SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________________ to ______________________
Commission file number 1-5471
GLOBAL MARINE INC.
(Exact name of registrant as specified in its charter)
Delaware 95-1849298
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
777 N. Eldridge Road, Houston, Texas 77079
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 596-5100
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: Common Stock, $.10
par value, 163,352,070 shares outstanding as of March 31, 1994.
<PAGE>
GLOBAL MARINE INC.
TABLE OF CONTENTS TO FORM 10-Q
QUARTER ENDED MARCH 31, 1994
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Report of Independent Accountants 2
Condensed Consolidated Statement of Operations
Three Months Ended March 31, 1994, and 1993 3
Condensed Consolidated Balance Sheet
March 31, 1994, and December 31, 1993 4
Condensed Consolidated Statement of Cash Flows
Three Months Ended March 31, 1994, and 1993 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II - OTHER INFORMATION
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURE 14
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
of Global Marine Inc.
We have made a review of the condensed consolidated balance sheet of
Global Marine Inc. and subsidiaries as of March 31, 1994, and the related
condensed consolidated statements of operations and cash flows for the
three-month periods ended March 31, 1994, and 1993. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of December 31,
1993, and the related consolidated statements of operations,
shareholders' equity, and cash flows for the year then ended (not
presented herein); and in our report dated February 11, 1994, we
expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31,
1993, is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
/s/ Coopers & Lybrand
Houston, Texas
May 6, 1994
<PAGE>
<TABLE>
GLOBAL MARINE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
<CAPTION>
Three Months Ended
March 31,
1994 1993
<S> <C> <C>
Revenues:
Marine drilling $ 65.2 $ 58.2
Oil and gas 2.8 2.8
Total revenues 68.0 61.0
Expenses:
Marine drilling 50.6 48.4
Oil and gas 1.0 1.0
Depreciation, depletion and amortization 9.3 9.2
General and administrative 3.3 3.2
Total operating expenses 64.2 61.8
Operating income (loss) 3.8 (.8)
Other income (expense):
Interest expense (note 4) (7.1) (8.2)
Dividend income (note 3) 1.1 -
Interest income .6 .6
Total other income (expense) (5.4) (7.6)
Loss before income taxes (1.6) (8.4)
Income tax expense .1 .9
Loss before cumulative effect of
change in accounting principle (1.7) (9.3)
Cumulative effect of change in
accounting for postemployment benefits (note 2) (3.5) -
Net loss $ (5.2) $ (9.3)
Net loss per common share:
Before cumulative effect of
change in accounting principle $(0.01) $(0.06)
Cumulative effect of change in
accounting for postemployment benefits (note 2) (0.02) -
Net loss per common share $(0.03) $(0.06)
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
GLOBAL MARINE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions)
<CAPTION>
March 31, December 31,
1994 1993
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 52.9 $ 31.2
Marketable securities (note 3) 20.0 20.2
Accounts receivable, net of allowances 49.0 57.9
Investment, at cost - 15.0
Note receivable - 10.2
Prepaid expenses 6.4 6.5
Other current assets 3.5 3.4
Total current assets 131.8 144.4
Properties:
Rigs and drilling equipment, less accumulated
depreciation of $142.3 and $134.0 at March 31,
1994 and December 31, 1993, respectively 335.7 311.2
Oil and gas properties, full cost method, less
accumulated depreciation, depletion and amortization
of $30.0 and $29.5 at March 31, 1994 and December 31,
1993, respectively 4.3 3.4
Net properties 340.0 314.6
Funds in escrow for operating lease 8.0 8.5
Note receivable - 7.5
Other assets 13.5 17.9
Total assets $ 493.3 $ 492.9
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
GLOBAL MARINE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (Continued)
(In millions)
<CAPTION>
March 31, December 31,
1994 1993
<S> <C> <C>
Current liabilities:
Accounts payable $ 14.8 $ 19.9
Accrued liabilities:
Interest 8.4 1.2
Compensation and related employee costs 8.2 9.4
Claims and allowances 3.1 3.0
Income taxes 2.0 2.0
Other 1.2 1.7
Total current liabilities 37.7 37.2
Long-term debt 225.0 225.0
Reserve for loss on operating lease 7.8 8.4
Other long-term liabilities 20.7 16.9
Shareholders' equity:
Preferred stock, $0.01 par value, 10 million
shares authorized, no shares issued or outstanding - -
Common stock, $0.10 par value, 200 million shares
authorized, 163,352,070 shares and 162,832,799
shares issued and outstanding at March 31, 1994 and
December 31, 1993, respectively 16.3 16.3
Additional paid-in capital 256.5 254.7
Accumulated deficit (note 3) (70.7) (65.6)
Total shareholders' equity 202.1 205.4
Total liabilities and shareholders' equity $ 493.3 $ 492.9
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
GLOBAL MARINE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
<CAPTION>
Three Months Ended
March 31,
1994 1993
<S> <C> <C>
Cash Flows From Operating Activities:
Net loss $(5.2) $ (9.3)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation, depletion and amortization 9.3 9.2
Cumulative effect of change in accounting principle 3.5 -
(Increase) decrease in accounts receivable 8.9 (2.5)
Decrease in note receivable 17.9 -
Increase in other current assets - (2.2)
Decrease in accounts payable (5.1) (1.3)
Increase in accrued liabilities 6.2 7.7
Other, net 2.3 (2.7)
Net cash flow provided by (used in)
operating activities 37.8 (1.1)
Cash Flows From Investing Activities:
Capital expenditures (34.6) (5.2)
Proceeds from sales or maturities of marketable securities 19.6 .7
Purchases of marketable securities (4.2) (5.3)
Disposals of properties .9 4.6
Other 2.1 .8
Net cash flow used in investing activities (16.2) (4.4)
Cash Flows From Financing Activities:
Common stock offering, net of expenses - 7.8
Payments on long-term debt - (.2)
Other .1 .4
Net cash flow provided by financing activities .1 8.0
Increase in cash and cash equivalents 21.7 2.5
Cash and cash equivalents at beginning of period 31.2 23.3
Cash and cash equivalents at end of period $52.9 $25.8
See notes to condensed consolidated financial statements.
