1
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): December 23, 1996
GLOBAL INDUSTRIES, LTD.
(Exact name of registrant as specified in its charter)
LOUISIANA 2-56600 72-1212563
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification Number)
107 GLOBAL CIRCLE
LAFAYETTE, LOUISIANA 70503
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (318) 989-0000
2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
As previously announced, on December 23, 1996, Global Industries, Ltd.
("Global") acquired from a subsidiary of J. Ray McDermott, S.A. a 49% ownership
interest in CCC Fabricaciones y Construcciones, S.A. de C.V. ("CCC"), a leading
provider of offshore construction services in Mexico, as well as the DB-21, a
400-foot combination pipelay derrick barge, a crawler crane, a saturation
diving system and approximately 21 acres of land located adjacent to Global's
facility in New Iberia, Louisiana (the "CCC Acquisition"). Global also
acquired from a subsidiary of J. Ray McDermott, S.A. an option to purchase for
$12.0 million the DB-15, a 400-foot combination pipelay derrick barge currently
chartered to CCC. The remaining 51% interest in CCC has been retained by a
group of affiliated privately-held Mexican companies that have participated in
CCC since its formation. The total purchase price for the CCC Acquisition
(including the exercise price of the option to purchase the DB-15) was $38.0
million. In addition, Global (i) has loaned $23.0 million to CCC to repay
$15.0 million of existing indebtedness and for working capital needs and (ii)
has provided performance guarantees supporting approximately $50.0 million of
CCC's existing indebtedness, primarily relating to existing construction
projects in progress. Global's investment in CCC will be accounted for under
the equity method.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. Page
----
(a) Financial Statements of Business Acquired.
Audited Financial Statements
Report of Statutory Auditor dated February 2, 1996
Independent Auditors' Report
Statements of Financial Position as December 31, 1995 and 1994
Statements of Income for the Years ended December 31, 1995
and 1994
Statements of Changes in Stockholders' Equity for the Years
ended December 31, 1995 and 1994
Statements of Changes in Financial Position for the Years
ended December 31, 1995 and 1994
Notes to Financial Statements
Interim Financial Statements (Unaudited)
Statements of Financial Position as of September 30, 1996
Statements of Income for the Nine Months ended
September 30, 1996 and 1995
Statements of Changes in Financial Position for the Nine Months
ended September 30, 1996 and 1995
Notes to Financial Statements
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3
(b) Pro Forma Financial Information (incorporated by reference to
the Company's Registration Statement on Form S-3 (Reg. No. 333-18773).
Pro Forma Consolidated Balance Sheet as of September 30, 1996
Pro Forma Consolidated Statement of Operations for the Fiscal Year
ended March 31, 1996
Pro Forma Consolidated Statement of Operations for the Six Months
ended September 30, 1996
Notes to Pro Forma Consolidated Financial Statements
(c) Exhibits.
2.1 Asset Purchase Agreement between Global Industries, Ltd
and J. Ray McDermott, Inc. dated as of December 23, 1996.
2.2 Barge and Crane Purchase Agreement between Global
Industries, Ltd and Hydro Marine Services, Inc. dated as
of December 23, 1996.
2.3 Barge Purchase Option Agreement between Global Industries,
Ltd and Hydro Marine Services, Inc. dated as of December
23, 1996.
23.1 Consent of KPMG Cardenas Dosal, S.C.
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4
CCC FABRICACIONES Y CONSTRUCCIONES,
S. A. DE C. V.
Financial Statements
December 31, 1995 and 1994
(With the Statutory and Independent Auditors' Reports Thereon)
4
5
The Stockholders of
CCC Fabricaciones y Construcciones, S. A. de C. V.:
(Mexican Pesos)
In my capacity as Statutory Auditor, I have examined the statement of financial
position of CCC Fabricaciones y Construcciones, S. A. de C. V. as of December
31, 1995, and the related statements of income, changes in stockholders' equity
and changes in financial position for the year then ended. These financial
statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
My audit was conducted with the provisions of Article 166 of the General
Corporations Law and in accordance generally accepted auditing standards those
standards require that the audit be planned and performed to obtain reasonable
assurance about whether the financial statements are free of material
misstatement and are prepared in accordance with generally accepted accounting
principles in Mexico. An audit consists of 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. I believe that my audit provides a reasonable basis
for my opinion.
In October 1995, the Company suffered a disaster where one of its marine vessel
was lost. The loss was covered by the insurance.
As discussed in note 11 c. to the financial statements at December 31, 1995 and
1994, the recovery of accounts receivable for leasing to affiliated companies
is uncertain. Such accounts amount to $31,720,248 and $25,033,494 ($16,472,655
at historical value), respectively, which are being negotiated and may generate
a future loss for the company in an amount which is unknown at the date of this
report.
As discussed in Note 7 to the financial statements, the Company's management is
dealing in the process of selling the investment in shares of its associated
company "Talleres Navales del Golfo, S. A. de C.V.". Consequently such
investment is stated at cost, less the recognition of the estimated loss in the
results of operations reflected in its financial statements (unaudited) for the
ninth-month period ended December 31, 1995, and deducted them the amortization
of the excess in cost on investment. Even though the Company considers not to
incur in significant losses in the sale of this investment. The final outcome
of this matter is contingent.
Generally accepted accounting principles in Mexico establish that these type of
investment should be updated near the closing date of the company which
maintain the investment, taking into account the effects of inflation in the
associated company and, if applicable, adjusting the investment to net market
value. Generally accepted audit standards establish that the financial
statements of the associated company should be audited, and according to the
information provided by the Company's
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management, the financial statements of the associated company have not yet
been examined by an Independent Public Accountant.
In my opinion, except for the fact that the financial statements of the
associated company were not restated and for the effects that may be derived
from having audited financial statements of the associated company, the
financial statements referred to above present fairly, in all material
respects, the financial position of CCC Fabricaciones y Construcciones, S. A.
de C. V. at December 31, 1995 and 1994 and the results of its operations, the
changes in its stockholders' equity and the changes in its financial position
for the year then ended, in accordance with accounting principles generally
accepted in Mexico.
