financial and
other restrictive covenants governing our debt.
WE HAVE COMMITTED SIGNIFICANT RESOURCES TO THE DEEPWATER DRILLING MARKET.
We have committed significant financial resources to the deepwater drilling
market through our deepwater rig construction projects. The cost of these
projects will exceed the cash flow from the contractual commitments that we have
for these projects. If the deepwater market continues to weaken, we may not be
able to obtain contracts for the use of the contracted rigs once the initial
contracts expire, and any renewals may be at lower dayrates and for shorter
terms than those in the initial contracts. For the periods during which we are
obligated to use the Deepwater Frontier, we will be obligated to pay the full
dayrate of $165,000 to the limited liability company that owns this rig, without
regard to whether we have a customer for this rig. These developments would
result in reduced cash flows and profitability, and adversely affect our results
of operations.
OUR CUSTOMERS MAY SEEK TO CANCEL OR RENEGOTIATE CONTRACTS DURING DEPRESSED
MARKET CONDITIONS.
During depressed market conditions like those we are currently
experiencing, a customer may no longer need a rig, or may be able to obtain a
comparable rig at a lower dayrate. As a result, customers may pressure us to
renegotiate the terms of existing contracts. In addition, customers may seek to
avoid their obligations under existing drilling contracts. Since December 1998,
customers have cancelled a number of contracts within the drilling industry,
including the contract for our Jack Bates semisubmersible rig, primarily based
on alleged performance breaches by the drilling contractors. Our customers for
our drillship Peregrine VII and our semisubmersible Falcon 100 cancelled their
contracts with us because of
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our late delivery of these rigs. If our customers cancel some of our significant
contracts, it could have a material adverse effect on our financial condition
and results of operations.
In April 1998, Cliffs Drilling Company (a wholly-owned subsidiary as of
December 1, 1998) was awarded a contract from PDVSA Exploration and Production
to drill 60 turnkey wells in Venezuela. The drilling program commenced in March
1998 and the program was expected to extend over approximately three and
one-half years and was expected to utilize 7 of our land drilling rigs in
Venezuela. However, during the first quarter of 1999, in response to the
downturn in the market, PDVSA and Cliffs Drilling renegotiated prices for the
next 14 wells to be drilled under this program. In the fourth quarter of 1999,
negotiations were completed for the following seven wells to be drilled under
this program at further reduced margins. As of September 30, 1999, we had
completed 24 wells with 11 wells remaining to be completed. We expect to
complete the remaining wells by the end of the first quarter in 2000. We no
longer have a contractual commitment for the remaining 25 of the original 60
wells, and we cannot assure you that these wells will ultimately be drilled.
OUR CUSTOMERS MAY CANCEL THEIR DEEPWATER CONTRACTS IF WE EXPERIENCE OPERATIONAL
PROBLEMS.
The deepwater market requires the use of floating rigs utilizing more
sophisticated technologies than those of the bottom-supported rigs that
previously constituted the majority of our fleet. We and other drilling
contractors have experienced problems with the new generation of subsea and
related systems designed for drilling in deeper waters. If this equipment fails
to function properly, the rig cannot engage in drilling operations. If we
encounter these or other operational problems on our deepwater rigs, we will
lose revenues, and our customers may have the right to terminate the drilling
contracts. The likelihood that a customer may seek to terminate a contract for
operational problems is increased during market downturns like the one we are
currently experiencing. If our customers cancel some of our significant
contracts, it could have a material adverse effect on our financial condition
and results of operations.
OUR CONSTRUCTION AND UPGRADE PROJECTS ARE SUBJECT TO DELAYS AND COST OVERRUNS.
Our deepwater rig construction and upgrade projects are subject to delays
and cost overruns from (1) delays in equipment deliveries, (2) unforeseen
engineering problems, (3) work stoppages, (4) weather interference, (5)
unanticipated cost increases and (6) shortages of materials or skilled labor.
Our conversion projects are particularly susceptible to cost overruns and delays
due to the engineering and construction uncertainties inherent in conversion
projects. The customers for our drillship Peregrine VII and semisubmersible
Falcon 100 have cancelled their drilling contracts due to late delivery of these
rigs. The drillship Peregrine IV has commenced operations for its customer.
