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 (Date of earliest event reported) June 20, 1995
TRITON ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-7864 75-1151855
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
6688 N. Central Expressway
Suite 1400
Dallas, Texas 75206
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 691-5200
N/A
(Former name or former address, if changed since last report)
ITEM 2. DISPOSITION OF ASSETS
On August 18, 1995, the Company sold Triton France S.A. ("Triton France")
through which it held its interest in the Villeperdue field to the operator of
the field, Coparex International. The sale terms resulted from a competitive
bid process with the assistance of an independent investment banking firm.
The Company received net proceeds, including repayment of inter-company debt,
of approximately $16 million and recorded a net gain of approximately $3.5
million. Unaudited pro forma financial statements giving effect to the sale
of Triton France are filed herewith in Item 7. Financial Statements and
Exhibits.
ITEM 5. OTHER EVENTS.
In June 1995, the Company sold the assets of its subsidiary, Jet East,
Inc., for $2.9 million in cash and a note. The Company realized a loss of
$1.4 million on the sale. The Company disposed of its remaining aviation
operations in August 1995. The Company accrued $.6 million as of June 30,
1995 for costs associated with final disposal of the segment.
The Company has restated its Consolidated Statements of Operations for
the seven month transition period ended December 31, 1994 and the years ended
May 31, 1994, 1993 and 1992 to reflect the aviation sales and services segment
as discontinued operations. Audited restated consolidated financial
statements for the seven month transition period ended December 31, 1994 and
the years ended May 31, 1994, 1993 and 1992 are filed herewith in Item 7.
Financial Statements and Exhibits.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Pro Forma Consolidated Condensed Balance Sheet as of June 30,
1995
Pro Forma Consolidated Condensed Statement of Operations -
Six months ended June 30, 1995
Pro Forma Consolidated Condensed Statement of Operations - Seven
months ended December 31, 1994
Pro Forma Consolidated Condensed Statement of Operations - Year
ended May 31, 1994
Notes to Pro Forma Consolidated Condensed Financial Statements
<PAGE>
(c) Exhibits.
Exhibit No. Description
23.1 Consent of Price Waterhouse LLP
23.2 Consent of KPMG Peat Marwick LLP, Dallas, Texas
27 Restated Financial Data Schedule for the Seven
Months Ended December 31, 1994
99.1 Restated Audited Financial Statements
TRITON ENERGY CORPORATION AND SUBSIDIARIES:
Report of Independent Accountants - December 31, 1994, May 31, 1994 and
1993
Report of Independent Accountants - May 31, 1992
Consolidated Statements of Operations - Seven months ended December 31,
1994 and years ended May 31, 1994, 1993 and 1992
Consolidated Balance Sheets - December 31, 1994, May 31, 1994 and 1993
Consolidated Statements of Cash Flows - Seven months ended December 31,
1994 and years ended May 31, 1994, 1993 and 1992
Consolidated Statements of Shareholders' Equity - Seven months ended
December 31, 1994 and years ended May 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
Schedules:
II - Valuation and Qualifying Accounts - Seven months ended December 31,
1994 and years ended May 31, 1994, 1993 and 1992
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
BASIS OF PRESENTATION
The accompanying unaudited pro forma consolidated condensed financial
statements give effect to the sale of Triton France S.A. ( "Triton France")
for proceeds of approximately $16 million. The unaudited Pro Forma
Consolidated Condensed Balance Sheet adjusts the June 30, 1995 historical
consolidated condensed balance sheet as though such transaction occurred on
June 30, 1995. The unaudited Pro Forma Consolidated Condensed Statements of
Operations adjusts the historical consolidated condensed statements of
operations for the six months ended June 30, 1995, the seven month transition
period ended December 31, 1994 and the year ended May 31, 1994 as though such
transaction occurred on June 1, 1993. The pro forma results exclude any
nonrecurring charges or credits directly attributable to the transaction.
The historical consolidated condensed statements of operations for the
seven months ended December 31, 1994 and the year ended May 31, 1994 have been
restated to reflect the aviation sales and services segment as discontinued
operations as discussed in Item 5. Other Events.
The pro forma consolidated condensed financial statements should be read
in conjunction with the restated historical consolidated financial statements
and related notes included elsewhere in this Form 8-K. The pro forma
information is not necessarily indicative of the Company's financial position
or results of operations that might have occurred had such transaction
actually occurred on the dates indicated above.
TRITON ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
JUNE 30, 1995
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DISPOSITION OF
HISTORICAL TRITON FRANCE PRO FORMA
ASSETS
Current assets:
Cash and equivalents $ 97,070 $ 16,000 (b) $ 113,070
Short-term marketable securities 41,397 --- 41,397
Receivables 29,070 (1,776) (a) 27,294
Inventories, prepaid expenses and other 6,652 (1,421) (a) 5,231
Total current assets 174,189 12,803 186,992
Long-term marketable securities 12,481 --- 12,481
Long-term receivables 58,566 --- 58,566
Property and equipment, at cost, less accumulated
depreciation and depletion of $502,048 445,771 (18,859) (a) 426,912
Investments and other assets 124,073 (158) (a) 123,915
$ 815,080 $ (6,214) $ 808,866
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 1,643 $ --- $ 1,643
Accounts payable and accrued liabilities 30,911 (3,307) (a) 27,604
Total current liabilities 32,554 (3,307) 29,247
Long-term debt, excluding current installments 395,794 --- 395,794
Deferred income taxes 23,089 --- 23,089
Deferred income and other 121,094 (2,493) (a) 118,601
Convertible debentures due to employees --- --- ---
Stockholders' equity:
Preferred stock, no par value 17,975 --- 17,975
Common stock, par value $1 35,710 --- 35,710
Additional paid-in capital 508,990 --- 508,990
Accumulated deficit (313,181) 2,854 (b) (310,327)
Foreign currency translation adjustment (6,171) (3,268) (a) (9,439)
Other (306) --- (306)
243,017 (414) 242,603
Less cost of common stock in treasury 468 468
Total stockholders' equity 242,549 (414) 242,135
Commitments and contingencies
$ 815,080 $ (6,214) $ 808,866
</TABLE>
The Company uses the full cost method to account for its oil and gas producing
activities.
See accompanying notes to pro forma consolidated condensed financial
statements.
<PAGE>
TRITION ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DISPOSITION OF
HISTORICAL TRITON FRANCE (c) PRO FORMA
Revenues:
Sales and other operating revenues $ 48,255 $ (7,463) $ 40,792
Other income 12,994 (24) 12,970
61,249 (7,487) 53,762
Costs and expenses:
Operating 17,104 (4,238) 12,866
General and administrative 12,592 (743) 11,849
Depreciation, depletion and amortization 10,468 (1,275) 9,193
Writedown of assets --- --- ---
Interest 11,510 --- 11,510
Equity in (earnings) loss of affiliates, net (777) --- (777)
Foreign exchange (gain) loss 5 (276) (271)
50,902 (6,532) 44,370
Earnings (loss) from continuing operations
before income taxes, minority interest and
discontinued operations 10,347 (955) 9,392
Income tax provision:
Current --- --- ---
Deferred 5,693 --- 5,693
4,654 (955) 3,699
Minority interest in loss of subsidiaries --- --- ---
Earnings (loss) from continuing operations $ 4,654 $ (955) $ 3,699
Weighted average number of shares outstanding 35,020 35,020
Earnings (loss) from continuing operations
per common share $ 0.12 $ 0.09
</TABLE>
See accompanying notes to pro forma consolidated condensed financial
statements.
<PAGE>
TRITION ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
SEVEN MONTHS ENDED DECEMBER 31, 1994
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DISPOSITION OF
HISTORICAL TRITON FRANCE (c) PRO FORMA
Revenues:
Sales and other operating revenues $ 20,736 $ (9,179) $ 11,557
Other income 4,585 (218) 4,367
25,321 (9,397) 15,924
Costs and expenses:
Operating 12,362 (5,784) 6,578
General and administrative 15,997 (480) 15,517
Depreciation, depletion and amortization 7,339 (2,363) 4,976
Writedown of assets 984 --- 984
Interest 7,754 (47) 7,707
Equity in (earnings) loss of affiliates, net 4,102 --- 4,102
Foreign exchange (gain) loss (383) 21 (362)
48,155 (8,653) 39,502
Earnings (loss) from continuing operations
before income taxes, minority interest and
discontinued operations (22,834) (744) (23,578)
Income tax provision (benefit):
Current (773) --- (773)
Deferred 4,569 --- 4,569
(26,630) (744) (27,374)
Minority interest in loss of subsidiaries --- --- ---
Earnings (loss) from continuing operations $ (26,630) $ (744) $ (27,374)
Weighted average number of shares outstanding 34,944 34,944
Earnings (loss) from continuing operations
per common share $ (0.78) $ (0.80)
</TABLE>
See accompanying notes to proforma consolidated condensed financial
statements.
<PAGE>
TRITION ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
YEAR ENDED MAY 31, 1994
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DISPOSITION OF
HISTORICAL TRITON FRANCE (c) PRO FORMA
Revenues:
Sales and other operating revenues $ 43,208 $ (17,494) $ 25,714
Gain on sale of Triton Canada common stock 47,865 --- 47,865
Other income 16,321 (396) 15,925
107,394 (17,890) 89,504
Costs and expenses:
Operating 27,887 (10,347) 17,540
General and administrative 30,429 (3,535) 26,894
Depreciation, depletion and amortization 19,821 (9,878) 9,943
Writedown of assets 45,754 (43,201) 2,553
Interest 7,504 (132) 7,372
Equity in (earnings) loss of affiliates, net (645) --- (645)
Foreign exchange (gain) loss (252) 83 (169)
130,498 (67,010) 63,488
Earnings (loss) from continuing operations
before income taxes, minority interest and
discontinued operations (23,104) 49,120 26,016
Income tax provision (benefit):
Current 3,688 2,045 5,733
Deferred (10,224) 10,661 437
(16,568) 36,414 19,846
Minority interest in (earnings) loss of subsidiaries 11,971 (12,027) (56)
Earnings (loss) from continuing operations $ (4,597) $ 24,387 $ 19,790
Weighted average number of shares outstanding 34,775 34,775
Earnings (loss) from continuing operations
per common share $ (0.13) $ 0.57
</TABLE>
See notes to pro forma consolidated financial statements.
TRITON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
On August 18, 1995, the Company sold Triton France through which it held
its interest in the Villeperdue field. The sale terms resulted from a
competitive bid process with the assistance of an independent investment
banking firm. The Company received net proceeds, including repayment of
inter-company debt, of approximately $16 million and realized a net gain of
approximately $3.5 million.
Pro forma adjustments are made to reflect:
(a) the elimination of assets and liabilities of Triton France as if the
sale occurred on June 30, 1995;
(b) the receipt of proceeds and resulting gain, net of taxes, from the
sale of Triton France; and
(c) the elimination of revenues and costs and expenses related to Triton
France as if the sale occurred June 1, 1993.
<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 hereunto duly authorized.
TRITON ENERGY CORPORATION
Date: August 24, 1995 By: /s/ Robert B. Holland, III
Robert B. Holland, III, Senior Vice
President and General Counsel
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Form S-8 (Nos. 2-80978,
33-4042, 33-27203, 33-29498, 33-46968 and 33-51691) and Form S-3 (Nos.
33-11920, 33-15793, 33-17614, 33-21984, 33-23058, 33-25634, 33-31319,
33-45847, 33-69230, 33-55347 and 33-46292) of Triton Energy Corporation of our
report dated February 14, 1995, except for Notes 1 and 4, as they relate to
the discontinued operations of the aviation sales and services segment, which
are dated as of August 24, 1995 appearing on page F-2 of this Form 8-K.
Price Waterhouse LLP
Dallas, Texas
August 24, 1995
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Triton Energy Corporation
We consent to incorporation by reference in the Registration Statements on
Form S-8 (Nos. 2-80978, 33-4042, 33-27203, 33-29498, 33-46968 and 33-51691)
and Form S-3 (Nos. 33-11920, 33-15793, 33-17614, 33-21984, 33-23058, 33-25634,
33-31319, 33-45847, 33-69230, 33-55347 and 33-46292) of Triton Energy
Corporation of our report dated August 14, 1992, relating to the consolidated
statements of operations, shareholders' equity and cash flows of Triton Energy
Corporation and subsidiaries for the year ended May 31, 1992 and related
schedule (before restatement for discontinued aviation sales and services
operations and wholesale fuel products operations) which report appears in the
Current Report on Form 8-K dated August 24, 1995 of Triton Energy Corporation.
KPMG Peat Marwick LLP
Dallas, Texas
August 24, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 12/31/94
RESTATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 7-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 22,341
<SECURITIES> 26,657
<RECEIVABLES> 19,385
<ALLOWANCES> (897)
<INVENTORY> 2,505
<CURRENT-ASSETS> 73,877
<PP&E> 892,708
<DEPRECIATION> 493,050
<TOTAL-ASSETS> 619,201
<CURRENT-LIABILITIES> 44,216
<BONDS> 0
<COMMON> 35,577
0
17,976
<OTHER-SE> 183,642
<TOTAL-LIABILITY-AND-EQUITY> 619,201
<SALES> 20,736
<TOTAL-REVENUES> 20,736
<CGS> 12,362
<TOTAL-COSTS> 12,362
<OTHER-EXPENSES> 7,339
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,754
<INCOME-PRETAX> (22,834)
<INCOME-TAX> 3,796
<INCOME-CONTINUING> (26,630)
<DISCONTINUED> (1,078)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (27,708)
<EPS-PRIMARY> (0.81)
<EPS-DILUTED> (0.81)
</TABLE>
Exhibit 99.1
TRITON ENERGY CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
<TABLE>
<CAPTION>
<S> <C>
PAGE
TRITON ENERGY CORPORATION AND SUBSIDIARIES:
Report of Independent Accountants - December 31, 1994,
May 31, 1994 and 1993 F-2
Report of Independent Accountants - May 31, 1992 F-3
Consolidated Statements of Operations - Seven months ended December 31, 1994
and years ended May 31, 1994, 1993 and 1992 F-4
Consolidated Balance Sheets - December 31, 1994, May 31, 1994 and 1993 F-5
Consolidated Statements of Cash Flows - Seven months ended December 31, 1994
and years ended May 31, 1994, 1993 and 1992 F-6
Consolidated Statements of Shareholders' Equity - Seven months ended
December 31, 1994 and years ended May 31, 1994, 1993 and 1992 F-7
Notes to Consolidated Financial Statements F-8
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SCHEDULES:
II - Valuation and Qualifying Accounts - Seven months ended
December 31, 1994 and years ended May 31, 1994, 1993 and 1992 F-54
</TABLE>
All other schedules are omitted as the required information is inapplicable or
presented in the consolidated financial statements or related notes
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Triton Energy Corporation
In our opinion, the consolidated financial statements as of and for the seven
months ended December 31, 1994 and as of and for the years ended May 31, 1994
and 1993 listed in the accompanying index present fairly, in all material
respects, the financial position of Triton Energy Corporation and its
subsidiaries at December 31, 1994 and May 31, 1994 and 1993, and the results
of their operations and their cash flows for the seven months ended December
31, 1994 and the years ended May 31, 1994 and 1993 in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted
our audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
As discussed in notes 1 and 4, the Company discontinued its aviation sales and
services segment in June 1995 and its wholesale fuel products segment in 1993.
