<PAGE>
UNITED STATES
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, 1996
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: 0-26388
FALCON DRILLING COMPANY, INC.
-------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 76-0351754
----------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1900 W. Loop South
Suite 1910
Houston, Texas 77027
----------------- ---------------------
(Address of Principal (Zip Code)
Executive offices)
Registrant's telephone number, including area code: (713) 623-8984
--------------
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
--- ----
The number of shares outstanding of the issuer's common stock, as of April 30,
1996: 35,306,917
1
<PAGE>
FALCON DRILLING COMPANY, INC.
INDEX TO FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
Item Number Description Page Number
- - --------------------------- -------------------------------------- -----------
<S> <C> <C>
Part I-
1 Financial Statements-
Condensed Consolidated Balance Sheets
as of March 31, 1996 (unaudited), and 3
December 31, 1995
Unaudited Condensed Consolidated
Statements of Operations for the 4
Three Months Ended March 31, 1996 and
1995
Unaudited Condensed Consolidated
Statements of Cash Flows for the 5
Three Months Ended March 31, 1996 and
1995
Notes to Unaudited Condensed 6
Consolidated Financial Statements
2 Management's Discussion and Analysis
of Financial Condition and Results of 18
Operations
Part II-
6 Exhibits and Reports on Form 8-K 22
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
----------- -------------
<S> <C> <C>
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 68,244 $ 9,016
Accounts receivable, net of allowance
for doubtful accounts of $375 at
March 31, 1996, and December 31, 1995 46,797 38,000
Other current assets 3,058 4,888
-------- --------
Total current assets 118,099 51,904
EQUIPMENT AND PROPERTY:
Drilling rigs and equipment 351,726 295,004
Vessels and other equipment 5,013 3,903
-------- --------
356,739 298,907
Less- Accumulated depreciation (38,941) (33,299)
-------- --------
317,798 265,608
OTHER ASSETS 19,970 23,511
-------- --------
Total assets $455,867 $341,023
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued
liabilities $ 31,537 $ 31,326
Income tax payable 91 141
Debt due within one year 2,037 3,999
-------- --------
Total current liabilities 33,665 35,466
LONG-TERM DEBT, less current portion 294,113 179,362
DEFERRED INCOME TAXES 11,399 10,679
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value,
100,000,000 shares authorized;
35,298,417 and 35,244,384 shares
issued and outstanding at March 31,
1996, and December 31, 1995,
respectively 353 352
Additional paid-in capital 113,031 112,853
Accumulated earnings 3,306 2,311
-------- --------
Total stockholders' equity 116,690 115,516
-------- --------
Total liabilities and
stockholders' equity $455,867 $341,023
======== ========
</TABLE>
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
3
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
(UNAUDITED)
OPERATING REVENUES $ 56,134 $ 41,217
COSTS AND EXPENSES:
Operating costs 38,144 28,308
General and administrative expenses 4,568 3,005
Depreciation 6,033 3,604
----------- -----------
OPERATING INCOME 7,389 6,300
OTHER (INCOME) EXPENSE:
Interest expense 5,710 4,012
Amortization of deferred costs 595 496
Other (income) expense, net (631) (326)
----------- -----------
INCOME BEFORE INCOME TAXES AND MINORITY
INTEREST 1,715 2,118
INCOME TAX PROVISION 720 720
----------- -----------
INCOME BEFORE MINORITY INTEREST 995 1,398
MINORITY INTEREST -- 403
----------- -----------
NET INCOME 995 995
PREFERRED STOCK DIVIDENDS AND ACCRETION -- 101
----------- -----------
NET INCOME APPLICABLE TO COMMON SHARES $ 995 $ 894
=========== ===========
NUMBER OF COMMON AND COMMON EQUIVALENT
SHARES USED IN COMPUTING EARNINGS PER
SHARE 35,893,122 26,888,820
=========== ===========
NET INCOME PER COMMON SHARE $.03 $.03
==== ====
</TABLE>
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
4
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 995 $ 995
Adjustments to reconcile net income to
net cash provided by operating
activities-
Depreciation and amortization 6,628 4,100
Realized gain on sale of assets (213) (11)
Minority interest in earnings of
subsidiary -- 403
Provision for deferred income taxes 720 720
Changes in assets and liabilities-
Accounts receivable, trade (8,797) 5,190
Other assets 2,608 1,609
Accounts payable and accrued
liabilities 161 (10,110)
-------- --------
Net cash provided by 2,102 2,896
operating activities -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and property (53,523) (3,077)
Refunds on deposits, net of deposits
made for drill pipe, rigs and
equipment 950 --
Proceeds from the sale of equipment
and property 413 44
-------- --------
Net cash used in investing
activities (52,160) (3,033)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of debt 152,000 56,000
Payments of outstanding debt (39,211) (27,047)
Issuance of common stock 178
Debt issuance costs (3,681) (1,995)
-------- --------
Net cash provided by
financing activities 109,286 26,958
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 59,228 26,821
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 9,016 4,868
-------- --------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 68,244 $ 31,689
======== ========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid $ 9,855 $ 6,512
Income taxes paid $ -- $ --
</TABLE>
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
5
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
1. BASIS OF PRESENTATION
AND SIGNIFICANT ACTIVITIES:
The accompanying unaudited interim condensed consolidated financial
statements of the Company for the three months ended March 31, 1996 and 1995,
have been prepared without an audit pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, all
adjustments, which consist of normal recurring adjustments, necessary to present
fairly the financial position, results of operations and cash flows for all
periods presented have been made. Operating results for the interim period are
not necessarily indicative of the results that can be expected for a full year.