I submit this opinion in compliance with the provisions of Article 166 of the
General Corporations Law and the bylaws of CCC Fabricaciones y Construcciones,
S. A. de C. V.
Fernando Holguin
Statutory Auditor
Mexico City, February 2, 1996.
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The Board of Directors and Stockholders
CCC Fabricaciones y Construcciones, S. A. de C. V.:
(Mexican Pesos)
We have examined the statements of financial position of CCC Fabricaciones y
Construcciones, S. A. de C. V. as of December 31, 1995 and 1994 and the related
statements of income, changes in stockholders' equity and changes in financial
position for the years then ended. 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 in accordance with generally accepted auditing
standards in Mexico. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement and are prepared in accordance with generally
accepted accounting principles in Mexico. An audit consists of 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, except for the limitation indicated in
paragraph five below.
In October 1995, the Company suffered a disaster where one of its marine vessel
was lost. The loss was covered by the insurance.
As mentioned in note 11 c. to the financial statements as of December 31, 1995
and 1994, the recovery of accounts receivable on leases from affiliated
companies is uncertain, for $31,720,248 and $25,033,494 ($16,472,655 at
historical value), respectively, which are currently being negotiated and may
result in a future loss for the Company in an amount which is unknown at the
date of this report.
As discussed in note 7 to the financial statements, the Company's management is
dealing in the process of selling the investment in shares of its associated
company Talleres Navales del Golfo, S. A. de C. V. Consequently such
investment is stated at cost, less the recognition of the estimated loss in the
results of operations reflected in its financial statements (unaudited) for
nine-month period ended December 31, 1995, and deducted them the amortization
of the excess in cost on investment. Even though the Company considers not to
incur in significant losses in the sale of this investment. The final out come
of this matter is contingent.
Generally accepted accounting principles in Mexico establish that these type of
investment should be updated near the closing date of the company which
maintain the investment, taking into account the effects of inflation in the
associated company and, if applicable, adjusting the investment to net market
value. Generally accepted audit standards establish that the financial
statements of the associated company should be audited, and according to the
information provided by the Company's
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management, the financial statements of the associated company have not yet
been examined by an Independent Public Accountant.
In our opinion, except for the fact that the financial statements of the
associated company were not restated and for the effects that may be derived
from having audited financial statements of the associated company, the
financial statements referred to above present fairly, in all material
respects, the financial position of CCC Fabricaciones y Construcciones, S. A.
de C. V. at December 31, 1995 and 1994 and the results of its operations, the
changes in its stockholders' equity and the changes in its financial position
for the year then ended, in accordance with accounting principles generally
accepted in Mexico.
KPMG CARDENAS DOSAL, S.C.
Ramon Vasquez Rojas
February 2, 1996.
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CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Statements of Financial position
December 31, 1995 and 1994
(Mexican pesos of constant purchasing power at December 31, 1995)
Assets 1995 1994
------ ---- ----
Current Assets:
Cash and temporary investments $ 16,775,360 18,567,672
----------------- --------------
Accounts receivable:
Petroleos Mexicanos (note 8) 293,418,760 242,426,203
Insurance to be recovered (note 6) 184,560,000 -
Related companies (notes 3 and 11) 57,279,075 117,234,918
Other accounts receivable (note 4) 8,250,056 20,956,274
----------------- --------------
Total accounts receivable 543,507,891 380,617,395
----------------- --------------
Advances to suppliers (note 5) 49,535,457 35,420,905
Prepaid expenses 1,963,029 12,059,236
----------------- --------------
Total current assets 611,781,737 446,665,208
----------------- --------------
Furniture, machinery and
construction equipment, net (note 6) 186,947,079 303,538,400
Advance for the acquisition
of shares (note 7) - 126,435,843
Investment in associated company (note 7) 57,480,000 -
Excess of cost over investment (note 7) 57,113,803 -
----------------- --------------
$ 913,322,619 876,639,451
================= ==============
Liabilities and Stockholders' Equity 1995 1994
------------------------------------ ---- ----
Current liabilities
Bank loans $ 189,786,466 177,958,834
Current installments of long-term
debt (note 8) 64,139,260 69,442,689
Accounts payable to suppliers and
accrued liabilities 249,729,797 349,551,856
Related companies (note 3) 49,185,740 4,702,570
----------------- --------------
Total current liabilities 552,841,263 601,655,949
Long-term debt (note 8) 235,377,343 121,168,113
----------------- --------------
Total liabilities 788,218,606 722,824,062
----------------- --------------
Stockholders' equity (note 9):
Capital stock 243,989,593 243,989,593
Paid-in capital 2,246,600 2,246,600
Retained earnings 115,126,868 99,908,492
Restatement of stockholders' equity (236,259,048) (192,329,296)
----------------- --------------
Total stockholder's equity 125,104,013 153,815,389
Contingencies and commitments (note 11)
----------------- --------------
$ 913,322,619 $ 876,639,451
================= ==============
See accompanying notes to financial statements.
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CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Statements of Income
Years ended December 31, 1995 and 1994
(Mexican pesos of constant purchasing power
at December 31, 1995)
1995 1994
---- ----
Income from constructions, services
and leasing services $ 806,840,879 1,022,344,992
Construction cost 681,020,695 865,084,753
----------------- -------------
Gross income 125,820,184 157,260,239
Administrative expenses 76,211,854 90,999,604
----------------- -------------
Operating income 49,608,330 66,260,635
----------------- -------------
Net financing cost (product):
Interest, net 61,943,124 35,648,615
Foreign exchange loss, net 143,844,318 65,174,372
Gain on monetary position (107,377,220) (6,599,451)
----------------- -------------
Total net financing cost 98,410,222 94,223,536
----------------- -------------
Other income, net (including effect
in disaster described in note 6) 71,451,426 36,213,191
----------------- -------------
Amortization of excess of cost over investment
in associated company 3,005,990 -
----------------- -------------
Income before tax and equity in the results
of associated company 19,643,544 8,250,290
----------------- -------------
Tax on assets (note 10) 1,642,354 2,211,793
----------------- -------------
Earnings before equity in the results of
associated company 18,001,190 6,038,497
Equity in the results of associated company (note 7) (2,782,814) -
----------------- -------------
Net income $ 15,218,376 6,038,497
================= =============
See accompanying notes to financial statements.