The consolidated financial statements as of and for the seven month period
ended December 31, 1994 and as of and for the years ended May 31, 1994 and
1993 have been restated to reflect the aviation sales and services segment as
discontinued operations. In addition, the 1992 consolidated financial
statements have been restated to reflect the aviation sales and services
segment and the wholesale fuel products segment as discontinued operations.
We have audited the adjustments that were applied to restate the 1992
consolidated financial statements. In our opinion, such adjustments are
appropriate and have been properly applied to the 1992 consolidated financial
statements.
As discussed in notes 6 and 12, respectively, the Company changed its methods
of accounting for investments in marketable securities at May 31, 1994 and
income taxes in 1993.
Price Waterhouse LLP
Dallas, Texas
February 14, 1995, except for Notes 1 and 4,
as they relate to the discontinued operations
of the aviation sales and services segment,
which are dated as of August 24, 1995
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Triton Energy Corporation
We have audited the consolidated statements of operations, shareholders'
equity and cash flows of Triton Energy Corporation and subsidiaries for the
year ended May 31, 1992 (before restatement for discontinued aviation sales
and services operations and wholesale fuel products operations). In
connection with our audit of the consolidated financial statements, we also
have audited the financial statement schedule as listed in the accompanying
index for the year ended May 31, 1992. These consolidated financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the results of operations and cash
flows of Triton Energy Corporation and subsidiaries for the year ended May
31, 1992, in conformity with generally accepted accounting principles. Also,
in our opinion, the related financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.
KPMG PEAT MARWICK LLP
Dallas, Texas
August 14, 1992
TRITON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED
DECEMBER 31, YEAR ENDED MAY 31,
1994 1994 1993 1992
REVENUES:
Sales and other operating revenues $ 20,736 $ 43,208 $ 84,414 $ 90,724
Gain on sale of Triton Canada common stock --- 47,865 --- ---
Other income 4,585 16,321 5,948 6,479
25,321 107,394 90,362 97,203
COSTS AND EXPENSES:
Operating, including $2,075, $7,538 and $8,436 in the
years ended May 31, 1994, 1993 and 1992 to affiliate 12,362 27,887 40,323 40,561
General and administrative 15,997 30,429 34,590 33,728
Depreciation, depletion and amortization 7,339 19,821 45,053 39,624
Writedown of assets and loss provisions 984 45,754 99,883 48,805
Interest 7,754 7,504 4,689 406
Equity in (earnings) loss of affiliates, net 4,102 (645) 12,493 16,646
Foreign exchange (gain) loss (383) (252) 776 4,557
48,155 130,498 237,807 184,327
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES, MINORITY INTEREST AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (22,834) (23,104) (147,445) (87,124)
Income tax expense (benefit) 3,796 (6,536) (43,881) (1,937)
(26,630) (16,568) (103,564) (85,187)
Minority interest in loss of subsidiaries --- 11,971 27,055 3,854
LOSS FROM CONTINUING OPERATIONS BEFORE
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (26,630) (4,597) (76,509) (81,333)
DISCONTINUED OPERATIONS:
Loss from operations (1,078) (4,094) (14,807) (12,704)
Loss on disposal --- (650) (16,077) ---
Gain on public stock offering --- --- 13,841 ---
LOSS BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE (27,708) (9,341) (93,552) (94,037)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE --- --- 4,017 ---
NET LOSS (27,708) (9,341) (89,535) (94,037)
DIVIDENDS ON PREFERRED STOCK 449 --- --- 1,386
LOSS APPLICABLE TO COMMON STOCK $ (28,157) $ (9,341) $ (89,535) $(95,423)
Weighted average common shares outstanding 34,944 34,775 34,241 29,898
LOSS PER COMMON SHARE:
Continuing operations $ (0.78) $ (0.13) $ (2.23) $ (2.77)
Discontinued operations (0.03) (0.14) (0.50) (0.42)
Cumulative effect of accounting change --- --- 0.12 ---
NET LOSS $ (0.81) $ (0.27) $ (2.61) $ (3.19)
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ASSETS DECEMBER 31, MAY 31, MAY 31,
1994 1994 1993
CURRENT ASSETS:
Cash and equivalents $ 22,341 $ 69,005 $ 52,939
Short-term marketable securities 26,657 63,431 24,253
Trade receivables 6,087 6,454 11,317
Other receivables 12,401 8,125 5,399
Inventories, prepaid expenses and other 6,391 4,095 6,570
Net assets of discontinued operations --- 4,566 21,789
TOTAL CURRENT ASSETS 73,877 155,676 122,267
Long-term marketable securities 23,264 28,831 ---
Investments in unconsolidated affiliates 34,162 36,809 50,115
Property and equipment, at cost, net 399,658 308,498 330,151
Deferred income taxes 34,486 34,426 25,000
Other assets 53,754 51,861 34,398
$ 619,201 $ 616,101 $ 561,931
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current installments of long-term debt $ 257 $ 312 $ 3,440
Short-term borrowings 17,351 1,640 3,280
Accounts payable and accrued liabilities 26,608 30,251 38,840
Liabilities of discontinued operations --- 6,700 31,360
Deferred income taxes --- --- 2,583
TOTAL CURRENT LIABILITIES 44,216 38,903 79,503
Long-term debt, excluding current installments 315,258 294,441 159,147
Deferred income taxes 14,672 10,037 13,178
Deferred income and other 7,860 9,298 9,100
Minority interest in subsidiaries --- --- 34,172
Redeemable preferred stock of subsidiary --- --- 11,399
Convertible debentures due to employees --- --- ---
SHAREHOLDERS' EQUITY:
Preferred stock, without par value; authorized 5,000,000 shares;
issued 522,412 and 522,460 shares at December 31, 1994 and
May 31, 1994, respectively, stated value $34.41 17,976 17,978 ---
Common stock, par value $1; authorized 200,000,000 shares;
issued 35,577,009, 35,519,103 and 35,231,142 shares at
December 31, 1994, May 31, 1994 and 1993, respectively 35,577 35,519 35,231
Additional paid-in capital 505,256 505,122 502,217
Accumulated deficit (314,014) (286,306) (276,965)
Foreign currency translation adjustment (5,639) (7,163) (4,087)
Other (1,384) (1,046) (246)
237,772 264,104 256,150
Less cost of common shares in treasury 577 682 718
TOTAL SHAREHOLDERS' EQUITY 237,195 263,422 255,432
Commitments and contingencies (note 19)
$ 619,201 $ 616,101 $ 561,931
</TABLE>
The Company uses the full cost method to account for its oil and gas producing
activities.
See accompanying notes to consolidated financial statements.
TRITON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED
DECEMBER 31, YEAR ENDED MAY 31,
1994 1994 1993 1992
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (27,708) $ (9,341) $ (89,535) $(94,037)
Adjustments to reconcile net loss to net cash provided
(used) by operating activities:
Depreciation, depletion and amortization 7,587 20,490 50,742 42,826
Amortization of debt discount 7,939 7,852 7,810 2,178
Gain on Input/Output, Inc. public stock offering --- --- (13,841) ---
(Gain) loss on sale of assets, net 201 (8,328) (228) (264)
Gain on sale of Triton Canada common stock --- (47,865) --- ---
Equity in (earnings) loss of affiliates, net 4,102 (645) 13,600 15,742
Writedown of assets and discontinued operations 984 46,404 118,916 45,830
Cumulative effect of accounting change --- --- (4,017) ---
Deferred income taxes 4,569 (10,224) (43,877) 1,044
Minority interest in undistributed loss of subsidiaries --- (11,971) (27,055) (3,854)
Other, net 1,096 2,735 4,591 8,305
Changes in working capital:
Marketable debt securities - trading 10,429 --- --- ---
Receivables (3,064) (1,797) (5,759) (5,048)
Inventories, prepaid expenses and other (2,314) 1,268 5,604 3,985
Net assets of discontinued operations (2,094) (7,578) --- ---
Accounts payable and accrued liabilities 2,657 (12,126) (10,103) 17,877
Income taxes (6,398) 6,162 (1,429) (12,089)
Net cash provided (used) by operating activities (2,014) (24,964) 5,419 22,495
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures and investments (89,895) (86,819) (124,925) (98,424)
Purchases of investments and marketable securities (5,879) (190,025) (69,207) (9,811)
Proceeds from sale of investments and marketable securities 36,664 119,905 44,970 10,300
Sales of property and equipment and other assets 539 22,816 5,242 5,460
Proceeds from Input/Output, Inc. public stock offering --- --- 24,144 ---
Proceeds from sale of Triton Canada common stock --- 59,029 --- ---
Proceeds from sale of discontinued operations 1,737 18,450 --- ---
Other, principally pledged securities in 1993 (3,509) (4,370) (11,410) (1,785)
Net cash used by investing activities (60,343) (61,014) (131,186) (94,260)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 1,701 123,408 132,138 5,013
Proceeds from short-term borrowings with
maturities greater than three months 7,671 --- 9,117 5,050
Short-term borrowings, net 8,040 (1,640) (8,179) (8,420)
Payments on long-term debt (212) (3,150) (10,492) (22,877)
Payments on debt associated with discontinued operations (1,883) (18,959) --- ---
Issuance of common stock 639 3,164 6,397 120,496
Preferred dividends (449) --- --- (1,386)
Other (258) (1,054) (2,318) (1,528)
Net cash provided by financing activities 15,249 101,769 126,663 96,348
Effects of exchange rate changes on cash and equivalents 444 275 (558) 537
Net increase (decrease) in cash and equivalents (46,664) 16,066 338 25,120
CASH AND EQUIVALENTS AT BEGINNING OF YEAR 69,005 52,939 52,601 27,481
CASH AND EQUIVALENTS AT END OF YEAR $ 22,341 $ 69,005 $ 52,939 $ 52,601
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED
DECEMBER 31, YEAR ENDED MAY 31,
1994 1994 1993 1992
PREFERRED STOCK:
Balance at beginning of year $ 17,978 $ --- $ --- $ 65,738
Redemption of $2 par value - issued fiscal 1986 --- --- --- (65,738)
Purchase of minority interest in Triton Europe --- 17,978 --- ---
Conversion of 5% preferred stock (2) --- --- ---
Balance at end of year 17,976 17,978 --- ---
COMMON STOCK:
Balance at beginning of year 35,519 35,231 34,649 21,497
Conversion of $2 par value preferred stock --- --- --- 3,321
Exercise of employee stock options and debentures 58 288 582 860
Conversion of Liquid Yield Options Notes --- --- --- 5,274
Conversion of 8 1/2% Convertible Debentures --- --- --- 697
Issuance of common stock --- --- --- 3,000
Balance at end of year 35,577 35,519 35,231 34,649
ADDITIONAL PAID-IN CAPITAL:
Balance at beginning of year 505,122 502,217 488,580 193,139
Cash dividends, $2 par value preferred stock --- --- --- (1,386)
Cash dividends, 5% preferred stock (449) --- --- ---
Conversion of $2 par value preferred stock --- --- --- 61,635
Exercise of employee stock options and debentures 464 2,876 5,815 10,747
Conversion of Liquid Yield Options Notes --- --- --- 94,805
Conversion of 8 1/2% Convertible Debentures --- --- --- 16,834
Issuance of common stock --- --- --- 105,889
Sale of the Company's stock by Crusader --- --- 3,920 6,917
Utilization of tax loss carryforwards --- --- 3,920 ---
Other, net 119 29 (18) ---
Balance at end of year 505,256 505,122 502,217 488,580
ACCUMULATED DEFICIT:
Balance at beginning of year (286,306) (276,965) (187,430) (93,393)
Net loss (27,708) (9,341) (89,535) (94,037)
Balance at end of year (314,014) (286,306) (276,965) (187,430)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT:
Balance at beginning of year (7,163) (4,087) 1,236 1,793
Sale of Triton Canada --- (3,341) --- ---
Adjustments due to translation changes 1,524 265 (5,323) (557)
Balance at end of year (5,639) (7,163) (4,087) 1,236
OTHER, NET:
Balance at beginning of year (1,046) (246) (307) (1,562)
Valuation reserve on marketable securities (429) (955) --- ---
Debt guarantee for ESOP --- --- 307 1,255
Adjustment for minimum pension liability 91 155 (246) ---
Balance at end of year (1,384) (1,046) (246) (307)
TREASURY STOCK:
Balance at beginning of year (682) (718) (715) (709)
Purchase of treasury stock (3) (5) (3) (6)
Transfer of shares to employee benefit plans 108 41 --- ---
Balance at end of year (577) (682) (718) (715)
TOTAL SHAREHOLDERS' EQUITY $ 237,195 $ 263,422 $ 255,432 $ 336,013
</TABLE>
See accompanying notes to consolidated
financial statements.
TRITON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN TABLES IN THOUSANDS, EXCEPT FOR SHARE DATA)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS ACTIVITIES
Triton Energy Corporation (together with its majority-owned subsidiaries, the
"Company") is an international oil and gas company primarily engaged in
exploration and production activities. The Company's principal properties and
operations are located in Colombia, France, Malaysia-Thailand, other Latin
American and Asian countries, Europe, Australia and North America, with a
significant portion of its proved reserves located in Colombia.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company.
All significant intercompany balances and transactions have been eliminated in
consolidation. Investments in 20% to 50% owned affiliates in which the
Company exercises significant influence over operating and financial policies
are accounted for using the equity method. Investments in less than 20% owned
affiliates are accounted for using the cost method.
CASH EQUIVALENTS
Cash equivalents are highly liquid investments purchased with an original
maturity of three months or less.
