-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, srBXC07ujky57tLa7LhPojPS5iM8nvnyyK344eUFawGVTHhUQiS0ytjcnU4se9Lq d+ZMDYbYgST9niv8C0K7EA== 0000950129-94-000541.txt : 19940706 0000950129-94-000541.hdr.sgml : 19940706 ACCESSION NUMBER: 0000950129-94-000541 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940422 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19940630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NOBLE DRILLING CORP CENTRAL INDEX KEY: 0000777201 STANDARD INDUSTRIAL CLASSIFICATION: 1381 IRS NUMBER: 730374541 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-13857 FILM NUMBER: 94537391 BUSINESS ADDRESS: STREET 1: 10370 RICHMOND AVE STE 400 CITY: HOUSTON STATE: TX ZIP: 77042 BUSINESS PHONE: 7139743131 MAIL ADDRESS: STREET 2: 10370 RICHMOND AVE STE 400 CITY: HOUSTON STATE: TX ZIP: 77042 8-K/A 1 FORM 8-K/A -- NOBLE DRILLING CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT AMENDMENT NO. 1 Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): APRIL 22, 1994 NOBLE DRILLING CORPORATION (Exact name of registrant as specified in its charter) Delaware 0-13857 73-0374541 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 10370 Richmond Avenue, Suite 400, Houston, Texas 77042 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (713) 974-3131 2 AMENDMENT NO. 1 Amend Item 7. Financial Statements and Exhibits by deleting such item in its entirety and substituting therefor the following: (a) Financial Statements of Businesses Acquired Financial Statements of Triton Engineering Services Company ("Triton") filed as a part of this report: Audited Financial Statements: Report of Independent Public Accountants Consolidated Balance Sheets at December 31, 1993 and 1992 Consolidated Statements of Income for the years ended December 31, 1993 and 1992 Consolidated Statements of Stockholders' Equity for the years ended December 31, 1993 and 1992 Statements of Consolidated Cash Flows for the years ended December 31, 1993 and 1992 Notes to Consolidated Financial Statements Unaudited Interim Financial Statements: Consolidated Balance Sheet at March 31, 1994 Consolidated Statement of Income for the quarter ended March 31, 1994 Statement of Consolidated Cash Flows for the quarter ended March 31, 1994 Notes to Consolidated Financial Statements (b) Pro Forma Financial Information Unaudited Pro Forma Condensed Consolidated Balance Sheet and Notes as of March 31, 1994 Unaudited Pro Forma Condensed Consolidated Statements of Operations and Notes for the quarter ended March 31, 1994 and the year ended December 31, 1993 (c) Exhibits Exhibit 2.1 - Stock Purchase Agreement dated April 22, 1994 among Joseph E. Beall ("Beall"), George H. Bruce ("Bruce"), Triton and Noble Drilling Corporation (the "Registrant") (filed as Exhibit 2.1 to the Registrant's Form 8-K dated May 6, 1994 and incorporated herein by reference). Exhibit 10.1 - Registration Agreement dated April 22, 1994 between the Registrant and Beall (filed as Exhibit 10.1 to the Registrant's Form 8-K dated May 6, 1994 and incorporated herein by reference). 3 Exhibit 10.2 - Employment Agreement dated April 22, 1994 between Triton and Beall (filed as Exhibit 10.2 to the Registrant's Form 8-K dated May 6, 1994 and incorporated herein by reference). Exhibit 10.3 - Lease Indemnity Agreement dated April 22, 1994 among Beall, Triton, 1201 Dairy Ashford Ltd. and the Registrant (filed as Exhibit 10.3 to the Registrant's Form 8-K dated May 6, 1994 and incorporated herein by reference). Exhibit 99.1 - News release dated April 25, 1994 (filed as Exhibit 99.1 to the Registrant's Form 8-K dated May 6, 1994 and incorporated herein by reference). 4 NOBLE DRILLING CORPORATION AND SUBSIDIARIES INDEX TO FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION DESCRIPTION PAGE - - ----------------------------------------------------- ---- ITEM 7.(A) AUDITED FINANCIAL STATEMENTS: Report of Independent Public Accountants 5 Consolidated Balance Sheets at December 31, 1993 and 1992 6 Consolidated Statements of Income for the years ended December 31, 1993 and 1992 7 Consolidated Statements of Stockholders' Equity for the years ended December 31, 1993 and 1992 8 Statements of Consolidated Cash Flows for the years ended December 31, 1993 and 1992 9 Notes to Consolidated Financial Statements 10 UNAUDITED INTERIM FINANCIAL STATEMENTS: Consolidated Balance Sheet at March 31, 1994 20 Consolidated Statement of Income for the quarter ended March 31, 1994 21 Statement of Consolidated Cash Flows for the quarter ended March 31, 1994 22 Notes to Consolidated Financial Statements 23 ITEM 7.(B) PRO FORMA FINANCIAL INFORMATION: Unaudited Pro Forma Condensed Consolidated Balance Sheet and Notes as of March 31, 1994 25 Unaudited Pro Forma Condensed Consolidated Statement of Operations and Notes for the quarter ended March 31, 1994 26 Unaudited Pro Forma Condensed Consolidated Statement of Operations and Notes for the year ended December 31, 1993 27 5 (LOGO) KPMG Peat Marwick Certified Public Accountants 700 Louisiana Telephone 713 224 4262 Telecopier 713 224 4566 P.O. Box 4545 Telex 286705 PMMT UR (RCA) Houston, TX 77210-4545 Independent Auditors' Report The Board of Directors and Stockholders Triton Engineering Services Company: We have audited the accompanying consolidated balance sheets of Triton Engineering Services Company and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of income, stockholders' equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits 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 audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Triton Engineering Services Company and subsidiaries at December 31, 1993 and 1992, and the results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles. As discussed in Notes 2 and 6 to the consolidated financial statements, the Company changed its method of accounting for income taxes to adopt the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," as of January 1, 1993. As discussed in Note 14 to the consolidated financial statements, the Company's Board of Directors have executed a letter of intent to sell all of the outstanding shares of common stock of the Company. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result from the sale. /s/ KPGM PEAT MARWICK Houston, Texas March 4,1994 Member Firm of (LOGO) Klynveld Peat Marwick Goerdeler 6 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 1993 and 1992