However, the customer has given notice to us of a claim of approximately $10.0
million for late delivery of the rig. We may also be subject to late delivery
penalties under the cancelled contract for our semisubmersible Falcon 100. Any
additional cost overruns or delays will adversely affect our financial condition
and results of operations.
REDUCED DAYRATES RESULTING FROM COMPETITION ADVERSELY EFFECT OUR RESULTS OF
OPERATIONS BECAUSE WE CANNOT SIGNIFICANTLY REDUCE OUR OPERATING COSTS.
The marine drilling market is highly competitive and no one competitor is
dominant. During periods when the supply of rigs exceeds demand, as it currently
does, this competition results in significant downward pressure on the dayrates
at which we can contract our rigs. Because our rig operating costs cannot be
materially reduced, any reduction in dayrates adversely affects our results of
operations.
WE ARE SUBJECT TO OPERATIONAL RISKS.
Our operations are subject to the hazards inherent in the marine drilling
business. These include (1) blowouts, (2) craterings, (3) fires, (4) collisions,
(5) capsizings and (6) adverse weather. These hazards could result in
substantial damage to the environment, personal injury and loss of life,
suspension of drilling operations or damage to property and producing
formations. We may incur substantial liabilities or losses as a result of these
hazards. While we maintain insurance protection against some of these risks,
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and seek to obtain indemnity agreements from our customers requiring the
customers to hold us harmless in the event of loss of production, reservoir
damage or liability for pollution that originates below the water surface, our
insurance or contractual indemnity protection may not be sufficient to protect
us under all circumstances or against all hazards.
WE CONDUCT TURNKEY DRILLING OPERATIONS.
We conduct most of our drilling services under daywork drilling contracts
where the customer pays for the period of time required to drill or workover a
well. We expect to provide an increasing portion of our services under turnkey
drilling contracts. Under turnkey drilling contracts, we contract to drill a
well to a contract depth under specified conditions for a fixed price. Our risks
under a turnkey drilling contract are substantially greater than on a well
drilled on a daywork basis because we assume most of the risks associated with
drilling operations generally assumed by the operator in a daywork contract,
including (1) risk of blowout, (2) loss of hole, (3) stuck drill stem, (4) lost
production or damage to the reservoir, (5) machinery breakdowns, (6) abnormal
drilling conditions and (7) risks associated with subcontractors' services,
supplies and personnel.
WE CONDUCT FOREIGN OPERATIONS.
We currently operate our rigs worldwide. Operations outside the United
States involve additional risks, including (1) war and civil disturbances, (2)
general strikes, (3) regional economic downturns and (4) foreign governmental
activities that may limit or disrupt markets, restrict payments or the movement
of funds, impose exchange controls or cause currency devaluations, or result in
the loss of contract rights or expropriation of property.
OFFSHORE DRILLING OPERATIONS ARE SUBJECT TO GOVERNMENT REGULATION.
A number of federal, state, local and foreign laws and regulations govern
our operations. These include laws and regulations that restrict the discharge
of materials into the environment or otherwise relate to the protection of the
environment, the safety of our personnel and vessels and other matters.
Environmental laws and regulations could impose significant liability on us for
damages, clean-up costs and penalties if we spill oil or other pollutants in the
course of our operations. Some of these laws impose liability without regard to
negligence or fault. Environmental and other laws and regulations may increase
our costs of doing business, discourage our customers from exploring for oil and
gas and reduce demand for our services.
THE WARRANTS ARE NOT LISTED ON ANY EXCHANGE, AND TRADING IN THE WARRANTS MAY BE
LIMITED.
The warrants are not listed on any stock exchange, and the Company is not
required to list the warrants on any stock exchange. Although the warrants are
eligible for trading in The PORTAL Market, trading in this market may be
limited. There can be no assurance as to the liquidity of the warrants.
FORWARD-LOOKING STATEMENTS
This prospectus includes and incorporates by reference forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. These statements relate to analyses and other information which are based
on forecasts of future results and estimates of amounts not yet determinable.