INVESTMENTS IN MARKETABLE SECURITIES
Investments in marketable debt securities are reported at fair value except
for those investments that management has the positive intent and the ability
to hold to maturity. Investments available-for-sale are classified based on
the stated maturity of the securities and changes in fair value are reported
as a separate component of shareholders' equity. Trading investments are
classified as current regardless of the stated maturity of the underlying
securities and changes in fair value are reported in other income.
Investments that will be held-to-maturity are classified based on the stated
maturity of the securities. Prior to May 31, 1994, the Company accounted for
its investments in debt securities at amortized cost and classified such
investments according to the stated maturity of the underlying securities.
PROPERTY AND EQUIPMENT
The Company follows the full cost method of accounting for exploration and
development of oil and gas reserves, whereby all productive and nonproductive
costs are capitalized. Individual countries are designated as separate cost
centers. All capitalized costs plus the undiscounted future development costs
of proved reserves are depleted using the unit of production method based on
total proved reserves applicable to each country. A gain or loss is
recognized on sales of oil and gas properties only when the sale involves
significant reserves.
Costs related to acquisition, holding and initial exploration of concessions
in countries with no proved reserves are initially capitalized and
periodically evaluated for impairment. The Company capitalizes internal costs
directly identified with acquisition, exploration and development activities
and does not include costs related to production, general overhead or similar
activities.
The net capitalized costs of oil and gas properties for each cost center,
less related deferred income taxes, cannot exceed the sum of (i) the estimated
future net revenues from the properties, discounted at 10%; (ii) unevaluated
costs not being amortized; and (iii) the lower of cost or estimated fair value
of unproved properties being amortized; less (iv) income tax effects related
to differences between the financial statement basis and tax basis of oil and
gas properties.
The estimated costs, net of salvage value, of dismantling facilities or
projects with limited lives or facilities that are required to be dismantled
by contract, regulation or law, and the estimated costs of restoration and
reclamation associated with oil and gas operations are accrued during
production and classified as a long-term liability.
Support equipment and facilities are depreciated using the unit of production
method based on total reserves of the field related to the support equipment
and facilities. Other property and equipment, which includes furniture and
fixtures, vehicles, aircraft and leasehold improvements, are depreciated
principally on a straight-line basis over estimated useful lives ranging from
3 to 30 years.
Repairs and maintenance are expensed as incurred and renewals and
improvements are capitalized.
ENVIRONMENTAL MATTERS
Environmental costs are expensed or capitalized depending on their future
economic benefit. Costs that relate to an existing condition caused by past
operations and have no future economic benefit are expensed. Liabilities for
future expenditures of a noncapital nature are recorded when future
environmental expenditures and/or remediation is deemed probable, and the
costs can be reasonably estimated.
<PAGE>
INCOME TAXES
Deferred tax liabilities or assets are recognized for the anticipated future
tax effects of temporary differences between the financial statement basis and
the tax basis of the Company's assets and liabilities using the enacted tax
rates in effect at year end. A valuation allowance for deferred tax assets is
recorded when it is more likely than not that the benefit from the deferred
tax asset will not be realized. Prior to June 1, 1992, the Company deferred
the tax effects of timing differences between financial reporting and taxable
income.
REVENUE RECOGNITION
Oil and gas revenues are recognized at the point of first measurement after
production which is generally upon delivery into field storage tank/processing
facilities or pipelines. Cost reimbursements arising from carried interests
granted by the Company are revenues to the extent the reimbursements are
contingent upon and derived from production. Obligations arising from net
profits interest conveyances are recorded as operating expenses when the
obligation is incurred.
FOREIGN CURRENCY TRANSLATION
The United States dollar is the designated functional currency for all of the
Company's foreign operations, except for foreign operations of certain
affiliates where the local currencies are used as the functional currency.
The cumulative translation effects from translating balance sheet accounts
from the functional currency into United States dollars at current exchange
rates are included as a separate component of shareholders' equity.
DISCONTINUED OPERATIONS AND RECLASSIFICATIONS
The Company discontinued its aviation sales and services segment in June 1995
and its wholesale fuel products segment in 1993 (see note 4). The
Consolidated Statements of Operations have been restated to reflect the
aviation sales and services segment as discontinued operations. In addition,
the 1992 consolidated Statement of Operations has been restated to reflect the
wholesale fuel products segment as discontinued operations.
Certain other previously reported financial information has been reclassified
to conform to the current period's presentation.
<PAGE>
EARNINGS (LOSS) PER COMMON SHARE
Earnings (loss) per common share is based on the weighted average number of
shares of common stock and common stock equivalents outstanding, unless the
inclusion of common stock equivalents has an antidilutive effect. The
Company's proportionate shares owned by Crusader Limited ("Crusader") are not
considered outstanding for purposes of determining weighted average number of
shares outstanding. Fully diluted earnings (loss) per common share is not
presented due to the antidilutive effect of including all potentially dilutive
securities.
THE USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period.
2. CHANGE IN FISCAL YEAR END
In May 1994, the Company changed its fiscal year end from May 31 to December
31 effective January 1, 1995. These financial statements cover the Company's
transition period for the seven months ended December 31, 1994.
The results of operations of the Company for the seven months ended December
31, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SEVEN MONTHS ENDED
DEC. 31, 1994 DEC. 31, 1993
(UNAUDITED)
Sales and other operating revenues $ 20,736 $ 30,992
Total revenues 25,321 88,964
Gross profit (loss) 51 (33,532)
Income tax expense (benefit) 3,796 (4,288)
Earnings (loss) from continuing operations (26,630) 18,383
Earnings (loss) from discontinued operations (1,078) (2,731)
Net earnings (loss) (27,708) 15,652
Dividends on preferred stock 449 ---
Net earnings (loss) applicable to common stock (28,157) 15,652
Earnings (loss) per common share:
Continuing operations (0.78) 0.53
Discontinued operations (0.03) (0.08)
Net earnings (loss) per common share (0.81) 0.45
</TABLE>
The results of operations for the seven months ended December 31, 1993
included a net after-tax benefit of $48 million, or $1.38 per common share,
relating to the sales of the Company's Canadian subsidiary and certain working
interest properties in the United States, which were partially offset by a
writedown of oil properties in France of $12.8 million, after taxes and
minority interest, or $0.37 per common share.
3. PURCHASE OF THE TRITON EUROPE MINORITY INTEREST
On March 31, 1994, the Company acquired all of the outstanding shares not
owned by the Company, representing the minority shareholders' 40.5% interest
in Triton Europe plc ("Triton Europe"), in exchange for 522,460 shares of the
Company's 5% Convertible Preferred Stock ("5% preferred stock"), with a value
of $18 million, and $2.6 million in cash, including transaction costs. The
transaction was recorded as a purchase, and accordingly, 100% of Triton
Europe's operating results have been included in the Company's results of
operations since March 31, 1994. The excess of the purchase price over the
carrying value of the minority interest in Triton Europe of $3.5 million has
been allocated to the full cost pools within Triton Europe.
4. DIVESTITURES AND DISCONTINUED OPERATIONS
In June 1995, the Company sold the assets of its subsidiary, Jet East, Inc.,
for $2.9 million in cash and a note and realized a loss of $1.4 million on the
sale. The Company disposed of its remaining aviation operations in August
1995. The Company accrued $.6 million as of June 30, 1995 for costs
associated with final disposal of the segment.
Summarized information for the aviation sales and services segment portion of
discontinued operations follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED YEAR ENDED MAY 31,
DEC. 31, 1994 1994 1993 1992
Revenues $ 16,117 $ 12,885 $19,864 $ 28,707
Loss before income taxes $ (1,078) $ (4,094) $(5,333) $(10,263)
Income tax expense (benefit) --- --- --- ---
Net loss $ (1,078) $ (4,094) $(5,333) $(10,263)
</TABLE>
In the first quarter of fiscal 1994, the Company completed the sale of its
76% interest in the common stock of Triton Canada Resources Ltd. ("Triton
Canada"). The Company received net proceeds of $59 million on September 10,
1993 and recorded a gain of $47.9 million.
In August and October 1993, the Company sold its United States working
interest properties for net proceeds of $19.5 million, resulting in a gain of
$7 million. The properties that were sold accounted for approximately 55.7%
of discounted future net revenues associated with United States proved
properties at May 31, 1993.
In fiscal 1993, the Company initiated a plan to discontinue its remaining
operations in the wholesale fuel products segment. An accrual for $16.1
million was recorded at May 31, 1993 as an estimate of the results of
operations for discontinued operations during fiscal 1994 and the anticipated
loss on disposal of the segment. An additional accrual of $.7 million was
recorded at May 31, 1994 for estimated operating losses caused by closing the
sale of several operating divisions later than originally anticipated. All
operations have been sold.
Summarized information for the wholesale fuel products segment portion of
discontinued operations follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED YEAR ENDED MAY 31,
DEC. 31, 1994 1994 1993 1992
Revenues $ 8,820 $ 81,383 $170,493 $108,476
Loss before income taxes $ (2,070) $ (14,422) $ (9,657) $ (4,518)
Income tax expense (benefit) 5 7 (158) 28
Net loss $ (2,075) $ (14,429) $ (9,499) $ (4,546)
</TABLE>
On August 12, 1992, the Company sold its remaining 26.9% interest in
Input/Output, Inc. through a secondary public offering. The net proceeds from
the offering were $24.1 million and resulted in a net gain on the disposition
of $13.8 million. The Company's equity in the earnings of Input/Output, Inc.
of $25,000 and $2 million for fiscal 1993 and 1992, respectively, has been
included in discontinued operations.
<PAGE>
5. WRITEDOWN OF ASSETS AND LOSS PROVISIONS
Writedown of assets and loss provisions are summarized as follows:
<TABLE>
<CAPTION>
<C> <S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED YEAR ENDED MAY 31,
DEC. 31, 1994 1994 1993 1992
Evaluated oil and gas properties $ 984 $ 44,123 $65,354 $22,665
Unevaluated oil and gas properties --- 251 25,817 13,113
Other property and equipment --- --- --- 545
Inventory --- 1,064 500 ---
Investments and other assets --- 316 2,712 2,532
Litigation --- --- 5,500 9,950
$ 984 $ 45,754 $99,883 $48,805
</TABLE>
During fiscal 1994, the carrying amounts of the Company's evaluated oil
properties in France were written down by $43.2 million through application of
the ceiling limitation prescribed by the Securities and Exchange Commission
(the "Commission" or "SEC") principally as a result of a temporary drop in oil
prices and a downward revision in estimated reserves.
Included in the writedowns of evaluated and unevaluated properties during
fiscal 1993 were $55.7 million and $11 million, respectively, of costs
associated with operations in France and an $8.2 million writedown of
unevaluated costs associated with onshore properties in the United Kingdom.
These writedowns resulted from Triton Europe's decision to curtail certain
exploration and development activities in Europe. As such, proved undeveloped
reserves in Europe were reduced, thereby requiring a writedown of evaluated
costs as a result of the SEC ceiling limitation for these properties. The
writedowns of unevaluated costs in both France and the United Kingdom were
associated with various license areas that were relinquished or allowed to
expire.
Similar cutbacks in Indonesia resulted in writedowns of costs associated with
evaluated properties of $8.7 million in fiscal 1993 and $13.7 million in
fiscal 1992. Also, during 1992 writedowns were recorded in Gabon
(unevaluated, $7 million), the United States (evaluated, $2.2 million) and
Canada (evaluated, $6.8 million).
In fiscal 1993, the Company settled or reached agreement to settle a number of
lawsuits for which a loss provision of $5.5 million was recorded.
In August 1992, the Company's share of a lawsuit settlement with the Company's
former controller was $9.5 million. A loss provision of $10 million,
including an estimate of outstanding legal fees and other expenses, was
recorded in fiscal 1992.
6. INVESTMENTS IN MARKETABLE SECURITIES
Effective May 31, 1994, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and
Equity Securities." The cumulative effect of adopting this standard of $1
million was recorded as a valuation reserve in shareholders' equity at May 31,
1994.
The amortized cost and estimated fair value of held-to-maturity and
available-for-sale marketable securities are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
DEC. 31, 1994 MAY 31, 1994
GROSS GROSS
AMORTIZED UNREALIZED MARKET AMORTIZED UNREALIZED MARKET
COST LOSSES VALUE COST LOSSES VALUE
Held-to-maturity:
Corporate and other
debt securities $ 7,437 $ 35 $ 7,402 $ 38,528 $ 262 $38,266
Available-for-sale:
Corporate and other
debt securities 29,605 1,384 28,221 29,786 955 28,831
$ 37,042 $ 1,419 $35,623 $ 68,314 $ 1,217 $67,097
</TABLE>
At December 31, 1994, all securities categorized as held-to-maturity were
classified as short-term investments. The maturities for the securities
available-for-sale range from one to three years with the exception of one
floating rate investment totalling $2 million which has a stated maturity in
excess of ten years. Trading investments of approximately $14 million and
$25 million at December 31, 1994 and May 31, 1994, respectively, were included
in short-term marketable securities.
7. INVESTMENTS IN UNCONSOLIDATED AFFILIATES
A summary of investments in unconsolidated affiliates accounted for by the
equity method follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DEC. 31, MAY 31, MAY 31,
1994 1994 1993
Crusader (49.9%) $ 34,162 $ 36,809 $ 36,937
Aero (28%) --- --- 3,000
Transwest Gas Systems Ltd. (50% owned by Triton Canada) --- --- 9,647
Other --- --- 531
$ 34,162 $ 36,809 $ 50,115
</TABLE>
CRUSADER
Crusader is an Australian public company engaged in oil and gas exploration
and production, coal processing and mining, and gas processing in Australia,
Canada, Ireland, the United States and other areas. The Company's equity
investment in Crusader's common stock was $26.2 million, $29.3 million and
$29.9 million at December 31, 1994, May 31, 1994 and 1993, respectively. At
December 31, 1994, May 31, 1994 and 1993, the Company's investment in Crusader
also included $8 million, $7.5 million and $7.1 million, respectively, of
convertible subordinated debentures issued by Crusader in 1989, which bear
interest at 12% and are due January 31, 1999. The quoted market value of the
Company's investment in Crusader's common stock and convertible subordinated
debentures at December 31, 1994 was $53.1 million and $8.8 million,
respectively.