Assets 1993 1992 ------ ---- ---- Current assets: Cash and cash equivalents $ 15,030,286 1,055,790 Accounts receivable: Trade, net of allowance of $290,000 in 1993 and $-0- in 1992 (note 13) 42,498,255 8,227,132 Unbilled 1,928,760 409,651 Other (note 12) 2,780,444 67,319 Inventory 3,340,045 3,647,470 Prepaid expenses 900,947 1,418,979 Costs of uncompleted contracts in excess of related billings (note 2) 1,108,994 1,362,591 ------------ ---------- Total current assets 67,587,731 16,188,932 ------------ ---------- Property and equipment: Drilling equipment 4,737,784 4,696,393 Furniture, fixtures and equipment 1,615,554 1,479,355 Leasehold improvements 333,684 333,684 Oil and gas properties 1,183,021 1,795,891 ------------ ---------- 7,870,043 8,305,323 Less accumulated depreciation and depletion 5,351,755 4,933,755 ------------ ---------- 2,518,288 3,371,568 ------------ ---------- Due from stockholder (note 9) 198,303 98,303 Assets held for sale (note 2) -- 645,094 Deferred income taxes (note 6) 574,070 -- Investment in assets of unconsolidated affiliates (notes 3 and 4) 1,292,576 12,624,812 ------------ ---------- $ 72,170,968 32,928,709 ------------ ---------- ------------ ---------- Liabilities and Stockholders' Equity ------------------------------------ Current liabilities: Accounts payable 33,309,160 6,670,521 Billings of uncompleted contracts in excess of related costs 2,576,012 -- Accrued liabilities 4,292,367 5,942,572 Accrued loss on uncompleted contract (note 14) 1,466,999 -- Income taxes payable (note 6) 3,427,603 1,794,560 Deferred income taxes (note 6) 3,236,425 2,779,215 Note payable 306,672 -- Note payable to bank (note 5) 1,500,000 -- ------------ ---------- Total current liabilities 50,115,238 17,186,868 ------------ ---------- Deferred income taxes (note 6) -- 844,333 ------------ ---------- Minority interest in joint venture (note 3) 6,899,556 -- ------------ ---------- Total liabilities 57,014,794 18,031,201 ------------ ---------- Stockholders' equity (notes 8 and 10): Common stock, no par value. Authorized 2,000,000 shares; 11,971 shares issued 11,971 11,971 Retained earnings 19,450,653 17,877,987 Treasury stock, 6,791 and 6,346 common shares, at cost, at December 31, 1993 and 1992, respectively (4,306,450) (2,992,450) ------------ ---------- Total stockholders' equity 15,156,174 14,897,508 Commitments and contingencies (notes 5, 7, 8, 11 and 12) ------------ ---------- $ 72,170,968 32,928,709 ------------ ---------- ------------ ----------
See accompanying notes to consolidated financial statements. 7 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME For the years ended December 31, 1993 and 1992
1993 1992 ---- ---- Revenues: Turnkey drilling operations (note 3) $ 89,407,120 18,799,852 Daywork services 20,595,769 1,215,074 Engineering services 7,811,893 8,975,776 Supply services and other 6,018,986 8,605,793 ------------ ---------- 123,833,768 37,596,495 Direct expenses (notes 3, 12 and 14) 103,128,414 26,066,217 ------------ ---------- Gross profit 20,705,354 11,530,278 Operating expenses 12,374,158 10,474,742 ------------ ---------- Operating income 8,331,196 1,055,536 ------------ ---------- Other income (expense): Equity in net income (loss) of unconsolidated affiliates: Joint venture (Mexican turnkey drilling contracts) (note 3) -- 4,577,382 Partnership (1201 Dairy Ashford, Ltd.) (note 4) (94,336) (93,131) Loss on permanent impairment of investment in partnership (note 4) -- (334,162) Interest income 293,389 303,005 Interest expense (335,810) (45,299) Gain on sale of property and equipment 91,068 305,288 Other 209,836 453,483 ------------ ---------- 164,147 5,166,566 ------------ ---------- Income before income tax provision and minority interest 8,495,343 6,222,102 Income tax provision (note 6) 2,222,007 4,225,367 Minority interest (note 3) 4,766,955 -- ------------ ---------- Income before cumulative effect of accounting change 1,506,381 1,996,735 Cumulative effect of change in accounting for income taxes (notes 2 and 6) 66,285 -- ------------ ---------- Net income $ 1,572,666 1,996,735 ------------ ---------- ------------ ----------
See accompanying notes to consolidated financial statements. 8 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the years ended December 31, 1993 and 1992
Shares of common Total stock Common Retained Treasury stockholders' outstanding stock earnings stock equity ----------- ------ -------- -------- ------------- Balance, January 1, 1992 5,625 $ 11,971 15,881,252 (2,992,450) 12,900,773 Net income -- -- 1,996,735 -- 1,996,735 ----- -------- ---------- ---------- ---------- Balance, December 31, 1992 5,625 11,971 17,877,987 (2,992,450) 14,897,508 ----- -------- ---------- ---------- ---------- Purchase of treasury stock (note 8) (445) -- -- (1,314,000) (1,314,000) Net income -- -- 1,572,666 -- 1,572,666 ----- -------- ---------- ---------- ---------- Balance, December 31, 1993 5,180 $ 11,971 19,450,653 (4,306,450) 15,156,174 ----- -------- ---------- ---------- ---------- ----- -------- ---------- ---------- ----------
See accompanying notes to consolidated financial statements. 9 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS For the years ended December 31, 1993 and 1992
1993 1992 ---- ---- Cash flows from operating activities: Net income $ 1,572,666 1,996,735 Adjustments to reconcile net income to net cash provided by operating activities: Allowance for doubtful accounts 290,000 -- Minority interest 4,766,955 -- Depreciation, depletion and amortization 1,169,943 1,709,551 Loss on uncompleted contract 1,466,999 Deferred income taxes (961,193) 1,874,569 Equity in net income of unconsolidated affiliates 94,336 (4,150,089) Gain on sale of property and equipment (91,068) (305,288) Changes in assets and liabilities: Decrease (increase) in: Accounts receivable (4,046,608) 1,012,761 Inventory 632,159 (95,467) Prepaid expenses 518,032 (87,234) Due from stockholder (100,000) (98,303) Costs of uncompleted contracts in excess of related billings 253,597 (1,362,591) Increase (decrease) in: Accounts payable 22,318,903 3,660,655 Accrued liabilities (14,922,053) 3,359,988 Billings of uncompleted contracts in excess of related costs 2,576,012 -- Income taxes payable 1,633,043 