==============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT UNDER 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
Commission file number 1-5587
READING & BATES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
73-0642271
(I.R.S. Employer Identification No.)
901 Threadneedle, Suite 200, Houston, Texas 77079
(Address of principal executive offices)(Zip Code)
(713)496-5000
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year, if changed
since last report.)
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___
NUMBER OF SHARES OF COMMON STOCK OF REGISTRANT OUTSTANDING
AT APRIL 15, 1994 : 55,486,938
NUMBER OF SHARES OF NON-VOTING CONVERTIBLE
CLASS B COMMON STOCK OF REGISTRANT OUTSTANDING
AT APRIL 15, 1994 : NONE
Exhibit Index
===============================================================================
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Company or Group of Companies for Which Report is Filed:
Reading & Bates Corporation and Subsidiaries
The financial statements for the three months ended March 31, 1994 and
1993, include, in the opinion of the Company, all adjustments (which
consist only of normal recurring adjustments) necessary to present
fairly the financial position and results of operations for such
periods. The financial data for the three months ended March 31, 1994
included herein have been subjected to a limited review by Arthur
Andersen & Co., the registrant's independent public accountants, whose
report is included herein. Results of operations for the three months
ended March 31, 1994 are not necessarily indicative of results of
operations which will be realized for the year ending December 31, 1994.
The financial statements should be read in conjunction with the
Company's Form 10-K for the year ended December 31, 1993.
<TABLE>
READING & BATES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands)
<CAPTION>
MARCH 31, DECEMBER 31,
-------------------------
1994 1993
----------- ----------
ASSETS (unaudited)
------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 75,401 $ 80,385
Accounts receivable:
Trade, net 32,701 36,536
Other 2,730 3,880
Materials and supplies inventory 8,980 8,709
Other current assets 4,218 4,842
--------- ---------
Total current assets 124,030 134,352
--------- ---------
INVESTMENTS IN AND ADVANCES TO
UNCONSOLIDATED INVESTEES 304 212
--------- ---------
PROPERTY AND EQUIPMENT:
Drilling 750,053 746,418
Other 5,852 5,778
--------- ---------
755,905 752,196
Accumulated depreciation and amortization (283,690) (277,534)
--------- ---------
Net property and equipment 472,215 474,662
--------- ---------
DEFERRED CHARGES AND OTHER ASSETS 4,724 3,248
--------- ---------
TOTAL ASSETS $ 601,273 $ 612,474
========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
READING & BATES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands)
<CAPTION>
MARCH 31, DECEMBER 31,
-----------------------
1994 1993
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY (unaudited)
------------------------------------
<S> <C> <C>
CURRENT LIABILITIES:
Short-term obligations $ - $ 2,735
Long-term obligations due within one year 20,234 20,234
Accounts payable - trade 5,549 7,656
Accrued liabilities 21,159 21,066
Income taxes 5,033 4,931
-------- --------
Total current liabilities 51,975 56,622
LONG-TERM OBLIGATIONS 91,595 96,562
OTHER NONCURRENT LIABILITIES 70,092 68,433
DEFERRED INCOME TAXES 2,807 2,807
-------- --------
Total liabilities 216,469 224,424
-------- --------
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST 67,781 68,507
-------- --------
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value 2,990 2,990
Common stock, $.05 par value 2,774 2,774
Capital in excess of par value 313,024 312,916
Retained earnings (deficit) from
March 31, 1991 (685) 2,021
Other (1,080) (1,158)
-------- --------
Total stockholders' equity 317,023 319,543
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $601,273 $612,474
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
READING & BATES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1994 1993
-------- --------
<S> <C> <C>
OPERATING REVENUES $ 42,357 $ 35,939
-------- --------
COSTS AND EXPENSES:
Operating expenses 28,625 24,712
Depreciation and amortization 6,920 6,621
General and administrative 4,415 4,010
-------- --------
39,960 35,343
-------- --------
OPERATING INCOME 2,397 596
-------- --------
OTHER INCOME (EXPENSE):
Interest expense (3,113) (3,481)
Interest income 751 357
Equity in losses of unconsolidated
investees (134) (1)
Other, net (258) (422)
-------- --------
(2,754) (3,547)
-------- --------
LOSS BEFORE INCOME TAX EXPENSE
