For the nine months ended September 30, 2003, net income totaled $13.7 million, or $0.04 per diluted share, on revenues of $1,842.8 million. Year-to-date 2003 results included the previously discussed costs associated with the planned IPO of TODCO, after-tax asset impairment charges totaling $26.6 million, or $0.08 per diluted share, and an after-tax loss of $13.8 million, or $0.04 per diluted share, relating to the early retirement of debt, partially offset by a favorable resolution of a non-U.S. income tax liability of $14.6 million, or $0.04 per diluted share. Excluding the impact of the IPO costs, impairment charges, debt retirement loss and favorable income tax resolution, net income for the nine months ended September 30, 2003 was $47.5 million, or $0.15 per diluted share. During the corresponding nine months ended September 30, 2002, the company reported a net loss of $951.2 million, or $2.94 per diluted share, on revenues of $2,009.3 million. Results for the first nine months of 2002 included the previously discussed tax benefit and non-cash loss on the impairment of long-lived assets, in addition to a non-cash charge of $1,363.7 million, or $4.22 per diluted share, pertaining to the adoption in January 2002 of Statement of Financial Accounting Standards 142 (FAS 142), Goodwill and Other Intangible Assets. Excluding the impact of the year-to-date tax benefit of $175.7 million, or $0.54 per diluted share, non-cash loss on the impairment of long-lived assets of $27.3 million, or $0.08 per diluted share, and loss from the non-cash charge relating to the adoption of FAS 142, net income for the nine months ended September 30, 2002 was $264.1 million, or $0.82 per diluted share. Cash flow from operations totaled $159.4 million and $464.6 million for the three and nine months ended September 30, 2003. Net debt (defined as long-term debt plus debt due within one year less cash and cash equivalents) declined to $2,895.1 million at September 30, 2003, from $3,282.5 million at December 31, 2002.
Revenues associated with the company's International and U.S. Floater Contract Drilling Services business segment were $564.4 million for the three months ended September 30, 2003, improving 3% from revenues of $548.5 million during the preceding quarter of 2003. During the third quarter of 2002, segment revenues totaled $641.2 million. Segment operating income, before general and administrative expense, was $118.9 million during the current quarter, while field operating income (defined as revenues less operating and maintenance expenses) during that period was $222.0 million. Segment field operating income for the three months ended September 30, 2003 was negatively impacted by approximately $17 million due to an ongoing disagreement with a customer concerning the applicable dayrate and other costs on the ultra-deepwater drillship Discoverer Enterprise following the riser separation incident on May 21, 2003. The segment results compared to operating income of $84.2 million and field operating income of $192.6 million during the preceding quarter of 2003 and $190.0 million and $315.5 million, respectively, during the corresponding three months in 2002. Segment fleet utilization improved to 71% for the three months ended September 30, 2003, from 68% during the preceding quarter of 2003, resulting primarily from improved utilization in the company's fleet of deepwater rigs. During the corresponding three months of 2002, segment utilization was 79%.
Prospects for the company's International and U.S. Floater Contract Drilling Services business segment are uncertain over the next six to nine months. Over this period, market dayrates for the industry's most technically advanced rigs will be difficult to predict and intermittent idle time could be experienced as several of these units, including four of the company's 5th Generation deepwater rigs, conclude contracts. The company continues to believe that over the long term, deepwater exploration and development drilling opportunities in Angola, Nigeria, India and other emerging locations represent a potentially significant source of future rig demand. In the company's Mid-Water fleet, no measurable improvement is expected through the first quarter of 2004 when seasonal demand in the North Sea is expected to offer additional drilling opportunities through the spring and summer months. Finally, a stable level of activity is expected to persist in most of the international jackup market sectors. The modest overcapacity present in the West Africa jackup market sector is expected to largely dissipate by mid-2004, although dayrates associated with near-term contract signings in the region are expected to decline from average levels experienced over the past 12 months.
Operating revenues from the company's Gulf of Mexico Shallow and Inland Water business segment continued to show improvement, totaling $58.5 million for the three months ended September 30, 2003 compared to $55.4 million during the preceding three months in 2003 and $54.0 million during the corresponding three months in 2002. The 6% revenue increase from the preceding quarter in 2003 was attributable to improvements in both average fleet utilization and dayrates among the segment's jackup rigs. The business segment recorded a reduced operating loss, before general and administrative expense, of $24.9 million during the current quarter, while the segment's field operating loss (defined as revenues less operating and maintenance expenses) narrowed to $2.1 million, compared to $49.5 million and $15.2 million, respectively, during the preceding quarter of 2003. For the corresponding three months in 2002, the segment's operating loss totaled $38.1 million while the field operating loss was $1.4 million. Segment fleet utilization improved to 44% in the current quarter, compared to 42% during the preceding quarter of 2003 and 38% during the corresponding three months in 2002.
The Gulf of Mexico Shallow and Inland Water business segment continues to benefit from a declining base of jackup rig supply in the Gulf of Mexico, which has helped to lift utilization and dayrates in an otherwise flat rig demand environment. Demand in the Gulf of Mexico inland barge fleet has trended lower, while total supply is unchanged. However, deep gas drilling interest among several exploration and production companies operating in the Gulf of Mexico is expected to increase, offering the prospect for improving demand in 2004.
The company continues to monitor market conditions for its planned IPO of TODCO, which operates its Gulf of Mexico Shallow and Inland Water business segment. The company first announced its divestiture plans in the third quarter of 2002. As the IPO had not been completed by the end of the third quarter of 2003, the company recognized its previously deferred costs relating to the offering. General and administrative expense for the three months ended September 30, 2003 included $8.0 million of IPO-related costs, of which $6.4 million was deferred in previous periods. The company expects to complete the IPO when market conditions warrant, subject to various factors.
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