487,091 ------------ ---------- Net cash provided by operating activities 17,171,723 8,002,378 ------------ ---------- Cash flows used in investing activities: Advances to and on behalf of joint venture -- (6,616,518) Reimbursement of advances to joint venturer (1,383,482) -- Distribution to joint venturer (2,444,780) -- Repayments of advances made to partnership 44,000 114,940 Property and equipment additions (687,831) (892,919) Proceeds from sale of property and equipment 782,194 547,495 ------------ ---------- Net cash used in investing activities (3,689,899) (6,847,002) ------------ ---------- Cash flows provided by (used in) financing activities: Proceeds from note payable to bank 1,500,000 -- Repayments of note payable (93,328) -- Repayment of subordinated debt -- (5,000,000) Purchase of treasury stock (914,000) -- ------------ ---------- Net cash provided by (used in) financing activities 492,672 (5,000,000) ------------ ---------- Net increase (decrease) in cash and cash equivalents 13,974,496 (3,844,624) Cash and cash equivalents, beginning of year 1,055,790 4,900,414 ------------ ---------- Cash and cash equivalents, end of year $ 15,030,286 1,055,790 ------------ ---------- ------------ ---------- Interest paid $ 335,810 89,110 ------------ ---------- ------------ ---------- Income taxes paid $ 1,483,169 1,863,709 ------------ ---------- ------------ ----------
See accompanying notes to consolidated financial statements. 10 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1993 and 1992 (1) CONSOLIDATED ENTITIES Triton Engineering Services Company and its wholly-owned subsidiaries ("Triton" or the "Company") provide specialized technical services to the upstream segment of the petroleum industry. The Company drills oil and gas wells worldwide, onshore and offshore, for clients on a fixed-fee turnkey basis, providing all engineering, equipment, materials, services and management required. In addition, it provides project management, engineering for drilling and production projects, daywork services, operations supervision, consulting and supply services. The Company's subsidiaries are: Triton USA, Inc. Triton International, Inc. Triton Tool and Supply, Inc. Triton International Limited Triton Engineering Services Company, S.A. Triton Engineering Services Company Limited Triton Turn-Key, Inc. Threadneedle Oil Company 1201 Dairy Ashford, Inc. Triton/Faja de Oro Joint Venture (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. The Company's 50% interest in Triton/Faja de Oro Joint Venture has also been consolidated in 1993; in 1992 such investment was accounted for under the equity method (see note 3). All significant intercompany accounts and transactions have been eliminated in consolidation. Investments in unconsolidated affiliates are accounted for under the equity method. BASIS OF PRESENTATION As described in note 6, the consolidated financial statements for 1993 reflect the adoption of Financial Accounting Standards Board Statement No. 109, "Accounting for Income Taxes" (Statement 109), effective January 1, 1993. RECOGNITION OF REVENUE FROM SERVICE AND TURNKEY DRILLING CONTRACTS The Company performs engineering services under contractual arrangements and recognizes revenues as services are rendered or as reimbursable expenses are incurred. Revenues on turnkey drilling contracts are recorded using the completed-contract method for financial reporting purposes. The completed-contract method recognizes income only if the contract is completed, or substantially completed, unless the contract is estimated to result in a loss, whereby provision is made immediately for the entire anticipated loss. (Continued) 11 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CASH EQUIVALENTS For presentation of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. INVENTORY Inventory is valued at the lower of cost, determined on a weighted-average basis, or market. No valuation allowance was deemed necessary at December 31, 1993 or 1992. PROPERTY AND EQUIPMENT Furniture, Fixtures and Equipment, Drilling Equipment and Leasehold Improvements Furniture, fixtures and equipment, drilling equipment and leasehold improvements are stated at cost. Depreciation is calculated on the straight-line method over the estimated useful lives ranging from three to seven years. Leasehold improvements are amortized straight-line over the shorter of the lease term or the estimated useful life of the asset. Maintenance and repairs are charged to expense as incurred. When property is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts with any gain or loss on disposal included in income. Oil and Gas Properties The Company utilizes the full-cost method to account for its investment in oil and gas properties. Under this method, all costs of acquisition, exploration and development of oil and gas reserves (including such costs as leasehold acquisition costs, geological expenditures, dry hole costs and tangible and intangible development costs) are capitalized as incurred. Oil and gas properties are depleted and charged to operations using the unit-of-production method based on the ratio of current production to proved oil and gas reserves. Dispositions of oil and gas properties are recorded as adjustments to capitalized costs, with no gain or loss recognized unless such adjustments would alter significantly the relationship between capitalized costs and proved reserves of oil and gas. During 1993, the Company sold a significant portion of its oil and gas properties, resulting in the recognition of a gain of $63,776; the Company had no significant dispositions during 1992. To the extent that capitalized costs of oil and gas properties, net of accumulated depreciation and depletion, exceed the discounted future net revenues of proved oil and gas reserves, such excess capitalized costs would be charged to operations. A valuation provision of $228,340 was required for the year ended December 31, 1992, and is included in operating expenses; no such provision was required in 1993. ASSETS HELD FOR SALE During 1993, the Company transferred approximately $320,000 and $325,000 of jar parts classified as assets held for sale at December 31, 1992 to property and equipment and inventory, respectively, as the Company no longer intends to actively market the jar parts