</TABLE>
GLOBAL MARINE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1994
NOTE 1 - GENERAL
The financial statements reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for the interim
periods. Such adjustments are considered to be of a normal nature unless
otherwise identified. Certain reclassifications have been made to the prior
year period to conform to the current period presentation. The term "Company"
refers to Global Marine Inc. and, unless the context otherwise requires, to the
Company's consolidated subsidiaries.
The year-end condensed balance sheet data was derived from audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles.
NOTE 2 - ACCOUNTING CHANGES
Effective January 1, 1994, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 112, "Employers' Accounting for Postemployment
Benefits." SFAS No. 112 requires the recognition of expense for
postemployment benefits on an accrual basis, rather than the cash-basis approach
used previously. Postemployment benefits include severance pay,
disability-related benefits and continuation of health care costs during the
period after employment but before retirement. The cumulative impact of this
change as of January 1, 1994 was an increase in the net loss in the amount of
$3.5 million ($0.02 per share) in the first quarter of 1994. Other than the
cumulative effect, the effect of the accounting change on the net loss was
not material. Assuming the accounting change was applied retroactively to
January 1, 1993, the effect of the change on the net loss and the net loss per
share for the quarter ended March 31, 1993, other than the cumulative effect,
would not have been material.
Effective January 1, 1994, the Company also adopted SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities." The new standard
expands the use of fair value accounting for certain investments in debt
and equity securities but retains the use of the amortized cost method for
investments in debt securities that the Company has the intent and ability to
hold to maturity. The adoption of the new standard had no effect, as of
January 1, 1994, on the accounting for the Company's investments in
marketable securities, which consisted entirely of debt securities as of that
date, because the Company holds such securities to maturity.
NOTE 3 - RECEIPT OF TRANSCO STOCK
In February 1994, the Company received 1,017,771 previously escrowed shares of
common stock, $0.50 par value per share, of Transco Energy Company
("Transco"), pursuant to the 1992 settlement of take-or-pay litigation, plus
$1.1 million in previously escrowed dividends which were declared and paid on
the escrowed shares during the period from June 1992 through February 1994,
plus interest. Upon receipt of the Transco shares, the Company reclassified
the $15.0 million carrying value of the stock from a current investment account
to marketable securities. As of March 31, 1994, the market and carrying
value of the Transco shares held by the Company and included in
marketable securities was $15.1 million. The unrealized holding gain as of
March 31, 1994 and the net change in the holding gain during the three months
then ended, which was recorded directly to accumulated deficit, was $0.1
million.
The Transco shares received by the Company will not be available for sale by the
Company in the public market prior to May 1994. Furthermore, the number of
shares of Transco common stock which the Company may sell during any single
three-month period will be limited; as a result, the Company may not be able
to complete the sale of all of the Transco shares until late 1994.
NOTE 4 - CAPITALIZATION OF INTEREST
For the quarter ended March 31, 1994, total interest expense was $7.6 million
less $0.5 million in interest capitalized in connection with the acquisition
and refurbishment of two offshore drilling rigs, the Glomar Adriatic IX and
Glomar Adriatic X, which were acquired in February 1994.
NOTE 5 - NET LOSS PER SHARE
The net loss per common share was based on the weighted average number of
common shares outstanding for each period. The weighted average shares for the
three months ended March 31, 1994 and 1993, were 163,129,928 and 143,696,806,
respectively.
NOTE 6 - SUBSEQUENT EVENT
On May 6, 1994, the Company signed an agreement to purchase a 1983 Marathon
LeTourneau 116-C jackup drilling rig, known as the "Bay Driller," from British
Gas for GBP9,250,000. The Company has purchased British pounds in an amount
equal to the purchase price in order to effectively fix the price in U.S.
dollars at $13.8 million. Under the terms of the agreement, the Company will
take delivery of the rig on October 1, 1994, and British Gas will have
quarterly options to charter the rig for use as an accommodation unit through
the end of 1995. Prior to utilizing the rig for drilling projects, the
Company would need to replace the rig's existing specialized drilling equipment
with standard drilling equipment at a cost presently estimated to be
approximately $10 million.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OPERATING RESULTS
SUMMARY
The Company reported operating income of $3.8 million for the first quarter of
1994 compared to a loss of $0.8 million for the prior-year first quarter.
The improvement in operating results is due to (i) increased contract drilling
dayrates and utilization in the U.S. Gulf of Mexico, (ii) the redeployment to
the Gulf of five of the Company's rigs from weak overseas markets during the
period from April 1993 to November 1993, and (iii) lower oil and gas
depletion expense, partially offset by a decline in turnkey drilling results.
Data relating to the Company's operations by business segment follows:
<TABLE>
Three Months Ended
March 31, Percentage
1994 1993 Change
(in millions)
<S> <C> <C> <C>
Revenues:
Marine drilling:
Contract drilling $51.9 $48.6 +7%
Turnkey drilling 14.8 9.9 +49%
Intrasegment elimination (1.5) (0.3)
Total marine drilling 65.2 58.2 +12%
Oil and gas 2.8 2.8 -
Total revenues $68.0 $61.0 +11%
Operating income:
Marine drilling:
Contract drilling $ 6.0 $ 1.1 +445%
Turnkey drilling 0.1 1.3 -92%
Elimination (1) (0.1) (0.3)
Total marine drilling 6.0 2.1 +186%
Oil and gas 1.3 0.4 +225%
Corporate expenses (3.5) (3.3) +6%
Total operating income (loss) $ 3.8 $(0.8) n/m (2)
</TABLE>
(1) Deferral of turnkey profit on oil and gas wells drilled on properties in
which the Company has an economic interest.
(2) Not meaningful.