It is suggested that these interim condensed consolidated financial statements
be read in conjunction with the audited financial statements and the notes
thereto included in the Company's latest annual report filed on Form 10-K.
During March 1996, the Company completed the offering and sale of $120
million principal amount of 8-7/8% Series A Senior Notes due 2003, resulting in
net proceeds of $116 million to the Company after deducting offering-related
expenses.
The Company holds a 37.5 percent effective interest in a Venezuelan joint
venture which operates two barge drilling rigs in Venezuela. The Company
accounts for its interests in the Venezuelan joint venture under the cost method
as Falcon does not currently exercise significant influence over the venture.
Through December 31, 1995, the Company had received cash distributions of
approximately $1.5 million of which $600,000 was recorded as a reduction of the
investment in the joint venture in order to reduce the investment to zero, and
the balance was recognized as revenues. During the three months ended March 31,
1996, the Company had received additional cash distributions of approximately
$397,000 which were recorded as revenues in the condensed consolidated statement
of operations during the three months ended March 31, 1996.
6
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
2. EARNINGS PER COMMON SHARE:
Net income per share of common stock has been computed on the basis of the
weighted average number of common shares outstanding during the period and,
where dilutive, the effect of common stock contingently issuable, which arises
primarily from the exercise of stock options and warrants. Accrued dividends on
the Series B redeemable preferred stock as well as the accretion of the
difference between the value of the Series B redeemable preferred stock at the
date of issue and the redemption value have been deducted from net income for
purposes of calculating net income applicable to common shares for the three
months ended March 31, 1995. The Company redeemed the Series B redeemable
preferred stock in December 1995. Fully diluted earnings per share are
considered to be equal to primary earnings per share in all periods presented
because the effects of potentially dilutive securities that are not common stock
equivalents were either antidilutive or immaterial.
The following table presents the computation of common and common
equivalent shares used in computing primary earnings per share:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
------------------------
1996 1995
----------- -----------
<S> <C> <C>
(UNAUDITED)
Weighted average shares of common stock
outstanding 35,289,541 15,922,500
Weighted average of common stock
equivalents 992,427 12,060,258
Effect of shares issuable pursuant to
stock option plans using the treasury
stock method (388,846) (1,093,938)
---------- ----------
Shares used in computing earnings per
share 35,893,122 26,888,820
========== ==========
</TABLE>
3. PRO FORMA RESULTS OF OPERATIONS:
The Company completed the acquisition of the remaining 50 percent interest
in Blake Workover in August 1995. Pro forma net income applicable to common
shares of the Company for the three-month period ended March 31, 1995, was
$1,140,000, and net income per common share was $.04 assuming the Company had
completed the acquisition of Blake Workover and had issued the 1,199,000 shares
of common stock that were issued in connection with the acquisition of the
remaining 50 percent interest in Blake Workover as of January 1, 1995. Pro forma
revenues remained the same for all periods presented. The effects of the Blake
Workover acquisition and the issuance of the common stock have been reflected in
the Company's historic balance sheet and results of operations beginning August
1995.
7
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
4. LONG-TERM DEBT:
The Company had the following debt outstanding as of March 31, 1996, and
December 31, 1995 (in thousands):
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
----------- -------------
(UNAUDITED)
<S> <C> <C>
8-7/8% Series A Senior Notes, due 2003 $120,000 --
9-3/4% Series B Senior Notes, due 2001 110,000 $110,000
Floating Rate Senior Notes, bearing
interest at LIBOR plus 3.5%,
redeemable in varying amounts
beginning in 1998 10,000 10,000
12-1/2% Series B Senior Subordinated
Notes, due 2005 50,000 50,000
Borrowings pursuant to a credit
agreement with two banks, at LIBOR
plus 2.5% or 1% over the higher of the
prime rate or the federal funds rate
plus .5%, secured by certain accounts
receivable -- 5,000
Note payable to a bank, at LIBOR plus
1.5% through maturity at December 31,
1999 1,513 1,969
Notes payable by affiliates, secured by
certain rigs, at 7.0%, due in varying
amounts commencing July 1994 with
final payment due June 30, 1999 1,304 1,392
Secured promissory note payable to
Grace Offshore Company (GOC), at 8.7%,
secured by certain FALRIG Partnership
jackup rigs, principal payments of
$1,667 due March 31, 1997 and 1998 3,333 5,000
-------- --------
296,150 183,361
Less- Amounts due within one year (2,037) (3,999)
-------- --------
$294,113 $179,362
======== ========
</TABLE>
In March 1996, the Company issued $120 million of 8-7/8% Series A Senior
Notes (the Series A Notes), resulting in net proceeds of $116 million to the
Company after deducting offering-related expenses of approximately $4 million.