for sale, instead, using such items in its drilling operations. (Continued) 12 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS The Financial Accounting Standards Board has issued Statements of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," ("Statement 106") and No. 112, "Employers' Accounting for Postemployment Benefits" ("Statement 112"). Statement 106 focuses principally on accounting for postretirement health care benefits, requiring accrual of the expected cost of those benefits during the period in which the employee provides service, and for the Company is effective for fiscal years beginning after December 15, 1994. Statement 112 requires employers to recognize the obligation to provide postemployment benefits unless the amount cannot be reasonably estimated; Statement 112 is effective for fiscal years beginning after December 15, 1993. The Company does not believe the implementation of Statement 106 or Statement 112, will have a material impact on its financial position. (3) JOINT VENTURE OPERATIONS During 1992, the Company entered into a 50/50 joint venture agreement (the "Joint Venture") with Perforadora Faja de Oro, S.A. de C.V. ("Faja") to perform four turnkey drilling contracts ("the Contracts") for Petroleos Mexicanos ("Pemex"), the government-owned Mexican oil company. In exchange for a 50% share of the profits of the Joint Venture, the Company agreed to provide technical support and advice to Faja with respect to the preparation of bids, the preparation of drilling programs, and engineering and supervisory support during operations. Pursuant to the terms of the agreement, Faja provided initial funding of up to $4,000,000 per well to cover expenses that were paid prior to collection from Pemex. The advance from Faja was repaid during January 1993. In 1992, the investment in the Joint Venture was accounted for using the equity method. At December 31, 1992 the Joint Venture had completed two of the four contracts. As Triton has significant influence over the activities of the Joint Venture and as the advances made by Faja were settled by the Joint Venture during January 1993, the Company began accounting for the investment in the Joint Venture through consolidation of its operations and financial position. The Company, through its wholly-owned subsidiary Triton Tool and Supply, Inc. (TTS), furnishes the Joint Venture with supplies, services and rentals of equipment at prices comparable to those TTS offers its best customers. The Joint Venture has no obligation to purchase from TTS. Included in the Company's revenues and gross profits at December 31, 1992 were $3,058,990 and $626,987, respectively, related to sales from TTS to the Joint Venture. (Continued) 13 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company also obtains supplies, equipment and services from third parties on behalf of the Joint Venture. The cost to the Company is rebilled in full to the Joint Venture. Receivables for reimbursement of purchases made on behalf of the Joint Venture are included in investments in unconsolidated affiliates at December 31, 1992. Profits, losses and net distributions are allocated 50% to the Company and 50% to Faja. Distribution of the proceeds of the Pemex contracts are 1) to pay all amounts owed to third parties, 2) to reimburse advances made by the Company and Faja to or on behalf of the Joint Venture and 3) to distribute remaining profits. Seventy-five percent of the remaining profit will be distributed within 10 days of the determination of the net profit, and the remaining 25% will be distributed within four months thereafter. The following details the Company's investment in the Joint Venture, which is included in investment in assets of unconsolidated affiliates at December 31, 1992: 1992 ---- Advances to and for expenses paid on behalf of the Joint Venture $ 6,616,518 Equity in Joint Venture income 4,577,382 ----------- Total $11,193,900 ----------- ----------- Summarized unaudited financial information for the Joint Venture at December 31, 1992 is as follows: 1992 ---- Assets: Current assets $34,746,348 ----------- ----------- Liabilities: Current liabilities 17,591,584 Advances from venturers 8,000,000 Undistributed earnings 9,154,764 ----------- 34,746,348 ----------- ----------- Revenues 34,744,770 Less expenses 25,590,006 ----------- Net income $ 9,154,764 ----------- ----------- The Joint Venture had revenues of $44,969,662 and net income of $9,533,910 during the year ended December 31, 1993. (Continued) 14 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (4) INVESTMENT IN UNCONSOLIDATED AFFILIATES The Company has a 10.44% investment in 1201 Dairy Ashford, Ltd. (the Partnership) through its wholly-owned subsidiary, 1201 Dairy Ashford, Inc., which serves as the general partner for the Partnership. An officer and certain directors of the Company are limited partners in the Partnership. Profits are to be allocated 100% to the partners, according to their respective percentage interest, until the limited partners are reimbursed in full for their initial and supplemental, if any, capital contributions. The remaining profits shall be allocated 50% to the limited partners and 50% to the general partner until the aggregate balance of all limited partner accounts equals $250,000 (the initial limited partners' aggregate investment), less any distributions to the limited partners after February 26, 1987. Any remaining profits shall be allocated 100% to the general partner. All losses are to be allocated 100% to the general partner. The Company leases office space from the Partnership. Rental expense related to the lease was $404,684 for 1993 and 1992. Minimum annual rentals of $404,684 are due under the lease, which expires on January 31, 2006. In addition, the Company is obliged to pay the operating costs, as defined, of the property subject to the lease. Such operating costs were $302,481 and $322,889 for 1993 and 1992, respectively. The Company holds two noninterest-bearing notes issued by the Partnership. One note in the original amount of $1,701,215 is secured by a lien on the land and building owned by the Partnership, and the second note in the original amount of $1,000,000 is unsecured. A note payable to a third party in the original amount of $2,600,000 is also secured by a