In the North Sea and West Africa, low oil prices continue to depress demand for
offshore drilling services, resulting in low dayrates and utilization. The
strength in the Gulf of Mexico offshore drilling market, which is attributable
to higher natural gas prices, has resulted in an increase in the
supply of rigs competing for jobs in the Gulf, as contractors have relocated
a significant number of rigs to the Gulf from weak overseas markets. This
increase in Gulf supply, together with a slight decline in the number of Gulf
rigs under contract since the end of 1993, have resulted in recent downward
pressures on Gulf dayrates.
Although the outlook for the Company for 1994 is improved over 1993, the Company
expects to report a net loss for the full year 1994.
MARINE DRILLING OPERATIONS
Contract drilling. Data with respect to the Company's contract drilling
operations follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31, Percentage
1994 1993 Change
<S> <C> <C> <C>
Contract drilling revenues by area (in millions):
Gulf of Mexico $29.8 $10.6 +181%
North Sea 6.6 19.3 -66%
West Africa 7.1 11.7 -39%
Other 8.4 7.0 +20%
Total $51.9 $48.6 +7%
Average rig utilization 92% 84%
Fleet average dayrate $24,300 $25,000
</TABLE>
Despite the slightly lower fleet average dayrate for the first quarter of 1994
compared to the prior year first quarter, the increased utilization resulted
in a $3.3 million increase in contract drilling revenues. Revenues from the
Gulf of Mexico increased by $19.2 million due to (i) the 1993 redeployment to
the Gulf of two rigs from West Africa and three rigs from the North Sea, (ii)
the September 1993 acquisition of two rigs from Transocean Drilling AS and (iii)
higher dayrates and utilization for the Company's other rigs in the Gulf of
Mexico. Revenues from the North Sea decreased by $12.7 million due to (i)
the redeployment of the three rigs from the North Sea to the Gulf of Mexico,
(ii) the sale of the offshore drilling rig, Glomar Moray Firth, to Transocean
Drilling AS in September 1993 and the completion of a management contract
with respect to that rig in December 1993 and (iii) lower North Sea utilization.
Revenues attributable to offshore West Africa decreased by $4.6 million
primarily due to the redeployment of the two rigs from offshore West Africa
to the Gulf of Mexico in 1993 and the sale of the offshore drilling rig, Glomar
Biscay II, in the first quarter of 1993. The $1.4 million increase in revenues
in the "Other" category was due to the redeployment of the Glomar Adriatic IV
from the Gulf of Mexico to Trinidad.
The Company anticipates that contracts on 12 of the Company's 22 rigs under
contract as of May 2, 1994, will expire at varying times on or prior to
June 30, 1994. No assurance can be made that the Company will obtain drilling
contracts for the three rigs that are presently available or for its other rigs
upon the completion of existing contracts. Short-term contracts have been
typical in the industry for the past decade, and the Company considers its
upcoming contract expirations typical of prevailing market conditions in the
normal course of business.
Drilling activity in the Gulf of Mexico increased throughout 1993 due to
stronger domestic natural gas prices and a growing number of drilling
prospects developed from enhanced seismic technology. In the Gulf of Mexico,
average demand increased to 125 rigs under contract (74 percent utilization)
for the quarter ended March 31, 1994 from 104 rigs (71 percent utilization)
for the first quarter of 1993. For the quarter ended December 31, 1993, an
average of 131 Gulf rigs were under contract (81 percent utilization). If
natural gas prices remain at current levels, drilling activity is expected to
remain strong. Dayrates, however, are currently trending downward as the supply
of the rigs in the Gulf of Mexico continues to increase due to the arrival of
rigs from weak overseas markets. As of May 2, 1994, all twelve of the
Company's rigs in the Gulf of Mexico were under contract.
In West Africa, the civil war in Angola, the reduction of the Nigerian
national oil company's participation in ongoing projects and low oil prices
have caused a reduction in the demand for offshore drilling rigs and,
accordingly, a reduction in dayrates. Offshore West Africa, average demand
decreased to 24 rigs under contract for each of the quarters ended March 31,
1994 and December 31, 1993 (73 percent utilization and 71 percent utilization,
respectively) from 32 rigs for the first quarter of 1993 (77 percent
utilization). As of May 2, 1994, all three of the Company's rigs located
offshore West Africa were under contract.
In the North Sea, low oil prices continue to negatively affect demand for
offshore drilling rigs. U.K. oil prices have trended downward from
approximately $21 per barrel in June of 1992 to a range of $13 per barrel to
$17 per barrel since July of 1993. In addition, the reduction in U.K. tax
relief for exploration and appraisal expenditures has further depressed the
North Sea drilling market. As a result, the outlook for North Sea activity
remains uncertain. In the North Sea, average demand decreased to 68 rigs
under contract (78 percent utilization) for the quarter ended March 31, 1994
from 77 rigs (83 percent utilization) for the quarter ended December 31, 1993,
and 85 rigs (77 percent utilization) for the first quarter of 1993. As of
May 2, 1994, only one of the Company's three rigs in the North Sea was under
contract.
Turnkey Drilling. Turnkey drilling operations completed four wells during the
first quarter of 1994 compared to three in the prior year first quarter,
resulting in a $4.9 million increase in revenues. Operating income from
turnkey drilling decreased by $1.2 million compared to the first quarter of
1993 due in part to a loss on one of the 1994 well completions.
OIL AND GAS OPERATIONS
Data related to the Company's oil and gas production follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31, Percentage
1994 1993 Change
<S> <C> <C> <C>
Gas
Production (in millions of cubic feet) 1,038 1,267 -18%
Average sale price (per thousand cubic feet) $2.20 $1.62 +36%
Oil
Production (in barrels) 35,723 41,672 -14%
Average sale price (per barrel) $13.31 $18.45 -28%
</TABLE>
The decline in oil production in the first quarter of 1994 as compared to the
first quarter of 1993 is due to the sale of a Montana oil property in 1993.