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CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Statements of Changes in Stockholders' Equity
Years ended December 31, 1995 and 1994
(Mexican pesos of constant purchasing power as December 31, 1995)
Restatement Total
Capital Paid-in Retained of stockholders' stockholders'
stock capital earnings equity equity
----- ------- -------- ------ ------
Balances at December 31, 1993 $ 174,667,516 24,112,738 93,869,994 (231,578,273) 61,071,975
Increase in capital stock through the
capitalization of liabilities
(note 9) 47,455,939 - - - 47,455,939
Increase in capital stock through the
capitalization of paid-in
capital (note 9) 21,866,138 (21,866,138) - - -
Recognition of the effects of inflation
on the financial information 39,248,977 39,248,977
Net income - - 6,038,498 - 6,038,498
---------------- ---------- ----------- ------------ -----------
Balances at December 31, 1994 243,989,593 2,246,600 99,908,492 (192,329,296) 153,815,389
Recognition of the effects of inflation
on the financial information - - - (43,929,752) (43,929,752)
Net income - - 15,218,376 - 15,218,376
---------------- ---------- ----------- ------------ -----------
Balances at December 31, 1995 $ 243,989,593 2,246,600 115,126,868 (236,259,048) 125,104,013
================ ========== =========== ============ ===========
See accompanying notes to financial statements.
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CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Statements of Changes in Financial Position
Years ended December 31, 1995 and 1994
(Mexican pesos of constant purchasing power at December 31, 1995)
1995 1994
---- ----
Operating activities:
Net earnings $ 15,218,376 6,038,498
Add charges not requiring funds:
Depreciation and amortization 21,796,751 17,608,176
Equity in the results of associated company 2,782,814 -
----------------------- -------------------
Funds provided by operations 39,797,941 23,646,674
Net investing in operating accounts (373,399,310) (20,021,584)
----------------------- -------------------
Funds (used in) provided by operating activities (333,601,369) 3,625,090
----------------------- -------------------
Financing activities:
Capital stock increases - 47,455,939
Bank loans, net 120,733,433 223,534,869
Related parties 104,439,013 (108,314,225)
----------------------- -------------------
Funds provided by financing activities 225,172,446 162,676,583
----------------------- -------------------
Investing activities:
Acquisition of furniture, machinery and
construction equipment, net (13,149,440) (59,530,154)
Write-off of marine vessel due to disaster 110,950,000 -
Advance for the acquisition of shares and
investment in shares 8,836,051 (107,070,980)
----------------------- -----------------
Funds provided by (used in) investing activities 106,636,611 (166,601,134)
----------------------- -------------------
Decrease in cash and temporary investments (1,792,312) (299,461)
Cash and temporary investments:
At beginning of year 18,567,672 18,867,133
----------------------- -------------------
At end of year $ 16,755,360 18,567,672
======================= ===================
See accompanying notes to financial statements.
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CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
(1) Operations and summary of significant accounting policies:
The Company's main activity is to render services mainly to Petroleos
Mexicanos (PEMEX) of oil and gas pipeline, construction and installation
of submarine oil and gas pipelines, manufacture and installation,
maintenance and repair of oil platforms, naval services related with
barges, tugboats and all type of marine vessels, constructions of
industrial plants, manufacture and installation of structural bridges,
construction of catalytic plants and lease of marine vessels, as well as
investment in other companies' shares.
Grupo Consorcio de Fabricaciones y Construcciones, S.A. de C.V. owns 51%
of the Company and OPI International, Inc., which was purchased by J. Ray
McDermott Holdings, Inc. in February 1995, owns the remaining 49%.
The Company has no personnel. Administrative and labor services are
provided by an affiliate.
In accordance with provisions of the Monetary Law until December 31, 1994,
it was mandatory to express all figures in financial statements or other
accounting documents in "New pesos" or with the symbol "N$". As from
January 1, 1996, this provision was revoked and it is obliged to express
them in pesos ($).
A description of the most significant accounting policies and practices
followed by the Company in the preparation of the financial statements
follows:
a. Financial statements presentation - The accompanying financial
statements include the recognition of the effects of inflation on
the financial information and are expressed in pesos of constant
purchasing power at the most date of the recent statement of
financial position.
The most significant Mexican National Consumer Price Indexes
(NCPI) used to recognize the effects of inflation were:
December 31, 1995 156.9150
December 31, 1994 103.2566
December 31, 1993 96.4550
b. Temporary investments - Stated at the lower of acquisition
cost plus earned interest at the statement of financial
position date, or estimated market value. Increases or
decreases are reflected in current year's operations.
13 (Continued)
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CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
c. Income and cost from construction and leasing services -
Income from construction, and related costs, are recognized as
incurred based on periodic estimates. Construction cost is
restated using factors derived from the NCPI.
d. Investment in shares - Investment in shares stock of
associated company from which the Company owns 40% of its
capital stock, is valued at the lower of acquisition cost plus
the recognition of equity in its results of operations, or net
market value (note 7). The excess of cost on investment is
amortized by the straight-line method over twenty years.
e. Furniture, machinery and construction equipment - The
furniture, machinery and construction equipment, including
those acquired through financial leasing, are restated at net
replacement value, based on appraisals made by independent
appraisers. Depreciation is computed using the straight-line
method, according to the useful life of the corresponding
assets.
f. Income tax (IT) - The IT charged to operations, include the
currently payable amount, and in addition recognize the effect
on IT of significant timing differences between taxable and
accounting income, on which it may reasonably be estimated
that a tax benefit or liability for tax purposes will arise
within a specific period and are not offset with timing items
of similar nature.
g. Foreign currency transactions and exchange differences - All
foreign currency transactions are recorded at the rates of
exchanges prevailing on the date of their execution or
liquidation. Foreign currency assets and liabilities are
translated at the exchange rates in force at the date of the
statement of financial position. Exchange differences are
charged to current year's operations.
h. Monetary effect - Determined by multiplying the difference
between monetary assets and liabilities at the beginning of
each month by inflation to year-end. The aggregate results
represent the gain on monetary position derived from
inflation.
i. Restatement of capital stock and retained earnings -
Determined by multiplying capital stock contributions and
retained earnings by factors derived from the NCPI, which
measure the accumulated inflation from the dates when
contributions were made and earnings or losses were generated,
to year- end. The amounts thus obtained represent the
constant values of stockholders' investment, which are stated
together with historical values.