AND MINORITY INTEREST (357) (2,951)
INCOME TAX EXPENSE 908 1,283
-------- --------
LOSS AFTER INCOME TAX EXPENSE AND
BEFORE MINORITY INTEREST (1,265) (4,234)
MINORITY INTEREST INCOME (EXPENSE) (226) 2,046
-------- --------
NET LOSS (1,491) (2,188)
DIVIDEND ON PREFERRED STOCK 1,215 -
-------- --------
NET LOSS APPLICABLE TO
COMMON STOCKHOLDERS $ (2,706) $ (2,188)
======== ========
NET LOSS PER COMMON SHARE $ (.05) $ (.04)
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
READING & BATES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
1994 1993
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,491) $ (2,188)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 6,920 6,621
Gain on dispositions of property and equipment (255) (1,415)
Recognition of deferred expenses 430 1,040
Equity in losses of unconsolidated investees 134 1
Minority interest in income (loss)
of consolidated subsidiaries 226 (2,046)
Changes in assets and liabilities:
Accounts receivable 4,811 (2,737)
Materials and supplies inventory (271) (599)
Deferred charges and other assets (1,311) (451)
Accounts payable - trade (2,107) (1,037)
Accrued interest 1,488 464
Accrued lease expense 1,033 912
Income taxes 102 155
Deferred income taxes - 223
Other, net 195 (374)
-------- --------
Net cash provided by (used in)
operating activities 9,904 (1,431)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Dispositions of property and equipment 120 275
Capital expenditures (4,262) (1,089)
Business acquisitions (1,139) (4,882)
Increase in investments in and advances
to unconsolidated investees (224) (71)
-------- --------
Net cash used in investing activities (5,505) (5,767)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term obligations - 11,624
Net proceeds from (payments on)
short-term obligations (2,735) 78
Principal payments on long-term obligations (5,433) (5,432)
Dividend paid on preferred stock (1,215) -
-------- --------
Net cash provided by (used in)
financing activities (9,383) 6,270
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS (4,984) (928)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 80,385 53,122
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 75,401 $ 52,194
======== ========
Supplemental Cash Flow Disclosures:
Interest paid $ 1,892 $ 2,983
Income taxes paid $ 839 $ 939
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
READING & BATES CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
A) COMMITMENTS AND CONTINGENCIES
LITIGATION - In the first quarter of 1994, a judgment was
entered with respect to the Company's loss of hire claim relating
to the damages to the "JACK BATES" caused by the Hurricane Andrew
and in April 1994, the Company received approximately $3.2
million in full satisfaction of that judgment. Approximately $2.4
million (net of $.8 million of expenses) has been included in
Operating Revenues for the three months ended March 31, 1994.
B) OTHER NONCURRENT LIABILITIES
The components of "OTHER NONCURRENT LIABILITIES" were as follows
(in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
-------- -----------
<S> <C> <C>
Long-term operating lease obligation $ 20,590 $ 19,558
Postretirement benefit obligations 15,456 15,256
Net liabilities associated with
discontinued operations 11,471 11,177
Pension obligations 9,531 9,382
Accrued interest expense related to the
8% Senior Subordinated Convertible
Debentures due December 1998 9,302 8,930
Deferred income 2,634 3,072
Other 1,108 1,058
-------- --------
Total $ 70,092 $ 68,433
======== ========
</TABLE>
C) DISCONTINUED OPERATIONS
SHIPPING - Shipping is engaged in two principal business
segments, shipping operations and drilling operations. The Company
is pursuing its plan to dispose of Shipping's shipping operations.
The net book value of Shipping's assets held for sale at March 31,
1994, consisting of vessels, tankers and chartering contracts, was
$51.4 million and related liabilities totalled $55.7 million,
including $35.8 million of long-term obligations and a $16.6
million reserve for losses on ultimate disposal and operations until
disposal. Accordingly, the net position of the shipping operations
in the accompanying balance sheet was $4.3 million liability at
March 31, 1994. Operating revenues and net loss of discontinued
operations not included in the Consolidated Statement of Operations
for the three months ended March 31, 1994 were $3.2 million and
$.7 million, respectively. Operating revenues and net loss of
discontinued operations not included in the Consolidated Statement
of Operations for the three months ended March 31, 1993 were $4.6
million and $.8 million, respectively.