The decrease in oil and gas production and a lower average oil price received
were offset by a higher average gas price received, resulting in revenues of
$2.8 million for each of the first quarters of 1994 and 1993.
The $0.9 million increase in oil and gas operating income was due to a lower
depletion rate for the first quarter of 1994 resulting from the property sale in
1993 and the attendant reduction in the depletable base.
OTHER INCOME AND EXPENSE
Interest expense for the first quarter of 1994 declined by $1.1 million from the
prior year first quarter due to (i) the reduction in long-term debt resulting
from the retirement of the rig mortgage note for the Glomar Baltic I in August
1993 and (ii) the capitalization of $0.5 million of interest in the first
quarter of 1994 attributable to the acquisition and refurbishment of two
offshore drilling rigs, the Glomar Adriatic IX and Glomar Adriatic X, which
were acquired in February 1994.
The Company recognized and received dividend income of $1.1 million in the first
quarter of 1994 on its investment in common stock of Transco. The dividends
relate to the period from June 1992 through February 1994, during which period
such dividends were held in escrow. Prior to February 1994, the exact amount
of the dividends to be received by the Company was not determinable.
Income tax expense of $0.1 million for the first quarter of 1994 consists of
$0.4 million in current foreign income tax expense offset by a credit of $0.3
million related to an adjustment to a federal income tax liability. Income tax
expense of $0.9 million for the first quarter of 1993 consists of current
foreign income tax expense. The Company's net operating losses provide no
current federal income tax benefit.
In the first quarter of 1994 the Company adopted SFAS No. 112, "Employers'
Accounting for Postemployment Benefits." The adoption of SFAS No. 112
resulted in a charge to earnings in the amount of $3.5 million for the
cumulative effect of the change.
LIQUIDITY AND CAPITAL RESOURCES
Capitalized words which appear in the following discussion that are not defined
herein are defined in the Company's Annual Report on Form 10-K for the
year ended December 31, 1993.
In February 1994, the Company received 1,017,771 previously escrowed shares of
Transco common stock, pursuant to the 1992 settlement of take-or-pay
litigation, plus $1.1 million in previously escrowed dividends which were
declared and paid on the escrowed shares during the period from June 1992
through February 1994, plus interest. The Transco shares received by the
Company will not be available for sale by the Company in the public market
prior to May 28, 1994. Furthermore, the number of shares of Transco common
stock which the Company may sell during any single three-month period will be
limited; as a result, the Company may not be able to complete the sale
of all of the Transco shares until late 1994. As of March 31, 1994, the
market value of the Transco shares held by the Company was $15.1 million.
In March 1994, the Company received $15.2 million in proceeds from the sale of
U.S. government securities which were previously held in trust in connection
with the Transco Note. The proceeds represented the remaining balance
due under the note, which was to mature quarterly through July 1995.
In February 1994, the Company purchased two jackup drilling rigs, the Glomar
Adriatic IX and the Glomar Adriatic X. The Company paid $26.0 million in cash
and issued $1.0 million in notes payable from the rigs' cash flow in
partial payment of the purchase price. The remainder of the purchase price will
be paid during the second quarter of 1994 by issuing to the seller up to
900,000 shares of Global Marine common stock. In addition, the Company
anticipates spending approximately $15 million to refurbish and upgrade the rigs
over the remainder of 1994 and the first quarter of 1995.
As of March 31, 1994, the Company had $52.3 million in cash and marketable
securities, net of restricted amounts of $20.6 million, of which $15.1
million consisted of the Transco stock. As of December 31, 1993, the Company
had $44.6 million in cash and marketable securities, net of restricted amounts
of $6.8 million.
During the quarter ended March 31, 1994, cash flow provided by operations
increased to $37.8 million, primarily resulting from the liquidation of
the Transco Note and collections on trade receivables, compared to a cash use of
$1.1 million for the comparable prior-year period.
Working capital decreased to $94.1 million at March 31, 1994 from $107.2 million
at December 31, 1993, due to the purchase of the Glomar Adriatic IX and Glomar
Adriatic X offshore drilling rigs.
In May 1994, the Company signed an agreement to purchase another offshore
drilling unit, a 1983 Marathon LeTourneau 116-C jackup known as the "Bay
Driller," at a price of $13.8 million, for delivery in October 1994. The
platform is currently outfitted and used by the seller as an accommodation
unit. In addition, the Company estimates it would need to spend approximately
$10 million to outfit the Bay Driller with suitable drilling equipment before
it can be operated as an offshore drilling unit. The Company does not expect to
make such additional expenditures prior to 1995. (See note 6 of notes to
condensed consolidated financial statements in Part I, Item 1 of this Quarterly
Report on Form 10-Q.)
Capital expenditures for the remainder of 1994 for the Company's drilling fleet,
other than for the refurbishment of the Glomar Adriatic IX and Glomar
Adriatic X and the purchase of the Bay Driller, are estimated to be $7 million,
principally for capital additions and improvements to the Company's rigs
currently in service. Capital expenditures for the Company's oil and gas
operations are estimated to be $6 million for the remainder of 1994,
principally for exploratory drilling, development drilling of producing
properties, the purchase of equipment used in connection with producing
properties, and workovers and recompletions.
The Company believes that it will be able to meet all of its current
obligations, including capital expenditures and debt service, from its cash
flow from operations and its cash, cash equivalents and marketable securities.
The Company's ability, however, to pay the principal amount of its Senior
Secured Notes upon maturity in December 1999 would require a substantial
improvement in current industry conditions. The Company estimates that the
average dayrate earned by the Company's contract drilling fleet would have to
increase from $24,300 per rig earned for the first quarter of 1994 to
approximately $29,000 per rig during the period from April 1, 1994, through the
date of maturity of the Senior Secured Notes in order to cover all cash
operating, capital and financing costs, including principal payments, during
the period up to and including the maturity of the Senior Secured Notes.
This estimate assumes the continuation of rig utilization and operating
expenses at current levels and does not include sources of liquidity other than
cash flow from the Company's contract drilling fleet.