14 (Continued)
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CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
j. Restatement of stockholders' equity - Determined by the
algebraic sum of the monetary effect, including the
accumulated results from the original monetary position and
the results from holding non-monetary assets.
(2) Foreign currency exposure and transactions:
The monetary assets and liabilities in United States dollars at
December 31, 1995 and 1994 are as follows:
(Thousands of dollars)
-----------------------
1995 1995
---- ----
Assets:
Current assets: 44,411 35,033
-------- ------
Liabilities:
Short-term 41,876 42,049
Long-term 33,358 17,690
-------- ------
75,234 59,739
-------- ------
Net liabilities 30,823 24,706
======= ======
Future cash flow in foreign currency 142,992 21,600
======= ======
15 (Continued)
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CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
At December 31, 1995 the Company had no exchange risks hedge
instruments; however, the future cash flows in dollars estimated by
the Company are as follows:
(Thousand of dollars)
Pemex:
Leasing contract for installation of
submarine oil and gas pipelines and 56,000
marine vessels
Leasing negotiation of a marine vessel
pending to be concluded* 3,600
Leasing negotiation of installation of
submarine pipelines pending to be
concluded* 42,500
Several licitations to be obtained* 25,600
Sale of TNG shares* 15,292
-------
142,992
-------
*unaudited information
The future cash flow of these transactions will be applied to cover
loans in U.S. dollars, as well as to finance the working capital.
The exchange rate with regard to U.S. dollar at December 31, 1995 and
1994 was $7.69 and $4.94, respectively. At February 2, 1996, date of
the accountants report, it was $7.50
Up to December 20, 1994, the rate of exchange slid on a daily basis;
however, on such date, the Mexican Government decided to widen the
fluctuation range. The following day, Banco de Mexico eliminated such
band allowing the rate of exchange to vary according to demand, and
supply, giving rise to a devaluation of the Mexican peso before the
U.S. dollar and other currencies.
At December 31, 1995, the Company held foreign non-monetary assets for
an approximate value of US$19,779,444, which replacement value may
only be determined in foreign currency.
16 (Continued)
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CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
Below is a summary of transactions carried out abroad during the years
ended December 31, 1995 and 1994, excluding machinery and equipment
importation:
(Thousand of dollars)
---------------------
1995 1994
---- ----
Imported supplies and spare parts 14,315 16,249
Interest expense 5,017 2,152
====== ======
(3) Transactions and balances with related companies:
The transactions carried out with affiliated companies during the
years ended December 31, 1995 and 1994 were as follows:
1995 1994
---- ----
Personnel labor expense and spare parts $ 135,420,511 121,347,966
Freight expenses 24,638,765 23,828,400
Property rental expense 4,285,130 3,950,699
Purchase of marine vessels -- 39,087,350
Interest expense 2,948,118 --
Purchase of supplies and spare parts 31,089,387 --
Other 8,285,689 --
============= ============
The amounts receivable from and payable to related companies at
December 31, 1995 and 1994, are comprised as follows:
1995 1994
---- ----
Accounts receivable:
-------------------
Corporacion de Servicios Maritimos, S.A. de C.V. $43,330,793 48,195,450
J. Ray McDermott (before OPI International Inc.) -- 41,721,399
Corporacion de Industrias y Construcciones,
S.A. de C.V. -- 11,530,712
Inmobiliaria y Administradora Turistica
Tres Playas, S.A. 8,513,315 11,062,258
Direccion Corporativa y Empresarial, S.A. de C.V. 2,087,172 3,623,415
Inmobiliaria Rio Tuxpan, S.A. de C.V. -- 1,101,684
Omnirent Aviones, S.A. de C.V. 829,366 --
Consultoria y Servicios de Ingenieria
Petrolera, S.A. de C.V. 2,518,429 --
----------- -----------
Total $57,279,075 117,234,918
=========== ===========
17 (Continued)
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CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
1995 1994
---- ----
Accounts payable:
----------------
Inmobiliaria Rio Tuxpan, S.A. de C.V. $ 2,680,099 --
Corporacion de Industrias y Construcciones,
S.A. de C.V. 4,418,705 --
Consorcio Industrial de Modulos
Electromecanicos, S.A. de C.V. 2,335,027 4,663,793
Offshore Support Services, Inc. 10,951,598 --
Personal Administrativo y de Servicos,
S.A. de C.V. 713,601 38,777
J. Ray McDermott Holdings, Inc. 24,031,598 --
Talleres Navales del Golfo, S.A. de C.V. 4,055,112 --
------------ ----------
Total $ 49,185,740 4,702,570
============ ==========
(4) Other accounts receivable:
Other accounts receivable are analyzed as follows:
1995 1994
---- ----
Recoverable income tax and tax on assets -- 2,831,131
Recoverable value added tax -- 2,854,667
Other $ 8,250,056 15,270,476
-------------- ----------
Total $ 8,250,056 20,956,274
============== ==========
(5) Advances to suppliers and inventories:
-------------------------------------
Are comprised as follows:
1995 1994
---- ----
Advances to suppliers $ 49,535,457 35,350,163
Supplies -- 70,742
----------------- ----------
Total $ 49,535,457 35,420,905
================= ==========
18 (Continued)
19
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
(6) Furniture, machinery and construction equipment:
-----------------------------------------------
The investment in furniture, machinery and construction equipment is
analyzed as follows:
December 31, 1995 Acquisition cost Restatement Total