D) INCOME TAXES
Income tax expense of $.9 million was recognized in the first
three months of 1994 despite a pretax loss of $.4 million. The
expense results primarily from income tax expense incurred with
respect to certain foreign operations.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
Reading & Bates Corporation
We have reviewed the accompanying consolidated balance sheet of
Reading & Bates Corporation (a Delaware corporation) and Subsidiaries
as of March 31, 1994, and the related consolidated statements of
operations and cash flows for the three-month period ended March 31,
1994. 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 upon our review, we are not aware of any material modifications
that should be made to the financial statements referred to above for
them to be in conformity with generally accepted accounting principles.
/s/Arthur Andersen & Co.
Houston, Texas
April 20, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
MATERIAL CHANGES IN FINANCIAL CONDITION
Consistent with the Company's strategy to
acquire Arcade Drilling AS and Arcade Shipping AS,
during the first quarter of 1994, the Company acquired
additional shares of Arcade Drilling AS resulting in
the Company directly owning approximately 21.9% of the
outstanding stock of Arcade Drilling AS and owning
approximately 82.6% of the outstanding stock of Arcade
Shipping AS.
Liquidity of the Company should be considered
in light of the significant fluctuations in demand
experienced by drilling contractors as rapid changes in
oil and gas producers' expectations, budgets and
drilling plans occur. These fluctuations can rapidly
impact the Company's liquidity as supply and demand
factors directly affect utilization and dayrates, which
are the primary determinants of cash flow from the
Company's operations. As of March 31, 1994,
approximately $21.1 million of total consolidated cash
and cash equivalents of $75.4 million are restricted
from the Company's use outside of Drilling. The
Company's management currently expects that its cash
flow from operations, in combination with cash on hand,
will be sufficient to satisfy the Company's 1994
working capital needs, dividends on preferred stock,
planned investments, capital expenditures, debt, lease
and other obligations.
The Company intends to continue to modernize
its fleet, in order to meet the requirements of
competitive conditions and the changing needs of its
customers. The Company continues to consider the
selective acquisition of existing rigs, directly or
through business combination transactions. The
Company's wholly owned subsidiary, Reading & Bates
Development Co., is the General Contractor for the
provision of a semisubmersible floating production
system for the Liuhua 11-1 Project being jointly
developed by Amoco Orient Petroleum Company and China
Offshore Oil Nanhai East Corporation in the South China
Sea. The Company is considering selective expansion in
floating production through additional management
contracts, alliances with other companies, and/or the
acquisition of floating production equipment.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1994 COMPARED
TO THREE MONTHS ENDED MARCH 31, 1993
The Company's net loss for the three months
ended March 31, 1994 was $1.5 million ($.05 per share
after preferred stock dividends of $1.2 million)
compared with net loss of $2.2 million ($.04 per share)
for the same period of 1993. Income from operations for
the three months ended March 31, 1994 was $2.4 million
compared to income from operations of $.6 million in
1993. The Company's utilization for the three months
ended March 31, 1994 and 1993 was 77% and 71%,
respectively.
Operating revenues are primarily a function of
dayrates and utilization. The $6.4 million increase in
operating revenues for the three months ended March 31,
1994 over the same period in 1993 is primarily due to
the increased utilization of the semisubmersible fleet
and the recognition of approximately $2.4 million of
operating revenues due to the settlement of the loss of
hire claim relating to the "JACK BATES" casualty caused
by Hurricane Andrew in 1992. The net effect of the
"JACK BATES" loss of hire settlement and physical
damage claims on the Company's results of operations
for the three months ended March 31, 1994 was income of
$2.2 million.
Operating expenses do not necessarily
fluctuate in proportion to changes in operating
revenues due to the continuation of personnel on board
and equipment maintenance when the Company's drilling
units are stacked. It is only during prolonged stacked
periods that the Company is significantly able to
reduce labor costs and equipment maintenance expense.
Additionally, labor costs fluctuate due to the
geographic diversification of the Company's drilling
units and the mix of labor between expatriates and
nationals as stipulated in the drilling contracts.