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On May 6, 1994, the Company signed an agreement to purchase a 1983 Marathon
LeTourneau 116-C jackup drilling rig, known as the "Bay Driller," from British
Gas. For further information, see note 6 of notes to condensed consolidated
financial statements in Item 1 and "Liquidity and Capital Resources" in Item 2,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," in Part I of this Quarterly Report on Form 10-Q.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 Purchase and Sale Agreement, dated May 6, 1994, between Global
Marine Inc. and British Gas.
15.1 Letter of Independent Accountants regarding Awareness of
Incorporation by Reference.
27.1 Financial Data Schedule. (Exhibit 27.1 is being submitted as an
exhibit only in the electronic format of this Quarterly Report on
Form 10-Q being submitted to the Securities and Exchange
Commission. Exhibit 27.1 shall not be deemed filed for purposes
of Section 11 of the Securities Act of 1933, Section 18
of the Securities Exchange Act of 1934 or Section 323 of the Trust
Indenture Act, or otherwise be subject to the liabilities of such
sections, nor shall it be deemed a part of any registration
statement to which it relates.)
(b) Reports on Form 8-K
The Company did not file any Current Reports on Form 8-K during the first
quarter of 1994.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GLOBAL MARINE INC.
(Registrant)
Dated: May 11, 1994 /s/ Thomas R. Johnson
Thomas R. Johnson
Vice President and Corporate Controller
(Duly Authorized Officer and Principal Accounting
Officer of the Registrant)
INDEX TO EXHIBITS
10.1 Purchase and Sale Agreement, dated May 6, 1994, between Global Marine
Inc. and British Gas.
15.1 Letter of Independent Accountants regarding Awareness of Incorporation
by Reference.
27.1 Financial Data Schedule. (Exhibit 27.1 is being submitted as an
exhibit only in the electronic format of this Quarterly Report on
Form 10-Q being submitted to the Securities and Exchange Commission.
Exhibit 27.1 shall not be deemed filed for purposes of Section 11 of
the Securities Act of 1933, Section 18 of the Securities Exchange
Act of 1934 or Section 323 of the Trust Indenture Act, or otherwise be
subject to the liabilities of such sections, nor shall it be deemed a
part of any registration statement to which it relates.)
EXHIBIT 10.1
THIS AGREEMENT is made the 6th day of May 1994
BETWEEN
(1) BRITISH GAS EXPLORATION AND PRODUCTION LIMITED, a
company incorporated in England and Wales and having
its registered office at Rivermill House, 152
Grosvenor Road, London SW1V 3JL (hereinafter referred
to as "the SELLER"); and
(2) GLOBAL MARINE INC. having its registered office at
777N. Eldridge Road, Houston, Texas 77079-4416, USA
(hereinafter referred to as "the Buyer").
Whereas the SELLER shall sell and the BUYER shall buy the Vessel
"Bay Driller" and whereas the SELLER and the BUYER accept as a
precondition to the sale of the Vessel that the Vessel shall be
removed from the British Register of Shipping and that the entry
in Registry relating thereto shall be closed.
IT IS HEREBY AGREED AS FOLLOWS:
1.0 DEFINITIONS
1.1 In this Agreement the following words shall have the
following meanings:
"Contract" means these terms and conditions and
Appendix 1, Appendix B and Appendix C hereto.
"Delivery" means delivery of the Vessel by the SELLERS
and acceptance thereof by the BUYER and the passing of
title in the Vessel from the SELLER to the BUYER by
delivery of Bills of Sale in accordance with Clause 7.
"Deposit" means the sum of NINE HUNDRED AND TWENTY
FIVE THOUSAND POUNDS sterling payable by the BUYER to
the SELLER upon signature of the Contract by the BUYER
and the SELLER.
"Purchase Price" means the sum of NINE MILLION TWO
HUNDRED AND FIFTY THOUSAND POUNDS STERLING.
"Vessel" means "Bay Driller" jack-up drilling unit.
2.0 PAYMENT
2.1 Deposit
As a security for the correct fulfilment of this
Contract, BUYER shall pay a deposit within 5 days of
signing this Sale Agreement.
The Deposit shall be paid to SELLER to account number
and bank details set forth in Clause 2.2 by
telegraphic transfer.
The above monies are to be free of bank charges and
other deductions to the SELLER and be paid on
signature of this Contract by both parties. Any fee
subsequently charged for holding said Deposit, shall
be borne by the SELLER.
Any interest on this account shall be paid to SELLER.
2.2 Purchase Price
The Purchase Price, less that amount paid as the
Deposit, shall be paid by telegraphic transfer to the
British Gas Exploration and Production Limited bank
account number 90090042, held at the following branch
of Barclays Bank plc:
Holborn and Chancery Lane
147 Holborn
London EC1N 2NV
Sort Code: 20-41-41
The above monies are to be free of bank charges and
other deductions to the SELLER on Delivery.
3.0 INSPECTION
The BUYER has been provided with an opportunity to
inspect the Vessel and all relevant records to its
satisfaction and has accepted the same.
4.0 TIME AND PLACE OF DELIVERY OF THE VESSEL
4.1 Delivery of the Vessel shall take place offshore in
the Morecambe Field.
Expected date of delivery 01 October 1994.
4.2 If the Vessel becomes a total or constructive or
compromised total loss before Delivery, the Contract
shall terminate in which event the Deposit shall be
returned forthwith to the Buyer together with interest
on the Deposit calculated at 5% per annum for the
period the Deposit is held by Seller.
4.3 The precise time of Delivery shall be evidenced by
execution by the SELLERS and BUYERS of a Protocol of
Acceptance and Delivery.
5.0 PARTIAL LOSS
In the event that the Vessel shall sustain damage not
amounting to a total loss or constructive or
compromised total loss prior to the Delivery:
(i) The SELLER hereby agrees to repair the
Vessel to the operational conditions (in all
material respects) prevailing on the date of
the BUYER's inspection of the Vessel, fair
wear and tear excepted.