At December 31, 1994, May 31, 1994 and 1993, Crusader owned approximately 3%
of the Company's common stock. Crusader's investment in the Company, using
the cost method of accounting, was $12.2 million, $11.6 million and $10.8
million at December 31, 1994, May 31, 1994 and 1993, respectively. The
Company's investment in Crusader and additional paid-in capital have each been
reduced to eliminate the Company's proportionate share of its common stock
owned by Crusader. During 1993 and 1992, Crusader recognized gains of $4.6
million and $8.7 million, respectively, on the sale of 245,000 and 400,647
shares, respectively, of the Company's common stock. The Company's share of
the sale proceeds has been credited to additional paid-in capital.
On April 28, 1994, Crusader issued $40.9 million aggregate principal amount of
6% Exchangeable Senior Notes due February 14, 2004 (the "6% Notes"). The 6%
Notes are exchangeable at the option of the holder after July 27, 1994 into
the shares of the Company's common stock held by Crusader at a price of $36.75
per share upon certain terms.
Summarized financial information for Crusader follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DEC. 31, MAY 31, MAY 31,
1994 1994 1993
ASSETS
Current assets $ 32,656 $ 37,656 $ 24,858
Noncurrent assets 138,909 127,817 118,276
$ 171,565 $165,473 $143,134
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 14,251 $ 15,741 $ 25,489
Noncurrent liabilities 79,705 66,212 35,178
Minority interest in subsidiaries 12,628 12,907 12,807
Shareholders' equity 64,981 70,613 69,660
$ 171,565 $165,473 $143,134
</TABLE>
<PAGE>
Summarized financial information for Crusader continued:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED YEAR ENDED MAY 31,
DEC. 31, 1994 1994 1993 1992
Revenues $ 22,535 $ 40,193 $ 54,924 $ 95,784
Costs and expenses (25,145) (40,574) (54,477) (96,587)
Income tax (expense) benefit (6,934) 476 (3,419) (6,276)
Minority interest 1,052 716 313 9,524
Earnings (loss) before cumulative effect of
accounting change (8,492) 811 (2,659) 2,445
Cumulative effect of accounting change --- --- 1,734 ---
Net earnings (loss) $ (8,492) $ 811 $ (925) $ 2,445
Company's equity in earnings (loss) before
cumulative effect of accounting change $ (4,102) $ 554 $ (3,512) $ (2,878)
Company's share of dividends $ --- $ 620 $ 840 $ 910
</TABLE>
The Company's equity in undistributed earnings of Crusader accounted for by
the equity method was approximately $20.7 million at December 31, 1994.
AERO
Aero is a public company that provides aviation related services. The Company
sold all of its interest in Aero except for 134,592 shares of series A
preferred stock as of May 20, 1994. The Company received proceeds of $1.5
million and recorded a gain for the same amount. The Company loaned to Aero
$.4 million, $2.7 million and $2 million in the years ended May 31, 1994, 1993
and 1992, respectively, and during the year ended May 31, 1994 retired a $6.9
million loan of Aero's that the Company had previously guaranteed and
collateralized. No loans were outstanding at May 31, 1994. The Company's
equity in Aero's loss (based on Aero's results of operations for each of the
three years in the period ended March 31, 1994) was nil, $9.5 million and
$14.1 million, in the years ended May 31, 1994, 1993 and 1992, respectively.
The Company's equity in Aero's loss included loss provisions of $7.3 million
and $11.8 million in the years ended May 31, 1993 and 1992, respectively,
relating to the Company's investment in Aero's common and preferred stock and
receivables from Aero.
<PAGE>
8. PROPERTY AND EQUIPMENT
Property and equipment, at cost, are summarized as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DEC. 31, MAY 31, MAY 31,
1994 1994 1993
Oil and gas properties, full cost method:
Evaluated $ 684,222 $629,871 $725,996
Unevaluated 99,330 97,169 66,600
Support equipment and facilities 78,601 45,688 24,983
Other 30,555 24,394 37,714
892,708 797,122 855,293
Less accumulated depreciation and depletion 493,050 488,624 525,142
$ 399,658 $308,498 $330,151
</TABLE>
The Company capitalizes interest on qualifying assets, principally unevaluated
oil and gas properties and support equipment and facilities. Capitalized
interest amounted to $11.8 million in the seven months ended December 31,
1994, and $16.9 million, $6.4 million and $6.5 million in the years ended May
31, 1994, 1993 and 1992, respectively. The Company capitalized general and
administrative expenses of $9.5 million in the seven months ended December
31, 1994, and $11.2 million, $9 million and $10.4 million in the years ended
May 31, 1994, 1993 and 1992, respectively.
9. OTHER ASSETS
Other assets consisted of the following:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DEC. 31, MAY 31, MAY 31,
1994 1994 1993
Investment in Colombian pipelines $ 18,848 $ 11,108 $ 7,567
Securities pledged to secure guarantees --- 10,155 10,658
Central Llanos pipeline receivable 14,303 8,798 1,320
Unamortized debt issue costs 8,403 9,347 4,994
Property held for sale 3,754 3,821 3,399
Cash surrender value of life insurance 3,714 3,210 2,398
Defined benefit plans - intangible asset 1,122 2,377 2,058
Other 3,610 3,045 2,004
$ 53,754 $ 51,861 $ 34,398
</TABLE>
During December 1994, the Company's wholly owned subsidiary Triton Pipeline
Colombia, Inc. ("Triton Pipeline") invested $7.7 million for its initial
equity contribution to the newly formed pipeline company Oleoducto Central
S.A. ("OCENSA"). OCENSA was formed to own and finance expanded pipeline and
port facilities to be constructed and operated for the transport of crude oil
from the Cusiana and Cupiagua fields to the port of Coveas.
In fiscal 1994 and 1993, Triton Colombia, Inc. ("Triton Colombia"), a wholly
owned subsidiary of the Company, purchased interests totaling approximately
6.6% in Oleoducto de Colombia S.A. ("ODC"), a pipeline company in Colombia,
for total consideration of $11.1 million. The purchases were made to secure
the transport capacity for the Company's oil production in Colombia.
As part of the purchase of ODC, the Company has agreed to assume by counter
guarantee, directly and proportionally to part of the interest purchased, the
guarantees granted to bank creditors of ODC through Shell Petroleum Company
Ltd. and Shell Overseas Trading Limited. Securities pledged to secure the
guarantees have been replaced with letters of credit as of December 31, 1994.
Triton Colombia, along with its joint venture partners in the Company's
Cusiana and Cupiagua fields in Colombia, committed to provide advances to
upgrade the capacity of the Central Llanos pipeline that is owned by Empresa
Colombiana de Petroleos ("Ecopetrol"). The Company advanced to Ecopetrol
total costs of $21.3 million through December 31, 1994, including $7 million
reflected in other receivables. The Company will recover this cost through
lower pipeline tariffs as crude oil is transported through the pipeline.
Upgrades to the pipeline and pump stations have been completed as of December
31, 1994.
The Company amortizes debt issue costs over the life of the borrowing using
the interest method. Amortization related to the Company's debt issue costs
was $1.3 million in the seven months ended December 31, 1994 and $1.5 million,
$.5 million and $.1 million in the years ended May 31, 1994, 1993 and 1992,
respectively.
<PAGE>
10. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities are summarized as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DEC. 31, MAY 31, MAY 31,
1994 1994 1993
Accounts payable, principally trade $ 8,466 $ 7,088 $ 8,976
Employee compensation and benefits 3,584 2,799 2,825
Royalties and property taxes, franchise
taxes and other taxes 3,752 3,084 5,178
Litigation and environmental matters 2,769 3,102 4,926
Joint venture billings 2,657 3,000 9,656
Income taxes payable 42 6,440 287
Stock appreciation rights 1,137 1,328 1,898
Other 4,201 3,410 5,094
$ 26,608 $ 30,251 $ 38,840
</TABLE>
11. DEBT
SHORT-TERM BORROWINGS
The Company borrowed $10 million on December 30, 1994 under a $25 million
revolving credit facility with a bank which matures on March 30, 1995. The
facility is secured by the stock of Crusader owned by the Company and bears
interest at prime (8.5% at December 31, 1994) plus 1/2%. Certain restrictive
covenants in the agreement limit the Company and its subsidiaries from selling
certain assets.
During the seven months ended December 31, 1994, a wholly owned subsidiary
renewed and increased its revolving credit facility with a bank to $10
million ($7.4 million outstanding at December 31, 1994), which is guaranteed
by the Company. This facility bears interest at prime to prime plus 1/2% and
matures on June 23, 1995, but may be extended at the sole discretion of the
lender. Certain restrictive covenants in the agreement limit the Company and
its subsidiaries from engaging in mergers, certain forms of indebtedness,
certain investments and selling certain assets.
The weighted average interest rates on short-term borrowings outstanding were
8.8%, 7.25% and 6.5% as of December 31, 1994, May 31, 1994 and 1993,
respectively.
<PAGE>
LONG-TERM DEBT
A summary of long-term debt follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DEC. 31, MAY 31, MAY 31,
1994 1994 1993
Senior Subordinated Discount Notes due 2000 $ 141,122 $ 133,505 $ ---
Senior Subordinated Discount Notes due 1997 170,274 158,618 140,509
Revolving credit facility 1,700 --- 1,000
Triton Canada revolving credit facility --- --- 15,630
Other notes and capitalized leases 2,419 2,630 5,448
315,515 294,753 162,587
Less current installments 257 312 3,440
$ 315,258 $ 294,441 $159,147
</TABLE>
On December 15, 1993, the Company completed the sale of $170 million in
principal amount of 9 3/4% Senior Subordinated Discount Notes ("9 3/4% Notes")
due December 15, 2000, providing net proceeds to the Company of approximately
$124 million. The original issue price was 75.1% of par, representing a yield
to maturity of 9 3/4%. No interest is payable on the 9 3/4% Notes during the
first three years of issue. Commencing December 15, 1996, interest on the 9
3/4% Notes will accrue at the rate of 9 3/4% per annum and will be payable
semi-annually on June 15 and December 15, beginning on June 15, 1997. The
Indenture, as amended, for the 9 3/4% Notes contains financial covenants that
include certain limitations on indebtedness, dividends, certain investments,
transactions with affiliates, and engaging in mergers and consolidations.
Additional provisions include optional and mandatory redemptions, and
requirements associated with changes in control.
On November 13, 1992, the Company completed the sale of $240 million in
principal amount of Senior Subordinated Discount Notes ("1997 Notes") due
November 1, 1997, providing net proceeds to the Company of approximately $126
million. The original issue price was 54.76% of par, representing a yield to
maturity of 12 1/2% per annum compounded on a semi-annual basis without
periodic payments of interest. The Indenture, as amended, for the 1997 Notes
contains financial covenants including certain limitations on indebtedness,
dividends, certain investments, transactions with affiliates, mergers and
consolidations. In addition, if the Company's consolidated net worth is less
than $225 million for two consecutive quarters, the Company is required to
offer to purchase 20% of the original principal amount of the 1997 Notes.
Additional provisions include optional and mandatory redemptions, and
requirements associated with changes in control.
As of December 31, 1994, the Company had a 7 1/2 year revolving credit
facility with a bank with a borrowing base of $11.7 million. Borrowings bear
interest at the London Interbank Offered Rate (6% at December 31, 1994) plus
3/4%. At December 31, 1994, the Company had utilized $11.1 million of the
line of credit through borrowings of $1.7 million and issuances of letters of
credit and other guarantees.
The aggregate maturities of long-term debt for the five years in the period
ending December 31, 1999 are as follows: 1995 - $.3 million; 1996 - $.3
million; 1997 - $170.5 million; 1998 - $.3 million; and 1999 - $.3 million.
The 1997 amount excludes accretion of interest on the 1997 Notes.
12. INCOME TAXES
Effective June 1, 1992, the Company adopted SFAS No. 109, "Accounting for
Income Taxes." The cumulative benefit of the change in fiscal 1993 was $4
million. For the year ended May 31, 1992, the provision was calculated in
accordance with Accounting Principles Board Opinion No. 11 ("APB 11").
The components of earnings (loss) from continuing operations before income
taxes, minority interest, and cumulative effect of accounting change are as
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED YEAR ENDED MAY 31,
DEC. 31, 1994 1994 1993 1992
United States $ (23,197) $ 33,869 $ (40,068) $(47,261)
Foreign 363 (56,973) (107,377) (39,863)
$ (22,834) $ (23,104) $(147,445) $(87,124)
</TABLE>
<PAGE>
The components of the provision for income taxes on continuing operations are
as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED YEAR ENDED MAY 31,
DEC. 31, 1994 1994 1993 1992
Current:
United States $ 71 $ (8) $ (411) $ (6)
Foreign (844) 3,696 176 (2,975)
Deferred:
United States (61) (9,426) (21,080) ---
Foreign 4,630 (798) (22,566) 1,044
$ 3,796 $ (6,536) $(43,881) $(1,937)
</TABLE>
A reconciliation of the differences between the United States federal
statutory tax rate and the Company's effective income tax rate follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED YEAR ENDED MAY 31,
DEC. 31, 1994 1994 1993 1992
Tax provision at statutory tax rate $ (7,992) $ (8,086) $(50,131) $(29,622)
Increase (decrease) resulting from:
United States losses without tax benefit (378) (1,433) 13,212 15,431
Net change in valuation allowance 28,336 1,027 (21,080) ---
Items not related to current year earnings (19,222) --- --- ---
Foreign items without tax benefit 2,434 4,350 6,053 12,930
Tax on earnings of foreign subsidiaries --- --- 8,065 (1,699)
Federal tax rate change --- (2,765) --- ---
Other 618 371 --- 1,023
$ 3,796 $ (6,536) $(43,881) $ (1,937)
</TABLE>
The deferred income tax provision for 1992 under APB No.11 resulted primarily
from timing differences in the capitalization, depletion and writedown of
costs relating to oil and gas properties.
