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EXHIBIT 99.1
For more information contact: Charles R. Ofner
(281) 496-5000
R&B Falcon Corporation Reports Third Quarter 2000 Results
October 25, 2000. Houston, Texas ........ R&B Falcon Corporation
(NYSE: FLC) reported net income of $27.3 million for the three months ending
September 30, 2000, compared with a net loss of $22.4 million for the
corresponding period in 1999. Net income applicable to common stockholders for
the third quarter was $13.7 million ($.07 per diluted share) after preferred
stock dividends of $13.6 million compared to a net loss applicable to common
shareholders of $34.5 million ($.18 per diluted share) after preferred dividends
of $12.1 million for the same period in 1999. Results for the current quarter
include a net gain of $.18 per share on the previously announced sale of the
Company's oil and gas properties in the Gulf of Mexico and a net impairment
charge of $.02 per share for estimated future losses on the Company's drilling
contract for the Deepwater Frontier. Excluding the effect of these two
non-recurring items, the Company would have reported a net loss of $.09 per
diluted share for the third quarter.
For the nine months ending September 30, 2000, the Company reported a
net loss applicable to common stockholders of $80.9 million ($.42 per diluted
share) after preferred stock dividends of $39.8 million compared to a net loss
applicable to common stockholders of $56.2 million ($.29 per diluted share) for
the corresponding period in 1999. The results for the nine months ending
September 30, 1999, include an extraordinary loss of $1.7 million ($.01 per
diluted share) for charges relating to the early extinguishment of debt and
include preferred stock dividends of $21.2 million.
Operating income for the third quarter of 2000 was $122.1 million on
revenues of $301.7 million compared to operating income of $3.8 million on
revenues of $214.2 million in the third quarter of 1999. Operating income in the
third quarter of 1999 included charges of $31.7 million for asset impairment
write-down and loss on the sale of assets following cancellation of drill ship
conversion projects, partially offset by a gain of $16.1 million on an insurance
settlement related to the physical loss of an inland barge drilling rig.
Operating income through September 30, 2000, was $123.3 million on revenues of
$721.1 million compared to operating income of $45.6 million on revenues of
$684.5 million for the same period in 1999.
Excluding the non-recurring gains and charges in each period, operating
income for the third quarter of 2000 increased to $54.1 million compared to
$19.4 million for the third quarter of 1999 due to higher earnings in the
Deepwater, Shallow Water and Inland Water segments. The improvement in Deepwater
segment earnings is attributable to higher rig utilization and the startup of
the new build Deepwater Nautilus vessel in late June. Significantly higher day
rates in the domestic offshore jackup and inland barge markets as well as
increased rig utilization resulted in improved earnings in the Shallow Water and
Inland Water segments. Average fleet utilization for the third quarter of 2000
was 49% compared to 39% for the same quarter in the preceding year.
Interest expense, net of capitalized interest, for the three months
ended September 30, 2000, was $60.7 million compared to $45.1 million for the
three months ended September 30, 1999 due primarily to lower capitalized
interest. Capitalized interest for the current quarter decreased by $13.5
million over the comparable period in 1999 as a result of lower investment in
the Company's deep water construction program as it nears completion.
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Paul B. Loyd, Jr., the Company's Chairman and Chief Executive Officer,
said, "During the third quarter R&B Falcon continued to achieve higher rig
utilization and day rates across our fleet, which resulted in substantial growth
in operating income from the previous quarter. Strong commodity prices and
improving market fundamentals indicate continued high demand for drilling
services particularly in the gas-driven domestic shallow and inland water
markets, a major growth area that should contribute to successive improvements
in quarterly results. During this quarter, we relocated two jackup rigs from the
international market to the Gulf of Mexico, both of which are operating. Two
additional jackups and three barge rigs were also placed into service during the
quarter as our rig reactivation program continues in response to the strong
market demand. In our Deepwater segment, higher sustained fleet utilization and
the startup of our remaining new build rigs on long-term contracts in the ultra
deep water market should provide significant earnings contribution for the
foreseeable future. We remain confident that R&B Falcon, with the largest fleet
of drilling rigs in the industry, will be the leading beneficiary as worldwide
demand for drilling improves over the anticipated extended growth period."
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 138 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 units,
internationally-based land drilling rigs and an offshore towing business.