(ii) If the Vessel shall be repaired to the
standard specified in Clause 5 (i) within
120 days after the date on which the Vessel
sustained the partial loss, the BUYER shall
be obliged to purchase the Vessel and the
SELLER shall deliver the Vessel for an
amount equal to the Purchase Price less any
Deposit paid, promptly after such repair
shall be completed, but not earlier than the
Delivery specified in Clause 4.
(iii) In the event that the Vessel is not repaired
within such 120 day period or it shall be
demonstrably and manifestly obvious that the
Vessel cannot be repaired to the standards
specified in Clause 5 (i) within 120 days
after the date on which the Vessel sustained
the partial loss, the BUYER has the right to
terminate this Agreement with no liability
to the SELLER, in which event the Deposit
shall be returned forthwith to the BUYER
together with interest on the Deposit
calculated at 5% per annum for the period
the Deposit is held by SELLER.
6.0 DELIVERY OF SPARES AND OTHER ITEMS
6.1 All spare parts and spare equipment belonging to the
Vessel used or unused whether on board or not (but not
spares on order) shall become the BUYERS' property at
Delivery. Spare parts not on board the Vessel shall
be delivered to the SELLERS' warehouse at locations
detailed in Appendix 1. The SELLER shall give written
notice to the BUYER that such spares are ready for
collection by the BUYER at the locations detailed in
Appendix 1, and if the BUYER fails to collect such
spares within 7 days of such notice, then the BUYER
shall pay to the SELLER reasonable storage charges for
each day up to the date on which it collects such
spares.
6.2 The SELLERS are not required to replace spare parts
which are taken out of inventory and used as
replacements prior to Delivery, but any replaced items
shall become the property of the BUYER at the time of
Delivery.
6.3 The SELLERS have the right to take ashore crockery,
plate, cutlery, linen and other articles bearing the
SELLER's flag or name, provided they replace same with
similar unmarked items. Captain's Officer's and
Crew's personal belongings are excluded from the sale.
6.4 Appendix 1 lists equipment that is included in the
sale but which is located ashore and Appendix B lists
equipment on board the Vessel but which is excluded
from the sale by SELLER.
7.0 DOCUMENTATION
7.1 In exchange for payment of the Purchase Price the
SELLER shall furnish the BUYER with legal Bills of
Sale in respect of all shares in the Vessel free from
all encumbrances and maritime liens or any other debts
whatsoever, duly notarially attested and authenticated
by the Panamanian consulate together with a
certificate stating that the Vessel is free from
registered encumbrances.
On receipt of payment, the SELLER shall (unless the
BUYER intends to maintain the Vessel under the British
Flag) provide for the deletion of the Vessel from the
Register of Shipping in London and deliver a
certificate of deletion to the BUYER within 3 days.
The BUYER undertakes to notify the SELLER of the
intended flag of the Vessel after Delivery not less
than seven (7) days prior to the date notified for
Delivery pursuant to Clause 4.1.
7.2 The SELLER shall, at the time of Delivery, deliver to
the BUYER all certificates, plans and other records
and documents relating to the Vessel which are on
board the Vessel or onshore. The SELLER may keep the
log books, but the BUYER shall have the right to take
copies of same. Technical documentation relating to
the Vessel which may be in the SELLER's possession
shall promptly, upon the BUYER's instructions, be
forwarded to the BUYER.
8.0 ENCUMBRANCES
8.1 The SELLER warrants that the Vessel and all spares
sold pursuant hereto at the time of Delivery are free
from all encumbrances and maritime or other liens or
any other debts whatsoever.
8.2 The SELLER shall indemnify the BUYER against all
consequences of any claims in respect of such
encumbrances, liens or debts against the Vessel
incurred prior to Delivery.
9.0 TAXES
9.1 Any taxes, fees and expenses in connection with the
registration of the Vessel in the BUYER's name shall
be for the BUYER's account.
9.2 The Purchase Price shall be exclusive of UK VAT or
duties or other taxes (if applicable); the BUYER shall
pay any other duty or taxes to the appropriate
recipient, and, if such duty or taxes are to be
assessed both on the Vessel and it's associated spare
parts and equipment ashore and on board against the
SELLER, to the SELLER at the time of payment of the
Purchase Price.
10.0 EXPENSES PENDING DELIVERY
As from Delivery the BUYER shall pay the day to day
running costs and expenses of the Vessel.
The BUYER shall reimburse the SELLER promptly on
demand for any such cost necessarily incurred by the
SELLER for which the BUYER is responsible and at
Delivery (and as a condition thereof) shall pay to the
SELLER any amounts then outstanding.
11.0 CONDITION ON DELIVERY
11.1 The Vessel with everything belonging to her shall be
at the SELLER's risk and expense until Delivery but
subject to the conditions of this Contract, she shall
be delivered and taken over as she is at the time of
inspection, fair wear and tear excepted.
11.2 The Vessel shall be delivered "AS IS CURRENT LOCATION"
i.e. offshore in the Morecambe Field in substantially
the same condition as when inspected, fair wear and
tear accepted. The SELLER warrant good title to the
Vessel, but save as is otherwise expressly provided
herein, make no other warranty or representation in
relation to the Vessel and the BUYER expressly agrees
and acknowledge that, save as is otherwise expressly
provided herein, no other warranty or representation
of any kind is or has been given by or on behalf of
the SELLER in relation to the Vessel. The BUYER
confirms that they have not relied on any warranty or
representation by law or otherwise, save as is
otherwise expressly provided herein, in relation to
the Vessel, including, without limitation, any
warranties or representations, express or implied as
to the description, seaworthiness, merchantability,
fitness for purpose, trade to any port, value,
condition, design or operation of any kind or nature
of the Vessel.
11.3 Upon delivery the BUYER undertakes to change the name
of the Vessel and remove SELLER's logo.
11.4 Seller shall provide BUYER with a Certificate of
Fitness ("COF") free of outstanding recommendations
existing at the date of execution of this Agreement.