<PAGE>
The components of the net deferred tax asset and liability under SFAS 109 are
as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1994 MAY 31, 1994 MAY 31, 1993
U.S. FOREIGN U.S. FOREIGN U.S. FOREIGN
Deferred tax asset:
Net operating loss carryforwards $ 105,250 $ 9,963 $ 96,054 $ 8,884 $ 84,625 $ 4,944
Depreciable/depletable property --- --- --- --- 2,546 ---
Credit carryforwards 17,175 --- 14,552 --- 3,135 ---
Reserves 6,861 --- 5,354 --- 5,460 187
Other 1,941 524 2,035 316 2,060 705
Gross deferred tax asset 131,227 10,487 117,995 9,200 97,826 5,836
Valuation allowances (95,226) (6,963) (69,366) (4,487) (72,826) ---
Net deferred tax asset 36,001 3,524 48,629 4,713 25,000 5,836
Deferred tax liability:
Accruals --- --- --- --- --- (3,475)
Depreciable/depletable property (1,515) (18,196) (14,203) (14,750) --- (18,122)
Total net deferred tax liability (1,515) (18,196) (14,203) (14,750) --- (21,597)
Net deferred tax asset (liability) 34,486 (14,672) 34,426 (10,037) 25,000 (15,761)
Less current deferred tax asset (liability) --- --- --- --- --- (2,583)
Noncurrent deferred tax asset (liability) $ 34,486 $(14,672) $ 34,426 $(10,037) $ 25,000 $(13,178)
</TABLE>
At December 31, 1994, the Company had net operating loss ("NOL") and depletion
carryforwards for United States tax purposes of $241.1 million and $6.8
million, respectively. In addition, at December 31, 1994, certain subsidiaries
had separate return limitation year ("SRLY") operating loss and depletion
carryforwards of $59.6 million and $13.5 million, respectively, which are
available to offset only the future taxable income of those subsidiaries. The
depletion carryforwards are available indefinitely. The NOL and SRLY operating
loss carryforwards expire from 1995 through 2009 as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
NOLS SRLYS
EXPIRING EXPIRING
BY YEAR BY YEAR
1995 $ --- $ 7,479
1996 758 11,602
1997 11,594 11,804
1998 8,809 8,437
1999 7,315 10,224
2000 20,713 10,045
2001-2009 191,900 32
Total $ 241,089 $ 59,623
</TABLE>
If certain changes in the Company's ownership should occur, there would be an
annual limitation on the amount of NOL carryforwards that can be utilized. To
the extent a change in ownership does occur, the limitation is not expected to
materially impact the utilization of such carryforwards.
The Company's share of the cumulative undistributed earnings of its
consolidated foreign subsidiaries that is intended to be permanently
reinvested, and on which no United States taxes have been provided, was
approximately $5.6 million at December 31, 1994. Unrecognized deferred taxes
on remittance of these funds are not expected to be material.
During the year ended May 31, 1993, the Company added $3.9 million to
additional paid-in capital for United States tax benefits attributable to the
utilization of net operating loss carryforwards. These carryforwards related
to periods prior to the Company's corporate readjustments.
13. EMPLOYEE BENEFITS
PENSION PLANS
The Company has a defined benefit pension plan covering substantially all
employees in the United States. The benefits are based on years of service
and the employee's final average monthly compensation. Contributions are
intended to provide for benefits attributed to past and future services. The
Company also has a supplemental executive retirement plan ("SERP") that is
unfunded and provides supplemental pension benefits to a select group of
management or key employees.
<PAGE>
The funding status of the plans follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1994 MAY 31, 1994 MAY 31, 1993
DEFINED DEFINED DEFINED
BENEFIT SERP BENEFIT SERP BENEFIT SERP
PLAN PLAN PLAN PLAN PLAN PLAN
Actuarial present value of benefit
obligations:
Vested benefit obligations $ 3,440 $ 3,345 $ 3,669 $ 3,357 $ 2,921 $ 3,069
Accumulated benefit obligations $ 3,570 $ 3,345 $ 3,819 $ 3,357 $ 2,963 $ 3,449
Projected benefit obligations $ 4,136 $ 4,299 $ 4,408 $ 4,241 $ 3,487 $ 3,708
Plan assets at fair value, primarily
listed stocks and United States
government securities 3,188 --- 3,475 --- 3,556 ---
Unfunded (funded) projected benefit
obligations 948 4,299 933 4,241 (69) 3,708
Unrecognized net loss (576) (157) (696) (401) (633) (504)
Prior service cost not yet recognized
in net periodic pension cost (765) (165) (798) (172) --- ---
Unrecognized net asset (liability) at
adoption 15 (1,792) 16 (1,890) 18 (2,058)
Adjustment required to recognize
minimum liability 760 1,160 889 1,579 --- 2,303
Accrued (prepaid) pension cost $ 382 $ 3,345 $ 344 $ 3,357 $ (684) $ 3,449
</TABLE>
A summary of the components of pension expense follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN YEAR ENDED MAY 31,
MONTHS ENDED
DEC. 31, 1994 1994 1993 1992
Service cost - benefits earned
during the period $ 454 $ 733 $ 259 $ 177
Interest cost on projected benefit obligation 344 553 463 455
Actual return on plan assets 219 111 (398) (246)
Net amortization and deferral (256) (173) 296 162
$ 761 $ 1,224 $ 620 $ 548
</TABLE>
The projected benefit obligations at December 31, 1994, May 31, 1994 and 1993
assume a discount rate of 8%, 7% and 7%, respectively, and a rate of increase
in compensation expense of 5%, 5% and 6%, respectively. The impact of the
change in the discount rate from 7% to 8% reduced the projected benefit
obligation at December 31, 1994 for both the defined benefit plan and SERP by
$.5 million. The impact of the change in the rate of increase in compensation
expense from 6% to 5% reduced the projected benefit obligation of the defined
benefit plan and SERP at May 31, 1994 by $.5 million and $.3 million,
respectively. The expected long-term rate of return on assets is 9% for the
defined benefit plan.
EMPLOYEE STOCK OWNERSHIP PLAN
Effective January 1, 1994, the Company amended and restated the employee
stock ownership plan to form a 401(k) plan ("the plan"). The Company
recognizes expense relating to the plan based on actual amounts contributed
since inception of the plan. The Company recognized expense of $.2 million
during the seven months ended December 31, 1994 and $.2 million from inception
to May 31, 1994. The Company used the shares allocated method prior to the
January 1, 1994 amendment ($.3 million in 1993 and $1.3 million in 1992).
14. REDEEMABLE PREFERRED STOCK OF SUBSIDIARY
Redeemable preferred stock of Triton Canada, a former subsidiary, for 1993 was
shown net of the unamortized discounts recorded at the date of acquisition.
Dividends on the redeemable preferred stocks are included in minority interest
in the accompanying consolidated statements of operations. The principal
terms and changes in the redeemable preferred stocks are summarized as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
TRITON
TRITON TRITON CANADA
CANADA CANADA SENIOR
PREFERRED PREFERRED PREFERRED
SERIES A SERIES B SERIES 1 TOTAL
Liquidation value per share C$20 C$10 C$10
Cumulative quarterly dividend per share C$.4625 C$.30 C$.25
Shares outstanding - May 31, 1993 701,400 239,075 165,729
Redemption value at May 31, 1993 $ 11,034 $ 1,881 $ 1,304 $14,219
Balance at May 31, 1991 $ 9,380 $ 2,036 $ 2,192 $13,608
Amortization and translation effect (309) (95) (103) (507)
Redemption --- (67) (62) (129)
Balance at May 31, 1992 9,071 1,874 2,027 12,972
Amortization and translation effect (332) (115) (73) (520)
Redemption (301) (100) (652) (1,053)
Balance at May 31, 1993 $ 8,438 $ 1,659 $ 1,302 $11,399
</TABLE>
15. SHAREHOLDERS' EQUITY
PREFERRED STOCK
In connection with the acquisition of the minority interest in Triton Europe,
the Company designated a series of 550,000 preferred shares (522,460 shares
issued) as 5% preferred stock, no par value, with a stated value of $34.41 per
share. Each share of the Company's 5% preferred stock series is convertible
into one common share, subject to adjustment in certain events. The 5%
preferred stock is convertible anytime on or after October 1, 1994, and bears
a fixed cumulative cash dividend of 5% per annum payable semi-annually on
March 30 and September 30, commencing September 30, 1994. If not converted
earlier, each 5% preferred share will be redeemed on March 30, 2004, either
for cash, or at the option of the Company, for the Company's common stock.
COMMON STOCK
Changes in issued common shares are as follows:
<TABLE>
<CAPTION>
<C> <S> <C> <C> <C>
SEVEN
MONTHS ENDED
DEC. 31, YEAR ENDED MAY 31,
1994 1994 1993 1992
Balance at beginning of period 35,519,103 35,231,142 34,649,148 21,497,255
Conversion of $2 par value preferred stock --- --- --- 3,321,176
Conversion of 5% preferred stock 48 --- --- ---
Exercise of employee stock options
and debentures 57,858 287,961 581,994 859,824
Conversion of liquid yield option notes --- --- --- 5,274,282
Conversion of 8 1/2% convertible
debentures --- --- --- 696,611
Issuance of common stock --- --- --- 3,000,000
Balance at end of period 35,577,009 35,519,103 35,231,142 34,649,148
</TABLE>
Changes in common shares held in treasury are as follows:
<TABLE>
<CAPTION>
<C> <S> <C> <C> <C>
SEVEN
MONTHS ENDED
DEC. 31, YEAR ENDED MAY 31,
1994 1994 1993 1992
Balance at beginning of period 54,354 57,483 57,400 57,250
Purchase of treasury stock 98 149 83 150
Transfer of shares to employee benefit plans (8,615) (3,278) --- ---
Balance at end of period 45,837 54,354 57,483 57,400
</TABLE>
STOCK OPTIONS
Options to purchase the Company's common stock have been granted to officers
and employees under various stock option plans. Grants generally become
exercisable in 25% cumulative annual increments beginning one year from the
date of issuance and expire at the end of ten years. At December 31, 1994,
964,490 shares were available for grant under the plans. Pursuant to the
1992 stock option plan, each nonemployee director receives an option to
purchase 15,000 shares each year. A summary of option transactions follows:
<TABLE>
<CAPTION>
<S> <C> <C>
NUMBER OF OPTION PRICE
SHARES PER SHARE
Outstanding at May 31, 1991 1,523,649 $ 8.38 - 21.22
Granted 787,500 19.88 - 52.50
Exercised (646,551) 8.38 - 21.22
Cancelled (20,274) 11.29 - 19.22
Outstanding at May 31, 1992 1,644,324 8.38 - 52.50
Granted 680,000 28.25 - 41.88
Exercised (552,828) 8.38 - 35.00
Cancelled (50,090) 11.29 - 52.50
Outstanding at May 31, 1993 1,721,406 8.38 - 42.25
Granted 1,414,800 28.63 - 33.50
Exercised (133,411) 8.38 - 16.25
Cancelled (336,250) 8.38 - 42.00
Outstanding at May 31, 1994 2,666,545 8.38 - 42.25
Granted 544,500 30.75 - 36.25
Exercised (48,691) 8.38 - 11.50
Cancelled (87,500) 39.63 - 42.00
Outstanding at December 31, 1994 3,074,854 8.38 - 42.25
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
NUMBER OF OPTION PRICE
SHARES PER SHARE
Shares exercisable:
May 31, 1992 313,437 $8.38 - 19.23
May 31, 1993 564,402 8.38 - 42.25
May 31, 1994 563,741 8.38 - 42.25
December 31, 1994 873,551 8.38 - 42.25
</TABLE>
The weighted average exercise price of options outstanding at December 31,
1994 was $33.80.
CONVERTIBLE DEBENTURE PLAN
The Company has a convertible debenture plan under which key management
personnel and others may purchase debentures that are convertible into shares
of the Company's common stock. The aggregate number of common shares issuable
upon conversion of the debentures cannot exceed 1,000,000 shares, subject to
adjustment in certain events. Each debenture represents an unsecured,
subordinated obligation due in seven to ten years and may be redeemed after
three years at a redemption price of 120% of the principal amounts. The
debentures outstanding at December 31, 1994 bear interest at the prime rate,
have a conversion date of one year following the date of issuance and may be
converted into the Company's common stock at a price of $25.13 per share,
subject to adjustment in certain events. At December 31, 1994, 253,977 shares
were available for grant under the plan.
<PAGE>
The participants in the plan purchased debentures by delivery of promissory
notes to the Company. The promissory notes are secured by the debentures that
are held as security by the Company, are due on the earlier of 2004 or
termination of employment and require annual interest payments equal to prime
plus 1/8%. The debentures are reflected as a noncurrent liability, net of the
related promissory notes, in the Consolidated Balance Sheets as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DEC. 31, 1994 MAY 31, 1994 MAY 31, 1993
Convertible debentures due employees $ 6,281 $ 6,355 $ 1,906
Promissory notes (6,281) (6,355) (1,906)
$ --- $ $--- $ $---
Number of shares outstanding 250,000 259,167 163,717
</TABLE>
SHAREHOLDER RIGHTS PLAN
In June 1990, the Company's board of directors adopted a Shareholder Rights
Plan pursuant to which preferred stock purchase rights were issued to holders
of its common stock at the rate of one right for each share of common stock
held as of the record date, June 26, 1990. The rights become exercisable only
if a holder acquires beneficial ownership of 15% or more or announces a tender
offer for 15% or more of the Company's common stock. Each right not owned by
such 15% holder entitles the holder under such circumstance to purchase shares
of common stock having a value equal to twice the $40 exercise price. The
Company may redeem the rights at $.01 per right at any time until the tenth
day following the public announcement that a 15% position has been acquired.
Unless the rights become exercisable, they will expire on June 26, 2000.
<PAGE>
STOCK APPRECIATION RIGHTS PLAN
The Company has a stock appreciation rights ("SARs") plan which authorizes the
granting of SARs to nonemployee directors of the Company. Upon exercise,
SARs allow the holder to receive the difference between the SARs' exercise
price and the fair market value of the common shares covered by SARs on the
exercise date and expire at the earlier of ten years or a date based on the
termination of the holder's membership on the board of directors. At December
31, 1994, May 31, 1994, 1993 and 1992, SARs covering 45,454, 55,454, 65,604
and 85,604 common shares, respectively, were outstanding. At December 31,
1994, exercise prices ranged from $8.00 to $13.20 per share, 45,454 shares
were exercisable and 17,940 shares were available for future grant.
Compensation expense (benefit) of $.1 million, $(.3 million), $.9 million and
$3.4 million for the seven months ended December 31, 1994 and the years ended
May 31, 1994, 1993 and 1992, respectively, was recorded based on the quoted
market value of the shares and the exercise provisions.
RESTRICTED STOCK PLAN
The Company has a restricted stock plan that provides for the award of up to
50,000 common shares to eligible key officers and employees. At the November
11, 1993 annual meeting, this plan was amended to also serve as an employee
stock purchase plan. At December 31, 1994, 39,415 shares were available for
issuance under the plan.