Labor costs have increased over the past years
primarily due to higher salary levels, inflation and
the decline of the U.S. dollar relative to certain
foreign currencies of countries where the Company
operates. Equipment maintenance expenses fluctuate
depending upon the type of activity the drilling unit
is performing and the age and condition of the
equipment. Scheduled maintenance of equipment and
overhauls are performed in accordance with the
Company's preventive maintenance program.
The increase in operating expenses for the
three months ended March 31, 1994 compared to the same
period of 1993 is primarily due to the change in the
geographic location of Company's fleet. During the
three months ended March 31, 1994, the Company's fleet
operated in geographic locations with higher operating
costs.
Minority interest for the three months ended
March 31, 1994 was an expense of $.2 million compared
to income of $2.0 million for the same period in 1993
as a result of Arcade Drilling AS incurring net income
in the three months ended March 31, 1994 compared to a
net loss in the same period in 1993.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
LITIGATION - The Company is one of the
defendants in certain litigation brought in
July 1984 by the Cheyenne-Arapaho Tribes of
Oklahoma in the U.S. District Court for the
Western District of Oklahoma, seeking to set
aside two communitization agreements with
respect to three leases involving tribal lands
in which the Company previously owned
interests and to have those leases declared
expired. In June 1989, the U.S. District Court
entered an interim order in favor of the
plaintiffs. On appeal, the U.S. Court of
Appeals for the Tenth Circuit upheld the
decision of the trial court and petitions for
rehearing of that decision were denied.
Petitions for writs of certiorari filed by the
parties with the U.S. Supreme Court have been
denied, and the case has been remanded to the
trial court for determination of damages.
In November 1988, a lawsuit was filed in
the U.S. District Court for the Southern
District of West Virginia against Reading &
Bates Coal Co., a wholly owned subsidiary of
the Company, by SCW Associates, Inc. claiming
breach of an alleged agreement to purchase the
stock of Belva Coal Company, a wholly owned
subsidiary of Reading & Bates Coal Co. with
coal properties in West Virginia. When those
coal properties were sold in July 1989 as part
of the disposition of the Company's coal
operations, the purchasing joint venture
indemnified Reading & Bates Coal Co. and the
Company against any liability Reading & Bates
Coal Co. might incur as the result of this
litigation. A judgment for the plaintiff of
$32,000 entered in February 1991 was satisfied
and Reading & Bates Coal Co. was indemnified
by the purchasing joint venture. On October
31, 1990, SCW Associates, Inc., the plaintiff
in the above-referenced action, filed a
separate ancillary action in the Circuit
Court, Kanawha County, West Virginia against
the Company and a wholly owned subsidiary of
Reading & Bates Coal Co., Caymen Coal, Inc.
(former owner of the Company's West Virginia
coal properties), as well as the joint
venture, Mr. William B. Sturgill personally
(former President of Reading & Bates Coal
Co.), three other companies in which the
Company believes Mr. Sturgill holds an equity
interest, two employees of the joint venture,
First National Bank of Chicago and First
Capital Corporation. The lawsuit seeks to
recover compensatory damages of $50 million
and punitive damages of $50 million for
alleged tortious interference with the
contractual rights of the plaintiff and to
impose a constructive trust on the proceeds of
the use and/or sale of the assets of Caymen
Coal, Inc. as they existed on October 15,
1988. The Company and its indirect subsidiary
intend to defend their interests vigorously.
The Company believes the damages alleged by
the plaintiff in this action are highly
exaggerated. In any event, the Company
believes that it has valid defenses and that
it will prevail in this litigation.
On January 26, 1993, Kerr-McGee Corporation
("Kerr-McGee") filed an action against the
Company and Reading & Bates Drilling Co., a
subsidiary of the Company, in the U.S.
District Court, Western District of Louisiana.