The Series A Notes mature on March 15, 2003, and bear interest at a rate of
8.875 percent, payable semiannually on March 15 and September 15. Beginning
March 15, 2000, the Company may redeem the Series A Notes at annually declining
redemption prices beginning at 104.4375 percent of the principal amount of such
notes. Upon change in control of the Company, as defined in the Indenture, the
Company will be required to make an offer to purchase the Series A Notes at 101
percent of the principal amount thereof.
The Company's 12-1/2% Series B Senior Subordinated Notes (the Subordinated
Notes) mature on March 15, 2005, and bear interest at a rate of 12.5 percent,
payable semiannually on March 15 and September 15. The Company has the option
to redeem up to 30 percent of the Subordinated Notes through March 15, 1998, at
a redemption price of 111.5 percent of the principal amount of such notes with
the proceeds of a public offering of the Company's capital stock, provided that
at least $35 million in aggregate principal of the Subordinated Notes remains
outstanding immediately after giving effect to such redemption. Beginning March
15, 2000, the Company may redeem the Subordinated Notes at annually declining
redemption prices beginning at 104.688 percent of the principal amount of such
notes. Upon change in control of the Company, as defined in the Indenture, the
Company will be required to make an offer to purchase the Subordinated Notes at
101 percent of the principal amount thereof. The Subordinated Notes are senior
unsecured obligations of the Company subordinated in right of payment to all
other existing or future senior indebtedness of the Company.
8
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The 9-3/4% Series B Senior Notes (the Series B Notes) mature on January 15,
2001, and bear interest at a rate of 9.75 percent, payable semiannually on
January 15 and July 15. The Company has the option to redeem up to 30 percent
of the Series B Notes through January 15, 1997, at a redemption price of 109
percent of the principal amount thereof, with the proceeds of the sale and
issuance of capital stock of the Company, provided that at least $50 million in
aggregate principal of the Series B Notes remains outstanding following
redemption. Upon the occurrence of a Change of Control of the Company, as
defined in the Indenture, each Noteholder will have the right to require the
Company to repurchase all of such Noteholder's Notes in whole or in part at a
purchase price in cash equal to 101 percent of the principal amount thereof.
The Floating Rate Notes bear interest at LIBOR plus 3.5 percent and are
redeemable at face value plus unpaid accrued interest at any time following 18
months after issuance (February 1994). The Floating Rate Notes are redeemable
prior to the end of such 18-month period at a price equal to 103.5 percent of
the principal amount outstanding plus unpaid accrued interest. If not
previously redeemed, principal amounts of the Floating Rate Notes are due in
payments of $1,000,000, $2,000,000 and $2,000,000 on the fourth, fifth and sixth
years following issuance, respectively, with the balance due January 24, 2001.
In order to provide an additional source of funds, the Company has a
revolving credit facility with two banks providing for borrowings of up to $25.0
million, which is secured by the Company's accounts receivable. The Company had
no borrowings outstanding under this credit facility as of March 31, 1996.
Approximately $25.0 million of borrowings were available under this facility at
March 31, 1996, based on the Company's eligible borrowing base, as defined. This
facility provides that amounts borrowed will bear interest at floating rates
based on LIBOR plus 2.5 percent or 1 percent over the greater of the prime rate
or the federal funds rate plus 2.5 percent.
5. COMMITMENTS AND CONTINGENCIES:
The Company is currently involved in various lawsuits and other
contingencies arising out of operations in the normal course of business. In the
opinion of management, uninsured losses, if any, in excess of those accrued will
not have a material adverse effect on the Company's consolidated financial
position or results of operations. The Company is self-insured for the
deductible portion of its insurance coverage and participates in an insurance
cooperative for most of its coverage. Most of its insurance provides for premium
adjustments based on claims experience. Future events, claims or assessments may
increase the Company's costs for such coverage. In the opinion of management,
adequate accruals have been made based on known and estimated exposures.
The Company has multiyear employment agreements with several of its
officers. The employment agreements provide for annual salaries and
discretionary bonuses to be determined by the board of directors.
The Company entered into contingent profits interest agreements during 1992
associated with certain acquisitions. The agreements require annual payments of
15 percent of an agreed-upon amount to be paid to the previous rig owners and a
former mortgage holder. This agreed-upon amount can be generally described as
domestic barge net income less overhead, depreciation and interest attributable
to these operations. These payments, if any, continue through 1997 or until
payment of $5 million is made. There have been no required payments under these
agreements through March 31, 1996.