These statements also relate to our future prospects, developments and business
strategies.
These forward-looking statements are identified by their use of terms and
phrases such as "anticipate," "believe," "could," "estimate," "expect,"
"intend," "may," "plan," "predict," "project," "will," and similar terms and
phrases, including references to assumptions. These statements are contained in
sections entitled "Summary" and "Risk Factors," and other sections of this
prospectus and in the documents incorporated by reference in this prospectus.
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These forward-looking statements involve risks and uncertainties that may
cause our actual future activities and results of operations to be materially
different from those suggested or described in this prospectus. These risks
include: our dependence on the oil and gas industry; the effects of recent
declines in oil and gas prices; our commitment to the deepwater drilling market;
the cancellation of contracts by our customers; our ability to secure adequate
financing, including financing to fund our deepwater drilling program; the risks
involved in our construction and upgrade projects; competition; operational
risks; risks involved in turnkey operations and foreign operations; the age of
our rigs; government regulation and environmental matters; our ability to
integrate and realize anticipated synergies relating to the merger with Cliffs
Drilling Company; our ability to achieve and execute internal business plans;
and the impact of any economic downturns and inflation.
If one or more of these risks or uncertainties materialize, or if
underlying assumptions prove incorrect, our actual results may vary materially
from those expected, estimated or projected.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock or
warrants by the selling securityholders.
We may receive up to $99.75 million from the exercise of the warrants. We
will use any net proceeds received from the exercise of the warrants for general
corporate purposes.
SELLING SECURITYHOLDERS
This prospectus may be used by the selling securityholders to offer and
sell up to 10,500,000 shares of our common stock. All of these shares of common
stock are issuable upon exercise of the warrants held by the selling
securityholders. Each warrant entitles the holder to purchase 35 shares of our
common stock for $9.50 per share. This prospectus also relates to the resale of
the warrants by the selling securityholders. All shares and warrants, to the
extent they are being offered, are being offered for the account of the
following securityholders and their donees or pledgees, who we refer to in this
prospectus as the selling securityholders.
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The following table sets forth information regarding the selling
securityholders for whom we are registering the common stock and warrants for
resale to the public, including the number of shares and warrants offered by
each selling securityholder. We have no knowledge of the intentions of any
selling securityholder to actually sell any of the securities listed in the
table. There are no material relationships between any of the selling
securityholders and our company other than as disclosed below.
BENEFICIAL OWNERSHIP BEFORE OFFERING(1)
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SHARES OF COMMON STOCK WARRANTS
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ISSUABLE UPON
EXERCISE OF OFFERED IN THIS OWNED PRIOR TO OFFERED IN THIS
SELLING SECURITYHOLDER WARRANTS OFFERING(2) THIS OFFERING OFFERING
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The 1199 Healthcare Employees Pension
Fund...................................... 52,500 52,500 1,500 1,500
Aeltus Investment Management.............. 525,000 525,000 15,000 15,000
American Skandia Advisors Fund, Inc., on
behalf of its ASAF Federated High Yield
Bond Fund............................... 9,625 9,625 275 275
American Skandia Trust, on behalf of its
Federated High Yield Portfolio.......... 26,250 26,250 750 750
Anchor Series High Yield Fund............. 3,500 3,500 100 100
Boston High Yield Cayman Unit Trust....... 61,250 61,250 1,750 1,750
The Brown and Williamson Master Retirement
Trust................................... 21,875 21,875 625 625
The City of Memphis Retirement System..... 31,500 31,500 900 900
Constellation Energy Group................ 3,500 3,500 100 100
Dallas Police and Fire Pension System..... 17,500 17,500 500 500
Detroit Edison Employees' Retirement
Trust................................... 17,500 17,500 500 500
Donaldson Lufkin & Jenrette Security
