SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: July 15, 1997
READING & BATES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-5587 73-0642271
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
901 Threadneedle, Suite 200, Houston, TX 77079
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (281) 496-5000
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99 - Press Release dated July 15, 1997 - Reading & Bates
announces second quarter 1997 earnings.
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 of the
undersigned thereunto duly authorized.
READING & BATES CORPORATION
By /s/T. W. Nagle
------------------------
T. W. Nagle
Executive Vice President,
Finance and Administration
(Principal Financial and
Accounting Officer)
Dated: July 15, 1997
EXHIBIT 99
For additional information, please contact: Mr. Charles R. Ofner
(281) 496-5000
RB Reports Favorable Second Quarter 1997 Results
July 15, 1997, Houston, Texas ........ Reading & Bates Corporation
(RB-NYSE) reported net income of $20.2 million ($.28 net income per share)
for the three months ended June 30, 1997, compared with net income of $15.8
million ($.23 net income per share after preferred stock dividends of $1.2
million) for the three months ended June 30, 1996. Operating income for the
quarter ended June 30, 1997 was $30.0 million on revenues of $98.4 million,
compared to operating income for the quarter ended June 30, 1996 of $22.4
million on revenues of $61.7 million. The $36.7 million improvement to
revenues is attributable to improved dayrates and utilization as well as the
addition of two vessels to the fleet. Average utilization for the three
months ended June 30, 1997 was 98% compared to 89% for the three months ended
June 30, 1996. The Company estimates that its net income per share from
ongoing drilling operations would have been approximately $.53 for the three
months ended June 30, 1997 absent Development Company operations.
For the six months ended June 30, 1997 the Company reported net income
of $42.1 million ($.58 net income per share) on revenues of $181.8 million
compared to net income of $29.3 million ($.43 net income per share after
preferred stock dividends of $2.4 million) on revenues of $122.9 million.
The $58.9 million improvements to revenues is again attributable to improved
dayrates and utilization as well as the addition of two vessels to the fleet.
Average utilization for the six months ended June 30, 1997 was 96% compared
to 92% for the six months ended June 30, 1996. The Company estimates that its
net income per share from ongoing drilling operations would have been
approximately $.93 for the six months ended June 30, 1997 absent Development
Company operations.
Paul B. Loyd, Jr. the Company's Chairman, President and CEO, said,
"First, let me reiterate the significance of our recent merger announcement
with Falcon Drilling. We believe that this merger is extremely positive
for shareholders of both companies. With respect to this quarter's results,
although we are very pleased with our second quarter 1997 core drilling
operational performance, consolidated reported results reflect the write-off
of two oil and gas properties in which Reading & Bates Development Company
had a partial interest as well as other expenses related to our Development
Company operations which, in the aggregate, reduced reported income by $.25
for the second quarter of 1997. Although current reported income was reduced
by the write-offs and other costs of pursuing the Development Company
strategy, we believe that the Development Company will ultimately provide our
shareholders with value and, as discussed as part of our merger announcement
with Falcon, we intend to seek a separate financial identity of the
Development Company, post merger."
Reading & Bates is a New York Stock Exchange listed company, providing
offshore drilling services throughout the world. Its wholly owned subsidiary,
Reading & Bates Development Co., engages in the business of acquiring
interests in offshore oil and gas properties and thereby participates in
reservoir risk sharing. Through its TOPS joint venture, a full range
of field development contracting alternatives is offered to oil and gas
companies, including such services as drilling, marine and subsea
construction and production facilities.
(financial highlights to follow)
READING & BATES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
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1997 1996 1997 1996
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OPERATING REVENUES $ 98,371 $ 61,700 $ 181,802 $ 122,890
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COSTS AND EXPENSES:
Drilling operations 35,339 25,384 70,756 55,576
Development operations 16,968 742 18,065 1,381
Depreciation 10,389 7,740 20,241 15,308
General and administrative 5,714 5,394 11,562 9,984
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Total costs and expenses 68,410 39,260 120,624 82,249
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OPERATING INCOME 29,961 22,440 61,178 40,641
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OTHER INCOME (EXPENSE):
Interest expense, net of
capitalized interest (4,560) (3,643) (8,089) (6,424)
Interest income 983 484 1,830 983
Other, net (125) (1,062) (417) (1,158)
- -------------------------------------------------------------------------------
Total other income (expense) (3,702) (4,221) (6,676) (6,599)
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INCOME BEFORE INCOME TAX
EXPENSE AND MINORITY INTEREST 26,259 18,219 54,502 34,042
- -------------------------------------------------------------------------------
INCOME TAX EXPENSE:
Current 1,486 1,179 2,978 2,272
Deferred 3,511 - 5,078 -
- -------------------------------------------------------------------------------
Total income tax expense 4,997 1,179 8,056 2,272
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MINORITY INTEREST (1,099) (1,205) (4,370) (2,463)
- -------------------------------------------------------------------------------
NET INCOME 20,163 15,835 42,076 29,307
DIVIDENDS ON PREFERRED STOCK - 1,212 - 2,425
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NET INCOME APPLICABLE
TO COMMON STOCKHOLDERS $ 20,163 $ 14,623 $ 42,076 $ 26,882
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PRIMARY NET INCOME
PER COMMON SHARE $ .28 $ .23 $ .58 $ .43
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FULLY DILUTED NET INCOME
PER COMMON SHARE $ N/A $ .22 $ N/A $ .41
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WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING:
PRIMARY 72,060 62,281 72,034 62,124
FULLY DILUTED N/A 70,929 N/A 70,771
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READING & BATES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
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6/30/97 12/31/96
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ASSETS:
Cash, cash equivalents and short-term investments $ 80,067 $ 59,089
Other current assets 111,596 81,001
Net property and equipment 718,414 657,629
Other assets 52,385 10,471
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TOTAL ASSETS $ 962,462 $ 808,190
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 74,138 $ 55,132
Long-term obligations 286,673 207,578
Other noncurrent liabilities 56,425 52,726
Minority interest 50,536 46,147
Stockholders' equity 494,690 446,607
- -----------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 962,462 $ 808,190
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