SELLER shall provide a COF with an expiration date of
31st August 1998 on delivery. Thereafter, SELLER's
obligations in relation to the COF shall cease.
Safety case items which involve physical modifications
to the Vessel but which are not required for the COF
shall not, unless otherwise decided by SELLER, be
implemented by SELLER before 30th September 1994.
In the event that SELLER retains the Vessel under
bareboat charter conditions such physical
modifications shall only be implemented by the SELLER
after 01 July 1995, unless otherwise decided by
SELLER. If SELLER implements any modifications after
transfer of ownership, BUYER shall accept costs
directly charged to SELLER for such modifications up
to a maximum cost of 200,000 POUNDS STERLING.
During the time of any bareboat charter SELLER shall
remain responsible for Safety Case Administration
including any actions with respect to HSE.
12.0 BUYER'S DEFAULT
12.1 If the BUYER fails to pay the Purchase Price on
Delivery or otherwise fail to accept the Delivery in
accordance with the terms of the Contract, the SELLER
has the right to terminate the Contract and retain the
Deposit.
12.2 The BUYER shall make due compensation for the losses,
excluding consequential losses, caused to the SELLER
arising out of the BUYER's failure to perform their
obligation hereunder. The SELLER shall be entitled to
claim compensation and for all expenses together with
interest at UK Sterling 3 month LIBOR rate (as quoted
in the Financial Times published in London by the
reference banks at 11.00 am on each working day) plus
2% calculated on a day to day basis from the time of
termination of the Contract until the time of payment.
13.0 SELLER'S DEFAULT
13.1 If the SELLER fails to execute a legal transfer of the
Vessel or to deliver the Vessel in accordance with the
terms of the Contract prior to the date set out in
Clause 4, the BUYER shall have the right to cancel the
Contract and the SELLER shall refund the Deposit
together with interest on the Deposit calculated at 5%
per annum for the period the Deposit is held by
SELLER.
13.2 The SELLER shall make due compensation for the losses,
excluding consequential losses, caused to the BUYERS
by failure to deliver the Vessel in accordance with
the terms of the Contract if such losses arise by
reason of the negligence of the SELLER, together with
interest at the rate and for the period set out in
Clause 12.2.
14.0 CONSEQUENTIAL LOSS
Notwithstanding any provision to the contrary, in no
event with either party be liable to the other for any
indirect, special or consequential damages, including
any damages for loss of profit.
15.0 ARBITRATION
15.1 If any dispute should arise in connection with the
interpretation and fulfilment of the Contract, the
same shall be decided by arbitration in the City of
London and shall be referred to a single Arbitrator to
be appointed by the parties hereto. If the parties
cannot agree upon the appointment of the single
Arbitrator, the dispute shall be settled by three
Arbitrators, each party appointing one Arbitrator, the
third being appointed by the President for the time
being of the London Maritime Arbitrators Association.
If either of the appointed Arbitrators refuses or is
incapable of acting, the party who appointed him shall
appoint a new arbitrator in his place.
15.2 If one of the parties fails to appoint an Arbitrator -
either originally or by way of substitution - for two
weeks after the other party having appointed his
Arbitrator has sent the party making default notice by
mail or telex to make the appointment, the party
appointing the third Arbitrator shall, after
application from the party having appointed his
Arbitrator, also appoint an Arbitrator on behalf of
the party making default.
15.3 The award rendered by Arbitration shall be final and
binding upon the parties and may if necessary be
enforced by the Courts or any other competent
authority in the same manner as a judgement in the
Court of Justice.
15.4 The Contract shall be subject to and construed in
accordance with the laws of England.
16.0 ENTIRE AGREEMENT
The Contract represents the entire agreement between
the SELLER and the BUYER in respect of the sale and
purchase of the Vessel, and any and all agreements,
representations, communications or understandings of
any party made prior to the date of the Contract are
excluded unless expressly set out herein.
17.0 NOTICES
17.1 All notices to the BUYER shall be sent to:
Mr J L McCulloch, Vice President and General Counsel
777N. Eldridge Road
Houston, Texas, 77079-4416
U.S.A.
Tel: 713,596,5837
FAX: 713,596,5196
TELEX: 765558
and all notices to the SELLER shall be sent to:
Mr R J Baxter
Divisional Logistics and Contracts Manager
British Gas Exploration and Production Limited
Building C, 100 Thames Valley Park Drive
Reading, Berkshire RG6 1PT
TEL: 0734 353222
FAX: 0734 292998
TELEX: 846231
17.2 All notices shall be in writing and may be delivered
by hand or sent by registered post or telex or
facsimile. In the absence of evidence to the
contrary, a notice sent by registered post shall be
deemed received on the date falling 7 days after the
date of posting, and, if delivered by hand or sent by
telex (provided correct answerback received) or
facsimile, on the date of delivery or transmission.
Notices received or deemed received outside normal
office hours at the place of receipt shall be deemed
received on the day when offices in the place of
receipt are next open.
18.0 CONFIDENTIALITY
All details of the sale negotiations shall be kept
strictly private and confidential so far as is
reasonably practicable. The SELLER and the BUYER
shall agree a joint press statement to be made at a
mutually acceptable time.
19.0 CHARTERBACK OPTIONS
The BUYER agrees to give the SELLER the following
demise charter options:-
(a) 1st October 1994 to 31st December 1994 inclusive
at a day rate of US $5,000;
(b) 1st January 1995 to 31st March 1995 inclusive at
a day rate of US $10,000;
(c) 1st April 1995 to 30th June 1995 inclusive at a
day rate of US $10,000;
(d) 1st July 1995 to 30th September 1995 inclusive at
a day rate of US $10,000.
(e) 1st October 1995 to 31st December 1995 inclusive
at a day rate of US $10,000.
Each option shall be declared by the SELLER to the
BUYER 60 days in advance.
The terms and conditions under which such charter
shall be governed are set out in Appendix C.