Corporation............................. 1,303,750 1,303,750 37,250 37,250
EA/Cayman Unit Trust -- EA/Mackay High
Yield Cayman Unit Trust................. 73,500 73,500 2,100 2,100
Federated Core Trust, on behalf of its
Federated High Yield Bond Fund.......... 49,000 49,000 1,400 1,400
Federated High Income Bond Fund, Inc...... 154,875 154,875 4,425 4,425
Federated High Yield Trust................ 84,000 84,000 2,400 2,400
Federated Insurance Series, on behalf of
its Federated High Yield Bond Fund II... 9,625 9,625 275 275
First American Investment Funds, Inc., on
behalf of its Strategic Income Fund..... 5,250 5,250 150 150
Fortis Advantage Portfolios, Inc. -- High
Yield Portfolio......................... 52,500 52,500 1,500 1,500
Fortis Series Fund, Inc. -- High Yield
Series.................................. 17,500 17,500 500 500
Halliburton Company....................... 17,500 17,500 500 500
The High Yield Plus Fund.................. 28,000 28,000 800 800
High Yield Portfolio...................... 420,000 420,000 12,000 12,000
Highbridge Capital Corporation............ 44,100 44,100 1,260 1,260
Houston Firemen's Relief and Pension
Fund.................................... 43,750 43,750 1,250 1,250
LB Series Fund, Inc., High Yield
Portfolio............................... 147,000 147,000 4,200 4,200
Loomis Sayles Bond Fund................... 98,000 98,000 2,800 2,800
Loomis Sayles High Yield Fund............. 3,500 3,500 100 100
Lutheran Brotherhood High Yield Fund...... 98,000 98,000 2,800 2,800
Magnetite Asset Investors L.L.C........... 368,550 368,550 10,530 10,530
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SHARES OF COMMON STOCK WARRANTS
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ISSUABLE UPON
EXERCISE OF OFFERED IN THIS OWNED PRIOR TO OFFERED IN THIS
SELLING SECURITYHOLDER WARRANTS OFFERING(2) THIS OFFERING OFFERING
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The Mainstay Funds, Inc., on behalf of its
Strategic Income Fund..................... 10,150 10,150 290 290
The Mainstay Funds, on behalf of its High
Yield Corporate Bond Fund Series........ 411,075 411,075 11,745 11,745
Mainstay VP Series Fund, Inc. on behalf of
its High Yield Corporate Bond
Portfolio............................... 164,500 164,500 4,700 4,700
The John & Mary R. Markle Foundation...... 3,500 3,500 100 100
Mason Street Funds, Inc................... 7,000 7,000 200 200
MetLife Separate Account 235.............. 35,000 35,000 1,000 1,000
Metropolitan Life Loomis Sayles High
Yield................................... 8,750 8,750 250 250
Minneapolis Teachers Retirement Fund...... 26,250 26,250 750 750
Nationwide Family of Funds, on behalf of
its Nationwide High Income Bond Fund.... 1,750 1,750 50 50
Northwest Investors Trust................. 245,000 245,000 7,000 7,000
The Northwestern Mutual Life Insurance
Company................................. 238,000 238,000 6,800 6,800
Northwestern Mutual Series Fund, Inc...... 35,000 35,000 1,000 1,000
Police Officers Pension System of the City
of Houston.............................. 18,900 18,900 540 540
Raytheon Master Trust..................... 52,500 52,500 1,500 1,500
State of Connecticut Fund "F"............. 61,250 61,250 1,750 1,750
SunAmerica Series Trust, on behalf of its
Corporate Bond Portfolio................ 3,500 3,500 100 100
Teachers' Retirement System of
Louisiana............................... 17,500 17,500 500 500
The Travelers Indemnity Company........... 47,460 47,460 1,356 1,356
The Travelers Insurance Company........... 45,325 45,325 1,295 1,295
The Travelers Insurance Company, Separate
Account SAD4............................ 28,000 28,000 800 800
The Travelers Insurance Company, Separate
Account TLAC............................ 4,445 4,445 127 127
The Travelers Life and Annuity Company.... 7,770 7,770 222 222
The Travelers Series High Yield Bond
Trust................................... 7,000 7,000 200 200
Travelers Series Trust, on behalf of its
Travelers Federated High Yield
Portfolio............................... 2,625 2,625 75 75
United Technologies Master Retirement
Plan.................................... 70,000 70,000 2,000 2,000
University of Pittsburgh Medical Center,
on behalf of its High Yield Account..... 1,750 1,750 50 50
Variable Investors Series Trust, on behalf
of its High Income Bond Fund............ 1,750 1,750 50 50
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(1) We have not provided any information regarding the beneficial ownership of
the selling securityholders after the offering because the number of shares
of common stock and warrants would be zero.