In addition, during 1994 a subsidiary of the Company acquired an interest
in a joint venture engaged in the development of drilling prospects in the
general areas of the Company's barge drilling operations and, in one instance,
has participated with several other companies in the funding of seismic
activities in south Louisiana. The Company's historical expenditures and
commitments to date for the funding and exploratory efforts of the joint venture
activities are approximately $4.0 million of which $3.2 million has been
included and recorded as other assets at March 31, 1996.
9
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Future participation in the development of oil and gas prospects and
related activities will depend in large part upon the availability of cash flows
and cash balances in excess of the Company's needs to fund its obligations and
further growth in its basic contract drilling business, as well as upon future
determinations by the Company as to the attractiveness of such other activities.
Existing commitments for funding these oil and gas activities are approximately
$350,000. The Company utilizes the full-cost method to account for its oil and
gas activities.
The Company has entered into an agreement to purchase three barge drilling
rigs for an approximate cost of $5.25 million and estimated mobilization costs
of $700,000. At March 31, 1996, the Company had made deposits of approximately
$500,000 which have been included in other assets. The seller of these rigs is
encountering logistical problems in connection with their delivery to the
Company. Management of the Company believes the deposit on these rigs is
refundable should the delivery of these rigs not be accomplished. Should these
acquisitions be completed, however, the acquisition costs will be capitalized
into rigs and equipment and depreciated over the remaining useful lives of the
acquired rigs.
In September 1995, the Company purchased a dynamically positioned
drillship, the Peregrine I, for a purchase price of $9.8 million. At March 31,
1996 the Peregrine I was in Singapore undergoing refurbishment and upgrade at a
cost estimated by the Company at $25 million, of which approximately $16 million
had been incurred and included in rigs and equipment at March 31, 1996.
In February 1996, the Company signed a memorandum of agreement to acquire
the Pelerin, a dynamically positioned drillship, for $32.4 million. This
memorandum of agreement is subject to certain conditions beyond the control of
the Company, including obtaining consents of operators to the assignment of
drilling contracts. The Company expects to complete the purchase of the Pelerin
in May 1996.
In April 1996, the Company completed the purchase of the D.K. McIntosh, a
jackup drilling rig, for a purchase price of $8.5 million.
6. SUPPLEMENTAL GUARANTOR INFORMATION:
The Company's obligations under the Series B Notes and the Floating Rate
Senior Notes are unconditionally guaranteed by each of the Company's directly
held subsidiaries and certain of the Company's indirectly held subsidiaries on a
joint and several basis.
The Indenture under which the Series B Notes were issued provides for
subsidiaries acquired subsequent to the issuance of the Series B Notes to be
designated as guarantors of the Series B Notes. The Indenture also provides
that 12 specified barge rigs are to be nonrecourse rigs, whereby the Company has
the option to transfer such nonrecourse barge rigs to nonrecourse subsidiaries
at any time provided, however, that the Company may, at its option and at any
time, designate up to two of its barge rigs in substitution for any two of the
designated nonrecourse barge rigs. In addition, up to two of the Company's
jackup rigs may be designated nonrecourse rigs provided certain financial tests
are met. Nonrecourse subsidiaries are not required to provide guarantees of the
Series B Notes and Floating Rate Senior Notes and are not subject to certain of
the Indenture covenants.
During December 1994, the Company transferred three nonrecourse barge rigs
to a newly formed nonguarantor subsidiary, Falcon Drilling de Venezuela, Inc.
During March 1995, Falcon Drilling de Venezuela, Inc., was merged into a
guarantor subsidiary of the Company in connection with the issuance of the
Subordinated Notes, and the three barge rigs previously designated as
nonrecourse rigs ceased being nonrecourse rigs. The following condensed
consolidating financial statements are presented for purposes of complying with
the reporting requirements of the parent company and the subsidiaries which are
guarantors under the Fixed Rate Notes. The financial statements at March 31,
1996, and December 31, 1995, include Eilert-Olsen Investments, Inc., as a
nonguarantor subsidiary. The Company believes that separate financial statements
and other disclosures of the guarantors are not material to the investors.
Upon occurrence of an event of default (as defined) under a revolving
credit facility with two banks, the ability of certain subsidiaries of the
Company to make distributions or other transfers to the Company will be
restricted.