----------------- ---------------- ----------- -----
Marine vessels $ 67,442,863 244,735,237 312,178,100
Construction equipment 15,593,649 35,412,245 51,005,894
Transportation equipment 241,892 3,952,989 4,194,881
Furniture and fixtures 648,054 1,609,830 2,257,884
Computer equipment 2,288,859 986,514 3,275,373
Constructions in progress 968,436 -- 968,436
Equipment acquired on financial
leasings 3,921,436 1,646,178 5,567,614
-------------- ----------- -----------
91,105,189 288,342,993 379,448,182
Accumulated depreciation 18,048,772 174,452,331 192,501,103
-------------- ----------- -----------
$ 73,056,417 113,890,662 186,947,079
============== =========== ===========
December 31, 1994
-----------------
Marine vessels $ 137,251,863 357,173,916 494,425,779
Construction equipment 14,721,548 85,018,030 99,739,578
Transportation equipment 246,827 5,346,233 5,593,060
Furniture and fixtures 608,896 1,950,947 2,559,843
Computer equipment 1,714,310 1,347,038 3,061,348
Constructions in progress 968,436 503,296 1,471,732
Equipment acquired on financial
leasings 4,126,882 2,399,099 6,525,981
-------------- ----------- -----------
159,638,762 453,738,559 613,377,321
Accumulated depreciation 24,794,989 285,043,932 309,838,921
-------------- ----------- -----------
$ 134, 843,773 168,694,627 303,538,400
============== =========== ===========
19 (Continued)
20
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
On October 15, 1996, due to climatological event, marine vessel No.
269 wrecked in Campeche area. An international firm specialist on
shipwrecks made an analysis and reported that the accident was a
total loss. For this situation the Company recognized on its records
the following operations:
Loss for the write-off of asset, net $ 110,950,000
Estimation of expenses related to the disaster 7,200,000
---------------
118,150,000
Claim to the insurance company (24 million dollars) 184,560,000
---------------
Excess $ 66,410,000
===============
The excess will be applied to purchase a new barge, which estimated
value is 15 million dollars, or into lease a vessel.
(7) Investment in shares and excess of cost over investment:
--------------------------------------------------------
Since 1992, CCC Fabricaciones y Construcciones, S.A. de C.V. (CCC) has
been in the process of acquiring a significant portion of the shares
of Astilleros Unidos de Veracruz, S.A. de C.V. (AUVER), with the
purpose of complementing its marine operations and transferring its
operating equipment from Tuxpan to Veracruz cities.
In this process, CCC took over the management of AUVER and in April
1992 transferred its technical and administrative personnel, as well
as its construction equipment to the facilities of AUVER to conduct
joint operations. At the same time, financial support was given to
AUVER, which in the other hand, has provided services to CCC. The net
balance of these transactions in favor of CCC amounts to $69,873,467
($45,978,461 at historical values) at December 31, 1994.
In December 1994, the fourd of the first importance court of Veracruz
City declared the bankruptcy of AUVER and, on the other hand, in May
1994, Talleres Navales del Golfo, S.A. de C.V. (TNG), an affiliate of
CCC, obtained the concession to use the harbor installations on the
shipyard located in the port of Veracruz. Consequently, CCC has
continued with its purpose to complement its marine operations by
investing in its affiliated Company TNG, by acquiring 40% of its
capital stock and initially contributing the debt payable by AUVER on
the amount of N$45,978,461. On December 31, 1994, CCC and TNG entered
into an agreement whereby the latter recognizes such debt, indicating
that CCC was committed to spend $66,450,915 of its own equity to
maintain the shipyard's operations and preserve its assets, for the
benefit of TNG and recognizes CCC as debtor for such amount, which CCC
capitalized as part of its 40% share in the capital stock of TNG. The
difference between the debt recorded in books $45,978,461, and the
final debt recognized
20 (Continued)
21
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
by TNG of $66,450,915 of $20,472,454 was recognized as other income in
the statement of income.
TNG initiated operations on March 10, 1995, with the commitment to pay
concession rights for 30 years as set forth in the concession
agreement. In addition, TNG acquired the following commitments:
- Purchase AUVER'S fixed assets for at least 10 million dollars.
- Settle a debt payable to Navimim, over the incomplete
construction of vessels, up to 2 million dollars.
- Liquidate suppliers up to 1 million dollars.
- Recognition of a liability of approximately 17 million dollars
of AUVER and in favor of Banco de Comercio Exterior; however,
TNG made negotiations with the aforementioned Bank to
recognize the liability for $28,740,000, which was capitalized
as mentioned below.
- Investment in fixed assets as necessary, including the
replacement of the dry floating deck.
- Dedicate an amount equal to 7.5% of dividends paid to
stockholders, if any, over the following ten years after the
assignment of the concession rights and obligations of the
shipyard, in order to negotiate other liabilities with AUVER
creditors.
The amount of these commitments, including the recognition of the
indebtedness with CCC referred in the following paragraph, were
recorded in TNG as preoperative expenses to be amortized on a
long-term basis.
The sale of equipment by the Company to TNG negotiated since 1994, in
the amount of N$29,218,863, was agreed in 1995, obtaining a profit of
N$20,275,154. The amount due to the Company was also capitalized as
part of 40% of the capital stock of TNG.