On March 23, 1993, the complaint was amended
to add Mobil Oil Exploration & Producing
Southeast, Inc. as an additional party
plaintiff in this action. In this action the
plaintiffs are seeking to recover an
unspecified amount for damages to a two well
platform and related production equipment,
facilities and pipelines, in South Timbalier
Island Block 34, allegedly caused by the
Company's semisubmersible drilling unit "JACK
BATES" (ex "ZANE BARNES") after that drilling
unit had been set adrift in the Gulf of Mexico
by Hurricane Andrew in August 1992. The
Company also has received notice that
Tennessee Gas Pipeline Company has asserted a
claim with respect to damage to a gas riser
pipe and related equipment also located at
Kerr-McGee's platform in South Timbalier
Island Block 34. On April 8, 1993, Murphy
Exploration & Production Company ("Murphy"), a
subsidiary of Murphy Oil Corporation, filed a
similar claim in the U. S. District Court,
Eastern District of Louisiana, with respect to
its 12 well platform located in South
Timbalier Island Block 86. The Court has
granted the Company's motion to transfer and
has entered an order transferring this case to
the U. S. District Court, Western District of
Louisiana. The Murphy action has now been
consolidated with the Kerr-McGee action.
The Company and its subsidiary believe they
have valid defenses with respect to the claims
asserted and intend to defend their interests
vigorously. In December 1992, the Company
provided a $10 million letter of undertaking
from the Company's protection and indemnity
association and a $34 million bond (secured to
the extent of approximately $32.3 million by
indemnities from the Company's excess
liability underwriters and approximately $1.7
million by a standby letter of credit issued
for account of the Company) to Kerr-McGee and
Murphy to secure their claims and avoid the
attachment of the "JACK BATES" prior to its
departure from the United States for a
drilling contract with Agip S.p.A. The
Company is not aware of any other claims that
may arise against it as a result of Hurricane
Andrew. The Company believes it has adequate
liability insurance to protect the Company and
its subsidiary from any material liability
that might result from these claims.
On April 13, 1993, the All American Marine
Slip, acting as managing general agent on
behalf of the lead underwriters on the
Company's primary loss of hire insurance
policy, denied the Company's loss of hire
claim with respect to the damages to the "JACK
BATES" caused by Hurricane Andrew amounting to
approximately $9.1 million, demanded
arbitration under the policy with respect to
the policy coverage dispute and filed an
action in the U. S. District Court, Southern
District of New York (the "New York action"),
seeking a declaratory judgment and order
compelling the Company to arbitrate the
dispute. On April 16, 1993, the Company filed
an action in the U. S. District Court,
Southern District of Texas (the "Texas
action"), seeking compensatory and punitive
damages for bad faith and unfair dealing by
the All American Marine Slip under the Texas
Insurance Code and Texas Deceptive Practices
Act. On April 23, 1993, the All American
Marine Slip amended its complaint in the New
York Action to seek damages for alleged
tortious interference with contract and abuse
of process by the Company's having filed the
Texas action. On July 7, 1993, the Company
and the All American Marine Slip agreed to
submit all claims in the New York action and
the Texas action to arbitration in New York,
preserving all rights of both parties (other
than the right to a jury trial). As a result
the New York action and the Texas action (the
latter having been transferred to New York
pursuant to court order) have been placed on
the suspense docket pending arbitration. On
August 6, 1993, the Company agreed with
certain underwriters at Lloyds and ILU
companies, representing 57.5% of the insurers
on the Company's primary loss of hire
insurance policy, to settle their respective
shares of the Company's loss of hire claim in
exchange for payment to the Company of an
aggregate of approximately $3.4 million. The
effect of that settlement leaves the All
American Marine Slip representing lead
underwriters with respect to the remaining
42.5% of the Company's loss of hire claim
subject to arbitration. On December 6, 1993,
the arbitration panel entered an interim award
that the Company had proved a valid claim
under its loss of hire policy and on December
30, 1993 entered a final award holding that
the amount of the Company's claim under the
policy was $7,296,000 and that the amount owed
by the remaining 42.5% of insurers was
$3,100,800, plus interest at the rate of 6.5%
per annum from August 1, 1993 until paid. In
its final award the arbitration panel also
held there was no bad faith on the part of the
insurers and that each party bear its own
legal costs. The court in the New York action
has entered an order confirming the award and
a judgment, and the Company has been paid
$3,236,712.52 (including accrued interest of
$135,912.52) in full satisfaction of that
judgment.