(2) Assumes the exercise of all of the warrants.
The information concerning the selling securityholders may change from time
to time and will be set forth in supplements to this prospectus.
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PLAN OF DISTRIBUTION
The purpose of this prospectus is to permit the selling securityholders, or
their pledgees on behalf of the selling securityholders, to offer and sell up to
300,000 warrants to purchase our common stock and up to 10,500,000 shares of our
common stock upon exercise of the warrants at such times and at such places as
the selling securityholders choose. Donees and other transferees of the selling
securityholders may also use this prospectus to offer and sell any warrants or
shares of common stock that they may acquire from the selling securityholders.
However, we may be required to supplement this prospectus to name these donees
or other transferees as selling securityholders if they acquire more than 500
shares of common stock or warrants to purchase more than 500 shares of common
stock.
We will not receive any proceeds from the sale of the warrants or the
common stock underlying the warrants through this prospectus. However, we will
receive up to $99.75 million upon the exercise of the warrants. We have agreed
to pay the expenses of registration of the securities offered hereby, including
legal and accounting fees, but excluding underwriter's discounts and
commissions, if any.
The warrants and the common stock underlying the warrants may be sold from
time to time at
- negotiated prices,
- fixed prices which may be changed,
- market prices prevailing at the time of sale or
- prices related to prevailing market prices.
The selling securityholders may effect such transactions directly or
indirectly through broker-dealers or agents
- in privately negotiated sales in the over-the-counter market or any
exchange on which the securities are listed (which, with respect to the
common stock, includes the New York Stock Exchange),
- by selling the shares to or through broker-dealers, including block
trades in which brokers or dealers will attempt to sell the shares as
agent but may position and resell the block as principal, and
- in one or more underwritten offerings on a firm commitment or best effort
basis.
Sales of these securities may also be made pursuant to Rule 144 under the
Securities Act, where applicable.
To the extent required under the Securities Act, the following information
will be set forth in an accompanying prospectus supplement:
- the names of donees or other transferees of selling securityholders,
- the aggregate amount of selling stockholders' shares being offered and
the terms of the offering,
- the names of any such agents, brokers, dealers, transferees or
underwriters, and
- any applicable fee or commission with respect to a particular offer.
Each selling securityholder will be responsible for paying compensation
owed by it to any underwriters, dealers, brokers or agents participating in the
distribution of its warrants or shares of common stock underlying its warrants,
regardless of whether such compensation is in the form of underwriting
discounts, concessions, commission or fees. This compensation might be in excess
of customary commissions. The aggregate proceeds to a selling securityholder
from the sale of its shares offered by this prospectus will be the purchase
price of such shares less any discounts or commissions.
If selling securityholders pledge, hypothecate or grant a security interest
in some or all of the warrants or the shares of common stock underlying the
warrants, then the pledgees, secured parties or persons to
10
<PAGE> 12
whom such securities have been hypothecated shall, upon foreclosure in the event
of default, be deemed to be selling securityholders under this prospectus.
A selling securityholder may also use this prospectus in the following
ways:
- to sell short, from time to time, shares of our common stock and, in such
instances, this prospectus may be delivered in connection with such short
sales and the shares offered hereby may be used to cover such short
sales,
- to enter into hedging transactions with broker-dealers, and the
broker-dealers may engage in short sales of shares of our common stock in
the course of holding the positions they assume with such selling
securityholder, including, without limitation, in connection with
distribution of these shares by such broker-dealers,
- to enter into option or other transactions with broker-dealers that
involve the delivery of shares of our common stock to the broker-dealers,
who may then resell or otherwise transfer these shares, and
- to loan or pledge the warrants and the shares of common stock underlying
the warrants to a broker-dealer and the broker-dealer may sell the shares
as loaned or upon a default may sell or otherwise transfer the pledge
shares.