lien on the land and building. The third party note, which matures on February 1, 2016, is callable by the lenders on February 1, 2001. The Company's lien is subordinate to the third party lien. The Company's 1993 operations include a loss of $94,336 representing the Company's equity in the Partnership's loss. The Company's 1992 operations include a loss of $93,131 representing the Company's equity in the partnership's loss and a charge of $334,162 to write down the Company's investment in the Partnership to its estimated net realizable value, as the liabilities of the Partnership exceed the appraised value of the Partnership's assets. No additional impairment was recorded during 1993. The following details the Company's investment in the Partnership, accounted for using the equity method, at December 31, 1993 and 1992: 1993 1992 ---- ---- Secured note $1,701,215 1,701,215 Unsecured note 623,297 667,297 Equity in partnership loss (697,774) (603,438) Reserve for impairment of value (334,162) (334,162) ---------- --------- Total $1,292,576 1,430,912 ---------- --------- ---------- --------- (Continued) 15 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following is selected unaudited financial data of the Partnership at December 31, 1993 and 1992: 1993 1992 ---- ---- Assets: Land $ 1,453,270 1,453,270 Building and leasehold improvements 4,220,792 4,220,792 Accumulated depreciation (2,789,604) (2,564,461) ----------- ---------- Net property 2,884,458 3,109,601 Current assets 2,420 22,591 ----------- ---------- Total assets $ 2,886,878 3,132,192 ----------- ---------- ----------- ---------- 1993 1992 ---- ---- Liabilities and partners' deficit: Current liabilities $ -- 79,293 Note payable - third party 2,526,701 2,554,386 Notes payable/advances - Triton 2,324,512 2,368,512 ----------- ---------- Total liabilities 4,851,213 5,002,191 Partners' deficit (1,964,335) (1,869,999) ----------- ---------- Total liabilities and partners' deficit $ 2,886,878 3,132,192 ----------- ---------- ----------- ---------- (5) DEBT AND CREDIT AGREEMENTS On June 2, 1992, the Company obtained a working capital line of credit in the amount of $1,500,000 maturing on May 2, 1993. The line of credit was extended during 1993 to June 1, 1994. The line of credit is secured by assignment of accounts receivable and inventory owned and subsequently acquired. The Company was not in compliance with certain covenants at December 31, 1993. Borrowings outstanding under the line of credit bear interest at the prime rate (as published by the Wall Street Journal) plus 1/2 of one percentage point (6.5% at December 31, 1993). At December 31, 1993, $1,500,000 was outstanding under the line of credit. (6) INCOME TAXES As discussed in Note 2, the Company adopted Statement 109 effective January 1, 1993. Statement 109 requires a change from the deferred method to the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Under Statement 109, the effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. (Continued) 16 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The cumulative effect on prior years of the adoption of Statement No. 109 increased net earnings by $66,285 and is reported separately in the consolidated statement of income for the year ended December 31, 1993. Prior year financial statements were not restated. The income tax provision consists of the following for the years ended December 31, 1993 and 1992. 1993 1992 ---- ---- Current provision - U.S. $ 937,106 376,428 Current provision - Foreign 592,040 1,286,998 Deferred provision - U.S. (894,908) 1,874,569 Foreign withholding taxes 1,587,769 687,372 ---------- --------- Income tax provision $2,222,007 4,225,367 ---------- --------- ---------- --------- The primary reasons for the difference in the statutory tax rate and the effective tax rate are the taxation of foreign earnings at rates in excess of, and in addition to, the U.S. statutory rate and the limitation of foreign tax credit utilization. The Company utilized foreign tax credits of $1,044,612 and $887,113 in 1993 and 1992, respectively. The tax effects of temporary differences that result in significant portions of the deferred income tax assets and liabilities at December 31, 1993 and a description of the financial statement items creating these differences are as follows: Deferred tax assets: Foreign tax credit carryforwards $ 2,243,515 Alternative minimum tax credit 66,022 UNICAP 85,351 ----------- Total deferred tax assets 2,394,888 ----------- Deferred tax liabilities: Property and equipment (34,990) Accrual to cash (3,321,776) Other (483,520) ----------- Total deferred tax liabilities (3,840,286) Less valuation allowance (1,216,957) ----------- Net deferred tax liability $(2,662,355) ----------- ----------- The foreign tax credit carryforwards begin to expire in 1997. (Continued) 17 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (7) COMMITMENTS AND CONTINGENCIES The Company leased an operating facility with a lease termination date of February 28, 1994. The minimum rental commitments under the lease are $40,000 in 1994. The Company exercised its option under the agreement to purchase the facility during 1994 for approximately $500,000 in cash and the issuance of a note payable to the seller for approximately $1.6 million. The related rental expense was $236,000 and $200,000 during 1993 and 1992, respectively. The Company is a defendant in litigation arising in the normal course of business. Management believes that the ultimate outcome of these matters will not have a materially adverse effect on the consolidated financial position of the Company. (8) SHAREHOLDERS' AGREEMENT Effective February 27, 1987, the Company executed a Shareholders' Agreement which placed certain restrictions on the transferability of substantially all of the Company's common shares. In the event an employee shareholder, as defined in the Shareholders' Agreement, dies, retires, becomes permanently or totally disabled, or is terminated involuntarily without cause, such shareholder may offer all or any part of the shares owned to the Company. The Company is obligated to purchase all of the shares offered, at a purchase price equal to the per share book value. In the event such a shareholder is terminated for reasons other than the aforementioned reasons, the Company