21 (Continued)
22
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
In summary, the Company's investment in TNG is analyzed as follows:
Capitalization of current account with AUVER $ 66,450,915
Cash delivered to TNG 15,872,480
Expenses made by TNG 4,407,520
--------------
86,730,915
Capitalization of account receivable on the sale of equipment
(includes value added tax of $4,382,831) 33,601,692
--------------
Total 120,332,607
Cash delivery 50,000
Equity in the results of TNG (computed over unaudited financial
statements for nine-month period ended December 31, 1995)
(2,782,814)
--------------
117,599,793
Par value of shares equal to 40% of the capital stock of TNG
57,480,000
--------------
Excess of cost over investment, subject to future long-term
amortization 60,119,793
Less amortization for the year 3,005,990
--------------
$ 57,113,803
==============
Starting in March 8, 1995 the TNG shareholders will be as follows:
Nominal contribution Shares
-------------------- ------
CCC $ 57,480,000 57,480,000
McDermott International Investment Co. Inc.,
(cash contributions)* 57,480,000 57,480,000
Banco Nacional de Comercio Exterior (payment
in lieu of loan)* 28,740,000 28,740,000
-------------- -----------
Tres Playas, S.A. $ 143,700,000 143,700,000
============== ===========
* McDermott International Investment Co. Inc., later acquired the
shares owned by Banco Nacional de Comercio Exterior.
22 (Continued)
23
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
The Company is negotiating to sale the investment in shares of this
associated to other related entity, and estimates that it would not
have a significant loss derived from this transaction. Such
investment was valued at acquisition cost less equity in the loss
incurred for the nine-month period ended December 31, 1995.
Management considers that the market value will be sufficient to
assure the investment in shares and the excess over investment, and
that a significant loss is not expected from this sale.
(8) Long-term debt:
The long-term at December 31, 1995 and 1994 is analyzed as follows:
1995 1994
---- ----
Loans received from:
J. Ray McDermott Holdings, Inc.:
Promissory note for US 13,291,406 bearing 13%
annual interest, payable in monthly
installments until August 31, 1998, guaranteed
with shares of CCC owned by CFC.
$102,210,912 --
Banque Paribas:
US 15,000,000 bearing 6.94% annual interest,
without maturity date, guaranteed by stockholder J.
Ray McDermott Holdings, Inc. 115,350,000 --
Serfin, S.A.:
Loan for US5,140,000 payable in monthly
installments of US 213,383. The loan bears
interest at an annual rate of 18%. The loan is
guaranteed with two marine vessels, with the rights
of two agreements with PEMEX and by a shareholder
endorser. 39,526,600 --
Loan for US 7,700,000 payable in two installments:
one for US 1,280,000 in May 1995, and another for
US 6,420,00 in November 1995. The loan bears
interest at an annual rate of 9.75%, payable
semiannually; however, as verbally agreed with the
Bank, the Company is only paying US$213,333 a month
at LIBOR plus two points. The loan is guaranteed
with the marine vessels, with the rights of the
contract with PEMEX and one stockholder endorser.
-- 57,806,348
------------ ----------
Carried forward $257,087,512 57,806,345
------------ ----------
23 (Continued)
24
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
Brought forward $257,087,512 57,806,345
Den Norse Bank:
Promissory notes for US 399,271 payable on June 30,
1997, guaranteed by J. Ray McDermott Holdings, Inc.
3,070,401 --
ICA Ingenieria, S.A. de C.V.:
Agreement entered for US 2,868,295 with interest of
13%, without guarantees 22,057,189 --
Nisho Iwai:
Loan for US12,000,000 bearing interest at LIBOR
plus 2.75%, payable in fourteen monthly
installments of US500,000 each, starting January
1995 and a final payment of US5,00,000. The loan
is guaranteed with the rights of a contract with
PEMEX, 50% endorser of a stockholder and J. Ray
McDermott, S.A. -- 90,087,818
OPI International:
Loan for US5,000,000 payable in the year 2000,
bearing 4% annual interest and guaranteed with
marine vessels. It is intended to capitalize this
loan, so therefore the creditor agrees not to
recognize interest and to translate its debt at the
exchange rate of $3.50 ($4.94 in 1995). 17,301,501 42,716,639
------------ -----------
Total long-term debt 299,516,603 190,610,802
Less current installments 64,139,260 69,442,689
------------ -----------
Long-term debt excluding current liabilities $235,377,343 121,168,113
============ ===========
On June 1, 1995 the Company completed the restructure of its
short-term bank debts, obtaining long-term refinancing for
US15,000,000 from a foreign bank (Banque Paribas) and an additional
loan for US15,000,000 from J. Ray McDermott Holding Inc., under the
terms described before.
24 (Continued)
25
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
This restructuration was applied as follows:
Dollars
-------
To reconvert to long-term various credits with
domestic banks in pesos 17,000,000
Cash delivery to TNG, for shares acquisition 3,348,000
For OPI loans payment 1,600,000
For working capital 8,052,000
----------
Total 30,000,000
==========
(9) Stockholders' equity:
The principal characteristics of the accounts comprising stockholders'
equity are described below:
a. At the General Shareholders' Meeting held on February 14 and
March 1, 1994, it was agreed to increase the variable portion
of capital stock by the capitalization of $47,455,939
($30,231,387 at historical values) of liabilities to
shareholders, plus a portion of the paid-in capital for
$21,866,138 ($13,440,875 at historical values).
b. After these increases, the capital stock is represented by
common, nominative shares, subscribed and paid with a par
value of one peso each, divided as shown below:
Shares Amount
------ ------
Series "A" shares representing fixed capital stock,
restricted to Mexicans 33,185,791 $ 33,185,791
Series "B" shares representing the variable portion of the
capital stock with no restrictions 31,884,387 31,884,387
---------- --------------
65,070,178 $ 65,070,178
========== ==============
25 (Continued)
26
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
c. At December 31, 1995 and 1994 the stockholders' equity
accounts are comprised as follows:
Capital Retained
December 31, 1995 stock Paid-in capital earnings (deficit)
----------------- ----- --------------- ------------------
Historical values $ 65,070,178 1,380,960 (106,651,726)
Restatement 178,919,415 865,640 221,778,594
------------ ------------ ------------
In constant pesos $243,989,593 2,246,600 115,126,868
============ ============ ===========
December 31, 1994
-----------------
Historical values $ 65,070,178 1,380,960 (26,763,094)
Restatement 178,919,415 865,640 126,671,586
------------ ------------ ------------
In constant pesos $243,989,593 2,246,600 99,908,492
============ ========= ==========
d. Retained earnings are subject to the following restrictions:
- 5% of net income for the year should be appropriated
to constitute the legal reserve, until it reaches
one-fifth of capital stock.