The selling securityholders, any underwriter, any broker-dealer or any
agent that participates with the selling securityholders in the distribution of
the warrants or the shares of common stock may be deemed to be "underwriter"
within the meaning of the Securities Act. As a result thereof, any discounts,
commissions or concessions received by them and any profit on the resales of
these securities purchased by them may be deemed to be underwriting commissions
under the Securities Act.
To comply with securities laws of certain states, if applicable, the
warrants and the shares of common stock underlying the warrants will be sold in
such jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states these securities may not be sold unless they have
been registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available.
Rules and regulations under the Securities Exchange Act of 1934 limit the
ability of anyone engaged in a distribution of our common stock or warrants to
simultaneously engage in market transactions in our common stock, warrants, and
other derivative securities. For example, selling stockholders must comply with
Rule 10b-5 and Regulation M under the Securities Exchange Act, which may limit
the timing of purchases and sales of common stock and warrants by the selling
securityholders.
Pursuant to a registration rights agreement entered into in connection with
the preferred stock financing and the issuance of the warrants, we have agreed
to keep the registration statement of which this prospectus is a part
continuously effective until the earlier of (1) two years after the first date
as of which no warrants remain outstanding or (2) if the warrants expire
unexercised, the expiration date of the warrants. In this regard, we are
required to supplement and/or amend the registration statement of which this
prospectus is a part to supplement or change the selling securityholders and
provide other information to maintain the accuracy of the disclosures in the
prospectus.
The registration rights agreement requires us to indemnify the selling
securityholders, any underwriter and the respective directors, officers and
controlling persons of each selling securityholder against certain liabilities
in connection with the offer and sale of the warrants and the shares of common
stock underlying the warrants hereunder, including under the Securities Act.
Similarly, each selling securityholder is required to indemnify us and our
directors, officers and controlling persons against certain liabilities in
connection with the offer and sale of the warrants and the shares of common
stock underlying the warrants hereunder, including the Securities Act, to the
extent that liability occurs as a result of reliance with written information
furnished to us by such selling securityholder expressly for use in connection
with the registration statement of which this prospectus is a part. To the
extent such indemnification is prohibited,
11
<PAGE> 13
the selling securityholders and we are required to contribute to payments the
parties may be required to make in respect of otherwise indemnifiable claims.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information filed by us at the SEC's public
reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Our filings with the SEC are also
available to the public from commercial document retrieval services and at the
SEC's web site at "http://www.sec.gov."
This prospectus constitutes a part of a registration statement we have
filed with the SEC under the Securities Act. As permitted by the rules and
regulations of the SEC, this prospectus does not contain all of the information
contained in the registration statement and the exhibits and schedules to the
registration statement. Accordingly, in this prospectus, we make reference to
the registration statement and to its exhibits and schedules. For further
information about us and about the securities we are offering in this
prospectus, you should consult the registration statement and its exhibits and
schedules. You should be aware that statements contained in this prospectus
concerning the provisions of any documents filed as an exhibit to the
registration statement or otherwise filed with the SEC are not necessarily
complete, and in each instance reference is made to the copy of the document so
filed as an exhibit to the registration statement. These statements are
qualified in their entirety by these references.
INCORPORATION BY REFERENCE
All documents filed by us under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act after the date hereof are incorporated by reference into
and to be a part of this prospectus from the date of filing of those documents.
We are incorporating by reference the following documents we have filed
with the SEC:
- Annual Report on Form 10-K for the fiscal year ended December 31, 1998;
- Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
1999, June 30, 1999 and September 30, 1999;
- Current Report on Form 8-K/A filed January 20, 1999, amending Current
Report on Form 8-K filed December 15, 1998; and
- Current Reports on Form 8-K filed March 16, 1999, April 19, 1999, April
21, 1999, May 20, 1999 and May 21, 1999.