has the option to purchase all or any part of the shares owned by such shareholder at 85% of the per share book value. (9) RELATED PARTY TRANSACTIONS On January 1, 1993, the Company entered into an employment agreement (the Agreement) with an executive (the Executive or Stockholder) of the Company. The Agreement is in effect for seven years with automatic one-year extensions unless the Company or the Executive terminates the Agreement in accordance with contract provisions. During 1992, the Company entered into an Agreement with the Stockholder to pay the premiums on a life insurance policy for the benefit of the Stockholder's estate. The advances made by the Company in payment of the premiums are secured by assignment of the policy to the Company solely to recover the amounts advanced by the Company. (10) INCENTIVE STOCK OPTION PLAN The Company's 1987 Incentive Stock Option Plan, as revised, provides for the granting of qualified stock options to purchase 1,000 shares of common stock to eligible employees. (Continued) 18 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The options are exercisable over a period determined by the Board of Directors, but no longer than ten years after the date they are granted, subject to the individual being an employee of the Company. However, options granted to individuals who own 10% or more of the combined voting power of all classes of stock of the Company have five years to exercise the option. The option price will be determined by the Company's Board of Directors but shall in no event be less than 100% of the fair market value on the date of grant. At December 31, 1993, 830 options are outstanding with exercise prices of $1,148 and $2,545 per share for 500 and 330 of the options, respectively. No options were exercised during 1993. The options begin to expire between 1997 and 2002. (11) PROFIT SHARING PLAN The Company has a noncontributory profit-sharing plan (the Plan) covering substantially all domestic employees. The Company incurred Plan expenses totaling $697,602 and $761,973 during 1993 and 1992, respectively. The Company makes discretionary contributions to the Plan in amounts determined annually by management. (12) INSURANCE The Company was self-insured for employee health claims up to $25,000 per individual from January 1, 1992 through April 30, 1992 and for up to $35,000 per individual from May 1, 1992 through December 31, 1993. Expense for employee health benefit claims and stop loss reinsurance premiums totaled $503,127 and $382,572 during 1993 and 1992, respectively. At December 31, 1993, a receivable of $2,379,585, net of an allowance of $2,790,000 related to disputed claims, was recorded related to the Company's claims under its insurance policy. The net insurance proceeds anticipated to be recovered are reflected as a reduction of turnkey drilling expenses as such proceeds represent reimbursements of redrilling and other costs incurred by the Company. Management believes the net receivable recorded as of December 31, 1993 is collectible. (13) CONCENTRATION OF CREDIT RISK The Company's sales and accounts receivable relate primarily to turnkey drilling activities. At December 31, 1993, $22,064,593 of accounts receivable related to drilling activities in Central and South America. An allowance of $290,000 has been recorded as of December 31, 1993 for doubtful accounts. The net receivable balance is deemed to be collectible by management. (Continued) 19 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (14) SUBSEQUENT EVENTS (UNAUDITED) The Company has recorded an accrual for $1,466,999 ($953,549 net of tax) related to a loss incurred on a domestic turnkey drilling contract in progress at December 31, 1993. The Company is vigorously pursuing recovery of the loss from a drilling company from whom it rented equipment for the drilling of the well. The Company believes it will ultimately be able to recover a portion of this loss. During January 1994, the Company entered into negotiations to sell all of the outstanding stock of Triton Engineering Services Company to Noble Drilling Corporation. A letter of intent has been signed by both parties. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result from the sale. 20 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET MARCH 31, 1994 (IN THOUSANDS) (UNAUDITED) ASSETS CURRENT ASSETS Cash and cash equivalents $ 17,685 Accounts receivable, net 22,666 Other current assets 16,527 ----------- Total current assets 56,878 ----------- PROPERTY AND EQUIPMENT Drilling equipment and facilities 4,846 Other 4,216 ----------- 9,062 Accumulated depreciation (4,905) ----------- 4,157 ----------- $ 61,035 ----------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Short-term debt $ 1,566 Accounts payable 13,355 Other current liabilities 27,804 ----------- Total current liabilities 42,725 ----------- MINORITY INTEREST 5,392 ----------- 48,117 ----------- SHAREHOLDERS' EQUITY Common stock 12 Retained earnings 17,212 Treasury stock, at cost (4,306) ----------- 12,918 ----------- $ 61,035 ----------- ----------- See notes to interim financial statements. 21 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME FOR THE QUARTER ENDED MARCH 31, 1994 (IN THOUSANDS) (UNAUDITED) Revenues: Turnkey drilling operations $ 22,458 Engineering services 1,536 Supply services and other 2,194 ---------- 26,188 Direct expenses 21,312 ---------- Gross profit 4,876 Operating expenses 4,521 ---------- Operating income 355 Other income (expense): Interest income 123 Gain (loss) on sale of assets (413) Other (1,948) ---------- Loss before income tax and minority interest (1,883) Income tax provision (115) Minority interest (493) ---------- Net loss $ (2,491) ---------- ---------- See notes to interim financial statements. 