The Company is involved in these and
various other legal actions arising in the
normal course of business. After taking into
consideration the evaluation of such actions
by counsel for the Company, management is of
the opinion that the outcome of known claims
and litigation will not have a material
adverse effect on the Company's business or
consolidated financial position or results of
operations.
Item 6(a). Exhibits
Exhibit 11 - Computation of Earnings Per Common
Share, Primary and Fully Diluted.
Exhibit 15 - Letter regarding unaudited interim
financial information.
Item 6(b). Reports on Form 8-K
There were 8 Current Reports on Form 8-K filed
during the three months ended March 31, 1994. A
Current Report on Form 8-K was filed January 3,
1994 announcing that the Company had purchased
additional shares of Arcade Shipping AS, filed
January 18, 1994 announcing that the "JACK BATES"
had received letters of intent to drill offshore
Indonesia, filed February 1, 1994 announcing that
Reading & Bates Drilling Co., a wholly owned
subsidiary of the Company, had received its ISO
9001 Certification, filed February 14, 1994
announcing the Supplement No. 1 to the Prospectus
dated October 20, 1993, filed February 15, 1994
announcing the Company's fourth quarter 1993
earnings, filed March 14, 1994 announcing the
promotion of Andrew Bakonyi, filed March 17, 1994
announcing the joint venture with DeepTech
International Inc., and filed March 25, 1994
announcing that as a member of the "Atlantic
Frontier Alliance", the Company has been invited
to tender for the development of the Foinaven
discovery in the Atlantic Ocean.
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.
READING & BATES CORPORATION
Date: April 29, 1994 By /s/T. W. Nagle
T. W. Nagle
Vice President and Chief
Financial Officer
EXHIBIT INDEX
Exhibit
Number Description
11 Computation of Earnings Per Common Share, Primary
and Fully Diluted.
15 Letter re: unaudited interim financial information.
Exhibit 11
----------
<TABLE>
READING & BATES CORPORATION
AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE, PRIMARY AND FULLY DILUTED
(in thousands except share and per share amounts)
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
1994 1993
----------- -----------
<S> <C> <C>
PRIMARY EARNINGS PER SHARE:
Weighted average number of common shares outstanding 55,488,570 55,501,932
=========== ===========
Net loss $ (1,491) $ (2,188)
Less dividend paid on $1.625 Convertible
Preferred Stock (1,215) -
----------- -----------
Adjusted net loss applicable to common shares
outstanding - assuming no dilution $ (2,706) $ (2,188)
=========== ===========
Net loss per common share - assuming no dilution $ (.05) $ (.04)
=========== ===========
FULLY DILUTED EARNINGS PER SHARE:
Weighted average number of common shares outstanding 55,488,570 55,501,932
Assume conversion of securities:
$1.625 Convertible Preferred Stock 8,668,010 -
8% Senior Subordinated Convertible Debentures 743,457 703,326
8% Convertible Subordinated Debentures 16,661 16,661
----------- -----------
Adjusted common shares outstanding - fully diluted 64,916,698 56,221,919
=========== ===========
Adjusted net loss applicable to common shares
outstanding - assuming no dilution $ (2,706) $ (2,188)
Adjustments:
Interest on 8% Senior Subordinated
Convertible Debentures 636 547
Interest on 8% Convertible Subordinated Debentures 502 472
Dividend paid on $1.625 Convertible Preferred Stock 1,215 -
----------- -----------
Adjusted net loss applicable to common
shares outstanding - assuming full dilution $ (353) $ (1,169)
=========== ===========
Net loss per common share - assuming full
dilution (antidiluive) $ (.01) $ (.02)
=========== ===========
</TABLE>
Exhibit 15
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Reading & Bates Corporation
We are aware that Reading & Bates Corporation has incorporated by
reference in its Registration Statements No. 33-44237, No. 33-50828 and
No. 33-50565 its Form 10-Q for the quarter ended March 31, 1994, which
includes our report dated April 20, 1994 covering the unaudited interim
financial information contained therein. Pursuant to Regulation C of
the Securities Act of 1933, that report is not considered a part of the
registration statement prepared or certified by our firm or a report
prepared or certified by our firm within the meaning Sections 7 and 11
of the Act.
/s/Arthur Andersen & Co.
Houston, Texas
April 20, 1994
