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: October 16, 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 October 16, 1997 - Reading & Bates
announces third 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: October 16, 1997
EXHIBIT 99
FOR IMMEDIATE RELEASE Contact: Mr. Charles R. Ofner
(281)496-5000
Reading & Bates Reports Favorable Third Quarter 1997 Results
October 16, 1997, Houston, Texas..Reading & Bates Corporation (RB-NYSE)
reported net income of $6.4 million ($.09 net income per share) for the
three months ended September 30, 1997, compared with net income of $22.6
million ($.34 net income per share after preferred stock dividends of $1.2
million) for the three months ended September 30, 1996. Operating income
for the quarter ended September 30, 1997 was $11.3 million on revenues of
$109.6 million, compared to operating income for the quarter ended
September 30, 1996 of $28.4 million on revenues of $76.4 million.
Development expenses increased by $42.0 million, primarily dry hole costs,
which more than offset the increase in operating income for the Drilling
operations of $24.9 million. The $33.1 million improvement to revenues is
attributable to improved dayrates and utilization as well as the addition
of one vessel to the fleet. Average utilization for the three months ended
September 30, 1997 was 94% compared to 91% for the three months ended
September 30, 1996. The Company estimates that its net income per share
from ongoing Drilling operations would have been approximately $.69 for the
three months ended September 30, 1997 absent Development Company
operations.
For the nine months ended September 30, 1997 the Company reported net
income of $48.5 million ($.67 net income per share) on revenues of $291.4
million compared to net income of $52.0 million ($.78 net income per share
after preferred stock dividends of $3.6 million) on revenues of $199.3
million. The $92.1 million improvement 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 nine months ended September 30,
1997 was 95% compared to 91% for the nine months ended September 30, 1996.
The Company estimates that its net income per share from ongoing drilling
operations would have been approximately $1.62 for the nine months ended
September 30, 1997 absent Development Company operations.
Paul B. Loyd, Jr. the Company's Chairman, President and CEO, said, "We are
pleased with the improvement in the results of our core drilling group,
which showed an increase of $7.1 million in operating income from the
previous quarter. Drilling revenues were up by $11.2 million compared to
the previous quarter. Unfortunately our development group incurred dry
hole costs of $39.2 million during the quarter on interests in six
prospects. As previously stated we intend to seek a separate financial
identity for the Development Company".
Reading & Bates Corporation 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 services. In July Reading & Bates and Falcon
Drilling Company Inc. announced that they have agreed to combine their
companies into a new company-- R&B Falcon Corporation--which will operate
the world's largest offshore drilling fleet.
(financial highlights to follow)
READING & BATES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
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1997 1996 1997 1996
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OPERATING REVENUES $ 109,558 $ 76,413 $ 291,360 $ 199,303
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COSTS AND EXPENSES:
Drilling operations 38,974 33,199 109,730 88,772
Development operations 42,668 681 60,733 2,065
Depreciation 10,906 8,684 31,147 23,992
General and administrative 5,698 5,411 17,260 15,395
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Total costs and expenses 98,246 47,975 218,870 130,224
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OPERATING INCOME 11,312 28,438 72,490 69,079
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OTHER INCOME (EXPENSE):
Interest expense, net of
capitalized interest (5,612) (3,362) (13,701) (9,786)
Interest income 1,132 551 2,962 1,534
Other, net (650) (706) (1,067) (1,864)
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Total other income (expense) (5,130) (3,517) (11,806) (10,116)
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INCOME BEFORE INCOME TAX
EXPENSE AND MINORITY INTEREST 6,182 24,921 60,684 58,963
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INCOME TAX EXPENSE (BENEFIT):
Current 3,063 570 6,041 2,842
Deferred (5,739) 527 (661) 527
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Total income tax
expense (benefit) (2,676) 1,097 5,380 3,369
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MINORITY INTEREST (2,481) (1,179) (6,851) (3,642)
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NET INCOME 6,377 22,645 48,453 51,952
DIVIDENDS ON PREFERRED STOCK - 1,206 - 3,631
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NET INCOME APPLICABLE
TO COMMON STOCKHOLDERS $ 6,377 $ 21,439 $ 48,453 $ 48,321
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PRIMARY NET INCOME
PER COMMON SHARE $ 0.09 $ 0.34 $ 0.67 $ 0.78
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FULLY DILUTED NET INCOME
PER COMMON SHARE N/A $ 0.32 N/A $ 0.74
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WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING:
PRIMARY 72,124 62,686 72,064 62,313
FULLY DILUTED N/A 71,058 N/A 70,679
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READING & BATES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
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09/30/97 12/31/96
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ASSETS:
Cash, cash equivalents and short-term investments $ 67,056 $ 59,089
Other current assets 114,197 81,001
Net property and equipment 794,910 657,629
Other assets 58,520 10,471
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TOTAL ASSETS $ 1,034,683 $ 808,190
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 64,211 $ 55,132
Long-term obligations 360,088 207,578
Other noncurrent liabilities 52,735 52,726
Minority interest 53,035 46,147
Stockholders' equity 504,614 446,607
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,034,683 $ 808,190
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