10
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
CONDENSED CONSOLIDATING BALANCE SHEET--MARCH 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
FALCON DRILLING GUARANTOR NONGUARANTOR
COMPANY, INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
---------------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 67,206 $ 1,038 $ -- $ -- $ 68,244
Accounts receivable, net 19,725 27,072 -- -- 46,797
Other current assets (80) 3,138 -- -- 3,058
-------- -------- ------ --------- ---------
Total current assets 86,851 31,248 -- -- 118,099
EQUIPMENT AND PROPERTY, net 41,406 273,710 2,682 -- 317,798
OTHER NONCURRENT ASSETS 73 19,897 -- -- 19,970
INVESTMENT IN SUBSIDIARIES AND JOINT
VENTURES, net 293,292 -- -- (293,292) --
-------- -------- ------ --------- --------
Total assets $421,622 $324,855 $2,682 $(293,292) $455,867
======== ======== ====== ========= ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued
liabilities $ 13,419 $ 18,209 $ -- $ -- $ 31,628
Debt due within one year -- 1,667 370 -- 2,037
-------- -------- ------ --------- ---------
Total current liabilities 13,419 19,876 370 -- 33,665
LONG-TERM DEBT, net 291,513 1,667 933 -- 294,113
DEFERRED INCOME TAXES -- 11,399 -- -- 11,399
STOCKHOLDERS' EQUITY:
Partnership capital -- 56,672 -- (56,672) --
Common stock 353 -- -- -- 353
Additional paid-in capital 113,031 206,648 1,701 (208,349) 113,031
Accumulated earnings (deficit) 3,306 28,593 (322) (28,271) 3,306
-------- -------- ------ --------- ---------
Total stockholders' equity 116,690 291,913 1,379 (293,292) 116,690
-------- -------- ------ --------- ---------
Total liabilities and stockholders'
equity $421,622 $324,855 $2,682 $(293,292) $455,867
======== ======== ====== ========= =========
</TABLE>
11
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
CONDENSED CONSOLIDATING BALANCE SHEET--DECEMBER 31, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
FALCON DRILLING GUARANTOR NONGUARANTOR
ASSETS COMPANY, INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------------- ------------ ------------- ------------- ------------
CURRENT ASSETS:
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 141 $ 8,875 $ -- $ -- $ 9,016
Accounts receivable, net 11,953 26,047 -- -- 38,000
Other current assets 2,524 2,364 -- -- 4,888
-------- -------- ------ --------- --------
Total current assets 14,618 37,286 -- -- 51,904
EQUIPMENT AND PROPERTY, net 18,598 244,313 2,697 -- 265,608
OTHER ASSETS 137 23,374 -- -- 23,511
INTERCOMPANY AND INVESTMENT IN
SUBSIDIARIES AND JOINT VENTURES, net 268,118 -- -- (268,118) --
-------- -------- ------ --------- --------
Total assets $301,471 $304,973 $2,697 $(268,118) $341,023
======== ======== ====== ========= ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued
liabilities $ 8,985 $ 22,482 $ -- $ -- $ 31,467
Debt and other obligations due within
one year 1,969 1,666 364 -- 3,999
-------- -------- ------ --------- --------
Total current liabilities 10,954 24,148 364 -- 35,466
LONG-TERM DEBT, net 175,000 3,334 1,028 -- 179,362
DEFERRED INCOME TAXES -- 10,679 -- -- 10,679
STOCKHOLDERS' EQUITY:
Partnership capital -- 56,672 -- (56,672) --
Common stock 352 352
Additional paid-in capital 112,854 191,921 1,603 (193,525) 112,853
Accumulated earnings (deficit) 2,311 18,219 (298) (17,921) 2,311
-------- -------- ------ --------- --------
Total stockholders' equity 115,517 266,812 1,305 (268,118) 115,516
-------- -------- ------ --------- --------
Total liabilities and stockholders'
equity $301,471 $304,973 $2,697 $(268,118) $341,023
======== ======== ====== ========= ========
</TABLE>
12
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
FALCON DRILLING GUARANTOR NONGUARANTOR
COMPANY, INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
---------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES $ 4,454 $51,680 $ -- $ -- $56,134
COSTS AND EXPENSES:
Operating costs 2,949 35,195 -- -- 38,144
General and administrative expenses 146 4,422 -- -- 4,568
Depreciation 323 5,694 16 -- 6,033
------- ------- ---- ------- -------
OPERATING INCOME 1,036 6,369 (16) 7,389
OTHER (INCOME) EXPENSE:
Interest expense 5,576 109 25 -- 5,710
Other (income) expense, net 64 (100) -- -- (36)
Equity in income of subsidiaries (3,665) -- -- 3,665 --
------- ------- ---- ------- -------
INCOME (LOSS) BEFORE INCOME TAXES (939) 6,360 (41) (3,665) 1,715
INCOME TAX PROVISION (BENEFIT) (1,934) 2,671 (17) -- 720
------- ------- ---- ------- -------
NET INCOME (LOSS) $ 995 $ 3,689 $(24) $(3,665) $ 995
======= ======= ==== ======= =======
</TABLE>
13
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
FALCON DRILLING GUARANTOR NONGUARANTOR
COMPANY, INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
---------------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES $ 2,221 $38,802 $ 194 $ -- $41,217
COSTS AND EXPENSES:
Operating costs 1,261 26,405 642 -- 28,308
General and administrative expenses 92 2,913 -- 3,005
Depreciation 201 3,272 131 -- 3,604
------- ------- ----- ------- -------