- The amount of stockholders' contributions and
retained earnings pending to be distributed, restated
on tax bases, on which income tax has been paid, may
be reimbursed or distributed to the stockholders tax
free. Other reimbursements and distributions in
excess of these amounts, according to the procedure
stipulated by the law, are subject to income tax at
the rate of 34% and therefore, stockholders may only
dispose of 66% of such amounts.
(10) Income tax (IT), tax on assets (TA) and tax loss carryforward:
--------------------------------------------------------------
In accordance with current tax regulations, companies must pay the
greater of IT and TA. Both taxes recognize the effects of inflation,
although in a different manner than accounting principles generally
accepted in Mexico.
The TA Law impose a 1.8% rate (2% as of 1994) on assets restated in
the case of fixed assets and deducted of some liabilities.
The TA payable in excess of IT for the year may be recovered in the
ten succeeding years, restated by inflation, provided that in any such
years IT exceeds TA.
26 (Continued)
27
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
Since TA exceeded IT in 1994 and 1993, and due to its uncertain
recovery, TA payable was charged to operations for the year.
At December 31, 1995 the TA that may be recovered in the future is as
follows:
Amount
------------------------------------------------
Restated at
Originated in Original December 31, 1995 Expire in
------------- -------- ----------------- ---------
1989 $ 199,693 432,478 1999
1990 129,129 328,264 2000
1994 1,455,414 2,211,647 2004
1995 1,428,521 1,542,354 2005
---------- ---------
Total $3,212,757 4,514,743
========== =========
A reconciliation between book and taxable income for the years ended
December 31, 1995 and 1994 is summarized below:
1995 1994
---- ----
Income before taxes and equity in results of
associated company $ 19,643,544 8,250,290
Add (deduct):
Accounting effect of the recognition
of inflation (95,107,008) (7,127,413)
Revenues from unapproved construction
works estimations, net of advances
received (408,095,696) (83,988,822)
Tax cost of construction 47,693,405 37,451,209
Non deductible expenses and costs 161,603,060 21,979,702
Inflationary component, net 146,645,603 277,128
Difference between accounting and
tax depreciation and amortization (109,194,135) (2,455,088)
Other, net 3,005,990 --
------------- -----------
Tax loss (233,805,237) (25,612,914)
============= ===========
27 (Continued)
28
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
At December 31, 1995 there are net timing differences for a net amount
of $408,095,696, on which no effect of deferred IT has been recognized
as it is considered that they do not meet the requirements set forth
by accounting principles generally accepted in Mexico. These
differences may increase the tax basis for future years and refer to
non taxable revenues from estimations, accruable advances when
received, advanced deduction of construction costs and other
provisions.
In accordance with the IT Law, a tax loss for a period, restated by
inflation, may be carried forward to the taxable income of the five
succeeding tax periods, which under certain circumstances may be
extended to ten year period. At December 31, 1995 tax loss
carryforward and the year in which the right of use will expire are as
follows:
Amount
---------------------------------
Restated at
Originated in Original December 31, 1994 Expire in
------------- -------- ----------------- ---------
1994 $ 16,853,925 17,385,231 1999
1995 (estimated) 233,805,237 233,805,237 2000
============ ===========
(11) Contingencies and commitments:
------------------------------
a. As mentioned in note 1, the Company has no personnel and
administrative services are rendered by four affiliates which, in
turn, invoice the Company for payments made to their personnel in
case of separation, disability or death, as incurred. The Company
records the expense on the same bases and does not recognize a
liability to cover other future labor benefits such as seniority
premiums, as these are considered immaterial in view of high
personnel turnover.
b. The Company is negotiating to sale the investment in shares of the
associate Talleres Navales del Golfo, S. A. de C. V. and the
result of this transaction is contingent.
c. At December 31, 1995 and 1994, the Company is in process of
reaching an agreement with certain affiliates to determine the
amount payable for barges leasing and office rental. The amount
subject to negotiation, recorded as an affiliates' accounts
receivable are $31,720,248 and $25,033,494, respectively.
28 (Continued)
29
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Financial Statements
(Mexican pesos of constant purchasing power
at December 31, 1995)
d. The Company is forced to guarantee public works bid with PEMEX
with a bank check in the latters' favor which is neither collected
nor recorded, for 5% of the total bid. At December 31, 1995 the
balance for this concept amounted to $27,900,100.
e. The Company is responsible for invoices discounted through
factoring, amounting to $5,185,094.
f. During the normal course of operations, the Company faces several
contingencies derived from lawsuits filed against it as well as on
its favor, and which, in the opinion of the legal counsel and
Company's management, will have no significant effect on the
financial statements.
29
30
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
CONDENSED STATEMENT OF FINANCIAL POSITION
SEPTEMBER 30, 1996
(IN THOUSANDS OF MEXICAN PESOS OF
CONSTANT PURCHASING POWER AT
SEPTEMBER 30, 1996)
(UNAUDITED)
ASSETS
------
Current Assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (2,249)
Investments, principally in associated company . . . . . . . . . . . . . 94,521
Accounts receivable:
Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 539,279
Related companies . . . . . . . . . . . . . . . . . . . . . . . . . 101,536
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,539
Advances to suppliers . . . . . . . . . . . . . . . . . . . . . . . . . 41,175
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . 8,291
-----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . 832,092
-----------
Furniture, machinery and construction equipment, net . . . . . . . . . . . . . . 178,643
-----------
$ 1,010,735
===========
See accompanying notes to financial statements.