CORPORATE READJUSTMENTS
To permit payments of common stock dividends from future earnings without
being penalized by an accumulated deficit, Article 4.13B of the Texas Business
Corporation Act formerly provided that a company may, subject to its board of
directors' approval, eliminate that deficit through application of additional
paid-in capital. Pursuant to board of directors' approvals on January 12,
1987 and August 6, 1986, the Company eliminated accumulated deficits of $5.3
million at November 30, 1986 and $28.7 million at May 31, 1986.
16. FAIR VALUE OF FINANCIAL INSTRUMENTS AND CREDIT RISK
CONCENTRATIONS
FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:
Cash and cash equivalents - The carrying amount approximates fair value due
to the short maturities of such instruments.
Marketable securities - Marketable securities consist primarily of marketable
debt securities. Estimated fair value is determined by quoted market prices.
Short- and long-term debt - The carrying amount of the Company's short-term
bank borrowings and current portion of long-term debt approximates fair value.
The fair values of the Company's senior subordinated debentures due in 1997
and 2000 are based on quoted market prices.
Redeemable preferred stock of subsidiary - The fair value of redeemable
preferred stock of subsidiary is based on quoted market prices.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
DEC. 31, 1994 MAY 31, 1994 MAY 31, 1993
CARRYING FAIR CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
Financial assets:
Marketable securities $ 49,921 $ 49,886 $ 92,262 $ 92,000 $ 24,253 $ 24,253
Financial liabilities:
Long-term debt (including
current portion) 315,515 299,916 294,753 299,430 162,587 177,406
Redeemable preferred stock
of subsidiary --- --- --- --- 11,399 13,771
</TABLE>
The Company entered into a foreign exchange contract in fiscal 1994 to
purchase C$8.6 million to hedge exposure to a Canadian tax liability resulting
from the sale of Triton Canada common stock. At May 31, 1994, the fair value
of the foreign exchange contract, which matured in July 1994, was based on
quoted rates for contracts with similar terms and maturity dates; however,
such fair value was offset by gains on the tax liability hedged by the
contract, so there was no significant difference between the recorded value
and the fair value of the Company's net foreign exchange position.
CONCENTRATION OF CREDIT RISK
Financial instruments that are potentially subject to concentrations of credit
risk consist of cash equivalents, marketable securities and receivables. The
Company sells crude oil, natural gas, condensate and other oil and gas
products to other oil and gas companies and government agencies. During the
seven months ended December 31, 1994 and the years ended May 31, 1994, 1993
and 1992, a single customer in France accounted for 34%, 31%, 29% and 31%,
respectively, and in Indonesia a single customer accounted for 12%, 13%, 10%
and 10%, respectively, of consolidated sales and other operating revenues.
The Company does not believe that the loss of any single customer or contract
pursuant to which oil and gas is sold would have a long-term material adverse
effect on its oil and gas revenues.
<PAGE>
17. OTHER INCOME
Other income is summarized as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED YEAR ENDED MAY 31,
DEC. 31, 1994 1994 1993 1992
Interest and dividends $ 4,144 $ 6,598 $4,205 $4,768
Gain on sale of United States
working interest properties --- 7,028 --- ---
Gain on sale of Aero common stock --- 1,500 --- ---
Other 441 1,195 1,743 1,711
$ 4,585 $ 16,321 $5,948 $6,479
</TABLE>
18. STATEMENTS OF CASH FLOWS
Supplemental disclosures of cash payments and noncash investing and financing
activities follow:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED YEAR ENDED MAY 31,
DEC. 31, 1994 1994 1993 1992
Cash paid during the year for:
Interest (net of amount capitalized) $ --- $ --- $ --- $ 2,074
Income taxes 5,557 222 1,321 11,734
Noncash investing and financing
activities:
Preferred stock issued for purchase of Triton
Europe minority interest --- 17,978 --- ---
Conversion of long-term debt into common stock --- --- --- 119,921
Conversion of preferred stock into common stock --- --- --- 65,568
Sale of the Company's shares by Crusader --- --- 3,920 6,917
Liabilities resulting from acquisitions --- --- 1,265 2,715
Property and equipment exchanged for
a long-term note receivable --- 1,980 --- ---
<PAGE>
</TABLE>
19. COMMITMENTS AND CONTINGENCIES
The Company is currently involved in the development of significant
discoveries in the Cusiana and Cupiagua fields (the "Fields") of Colombia.
The first two early production units at the central processing facility at
Cusiana began operation in October and December 1994, with gross production
reaching 90,000 barrels in early February 1995. Capital requirements for full
field development of the Fields are expected to continue at substantial levels
into 1997, but should be substantially covered by the proceeds from Colombian
oil sales during this period.
Negotiations among the Company and the other working interest owners of the
Fields and TransCanada PipeLines Colombia Limited and IPL Energy (Colombia)
Limited led to the execution of certain agreements relating to OCENSA in
December 1994.
The agreements contemplate that capitalization of OCENSA will be approximately
70% senior debt and 30% equity. OCENSA is expected to borrow all senior debt
under four separate facilities, each of which would be severally and
separately supported by performance obligations under various transportation,
advance tariff and other agreements of one of the initial shipper group
consisting of the Company, Ecopetrol, BP Exploration Company (Colombia)
Limited and TOTAL. Proposals for the contemplated debt financing of OCENSA
are being evaluated, although no commitments have been signed.
The Company's 9.6% share of OCENSA is owned through Triton Pipeline. The
Company has guaranteed Triton Pipeline's performance under an equity
subscription agreement with OCENSA.
The Company's capital budget for the year ending December 31, 1995 is
approximately $175 million, excluding capitalized interest, of which
approximately $100 million relates to the Fields and $29 million relates to
Block A-18 of the Malaysia-Thailand Joint Development Area. The Company
expects to meet the balance of its direct capital needs in 1995 and later
years with cash on hand, marketable securities, increasing cash flow from
Colombian operations, proceeds from asset sales (including possible forward
sales of oil), and possibly the issuance of equity or other securities.
During the normal course of business, the Company is subject to the terms of
various operating agreements and capital commitments associated with the
exploration and development of its oil and gas properties. Many of these
commitments are discretionary on the part of the Company. It is management's
belief that such commitments, including the capital requirements in Colombia,
discussed above, will be met without any material adverse effect on the
Company's operations or consolidated financial condition.
The Company leases office space, other facilities and equipment under various
operating leases expiring through 2009. Total rental expense was $1.3 million
for the seven months ended December 31, 1994 and $2.6 million, $4 million and
$5 million for the years ended May 31, 1994, 1993 and 1992, respectively,
including rental expense for discontinued operations of $.1 million for the
seven months ended December 31, 1994 and $.4 million, $1.5 million and $1.2
million for years ended May 31, 1994, 1993 and 1992, respectively. At
December 31, 1994, the minimum payments required over the next five years and
thereafter are as follows: 1995 - $2.8 million; 1996 - $2.7 million; 1997 -
$2.1 million; 1998 - $1.7 million; 1999 - $1.6 million and thereafter - $1.8
million.
GUARANTEES
At December 31, 1994, the Company had guaranteed loans of approximately $7.7
million of a Colombian pipeline company in which the Company has an ownership
interest and guaranteed performance of $9.1 million in future exploration
expenditures in various countries. These commitments are backed by letters of
credit, bank guarantees and pledged securities.
REGULATORY MATTERS
The Company continues to cooperate with inquiries by the Commission and the
Department of Justice (the "Department") regarding possible violations of the
Foreign Corrupt Practices Act in connection with the Company's operations in
Indonesia. Based upon the information available to the Company to date, the
Company believes that it will be able to resolve any issues that either the
Commission or the Department ultimately might raise concerning these matters
in a manner that would not have a material adverse effect on the Company's
operations or consolidated financial condition.
<PAGE>
ENVIRONMENTAL MATTERS
The Company is subject to extensive environmental laws and regulations. These
laws regulate the discharge of materials into the environment and may require
the Company to remove or mitigate the environmental effects of the disposal or
release of petroleum substances at various sites. Also, the Company remains
liable for certain environmental matters that may arise from formerly owned
fuel businesses that were involved in the storage, handling and sale of
hazardous materials, including fuel storage in underground tanks. The Company
believes that the level of future expenditures for environmental matters,
including clean-up obligations, is impracticable to determine with a precise
and reliable degree of accuracy. Management believes that such costs, when
finally determined, will not have a material adverse effect on the Company's
operations or consolidated financial condition. During the seven months ended
December 31, 1994 and the years ended May 31, 1994, 1993 and 1992, the Company
accrued nil, $4.4 million, nil and $1.2 million, respectively, for
environmental costs.
LITIGATION
The Company is also subject to ordinary litigation that is incidental to its
business, none of which is expected to have a material adverse effect on the
Company's operations or consolidated financial condition.
20. RELATED PARTY TRANSACTIONS
Net assets of discontinued operations at May 31, 1993, and investment in
affiliates at May 31, 1992, included $1.9 million and $1.7 million,
respectively, due from Aero for fuel purchases. Total fuel sales to Aero were
$1 million in fiscal 1994, $4 million in fiscal 1993 and $2.9 million in
fiscal 1992. In fiscal 1992, the Company purchased certain equipment from
Aero for $.5 million and leased the equipment back to Aero pursuant to an
operating lease with annual rentals of $.1 million over a five-year term.
The Company charged Crusader $.3 million for the seven months ended December
31, 1994 and $.6 million for the years ended May 31, 1994, 1993 and 1992 for
administrative services. Also during fiscal 1994, the Company was paid $1.2
million by Crusader for acting as agent in issuing its 6% Notes and recorded
$.6 million as other income.
<PAGE>
21. GEOGRAPHIC DATA
The Company's oil and gas business is subject to operating risks normally
associated with the exploration and production of oil and gas, including
blowouts, cratering, pollution and acts of nature that could result in damage
to oil and gas wells, production facilities or formations. In addition, oil
and gas prices have fluctuated substantially over recent years as a result of
numerous factors, including changes in worldwide production and demand levels,
various worldwide political and economic events and other events which are
outside of the Company's control.
The Company's principal properties and operations are located in Colombia and
Malaysia-Thailand. The Company also has oil and gas interests in other Latin
American and Asian countries, Europe, Australia and North America. Operating
in foreign countries subjects the Company to inherent risks such as a loss of
revenue, property and equipment from such hazards as expropriation,
nationalization, war and other political risks, risks of increase of taxes and
governmental royalties, renegotiation of contracts with governmental entities
and changes in laws in policies governing operations of foreign based
companies.
Information about the Company's operations by geographic area follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED
DEC. 31, YEAR ENDED MAY 31,
1994 1994 1993 1992
SALES AND OTHER OPERATING REVENUES:
Colombia $ 6,249 $ 5,911 $ 3,474 $ ---
France 9,179 17,494 30,897 37,844
Indonesia 3,174 7,186 10,449 12,146
United States 2,134 5,629 16,838 16,897
Canada --- 6,759 22,651 23,837
Other --- 229 105 ---
Consolidated $ 20,736 $ 43,208 $84,414 $90,724
</TABLE>
Geographic data continued:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SEVEN
MONTHS ENDED
DEC. 31, YEAR ENDED MAY 31,
1994 1994 1993 1992
OPERATING PROFIT (LOSS):
Colombia $ (192) $ (503) $ (672) $ (759)
France 722 (49,734) (79,336) 2,319
Indonesia (75) (4,582) (10,425) (13,181)
United States (1,426) (1,269) 383 (12,049)
Canada --- (47) (986) (11,389)
Other (2,258) (3,285) (20,095) (12,722)
Consolidated (3,229) (59,420) (111,131) (47,781)
Equity in earnings (loss) of affiliates, net (4,102) 645 (12,493) (16,646)
Other income, including gain on sale of
Triton Canada in the year ended May 31, 1994 4,585 64,186 5,948 6,479
General corporate expenses (12,717) (20,947) (23,546) (23,807)
Foreign exchange gain (loss) 383 252 (776) (4,557)
Writedown of other investments --- (316) (758) (406)
Interest expense (7,754) (7,504) (4,689) (406)
Loss from continuing operations before
income taxes and minority interest $ (22,834) $ (23,104) $(147,445) $(87,124)
TRADE AND OTHER RECEIVABLES:
Colombia $ 10,006 $ 5,508 $ 510 $ 65
France 3,866 3,431 2,357 4,724
Indonesia 1,257 1,303 1,571 2,341
United States 2,614 2,786 4,517 5,570
Canada --- --- 4,169 3,478
Other 745 1,551 3,592 1,629
Consolidated $ 18,488 $ 14,579 $ 16,716 $ 17,807
IDENTIFIABLE ASSETS:
Colombia $ 335,474 $ 237,397 $ 147,280 $ 58,632
France 27,038 28,954 78,830 166,970
Indonesia 2,553 3,978 6,042 19,557
United States 46,474 44,030 86,142 77,768
Canada --- --- 48,667 52,394
Other 54,932 52,410 34,963 38,744
Consolidated 466,471 366,769 401,924 414,065
Net assets of discontinued operations --- 4,566 21,789 35,873
Invesments in unconsolidated affiliates 34,162 36,809 50,115 71,433
Corporate assets 118,568 207,957 88,103 49,798
Total assets at period-end $ 619,201 $ 616,101 $ 561,931 $571,169
</TABLE>
All oil sales in France were to Societe Nationale Elf Aquitaine, which is
principally owned by the French government. All oil sales in Indonesia are to
Pertamina, the Indonesian government oil company.
22. SUBSEQUENT EVENTS (UNAUDITED)
EXPLORATION CONTRACT IN CHINA
On February 8, 1995, the Company and the China National Offshore Oil Company
signed a production sharing contract in Beijing that will allow the Company to
explore for hydrocarbons on Contract Area 16/22 in the Pearl River Mouth Basin
about 110 miles southeast of Hong Kong.
EXPLORATION CONTRACT IN ECUADOR
On February 16, 1995, the Company signed an exploration agreement with
Petroecuador for Block 19, which calls for the Company to acquire 250 miles of
new seismic data and drill two exploratory wells during a four year
exploration period.
LONG-TERM REVOLVING CREDIT FACILITY
On March 30, 1995, the Company signed a $65 million bank revolving credit
facility. Borrowings bear interest at various rates either based on prime or
the London Interbank Offered Rate and mature on September 30, 1996. The
facility is secured by the Company's marketable securities portfolio and
Crusader common stock owned by the Company. As of June 30, 1995, the Company
had borrowed $59.7 million and issued a letter of credit for $2.8 million
under the facility.