22 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES STATEMENT OF CONSOLIDATED CASH FLOWS FOR THE QUARTER ENDED MARCH 31, 1994 (IN THOUSANDS) (UNAUDITED) Cash flows from operating activities: Net loss $ (2,491) Adjustments to reconcile net loss to net cash provided by operating activities: Minority interest 493 Depreciation, depletion and amortization 236 (Gain) loss on sale of assets 413 (Gain) loss on foreign exchange (6) Elimination of investment in partnership 1,545 Changes in assets and liabilities: Decrease (increase) in: Accounts receivable 19,832 Other assets (5,695) Increase (decrease) in: Accounts payable (19,954) Other liabilities 12,805 ---------- Net cash provided by operating activities 7,178 ---------- Cash flows used in investing activities: Purchase of property and equipment (2,356) Proceeds from sale of property and equipment 68 Distribution to joint venturer (2,000) ---------- Net cash used in investing activities (4,288) ---------- Cash flows used in financing activities: Repayment of note payable (241) Effect of exchange rate changes on cash 6 ---------- Increase (decrease) in cash and cash equivalents 2,655 Cash and cash equivalents, beginning of period 15,030 ---------- Cash and cash equivalents, end of period $ 17,685 ---------- ---------- Interest paid $ 10 ---------- ---------- Income taxes paid $ 835 ---------- ---------- See notes to interim financial statements. 23 TRITON ENGINEERING SERVICES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE QUARTER ENDED MARCH 31, 1994 (UNAUDITED) NOTE 1 - FINANCIAL STATEMENT BASIS The consolidated balance sheet as of March 31, 1994, the related consolidated statement of income for the three-month period ended March 31, 1994 and the consolidated statement of cash flows for the three-month period ended March 31, 1994 are unaudited. In the opinion of management, all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of such financial statements have been included. These interim financial statements are presented in condensed form and should be read in conjunction with the 1993 audited financial statements and notes. 24 NOBLE DRILLING CORPORATION AND SUBSIDIARIES PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma condensed consolidated balance sheet at March 31, 1994 and unaudited pro forma condensed consolidated statements of operations for the quarter ended March 31, 1994 and the year ended December 31, 1993, reflect the pro forma financial position and results of operations, respectively, of Noble Drilling Corporation and subsidiaries ("Noble") after giving effect to the acquisition of Triton Engineering Services Company ("Triton") pursuant to the terms of a Stock Purchase Agreement (the "Acquisition") dated April 22, 1994, as further described in Item 2 of the Noble's Form 8-K dated May 6, 1994. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical condensed consolidated financial statements of Noble and the historical financial statements of Triton and the respective related notes thereto. The unaudited pro forma condensed consolidated statements of operations are not necessarily indicative either of the results of operations that would have occurred had the Acquisition been effected on January 1, 1993 or of future results of operations. 25 NOBLE DRILLING CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1994 (IN THOUSANDS) ASSETS
HISTORICAL ------------------------ PRO FORMA THE ACQUISITION AS COMPANY TRITON ADJUSTMENTS ADJUSTED ------- ------ ----------- -------- CURRENT ASSETS Cash and cash equivalents............................ $ 9,674 $ 17,685 $ (4,085)(A) $ 23,274 Restricted cash...................................... 1,789 1,789 Investment in marketable securities.................. 34,873 34,873 Accounts receivable, net............................. 41,748 22,666 64,414 Other current assets................................. 37,937 16,527 54,464 ----------- ---------- ---------- ----------- Total current assets.............................. 126,021 56,878 (4,085) 178,814 ----------- ---------- ---------- ----------- PROPERTY AND EQUIPMENT Drilling equipment and facilities.................... 621,689 4,846 (3,403)(B) 623,132 Other................................................ 13,995 4,216 (1,502)(B) 16,709 ----------- ---------- ---------- ----------- 635,684 9,062 (4,905) 639,841 Accumulated depreciation............................. (268,311) (4,905) 4,905 (B) (268,311) ----------- ---------- ---------- ----------- 367,373 4,157 0 371,530 OTHER ASSETS............................................ 13,483 336 (C) 13,819 ----------- ---------- ---------- ----------- $ 506,877 $ 61,035 $ (3,749) $ 564,163 ----------- ---------- ---------- ----------- ----------- ---------- ---------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Short-term debt...................................... $ 1,566 $ 4,000 (A) $ 5,566 Current installment of long-term debt................ $ 546 546 Accounts payable..................................... 7,569 13,355 20,924 Interest payable..................................... 5,612 5,612 Other current liabilities............................ 33,305 27,804 61,109 ----------- ---------- ---------- ----------- Total current liabilities......................... 47,032 42,725 4,000 93,757 ----------- ---------- ---------- ----------- LONG-TERM DEBT.......................................... 127,138 127,138 OTHER LIABILITIES....................................... 1,108 1,108 MINORITY INTEREST....................................... 119 5,392 5,511 ----------- ---------- ---------- ----------- 175,397 48,117 4,000 227,514 ----------- ---------- ---------- ----------- SHAREHOLDERS' EQUITY Preferred stock...................................... 2,990 2,990 Common stock......................................... 4,784 12 (12)(D) 4,859 75 (A) Capital stock in excess of par value................. 333,710 5,094 (A) 338,804 Cumulative translation adjustment.................... (2,641) (2,641) Retained earnings (deficit).......................... (5,613) 17,212 (17,212)(D) (5,613) Treasury stock, at cost.............................. (1,750) (4,306) 4,306 (D) (1,750) ----------- ---------- ---------- ----------- 331,480 12,918 (7,749) 336,649 ----------- ---------- ---------- ----------- $ 506,877 $ 61,035 $ (3,749) $ 564,163 ----------- ---------- ---------- ----------- ----------- ---------- ---------- -----------