OPERATING INCOME 667 6,212 (579) -- 6,300
OTHER (INCOME) EXPENSE:
Interest expense 3,943 48 62 (41) 4,012
Other (income) expense, net -- 129 -- 41 170
Equity in income of subsidiaries (3,129) -- -- 3,129 --
------- ------- ----- ------- -------
INCOME (LOSS) BEFORE INCOME TAXES AND
MINORITY INTEREST (147) 6,035 (641) (3,129) 2,118
INCOME TAX PROVISION (BENEFIT) (1,545) 2,534 (269) -- 720
------- ------- ----- ------- -------
NET INCOME (LOSS) BEFORE MINORITY
INTEREST 1,398 3,501 (372) (3,129) 1,398
MINORITY INTEREST 403 -- -- -- 403
------- ------- ----- ------- -------
NET INCOME (LOSS) $ 995 $ 3,501 $(372) $(3,129) $ 995
======= ======= ===== ======= =======
</TABLE>
14
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
FALCON DRILLING GUARANTOR NONGUARANTOR
COMPANY, INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
---------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 995 $ 3,689 $(24) $(3,665) $ 995
Adjustments to reconcile net income
(loss) to net cash provided by (used
in) operating activities-
Equity in unconsolidated
subsidiaries (3,665) -- -- 3,665 --
Depreciation and amortization 387 6,225 16 -- 6,628
Realized gain on the sale of assets -- (213) -- -- (213)
Provision for deferred income taxes -- 720 -- -- 720
Changes in assets and liabilities (426) (5,699) 97 -- (6,028)
-------- -------- ---- ------- --------
Net cash provided by (used in)
operating activities (2,709) 4,722 89 -- 2,102
-------- -------- ---- ------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and property (19,190) (34,333) -- -- (53,523)
Refunds on drill pipe, rigs and
equipment, net of deposits 950 -- -- -- 950
Sale of equipment and property -- 413 -- -- 413
Intercompany advances (23,028) 23,028 -- -- --
-------- -------- ---- ------- --------
Net cash used in investing activities (41,268) (10,892) -- -- (52,160)
-------- -------- ---- ------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of debt 152,000 -- -- -- 152,000
Payments of outstanding debt (37,455) (1,667) (89) -- (39,211)
Issuance of common stock, net 178 -- -- -- 178
Debt issuance costs (3,681) -- -- -- (3,681)
-------- -------- ---- ------- --------
Net cash provided by (used in)
financing activities 111,042 (1,667) (89) -- 109,286
-------- -------- ---- ------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 67,065 (7,837) -- -- 59,228
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 141 8,875 -- -- 9,016
-------- -------- ---- ------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 67,206 $ 1,038 $ $ $ 68,244
======== ======== ==== ======= ========
</TABLE>
15
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
FALCON DRILLING GUARANTOR NONGUARANTOR
COMPANY, INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
---------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 995 $ 3,501 $(372) $(3,129) $ 995
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities-
Equity in unconsolidated
subsidiaries (3,129) -- -- 3,129 --
Depreciation and amortization 201 3,768 131 -- 4,100
Realized gain on the sale of assets -- (11) -- -- (11)
Minority interest in earnings of
subsidiary 403 -- -- -- 403
Changes in current assets and
current liabilities and
intercompany balances (52,445) 50,361 323 -- (1,761)
-------- ------- ----- ------- -------
Net cash provided by (used in)
operating activities (53,975) 57,619 82 -- 3,726
-------- ------- ----- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and property -- (3,077) -- -- (3,077)
Proceeds from sale of equipment and
property -- 44 -- -- 44
Deferred costs of Venezuelan
operations -- (830) -- -- (830)
-------- ------- ----- ------- -------
Net cash used in investing activities -- (3,863) -- -- (3,863)
-------- ------- ----- ------- -------
</TABLE>
16
<PAGE>
FALCON DRILLING COMPANY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
FALCON DRILLING GUARANTOR NONGUARANTOR
COMPANY, INC. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
---------------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of debt $56,000 $ -- $ -- $ -- $ 56,000
Payments of outstanding debt -- (26,965) (82) -- (27,047)
Debt issuance costs (1,995) -- -- -- (1,995)
------- -------- ---- ---- --------
Net cash provided by (used in)
financing activities 54,005 (26,965) (82) -- 26,958
------- -------- ---- ---- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 30 26,791 -- -- 26,821
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR -- 4,868 -- -- 4,868
------- -------- ---- ---- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 30 $ 31,659 $ -- $ -- $ 31,689
======= ======== ==== ===== ========
</TABLE>
17
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The Company's historical results of operations have been significantly
affected by a series of acquisitions that have resulted in the Company's current
fleet of barge and offshore rigs. The following table sets forth information
reflecting the year of acquisition of the rigs constituting the Company's
current fleet and the number of such rigs that are currently in service.