You may request a copy of any of these filings, at no cost, by writing or
telephoning us at the following address or phone number:
R&B Falcon Corporation
901 Threadneedle
Houston, Texas 77079
(281) 496-5000
Attention: Investor Relations
LEGAL MATTERS
Legal matters with respect to the warrants and the common stock underlying
the warrants offered hereby will be passed upon for us by Gardere Wynne Sewell &
Riggs, L.L.P., Houston, Texas.
12
<PAGE> 14
EXPERTS
The consolidated financial statements included in the R&B Falcon
Corporation Annual Report on Form 10-K for the year ended December 31, 1998,
incorporated by reference in this prospectus and elsewhere in the registration
statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in giving said
report.
With respect to the unaudited interim financial information for the
quarters ended March 31, 1999, June 30, 1999 and September 30, 1999, Arthur
Andersen LLP has applied limited procedures in accordance with professional
standards for a review of that information. However, their separate reports
thereon state that they did not audit and they do not express an opinion on that
interim financial information. Accordingly, the degree of reliance on their
reports on that information should be restricted in light of the limited nature
of the review procedures applied. In addition, the accountants are not subject
to the liability provisions of Section 11 of the Securities Act of 1933 for
their reports on the unaudited interim financial information because these
reports are not a "report" or a "part" of the registration statement prepared or
certified by the accountants within the meaning of Sections 7 and 11 of that
Act.
The consolidated financial statements of Cliffs Drilling Company as of
December 31, 1997 and for each of the two years in the period ended December 31,
1997, incorporated by reference in this prospectus, have been audited by Ernst &
Young LLP, independent accountants, as stated in their report, which is
incorporated by reference herein.
13
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses to be paid by the
Registrant in connection with the issuance and distribution of the Capital
Securities being registered. All amounts shown are estimates except for the
Securities and Exchange Commission registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $27,915
Legal fees and expenses..................................... 10,000
Accountants' services....................................... 10,000
Printing, EDGAR formatting and mailing expenses............. 20,000
Miscellaneous............................................... 5,000
-------
Total............................................. $72,915
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Amended and Restated Certificate of Incorporation and Bylaws of R&B
Falcon Corporation require the indemnification of directors and officers to the
fullest extent permitted by law.
Section 145 of the Delaware General Corporation Law authorizes and empowers
R&B Falcon Corporation to indemnify the directors, officers, employees and
agents of R&B Falcon Corporation against liabilities incurred in connection
with, and related expenses resulting from, any claim, action or suit brought
against any such person as a result of his relationship with R&B Falcon
Corporation, provided that such person acted in good faith and in a manner such
person reasonably believed to be in, and not opposed to, the best interests of
R&B Falcon Corporation in connection with the acts or events on which such
claim, action or suit is based. The finding of either civil or criminal
liability on the part of such persons in connection with such acts or events is
not necessarily determinative of the question of whether such persons have met
the required standard of conduct and are, accordingly, entitled to be
indemnified. The foregoing statements are subject to the detailed provisions of
Section 145 of the General Corporation law of the State of Delaware.
Article 6.1 of the Bylaws of R&B Falcon Corporation provides that R&B
Falcon Corporation shall indemnify to the fullest extent authorized or permitted
by law, any person made, or threatened to be made, a party to or otherwise
involved in any action or proceeding by reason of the fact that he or she is or
was a director or officer of R&B Falcon Corporation, at the request of R&B
Falcon Corporation or by reason of the fact that such director or officer at the
request of R&B Falcon Corporation, is or was serving any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise, in
any capacity.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
*4.1 -- Warrant Agreement, including form of Warrant
*4.2 -- Registration Rights Agreement dated April 22, 1999
between R&B Falcon Corporation and Donaldson Lufkin &
Jenrette Securities Corporation
*5 -- Legal Opinion of Gardere Wynne Sewell & Riggs, L.L.P.
15.1 -- Letter regarding unaudited interim financial information
23.1 -- Consent of Arthur Andersen LLP, independent public
accountants
23.2 -- Consent of Ernst & Young, LLP, independent public
accountants
*23.3 -- Consent of Gardere Wynne Sewell & Riggs, L.L.P. (included
in Exhibit 5)
*24 -- Power of Attorney (contained on signature page to the
Registration Statement)
</TABLE>
II-1
<PAGE> 16
- ---------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes that: (1) For purposes of
determining any liability under the Act, the information omitted from the form
of prospectus filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared effective;
and (2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) of 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 1 to Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Houston, State of
Texas, on November 19, 1999.