SALE OF SARACEN MINERALS
In March 1995, Crusader Ltd. ("Crusader"), a 49.9% affiliate of the Company,
completed the sale of Saracen Minerals for proceeds of $14.3 million. This
sale resulted in a net gain to the Company of approximately $3.8 million.
<PAGE>
FORWARD SALE OF COLOMBIAN OIL PRODUCTION
On May 26, 1995, the Company sold 10.4 million barrels of oil in a forward oil
sale. Under the terms of the sale, the Company received approximately $87
million of the approximately $124 million net proceeds, and is entitled to
receive substantially all of the remaining proceeds (now held in various
interest-bearing reserve accounts) when the Company's Cusiana and Cupiagua
fields project in Colombia becomes self-financing, which is expected in 1997,
and when certain other conditions are met. The proceeds held in
interest-bearing reserve accounts have been recorded as long-term receivables.
The Company has recorded the net proceeds as deferred income and will
recognize such revenue when the barrels are delivered during a five-year
period beginning in June 1995. The volumes sold in the forward oil sale
represent approximately 15% of the Company's currently projected Cusiana and
Cupiagua production over the five-year period.
The oil was sold to an unrelated entity. Morgan Guaranty Trust Company of New
York ("Morgan Guaranty") has agreed to purchase the oil delivered by the
Company to the unrelated entity at a fixed price.
In order to accommodate efficient marketing of the oil, the Company has agreed
to purchase such oil from Morgan Guaranty at a price per barrel equal to the
then current market price of West Texas Intermediate crude ("WTI") minus
$2.50. The Company intends to market the oil purchased from Morgan Guaranty
together with the Company's other Colombian production.
Morgan Guaranty also agreed to purchase up to $40 million of additional
production on a forward sale basis in the event that the Company is otherwise
unable to meet its cash call obligations in respect of the Cusiana and
Cupiagua fields project. The number of barrels would be determined based on a
formula intended to reflect their fair market value. The Company does not
expect, however, to sell any production under this agreement.
The purchase prices and other terms of the transaction were determined by
arm's-length negotiations among the Company, J.P. Morgan Securities Inc.,
Morgan Guaranty and the unrelated entity. The prices reflect the various
parties' mutual agreement as to present fair market value of the barrels of
oil to be delivered, taking into account such factors as quality relative to
WTI, transportation costs and timing of deliveries.
In anticipation of entering into the forward oil sale, the Company entered
into five year commodity swap agreements in April and May 1995, to hedge price
risk associated with the portion of the Company's oil production in Colombia
expected to be sold in the forward oil sale. Sales of the Company's Colombian
production are priced with reference to WTI. The swap agreements, which were
entered into with a counterparty with a "AAA" credit rating, fixed a WTI price
benchmark of $18.42 per barrel on approximately 10.4 million barrels.
Simultaneously, the Company purchased from the same institution call options
to retain the ability to benefit from future WTI price increases above $20.42
per barrel. The volumes and expiration dates on the call options coincide
with the volumes and delivery dates under the swap agreements.
Prior to completion of the forward oil sale, the swap and call agreements had
been accounted for as hedging transactions. Upon completion of the forward
oil sale, as a result of which the swap agreements were superseded, the call
options were recorded as a separate investment at their then fair market value
of $9.3 million. As a result of this accounting treatment, fluctuations in
the value of the call options will affect other income as non-cash
adjustments.
SALE OF TRITON FRANCE
On August 18, 1995, the Company sold Triton France S. A. through which it held
its interest in the Villeperdue field. The Company received net proceeds of
approximately $16 million and recorded a net gain of $3.5 million.
LAWSUIT SETTLEMENTS
In March 1995 and May 1995, the Company received proceeds of $1.9 million and
$5.3 million, respectively, as settlement in two lawsuits.
EXPLORATION CONTRACT IN COLOMBIA
In June 1995, the company signed the Guayabo and Las Amelias Association
Contract covering a contiguous area of approximately 1.7 million acres in
Colombia. The area is located approximately 150 kilometers north of Bogota
and 140 kilometers northwest of the Fields, and its northern edge lies
immediately south of the El Pinal block.
<PAGE>
23. QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIRST SECOND ONE
TRANSITION PERIOD ENDED QUARTER QUARTER MONTH
December 31, 1994:
Sales and other operating revenues $ 9,758 $ 7,932 $ 3,046
Gross profit (loss) 112 (38) (23)
Net earnings (loss) (8,173) (11,100) (8,435)
Net earnings (loss) per common share (0.23) (0.33) (0.24)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
QUARTER
FISCAL YEARS ENDED FIRST SECOND THIRD FOURTH
May 31, 1994:
Sales and other operating revenues $ 18,474 $ 10,129 $ 6,962 $ 7,643
Gross loss (11,419) (13,087) (17,652) (7,780)
Net earnings (loss) 35,078 (11,237) (19,985) (13,197)
Net earnings (loss) per common share 1.01 (0.32) (0.57) (0.38)
May 31, 1993:
Sales and other operating revenues $ 22,274 $ 19,475 $ 22,274 $ 20,391
Gross profit (loss) 2,902 (3,569) (95,039) (5,140)
Earnings (loss) before cumulative
effect of accounting change 1,134 (5,908) (65,123) (23,655)
Net earnings (loss) 5,151 (5,908) (65,123) (23,655)
Earnings (loss) per common share:
Before cumulative effect of
accounting change 0.03 (0.17) (1.90) (0.69)
Net earnings (loss) 0.15 (0.17) (1.90) (0.69)
</TABLE>
Gross profit (loss) consists of sales and other operating revenues less
operating expenses, depreciation, depletion and amortization and writedowns
pertaining to operating assets.
In the month ended December 31, 1994, the Company recorded equity in losses of
Crusader of $4.2 million due principally to adjustments to deferred taxes and
writedowns of unproved oil and gas properties in the Philippines and
Argentina.
<PAGE>
In the fourth quarter of the year ended May 31, 1994, the Company recorded
writedowns of $6.8 million, primarily resulting from application of the SEC
ceiling limitation caused by a downward revision in the estimated reserves for
France. The Company also recognized a gain of $1.5 million on the sale of its
investment in Aero.
In the fourth quarter of the year ended May 31, 1993, the Company recorded a
loss provision of $16.1 million on the discontinued operations of the
wholesale fuel segment. The Company also recorded a $25 million income tax
benefit, of which $3.9 million was booked to additional paid-in capital, with
the adoption of SFAS No. 109 due to the then pending sale of Triton Canada,
the sale of certain domestic properties and anticipated income from Colombian
operations.
On January 1, 1995, the Company began operating on a calendar year. Quarterly
results restated for calendar 1994 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
QUARTER
FIRST SECOND THIRD FOURTH
December 31, 1994:
Sales and other operating revenues $ 6,923 $ 8,950 $ 8,637 $$ $ 8,442
Gross profit (loss) (8,662) (7,914) (27) (68)
Net earnings (loss) (14,058) (13,826) (7,870) (16,947)
Net earnings (loss) per common share (0.40) (0.40) (0.24) (0.48)
</TABLE>
In the fourth calendar quarter of 1994, the Company recorded equity in losses
of Crusader of $4.5 million due principally to adjustments to deferred taxes
and writedowns of unproved oil and gas properties in the Philippines and
Argentina.
24. OIL AND GAS DATA
The following tables provide additional information about the Company's oil
and gas exploration and production activities. Equity affiliate amounts
reflect only the Company's proportionate interest in Crusader.
<PAGE>
RESULTS OF OPERATIONS
The results of operations for oil and gas producing activities, considering
direct costs only, follow:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
UNITED TOTAL
COLOMBIA FRANCE INDONESIA STATES CANADA OTHER WORLDWIDE
December 31, 1994:
Revenues $ 6,249 $ 9,179 $ 3,174 $ 1,919 $ --- $ --- $ 20,521
Costs:
Production costs 4,290 5,784 2,054 144 --- --- 12,272
Depletion and depreciation 1,184 2,132 298 1,189 --- --- 4,803
Writedown of assets --- --- --- 984 --- --- 984
Income taxes 74 421 --- --- --- --- 495
Results of operations $ 701 $ 842 $ 822 $ (398) $ --- $ --- $ 1,967
May 31, 1994:
Revenues $ 5,911 $ 17,252 $ 7,186 $ 4,700 $ 5,961 $ 229 $ 41,239
Costs:
Production costs 4,230 10,347 6,413 2,436 2,919 281 26,626
Depletion 917 9,443 1,363 2,290 2,482 --- 16,495
Writedown of assets --- 43,201 922 --- --- 251 44,374
Income taxes 85 --- --- --- 466 --- 551
Results of operations $ 679 $(45,739) $ (1,512) $ (26) $ 94 $ (303) $ (46,807)
May 31, 1993:
Revenues $ 3,474 $ 30,574 $ 10,449 $ 14,032 $20,423 $ 105 $ 79,057
Costs:
Production costs 2,411 13,494 5,984 2,471 10,431 97 34,888
Depletion 544 22,287 4,250 6,587 8,633 --- 42,301
Writedown of assets --- 66,765 8,734 879 --- 14,793 91,171
Income taxes 195 --- --- --- 1,466 --- 1,661
Results of operations $ 324 $(71,972) $ (8,519) $ 4,095 $ (107) $(14,785) $ (90,964)
May 31, 1992:
Revenues $ --- $ 37,515 $ 12,146 $ 13,423 $21,042 $ --- $ 84,126
Costs:
Production costs --- 15,034 4,501 2,857 11,874 --- 34,266
Depletion --- 14,314 4,445 8,570 9,155 --- 36,484
Writedown of assets --- --- 13,672 2,169 6,824 13,113 35,778
Income taxes --- 2,102 --- 558 --- --- 2,660
Results of operations $ --- $ 6,065 $ (10,472) $ (731) $(6,811) $(13,113) $ (25,062)
</TABLE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN TABLES IN THOUSANDS, EXCEPT FOR SHARE DATA)
The Company's equity share of Crusader's results of operations for oil and
gas producing activities follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
UNITED
AUSTRALIA CANADA STATES OTHER TOTAL
December 31, 1994 $ 1,339 $ 243 $ 36 $(1,662) $ (44)
May 31, 1994 $ 2,904 $ 712 $(1,270) $ --- $2,346
May 31, 1993 $ 3,771 $ 1,259 $(3,338) $ --- $1,692
May 31, 1992 $ 2,856 $ 352 $ 71 $ --- $3,279
</TABLE>
COSTS INCURRED AND CAPITALIZED COSTS
The costs incurred in oil and gas acquisition, exploration and
development activities and related capitalized costs follow:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MALAYSIA- UNITED TOTAL
COLOMBIA THAILAND FRANCE INDONESIA STATES CANADA OTHER WORLDWIDE
December 31, 1994:
Costs incurred:
Property acquisition $ 9,824 $ --- $ --- $ --- $ --- $ --- $ 1,058 $ 10,882
Exploration 21,691 5,151 79 --- --- --- 7,088 34,009
Development 31,892 --- 5 1 1 --- --- 31,899
Depletion per equivalent
barrel of production 1.77 --- 4.15 1.60 7.04 --- --- 3.37
Cost of properties at period-end:
Unevaluated $ 38,000 $ 20,334 $ 281 $ --- $ 9,202 $ --- $31,513 $ 99,330
Evaluated $ 175,281 $ --- $265,284 $ 44,594 $ 190,396 $ --- $ 8,667 $ 684,222
Support equipment and
facilities $ 78,601 $ --- $ --- $ --- $ --- $ --- $ --- $ 78,601
Accumulated depletion and
depreciation at period-end $ 2,645 $ --- $244,264 $ 44,097 $ 178,623 $ --- $ 8,667 $ 478,296
</TABLE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN TABLES IN THOUSANDS, EXCEPT FOR SHARE DATA)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MALAYSIA- UNITED TOTAL
COLOMBIA THAILAND FRANCE INDONESIA STATES CANADA OTHER WORLDWIDE
May 31, 1994:
Costs incurred:
Property acquisition $ --- $ 750 $ --- $ --- $ --- $ 94 $ --- $ 844
Exploration 24,865 4,775 205 --- --- 260 12,366 42,471
Development 29,833 --- 3,575 1,050 300 2,022 --- 36,780
Depletion per equivalent
barrel of production 1.96 --- 8.97 3.09 6.58 3.60 --- 5.47
Cost of properties at period-end:
Unevaluated $ 47,833 $ 15,183 $ 212 $ --- $ 10,094 $ --- $23,847 $ 97,169
Evaluated $ 118,215 $ --- $266,231 $ 47,677 $ 190,033 $ --- $ 7,715 $ 629,871
Support equipment and
facilities $ 45,688 $ --- $ --- $ --- $ --- $ --- $ --- $ 45,688
Accumulated depletion
at period-end $ 1,461 $ --- $243,084 $ 46,560 $ 176,450 $ --- $ 7,715 $ 475,270
May 31, 1993:
Costs incurred:
Property acquisition $ --- $ --- $ --- $ --- $ --- $ 205 $ 2,781 $ 2,986
Exploration 27,115 2,431 1,677 --- --- 1,487 3,647 36,357
Development 27,988 --- 2,512 1,417 348 5,703 --- 37,968
Depletion per equivalent
barrel of production 2.48 --- 15.19 7.93 6.81 3.24 --- 7.22
Cost of properties at period-end:
Unevaluated $ 33,460 $ 9,658 $ 164 $ --- $ 10,514 $ 1,321 $11,483 $ 66,600
Evaluated $ 77,890 $ --- $264,004 $ 46,246 $ 202,874 $119,393 $15,589 $ 725,996
Support equipment and
facilities $ 24,983 $ --- $ --- $ --- $ --- $ --- $ --- $ 24,983
Accumulated depletion
at period-end $ 544 $ --- $190,440 $ 43,983 $ 174,419 $ 76,940 $15,589 $ 501,915
May 31, 1992:
Costs incurred:
Property acquisition $ --- $ --- $ --- $ --- $ --- $ 238 $ 1,579 $ 1,817
Exploration 20,231 1,603 11,184 --- 1,191 3,287 10,629 48,125
Development 9,224 --- 9,683 7,090 2,767 1,158 --- 29,922
Depletion per equivalent
barrel of production --- --- 7.91 7.24 7.68 3.20 --- 5.70
Cost of properties at period-end:
Unevaluated $ 24,069 $ 6,950 $ 9,511 $ 2,428 $ 10,605 $ 1,907 $20,411 $ 75,881
Evaluated $ 33,846 $ --- $256,853 $ 42,342 $ 202,435 $118,199 $ 4,626 $ 658,301
Accumulated depletion
at period-end $ --- $ --- $107,774 $ 30,951 $ 166,950 $ 72,390 $ 4,626 $ 382,691
</TABLE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)
A summary of costs excluded from depletion at December 31, 1994 by year
incurred follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
MAY 31,
DEC. 31, MAY 31, MAY 31, MAY 31, 1991
TOTAL 1994 1994 1993 1992 AND PRIOR
Property acquisition $ 6,854 $ 921 $ 750 $ 1,950 $ --- $ 3,233
Exploration 62,823 25,662 16,710 4,134 4,271 12,046
Capitalized interest 29,653 8,347 16,863 1,888 945 1,610
$
Total worldwide $99,330 $ 34,930 $ 34,323 $ 7,972 $ 5,216 $ 16,889
</TABLE>
The Company has significant property acquisition and exploration costs that
have not been evaluated and are not currently subject to depletion. At this
time the Company is unable to predict either the timing of the inclusion of
those costs and the related oil and gas reserves in its depletion computation
or their potential future impact on depletion rates. Drilling or other
exploration activities are being conducted in each of these cost centers.