20.0 ASSIGNMENT
Buyer shall be entitled to assign the Sale Agreement
and all rights and obligations thereunder to any of
Buyers wholly owned subsidiaries at any time prior to
the closing date.
21.0 BUYERS PERSONNEL
(a) Buyer shall be entitled to place on board the
Vessel a mutually agreed number of personnel
(minimum of 1/maximum of 3 based on available
beds) from the date of execution of this Contract
until Delivery. The Buyer shall be responsible
for the costs to place Buyer's personnel on board
the Vessel, their salaries and benefits, and the
costs of transportation between their point of
origin and the heliport for departure to the Rig.
Seller will at its cost provide scheduled
helicopter transport between the heliport and the
Vessel, catering and accommodations services
onboard the Vessel for Buyer's personnel.
(b) Buyer shall release, indemnify, defend and hold
Seller harmless from any claim or liability for
injury or death to Buyer's personnel assigned to
the Vessel, regardless of the cause, fault or
negligence of Seller, its contractors on board
the Vessel or their respective officers,
directors, employees, or agents. Seller shall
release, indemnify, defend and hold Buyer
harmless from any claim or liability for damage
to Seller's property and for injury or death to
Seller's personnel and those of Seller's
contractors on board the Vessel, regardless of
the cause, fault or negligence of Buyer, its
contractors or their respective officers,
directors, employees or agents.
<PAGE>
IN WITNESS whereof the parties hereto have caused this Contract
to be signed on their behalf the day and year first written
above.
For British Gas Exploration and Production Limited
Witness:-
Signed: /s/ R. J. BAXTER Signed: /s/ L. L. MAUGER
Name: R.J BAXTER Name: L.L.MAUGER
Title: DIVISIONAL LOGISTICS Title: SENIOR SUPPLIES &
MANAGER CONTRACTS OFFICER
For the BUYER on behalf of, and with the full authority of, the
BUYER
Witness:-
Signed: /s/ J. MCCULLOCH Signed:
Name: MR.J.McCULLOCH Name:
Title: VICE PRESIDENT AND Title:
GENERAL COUNSEL
EXHIBIT 15.1
ACCOUNTANTS' AWARENESS LETTER
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Global Marine Inc.
Registration Statements
We are aware that our report dated May 6, 1994, on our review of the condensed
consolidated interim financial information of Global Marine Inc. and
subsidiaries for the three months ended March 31, 1994, and included in this
Quarterly Report on Form 10-Q is incorporated by reference in (i) the
prospectus constituting part of the Company's Registration Statements on Form
S-8 (Registration Nos. 33-32088, 33-40961, and 33-63326), respectively, for the
Global Marine Inc. 1989 Stock Option and Incentive Plan, (ii) the prospectus
constituting part of the Company's Registration Statement on Form S-8
(Registration No. 33-40266) for the Global Marine Savings Incentive Plan, and
(iii) the prospectus constituting part of the Company's Registration
Statement on Form S-8 (Registration No. 33-40961) for the Global Marine Inc.
1990 Non-Employee Director Stock Option Plan. Pursuant to Rule 436(c) under
the Securities Act of 1933, this report should not be considered a part of any
of said registration statements prepared or certified by us within the meaning
of Sections 7 and 11 of that Act.
Houston, Texas /s/ Coopers & Lybrand
May 11, 1994
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27.1
FINANCIAL DATA SCHEDULE
This schedule contains summary financial information extracted from the
consolidated balance sheets of Global Marine Inc. and subsidiaries as of
March 31, 1994, and December 31, 1993, and the related consolidated
statements of operations for each of the three-month periods ended March 31,
1994, and 1993, and is qualified in its entirety by reference to such
financial statements.
<CAPTION>
Item Item March 31, December 31,
Number Description 1994 1993
(in millions)
<C> <S> <C> <C>
5-02(1) Cash and cash items $52.9 $ 31.2
5-02(2) Marketable securities 20.0 20.2
5-02(3)(a)(1) Notes and accounts receivable - trade 50.2 59.1
5-02(4) Allowances for doubtful accounts (1.2) (1.2)
5-02(6) Inventory - -
5-02(9) Total current assets 131.8 144.4
5-02(13) Property, plant and equipment 512.3 478.1
5-02(14) Accumulated depreciation 172.3 163.5
5-02(18) Total assets 493.3 492.9
5-02(21) Total current liabilities 37.7 37.2
5-02(22) Bonds, mortgages and similar debt 225.0 225.0
5-02(28) Preferred stock - mandatory redemption - -
5-02(29) Preferred stock - no mandatory redemption - -
5-02(30) Common stock 16.3 16.3
5-02(31) Other stockholders' equity 185.8 189.1
5-02(32) Total liabilities and stockholders' equity 493.3 492.9
Three Months Ended March 31,
1994 1993
(in millions, except per share data)
<C> <S> <C> <C> <C>
5-03(b)1(a) Net sales of tangible products $ 2.8 $ 2.8
5-03(b)1 Total revenues 68.0 61.0
5-03(b)2(a) Cost of tangible goods sold 1.5 2.4
5-03(b)2 Total costs and expenses applicable
to sales and revenues 60.9 58.6
5-03(b)3 Other costs and expenses - -
5-03(b)5 Provision for doubtful accounts and notes - -
5-03(b)(8) Interest and amortization of debt discount 7.1 8.2
5-03(b)(10) Income before taxes and other items (1.6) (8.4)
5-03(b)(11) Income tax expense 0.1 0.9
5-03(b)(14) Income/loss continuing operations (1.7) (9.3)
5-03(b)(15) Discontinued operations - -
5-03(b)(17) Extraordinary items - -
5-03(b)(18) Cumulative effect - changes in
accounting principles (3.5) -
5-03(b)(19) Net income or loss (5.2) (9.3)
5-03(b)(20) Earnings per share - primary (0.03) (0.06)
5-03(b)(20) Earnings per share - fully diluted (0.03) (0.06)
</TABLE>