This communication contains forward-looking statements that are based
upon utilization, day rate and business condition assumptions that the Company
currently believes are reasonable and achievable. The Company can give no
assurance that such assumptions will prove to have been correct. Therefore,
actual results could differ materially from the information presented. The
Company's periodic reports filed with the Securities and Exchange Commission
should be consulted for a description of risk factors associated with an
investment in the Company.
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R&B FALCON CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
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2000 1999 2000 1999
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<S> <C> <C> <C> <C>
OPERATING REVENUES:
Deepwater $ 128.6 $ 93.6 $ 287.1 $ 270.1
Shallow water 76.2 40.7 178.0 155.3
Inland water 40.2 28.6 99.4 85.5
Engineering services and land operations 56.9 51.2 152.1 173.4
Development (0.2) 0.1 4.5 0.2
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Total operating revenues 301.7 214.2 721.1 684.5
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COSTS AND EXPENSES:
Deepwater 61.7 42.9 154.7 126.2
Shallow water 44.4 33.7 118.2 115.3
Inland water 27.8 10.1 81.3 66.8
Engineering services and land operations 46.5 37.9 123.5 126.9
Development (67.2) 0.3 (65.2) 2.5
Cancellation of conversion projects -- 31.7 -- 31.7
Depreciation and amortization 50.1 39.9 139.3 114.7
General and administrative 16.3 13.9 46.0 54.8
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Total costs and expenses 179.6 210.4 597.8 638.9
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OPERATING INCOME 122.1 3.8 123.3 45.6
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OTHER INCOME (EXPENSE):
Interest expense, net of capitalized interest (60.7) (45.1) (163.2) (116.5)
Interest income 6.3 9.7 23.2 24.6
Income (loss) from equity investees plus related income (10.4) 2.7 (19.2) 9.0
Other, net (0.3) (0.4) (0.1) (0.7)
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Total other income (expense) (65.1) (33.1) (159.3) (83.6)
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INCOME (LOSS) BEFORE INCOME TAXES,
MINORITY INTEREST AND EXTRAORDINARY LOSS 57.0 (29.3) (36.0) (38.0)
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INCOME TAX EXPENSE (BENEFIT):
Current 5.6 11.4 18.2 30.0
Deferred 14.0 (22.1) (26.5) (43.8)
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Total income tax expense (benefit) 19.6 (10.7) (8.3) (13.8)
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MINORITY INTEREST (10.1) (3.8) (13.4) (9.1)
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INCOME (LOSS) BEFORE EXTRAORDINARY LOSS 27.3 (22.4) (41.1) (33.3)
EXTRAORDINARY LOSS, NET OF TAX BENEFIT -- -- -- (1.7)
------- ------- ------- -------
NET INCOME (LOSS) 27.3 (22.4) (41.1) (35.0)
DIVIDENDS AND ACCRETION ON PREFERRED STOCK 13.6 12.1 39.8 21.2
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NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS $ 13.7 $ (34.5) $ (80.9) $ (56.2)
======= ======= ======= =======
NET INCOME (LOSS) PER COMMON SHARE:
BASIC:
Income (loss) before extraordinary loss
and after preferred stock dividends $ 0.07 $ (0.18) $ (0.42) $ (0.28)
Extraordinary loss -- -- -- (0.01)
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Net income (loss) $ 0.07 $ (0.18) $ (0.42) $ (0.29)
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DILUTED:
Income (loss) before extraordinary loss
and after preferred stock dividends $ 0.07 $ (0.18) $ (0.42) $ (0.28)
Extraordinary loss -- -- -- (0.01)
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Net income (loss) $ 0.07 $ (0.18) $ (0.42) $ (0.29)
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WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING:
BASIC 194.2 192.8 193.6 192.6
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DILUTED 206.8 192.8 193.6 192.6
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</TABLE>
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R&B FALCON CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
<TABLE>
<CAPTION>
9/30/00 12/31/99
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<S> <C> <C>
ASSETS:
Cash, cash equivalents and short-term investments $ 353.6 $ 717.0
Less cash dedicated to capital projectS* (20.7) (160.4)
Other current assets 377.2 316.3
Net property and equipment 3,830.9 3,635.2
Other assets 299.5 413.8
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TOTAL ASSETS $4,840.5 $4,921.9
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 330.5 $ 358.6
Long-term obligations 2,901.3 2,933.4
Other noncurrent liabilities 72.3 92.9
Minority interest 67.3 56.6
Preferred stock 315.7 276.0
Stockholders' equity 1,153.4 1,204.4
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,840.5 $4,921.9
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</TABLE>
*Classified as other assets