<TABLE>
<CAPTION>
RIGS ACQUIRED
----------------------------------------
BOTTOM- UNITS
DRILLING WORKOVER SUPPORTED CURRENTLY IN
YEAR ACQUIRED BARGES BARGES UNITS DRILLSHIP SERVICE
- - --------------- -------- -------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
1988-1991 16 2 -- -- 11
1992 13 -- 4 -- 15
1993 5 -- 7 -- 12
1994 4 5 -- -- 5
1995 5 -- 5 1 7
1996 2 2 2 1 6
</TABLE>
Revenues. The Company's revenues are determined primarily by (a) the number of
rigs it has available for service and (b) demand for contract drilling and
workover services, which affects the number of days the Company's fleet is
utilized and the day rates it receives. In response to changes in demand, the
Company has modified and mobilized previously cold stacked rigs into
international markets, particularly Venezuela. In addition, the Company may, in
the future, in response to changes in demand, withdraw a rig from active service
or may reactivate a previously stacked rig, which could decrease or increase
revenues, respectively.
Operating Costs. Operating costs include all direct costs and expenditures
associated with operating active rigs and cold stacking inactive rigs. These
costs and expenditures vary based on rig utilization and the number of rigs
actively marketed by the Company. These costs and expenditures include rig
labor costs, repair, maintenance and supply expenditures, insurance costs, fuel
costs, mobilization and other costs related to operating drilling and workover
rigs.
Operating Income. Operating income is primarily affected by revenue factors,
but is also a function of varying levels of operating expenses. Changes in day
rates do not affect operating expenses. Significant changes in rig utilization
can change the level of operating expenses from period to period as the Company
may adjust the level of its actively marketed rig fleet to more closely match
anticipated level of demand. The general and administrative expenses, which
generally include the costs of the Company's shore-based support functions, also
affect operating income. These costs generally do not vary significantly from
period to period unless the Company materially expands its asset base, nor do
they vary over short periods of time with rig utilization. Depreciation, which
is determined by the level of the Company's capital expenditures and
depreciation practices, is the other major determinant of operating income.
18
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS--(Continued)
RESULTS OF OPERATIONS
Comparative data relating to the Company's revenues and operating expenses by
major areas of operations are listed below:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
------------------
1996 1995
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Revenues-
Domestic barge drilling $18,089 $18,060
Domestic barge workover 4,022 2,862
International shallow-water drilling 10,001 6,892
Offshore drilling 21,544 13,403
Drillships 2,478 --
------- --------
$56,134 $41,217
======= =======
Operating costs-
Domestic barge drilling $13,237 $12,435
Domestic barge workover 2,779 1,550
International shallow-water drilling 5,606 3,110
Offshore drilling 15,104 11,213
Drillships 1,418 --
------- --------
$38,144 $28,308
======= =======
Rig operating income-
Domestic barge drilling $ 4,852 $ 5,625
Domestic barge workover 1,243 1,312
International shallow-water drilling 4,395 3,782
Offshore drilling 6,440 2,190
Drillships 1,060 --
------- --------
17,990 12,909
General and administrative expenses 4,568 3,005
Depreciation expense 6,033 3,604
------- -------
Operating income $ 7,389 $ 6,300
======= =======
</TABLE>
For the Three-Month Periods Ended March 31, 1996 and 1995
- - ---------------------------------------------------------
Revenues. Revenues for the three months ended March 31, 1996, increased 36.2
percent, or $14.9 million, over the prior period. The $3.1 million increase in
international shallow-water drilling revenue is primarily attributable to the
mobilization of a submersible rig to Venezuela during the fourth quarter of
1995. Domestic barge revenues were unchanged between the two periods. Domestic
barge workover revenues were $1.2 million greater for the 1996 period primarily
due to increased utilization. Offshore drilling revenue increased $8.1 million
due to higher utilization and day rates during the first three months of 1996
and the acquisition of five jackup rigs in September 1995. Drillship revenues
of $2.5 million reflect the acquisition of the Peregrine II which began
operations for Falcon during February 1996.
19
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS-(Continued)
Operating Costs. Rig operating costs increased 34.7 percent, or $9.8 million,
primarily as a result of increased rig activity and fleet size in the
international shallow-water, offshore and drillship divisions.
Operating Income. Operating income increased 17.3 percent, or $1.1 million, as
a result of an increase of $5.1 million of rig operating income, which was
partially offset by a net increase of approximately $1.6 million in general and
administrative expenses and a $2.4 million increase in depreciation expense
resulting from a greater number of rigs owned by the Company. The increase in
general and administrative expenses is primarily due to the following factors:
(a) the February startup of a shorebase in Brazil for the operation of the
drillship Peregrine II and (b) an increase in the Venezuela shorebase costs due
to the mobilization of a submersible rig to Venezuela.