30
31
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
CONDENSED STATEMENT OF FINANCIAL POSITION
SEPTEMBER 30, 1996
(IN THOUSANDS OF MEXICAN PESOS OF
CONSTANT PURCHASING POWER AT
SEPTEMBER 30, 1996)
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 297,146
Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,482
Accounts payable to suppliers and accrued liabilities . . . . . . . . . 257,662
Related companies . . . . . . . . . . . . . . . . . . . . . . . . . . . 139,375
Total current liabilities . . . . . . . . . . . . . . . . . . . 748,665
----------
Long term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147,491
----------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 896,156
Stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,579
----------
Contingencies --
$1,010,735
==========
See accompanying notes to financial statements.
31
32
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
CONDENSED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(IN THOUSANDS OF MEXICAN PESOS OF
CONSTANT PURCHASING POWER AT
SEPTEMBER 30, 1996)
(UNAUDITED)
1996 1995
---- ----
Income from constructions, services and leasing services . . . . . . $ 806,441 $663,723
Construction cost . . . . . . . . . . . . . . . . . . . . . . . . . . 675,039 558,923
--------- --------
Gross income . . . . . . . . . . . . . . . . . . . . . . . . 131,402 104,800
Administration expenses . . . . . . . . . . . . . . . . . . . . . . . 66,610 65,420
--------- --------
Operating income . . . . . . . . . . . . . . . . . . . . . . 64,792 39,380
Net financing cost . . . . . . . . . . . . . . . . . . . . . . . . . 2,099 21,148
Other income (expenses), net . . . . . . . . . . . . . . . . . . . . (17,261) 2,121
--------- --------
Income before tax and equity in the results
of associated company . . . . . . . . . . . . . . . . . . . 45,432 20,353
Tax on assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,350 1,867
--------- --------
Income before equity in the results of
associated company . . . . . . . . . . . . . . . . . . . . . 44,082 18,486
Equity in the results of associated company . . . . . . . . . . . . . 19,780 5,463
--------- --------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,302 $ 13,023
========= ========
See accompanying notes to financial statements.
32
33
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
CONDENSED STATEMENTS OF CHANGES IN FINANCIAL POSITION
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(IN THOUSANDS OF MEXICAN PESOS OF
CONSTANT PURCHASING POWER AT
SEPTEMBER 30, 1996)
(UNAUDITED)
1996 1995
---- ----
Operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,302 $ 13,023
Add charges not requiring funds:
Depreciation and amortization . . . . . . . . . . . . . 10,261 9,886
Equity in the results of associated company . . . . . . 19,780 5,463
--------- ---------
Funds provided by operations . . . . . . . . . . . . . . 54,343 28,372
Net investing in operating accounts . . . . . . . . . . . . . . . . . 43,237 (281,930)
--------- ---------
Funds provided by (used in) operating activities . . . . 97,580 (253,558)
--------- ---------
Financing activities:
Bank loans, net . . . . . . . . . . . . . . . . . . . . . . (89,968) 138,410
Related parties . . . . . . . . . . . . . . . . . . . . . . (28,100) 107,224
--------- ---------
Funds provided by (used in) financing activities . . . . (118,068) 245,634
--------- ---------
Investing activities:
Acquisition of furniture, machinery and equipment, net . . . (1,957) (1,510)
Advance for the acquisition of shares . . . . . . . . . . . -- (10,638)
--------- ---------
Funds used in investing activities . . . . . . . . . . . (1,957) (12,148)
--------- ---------
Decreases in cash . . . . . . . . . . . . . . . . . . . . . . . . . . (22,445) (20,072)
Cash:
At beginning of period . . . . . . . . . . . . . . . . . . . 20,196 22,354
--------- ---------
At end of period . . . . . . . . . . . . . . . . . . . . . . $ (2,249) $ 2,282
========= =========
See accompanying notes to financial statements.
33
34
CCC FABRICACIONES Y CONSTRUCCIONES, S.A. DE C.V.
Notes to the Condensed Financial Statements
(Mexican Pesos of Constant Purchasing Power
at September 30, 1996, except as indicated)
(Unaudited)
1. BASIS OF PRESENTATION - The accompanying unaudited condensed financial
statements include the accounts of the Company. In the opinion of
management of the Company, all adjustments (such adjustments
consisting only of a normal recurring nature) necessary for a fair
presentation of the operating results for the interim periods
presented have been included in the unaudited condensed financial
statements.
2. CONTINGENCIES - The Company is forced to guarantee public works bid
with Petroleos Mexicanos ("PEMEX") with a bank check in the latter's
favor which is neither collected nor recorded, for 5% of the total
bid. At September 30, 1996 the balance for this concept amounted to
approximately $155,506,000.
In the ordinary course of business, the Company is responsible for
invoices discounted through factoring. As of September 30, 1996 there
were no invoices subject to factoring.
During the normal course of operations, the Company faces several
contingencies derived from lawsuits filed against it as well as on its
favor, and which, in the opinion of the legal counsel and Company's
management, will have no significant effect on the financial
statements.
3. SUBSEQUENT EVENTS - During October 1996 the Company sold its
investment in shares of the associate Talleres Navales del Golfco,
S.A. de C.V. for $94,375,000 and recognized a loss on the disposition
approximating $16,000,000. Included under the caption "equity in the
results of associated company" for 1996 is a charge of $16,000,000 to
recognize the loss as of September 30, 1996.
On December 23, 1996 Global Industries, Ltd. ("Global") acquired from
J. Ray McDermott, S.A. a 49% ownership interest in the Company.
Coincident with the acquisition, Global (i) loaned US $23.0 million to
the Company to repay US $15.0 million of existing bank indebtedness
and for working capital needs and (ii) provided performance guarantees
supporting approximately US $50.0 million of the Company's existing
indebtedness primarily relating to construction projects in progress.
34
35
SIGNATURE
Pursuant to the requirements of Section 12 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.
Dated: February 12, 1997
GLOBAL INDUSTRIES, LTD.
By: /S/ MICHAEL J. POLLOCK
---------------------------------
Michael J. Pollock
Vice President, Chief Financial Officer
35
36
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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23.1 Consent of KPMG Cardenas Dosal, S.C.
36