R&B FALCON CORPORATION
By: /s/ TIM W. NAGLE
----------------------------------
Tim W. Nagle
Executive Vice President
Pursuant to the requirements of the Securities Act, this Amendment No. 1 to
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chairman of the Board, Chief November 19, 1999
- ----------------------------------------------------- Executive Officer and Director
Paul B. Loyd (Principal Executive Officer)
/s/ TIM W. NAGLE Executive Vice President and November 19, 1999
- ----------------------------------------------------- Chief Financial Officer
Tim W. Nagle (Principal Accounting and
Financial Officer)
Director
- -----------------------------------------------------
Purnendu Chatterjee
* Director November 19, 1999
- -----------------------------------------------------
Steven A. Webster
Director
- -----------------------------------------------------
Arnold L. Chavkin
* Director November 19, 1999
- -----------------------------------------------------
Charles A. Donabedian
* Director November 19, 1999
- -----------------------------------------------------
Douglas A.P. Hamilton
Director
- -----------------------------------------------------
Macko A.E. Laqueur
Director
- -----------------------------------------------------
Michael E. Porter
* Director November 19, 1999
- -----------------------------------------------------
Robert L. Sandmeyer
* Director November 19, 1999
- -----------------------------------------------------
Douglas E. Swanson
* Director November 19, 1999
- -----------------------------------------------------
William R. Ziegler
* /s/ TIM W. NAGLE
- -----------------------------------------------------
Tim W. Nagle, Attorney-in-Fact
</TABLE>
II-3
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
*4.1 -- Warrant Agreement, including form of Warrant
*4.2 -- Registration Rights Agreement dated April 22, 1999
between R&B Falcon Corporation and Donaldson Lufkin &
Jenrette Securities Corporation
*5 -- Legal Opinion of Gardere Wynne Sewell & Riggs, L.L.P.
15.1 -- Letter regarding unaudited interim financial information
23.1 -- Consent of Arthur Andersen LLP, independent public
accountants
23.2 -- Consent of Ernst & Young, LLP, independent public
accountants
*23.3 -- Consent of Gardere Wynne Sewell & Riggs, L.L.P. (included
in Exhibit 5)
*24 -- Power of Attorney (contained on signature page to the
Registration Statement)
</TABLE>
- ---------------
* Previously filed
<PAGE> 1
EXHIBIT 15.1
Letter regarding unaudited interim financial information
R&B Falcon Corporation:
We are aware that R&B Falcon Corporation has incorporated by reference
in this registration statement on Form S-3 (Registration Statement No.
333-81181), its Form 10-Q for the quarters ended March 31, 1999, June 30, 1999
and September 30, 1999, which include our reports dated April 28, 1999, July 23,
1999 and October 29, 1999, respectively, covering the unaudited interim
financial information contained therein. Pursuant to Regulation C of the
Securities Act of 1933, those reports are not considered a part of the
registration statement prepared or certified by our Firm or reports prepared or
certified by our Firm within the meaning of Sections 7 and 11 of the Act.
ARTHUR ANDERSEN LLP
Houston, Texas
November 19, 1999
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-3
(Registration Statement No. 333-81181) of our report dated March 26, 1999
included in R&B Falcon Corporation's Form 10-K for the year ended December 31,
1998 and to all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
November 19, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
(Amendment No. 1 to Form S-3) and related Prospectus of R&B Falcon Corporation
for the registration of 10.5 million shares of Common Stock and .3 million
Common Stock Purchase Warrants of our report dated February 13, 1998, with
respect to the consolidated financial statements of Cliffs Drilling Company
included in its Annual Report (Form 10-K) for the year ended December 31, 1997
and incorporated by reference in the R&B Falcon Corporation Current Report on
Form 8-K/A Amendment No. 1 dated January 20, 1999, both filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Houston, Texas
November 19, 1999