Interest Expense. Interest expense was $1.7 million or 42.3 percent higher
during the 1996 period primarily due to the issuance of $50.0 million in senior
subordinated notes in March 1995.
Amortization of Deferred Costs. Amortization of deferred costs increased by
approximately $.1 million as a result of the costs associated with the placement
of the $50.0 million of senior subordinated notes and deferred start-up costs
incurred in Venezuela.
Other Income, net. Other income increased by approximately $.3 million
primarily as a result of higher interest income earned on the Company's
available cash balances and gains on sales of equipment during the period.
Net Income. Net income applicable to common shares increased 11.3 percent, or
approximately $.1 million, during 1996 primarily as a result of improved
operating results in the Company's offshore rig and international barge areas
and the addition of the drillship operations, all of which more than offset
increases in depreciation, interest expense, and general and administrative
expenses.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $2.1 million for the three
months ended March 31, 1996, compared to $2.9 million for the comparable prior
period. The $.8 million decrease in net cash provided by operating activities
was the result of improved operating results, offset by an increase in the
receivables component of working capital at March 31, 1996. Net cash used in
investing activities was $52.1 million for the three months ended March 31,
1996, compared to $3.0 million for the comparable prior period. The increase of
$49.1 million was due to increased capital expenditures including the
acquisitions of the drilling barge Gus Androes, the submersible rig Real
Explorer and the drillship Peregrine II. Net cash provided by financing
activities was $109.3 million for the three months ended March 31, 1996,
compared to $27.0 million for the comparable prior period. The overall increase
of $82.3 million was due primarily to the issuance of the 1996 Senior Notes.
During the remainder of 1996, the Company currently expects to incur
additional capital expenditures of approximately $60 million including (a)
approximately $40 million for the acquisition of the drillship Pelerin and the
completion of upgrades to the drillship Peregrine I and (b) approximately $20
million for drill pipe, rig reactivations, rig enhancements and other equipment.
The Company believes that its available funds, together with cash generated
from operations, will be sufficient to fund its capital expenditures, working
capital and debt service requirements. Future cash flows are subject to a number
of uncertainties, particularly the condition of the oil and gas industry and the
related drilling activity in the Company's markets. Liquidity of the Company
should be considered in light of the significant fluctuations in demand that may
be experienced by drilling contractors as rapid changes in oil and gas
producers' expectations and budgets occur. These fluctuations can rapidly impact
the Company's liquidity as supply and demand factors directly affect utilization
and day rates, which are the primary determinants of cash flow from the
Company's operations. There can therefore be no assurance that these resources
will continue to be sufficient to fund the Company's cash requirements. Upon the
occurrence of an event of default under the Company's revolving credit facility,
the ability of certain subsidiaries of the Company to
20
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS-(Continued)
make distributions or other transfers to the Company will be restricted. The
Company may defer or cancel certain planned purchases or discretionary expenses
if future cash flows or market conditions are not favorable. In addition, the
Company has historically sold certain assets that it believed were nonessential
to its core businesses when it could realize value from their sale in excess of
that which the Company could reasonably expect to realize from their operation.
In addition, the Company believes that additional funding could be generated
through the public debt or equity markets, although there can be no assurances
in this regard.
21
<PAGE>
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
EXHIBIT NO. DESCRIPTION
- - ----------- -----------
27 Falcon Drilling Company, Inc. and
Subsidiaries Financial Data Schedule
- - -----
(b) Reports on Form 8-K: In a report filed on Form 8-K dated February
21, 1996, the Company reported that it was making a private
placement of $100 million of unsecured notes maturing in 2003.
22
<PAGE>
SIGNATURES
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.
Falcon Drilling Company, Inc.
Date: May 14, 1996 /s/ Robert F. Fulton
--------------------
Robert F. Fulton
Executive Vice President and Principal
Financial Officer
23
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ITEM
1-FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 68,244
<SECURITIES> 0
<RECEIVABLES> 47,172
<ALLOWANCES> (375)
<INVENTORY> 0
<CURRENT-ASSETS> 118,099
<PP&E> 356,739
<DEPRECIATION> (38,941)
<TOTAL-ASSETS> 455,867
<CURRENT-LIABILITIES> 33,665
<BONDS> 294,113
0
0
<COMMON> 353
<OTHER-SE> 116,337
<TOTAL-LIABILITY-AND-EQUITY> 455,867
<SALES> 0
<TOTAL-REVENUES> 56,134
<CGS> 0
<TOTAL-COSTS> 48,745
<OTHER-EXPENSES> (631)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,710
<INCOME-PRETAX> 1,715
<INCOME-TAX> 720
<INCOME-CONTINUING> 995
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 995
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