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (A) To record the purchase by Noble Drilling Corporation ("Noble") of all of the outstanding shares of common stock of Triton Engineering Services Company ("Triton"). (B) To record the effect of Noble accounting for the fixed assets of Triton at fair market value. (C) To record goodwill of $336,000, which represents the excess of the purchase price over net assets acquired. (D) To eliminate Triton's equity pursuant to the Stock Purchase Agreement dated April 22, 1994 (the "Acquisition"). 26 NOBLE DRILLING CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1994 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL ------------------------ PRO FORMA THE ACQUISITION AS COMPANY TRITON ADJUSTMENTS ADJUSTED ------- ------ ----------- -------- REVENUES Contract drilling services........................ $ 57,865 $ 57,865 Turnkey drilling services......................... $ 22,458 22,458 Engineering and consulting services............... 309 1,536 1,845 Other revenue..................................... 1,074 2,194 $ (53)(A) 3,215 ---------- ---------- ----------- ----------- 59,248 26,188 (53) 85,383 OPERATING COSTS AND EXPENSES Contract drilling services........................ 38,001 38,001 Turnkey drilling services......................... 18,989 18,989 Engineering and consulting services............... 258 756 1,014 Other expense..................................... 601 1,376 (2)(A) 1,975 Selling, general and administrative............... 6,324 4,476 (1,070)(B) 9,730 Depreciation and amortization..................... 7,161 236 9 (C) 7,406 Minority interest................................. (37) 493 456 ---------- ---------- ----------- ----------- 52,308 26,326 (1,063) 77,571 ---------- ---------- ----------- ----------- OPERATING INCOME (LOSS).............................. 6,940 (138) 1,010 7,812 OTHER INCOME (EXPENSE) Interest expense.................................. (3,000) (3,000) Interest income................................... 587 123 710 Other, net........................................ 1,143 (2,361) 51 (A) 1,053 2,220 (D) ---------- ---------- ----------- ----------- INCOME (LOSS) BEFORE INCOME TAXES.................... 5,670 (2,376) 3,281 6,575 INCOME TAX PROVISION................................. (1,203) (115) (696)(E) (2,014) ---------- ---------- ----------- ----------- NET INCOME (LOSS).................................... 4,467 (2,491) 2,585 4,561 PREFERRED STOCK DIVIDENDS............................ (1,682) (1,682) ---------- ---------- ----------- ----------- NET INCOME (LOSS) APPLICABLE TO COMMON SHARES............................................ $ 2,785 $ (2,491) $ 2,585 $ 2,879 ---------- ---------- ----------- ----------- ---------- ---------- ----------- ----------- NET INCOME PER COMMON SHARE.......................... $ 0.06 $ 0.06 ---------- ----------- ---------- ----------- WEIGHTED AVERAGE COMMON SHARES OUTSTANDING....................................... 48,355 752 49,107
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (A) To reclassify the operating results of Triton's oil and gas activities, as these activities are not an ongoing business line of Noble. (B) To eliminate a nonrecurring stock option buyout effected by Triton in March 1994 in connection with the Acquisition. (C) To record amortization of $9,000 for goodwill associated with the Acquisition. (D) To eliminate the write-off of $2,220,000 of notes receivable from a partnership that was not part of the Acquisition. (E) To record the incremental tax effect of the Acquisition adjustments. 27 NOBLE DRILLING CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1993 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL ------------------------ PRO FORMA THE ACQUISITION AS COMPANY TRITON ADJUSTMENTS ADJUSTED ------- ------ ----------- -------- REVENUES Contract drilling services........................ $ 188,206 $ 188,206 Turnkey drilling services......................... $ 110,003 110,003 Engineering and consulting services............... 2,292 7,812 10,104 Other revenue..................................... 4,444 6,019 $ (362)(A) 10,101 --------- --------- --------- ---------- 194,942 123,834 (362) 318,414 OPERATING COSTS AND EXPENSES Contract drilling services........................ 123,817 123,817 Turnkey drilling services......................... 89,456 89,456 Engineering and consulting services............... 2,083 3,518 5,601 Other expense..................................... 2,736 9,195 (59)(A) 11,872 Selling, general and administrative............... 22,405 12,163 34,568 Depreciation and amortization..................... 20,472 1,170 34 (B) 21,676 Minority interest................................. (232) 4,767 4,535 --------- --------- --------- ---------- 171,281 120,269 (25) 291,525 --------- --------- --------- ---------- OPERATING INCOME..................................... 23,661 3,565 (337) 26,889 OTHER INCOME (EXPENSE) Interest expense.................................. (5,406) (336) (5,742) Interest income................................... 1,628 293 1,921 Other, net........................................ 1,737 206 303 (A) 2,340 94 (C) --------- --------- --------- ---------- INCOME BEFORE INCOME TAXES........................... 21,620 3,728 60 25,408 INCOME TAX PROVISION................................. (2,474) (2,222) (7)(D) (4,703) --------- --------- --------- ---------- INCOME FROM CONTINUING OPERATIONS.................... 19,146 1,506 53 20,705 PREFERRED STOCK DIVIDENDS............................ (6,728) (6,728) --------- --------- --------- ---------- INCOME FROM CONTINUING OPERATIONS APPLICABLE TO COMMON SHARES....................... $ 12,418 $ 1,506 $ 53 $ 13,977 --------- --------- --------- ---------- --------- --------- --------- ---------- INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE...................................... $ 0.32 $ 0.36 --------- ---------- --------- ---------- WEIGHTED AVERAGE COMMON SHARES OUTSTANDING....................................... 38,366 752 39,118
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (A) To reclassify the operating results of Triton's oil and gas activities, as these activities are not an ongoing business line of Noble. (B) To record amortization of $34,000 for goodwill associated with the Acquisition. (C) To eliminate the net loss of $94,000 from an unconsolidated partnership that was not part of the Acquisition. (D) To record the incremental tax effect of the Acquisition adjustments. 28 SIGNATURES Pursuant to the requirement 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. Date: June 30, 1994 NOBLE DRILLING CORPORATION By: /s/ Byron L. Welliver Byron L. Welliver, Senior Vice President-Finance and Treasurer -----END PRIVACY-ENHANCED MESSAGE-----