The Company's equity share of costs incurred by Crusader follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
UNITED
AUSTRALIA CANADA STATES OTHER TOTAL
Cost of property acquisition,
exploration and development:
December 31, 1994 $ 3,557 $ 313 $ 26 $1,028 $ 4,924
May 31, 1994 $ 2,955 $ 1,099 $ 1,687 $ --- $ 5,741
May 31, 1993 $ 1,631 $ 1,153 $ 807 $ --- $ 3,591
May 31, 1992 $ 3,740 $ 680 $ 4,110 $ 118 $ 8,648
Net capitalized costs:
December 31, 1994 $ 28,987 $ 3,889 $ --- $1,340 $34,216
May 31, 1994 $ 27,001 $ 4,395 $ 3,750 $ --- $35,146
May 31, 1993 $ 26,336 $ 4,374 $ 2,846 $ --- $33,556
May 31, 1992 $ 30,851 $ 3,984 $ 6,337 $ 430 $41,602
</TABLE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN TABLES IN THOUSANDS, EXCEPT FOR SHARE DATA)
OIL AND GAS RESERVE DATA (UNAUDITED)
The following tables present the Company's estimates of its proved oil and
gas reserves. These estimates were prepared by the Company's independent and
internal petroleum reservoir engineers. The Company emphasizes that reserve
estimates are inherently imprecise and are expected to change as future
information becomes available. Oil reserves are stated in thousands of
barrels and gas reserves are stated in millions of cubic feet. The largest
portion of the Company's reserves relate to the SDLA, Tauramena and Rio
Chitamena Association Contract Areas in Colombia. The Company had a 20% and
50% interest in the reserves of SDLA and Tauramena, respectively, for 1992 and
1991. The reserves for 1994 and 1993 reflect the equalization of these
interests to 24% and Ecopetrol's decision to exercise its contractual right to
acquire 50% of the working interest through the declaration of commerciality.
The Company consequently has a 9.6% working interest in these areas after 20%
governmental royalties.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COLOMBIA FRANCE INDONESIA UNITED STATES CANADA
OIL GAS OIL OIL OIL GAS OIL GAS
Proved developed and
undeveloped reserves:
As of May 31, 1991 13,952 84,110 28,352 3,660 2,405 22,072 2,035 99,046
Revisions --- (84,110) (2,414) (1,322) 449 (1,148) 104 (6,170)
Sales --- --- --- --- (144) (157) --- ---
Extensions and discoveries 15,284 1,530 --- --- --- --- 130 2,747
Production --- --- (1,809) (614) (421) (4,172) (251) (15,675)
As of May 31, 1992 29,236 1,530 24,129 1,724 2,289 16,595 2,018 79,948
Revisions 5,398 14,720 (14,574) (237) 57 8,271 197 6,332
Purchases of minerals in place --- --- 101 --- --- --- --- ---
Extensions and discoveries 51,801 --- --- --- 3 104 750 6,498
Production (219) --- (1,467) (536) (397) (3,421) (279) (14,329)
As of May 31, 1993 86,216 16,250 8,189 951 1,952 21,549 2,686 78,449
Revisions 3,682 --- (2,177) 165 23 (1,644) --- ---
Sales --- --- (502) --- (1,171) (11,426) (2,584) (74,928)
Extensions and discoveries 3,173 --- --- --- --- --- --- ---
Production (467) --- (1,053) (441) (156) (1,150) (102) (3,521)
As of May 31, 1994 92,604 16,250 4,457 675 648 7,329 --- ---
Revisions 10,113 (1,529) 2,301 (87) 14 486 --- ---
Sales --- --- --- --- --- --- --- ---
Purchases of minerals in place 2,111 --- --- --- --- --- --- ---
Production (435) --- (514) (186) (66) (618) --- ---
As of December 31, 1994 104,393 14,721 6,244 402 596 7,197 --- ---
<S> <C> <C> <C>
ARGENTINA TOTAL WORLDWIDE
OIL OIL GAS
Proved developed and
undeveloped reserves:
As of May 31, 1991 --- 50,404 205,228
Revisions --- (3,183) (91,428)
Sales --- (144) (157)
Extensions and discoveries --- 15,414 4,277
Production --- (3,095) (19,847)
As of May 31, 1992 --- 59,396 98,073
Revisions 6 (9,153) 29,323
Purchases of minerals in place --- 101 ---
Extensions and discoveries --- 52,554 6,602
Production (6) (2,904) (17,750)
As of May 31, 1993 --- 99,994 116,248
Revisions 18 1,711 (1,644)
Sales --- (4,257) (86,354)
Extensions and discoveries --- 3,173 ---
Production (18) (2,237) (4,671)
As of May 31, 1994 --- 98,384 23,579
Revisions --- 12,341 (1,043)
Sales --- --- ---
Purchases of minerals in place --- 2,111 ---
Production --- (1,201) (618)
As of December 31, 1994 --- 111,635 21,918
</TABLE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN TABLES IN THOUSANDS, EXCEPT FOR SHARE DATA)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COLOMBIA FRANCE INDONESIA UNITED STATES CANADA ARGENTINA
OIL GAS OIL OIL OIL GAS OIL GAS OIL
Proved developed reserves at:
May 31, 1992 --- --- 7,468 1,724 2,138 16,396 2,018 79,948 ---
May 31, 1993 --- --- 8,189 951 1,945 21,540 2,516 78,449 ---
May 31, 1994 1,237 --- 4,457 675 648 7,329 --- --- ---
December 31, 1994 47,789 14,721 6,244 402 596 7,197 --- --- ---
<S> <C> <C>
TOTAL WORLDWIDE
OIL GAS
Proved developed reserves at:
May 31, 1992 13,348 96,344
May 31, 1993 13,601 99,989
May 31, 1994 7,017 7,329
December 31, 1994 55,031 21,918
</TABLE>
The Company's proportional equity interest in Crusader's estimated proved
developed and undeveloped oil and gas reserves is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AUSTRALIA CANADA UNITED STATES TOTAL
OIL GAS OIL GAS OIL GAS OIL GAS
May 31, 1992 1,464 43,923 1,069 2,766 115 308 2,648 46,997
May 31, 1993 2,803 39,646 1,108 2,615 83 167 3,994 42,428
May 31, 1994 2,574 40,174 963 2,790 48 122 3,585 43,086
December 31, 1994 3,163 59,115 823 1,836 --- --- 3,986 60,951
</TABLE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN TABLES IN THOUSANDS, EXCEPT FOR SHARE DATA)
STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH INFLOWS AND CHANGES
THEREIN (UNAUDITED)
The following table presents a standardized measure of discounted future net
cash inflows relating to proved oil and gas reserves. Future cash inflows
were computed by applying year end prices of oil and gas relating to the
Company's proved reserves to the estimated year end quantities of those
reserves. Future price changes were considered only to the extent provided by
contractual agreements in existence at year end. Future production and
development costs were computed by estimating those expenditures expected to
occur in developing and producing the proved oil and gas reserves at the end
of the year, based on year end costs. Actual future cash inflows may vary
considerably and the standardized measure does not necessarily represent the
fair value of the Company's oil and gas reserves.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
UNITED TOTAL
COLOMBIA FRANCE INDONESIA STATES CANADA WORLDWIDE
December 31, 1994:
Future cash inflows $ 1,764,939 $105,523 $ 6,677 $20,072 $ --- $1,897,211
Future production and
development costs 440,227 59,558 5,645 1,845 --- 507,275
Future net cash inflows before
income taxes $ 1,324,712 $ 45,965 $ 1,032 $18,227 $ --- $1,389,936
Future net cash inflows before
income taxes discounted at 10%
per annum $ 594,061 $ 25,759 $ 974 $11,824 $ --- $ 632,618
Future income taxes discounted at
10% per annum 132,948 --- --- --- --- 132,948
Standardized measure of discounted
future net cash inflows $ 461,113 $ 25,759 $ 974 $11,824 $ --- $ 499,670
May 31, 1994:
Future cash inflows $ 1,591,448 $ 76,755 $ 10,278 $23,562 $ --- $1,702,043
Future production and
development costs 474,382 44,603 7,575 1,945 --- 528,505
Future net cash inflows before
income taxes $ 1,117,066 $ 32,152 $ 2,703 $21,617 $ --- $1,173,538
Future net cash inflows before
income taxes discounted at 10%
per annum $ $506,022 $ 23,147 $ 2,570 $14,008 $ --- $ 545,747
Future income taxes discounted at
10% per annum 150,537 --- --- --- --- 150,537
Standardized measure of discounted
future net cash inflows $ $355,485 $ 23,147 $ 2,570 $14,008 $ --- $ 395,210
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
UNITED TOTAL
COLOMBIA FRANCE INDONESIA STATES CANADA WORLDWIDE
May 31, 1993:
Future cash inflows $1,608,471 $163,367 $ 18,095 $70,347 $162,208 $2,022,488
Future production and
development costs 498,032 79,593 13,926 10,575 85,035 687,161
Future net cash inflows before
income taxes $1,110,439 $ 83,774 $ 4,169 $59,772 $ 77,173 $1,335,327
Future net cash inflows before
income taxes discounted at 10%
per annum $ 455,077 $ 54,594 $ 3,630 $38,693 $ 56,322 $ 608,316
Future income taxes discounted at
10% per annum 149,033 --- --- --- 7,801 156,834
Standardized measure of discounted
future net cash inflows $ 306,044 $ 54,594 $ 3,630 $38,693 $ 48,521 $ 451,482
May 31, 1992:
Future cash inflows $ 581,806 $527,701 $ 30,492 $63,978 $146,211 $1,350,188
Future production and
development costs 347,588 236,150 17,049 12,237 82,247 695,271
Future net cash inflows before
income taxes $ 234,218 $291,551 $ 13,443 $51,741 $ 63,964 $ 654,917
Future net cash inflows before
income taxes discounted at 10%
per annum $ 64,969 $160,581 $ 11,560 $35,485 $ 45,489 $ 318,084
Future income taxes discounted at
10% per annum 19,208 33,576 --- --- 2,921 55,705
Standardized measure of discounted
future net cash inflows $ 45,761 $127,005 $ 11,560 $35,485 $ 42,568 $ 262,379
</TABLE>
The Company's proportional equity interest in Crusader's standardized measure
of discounted future net cash inflows follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
UNITED
AUSTRALIA CANADA STATES TOTAL
December 31, 1994 $ 32,492 $ 3,424 $ --- $35,916
May 31, 1994 $ 35,306 $ 3,997 $ 526 $39,829
May 31, 1993 $ 35,939 $ 6,016 $ 1,175 $43,130
May 31, 1992 $ 31,549 $ 4,964 $ 1,701 $38,214
</TABLE>
<PAGE>
Changes in the standardized measure of discounted future net cash inflows
follow:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DEC. 31, MAY 31,
1994 1994 1993 1992
Total worldwide, excluding equity share:
Beginning of period $ 395,210 $451,482 $ 262,379 $ 281,664
Extensions, discoveries and improved recovery --- 16,521 276,834 35,959
Sales, net of production costs (8,249) (14,613) (44,169) (49,860)
Net change in prices and production costs (14,746) (54,143) (4,958) 91,844
Purchases of reserves 9,573 --- 674 ---
Sales of reserves --- (83,462) --- (936)
Revisions of quantity estimates 43,816 879 (58,019) (111,575)
Accretion of discount 31,835 60,831 31,809 34,617
Development and facilities costs incurred 45,152 57,485 62,951 29,922
Change in future development costs 3,695 (57,459) 19,228 (53,767)
Changes in production rates and other (24,205) 11,392 5,882 (4,284)
Net change in income taxes 17,589 6,297 (101,129) 8,795
End of period $ 499,670 $395,210 $ 451,482 $ 262,379
</TABLE>
At May 31, 1993 and 1992, $33.4 million and $61.4 million, respectively, of
the consolidated standardized measure of discounted future net cash inflows
was attributable to minority interests in consolidated subsidiaries. The
Company's weighted average oil price per barrel during the seven months ended
December 31, 1994, and at December 31, 1994, was $16.25 and $16.46,
respectively.
SCHEDULE II
TRITON ENERGY CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING CHARGED TO OTHER AT CLOSE
CLASSIFICATIONS OF YEAR EARNINGS ACCOUNTS DEDUCTIONS OF YEAR
----------------------------
Year ended May 31, 1992 -
Allowance for doubtful
receivables $ 2,632 $ 2,648 $ 14 $ (516) $ 4,778
Year ended May 31, 1993 -
Allowance for doubtful
receivables $ 4,778 $ 964 $ --- $ (4,580) $ 1,162
Allowance for deferred
tax asset $ --- $ 21,080 $ 51,746 $ --- $ 72,826
Year ended May 31, 1994 -
Allowance for doubtful
receivables, excluding
discontinued operations $ 1,162 $ (149) $ 4 $ (144) $ 873
Allowance for deferred
tax asset $ 72,826 $ 1,027 $ --- $ --- $ 73,853
Period ended Dec 31, 1994 -
Allowance for doubtful
receivables $ 873 $ 19 $ 20 $ (15) $ 897
Allowance for deferred
tax asset $ 73,853 $ 28,336 $ --- $ --- $ 102,189
</TABLE>
___________________
Note - Deductions in the year ended May 31, 1993 relate primarily to
discontinued operations.
<PAGE>
