ITEM 3. LEGAL PROCEEDINGS
Not applicable.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of the Company's security holders during the fourth quarter of 1995.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock, $0.10 par value per share, is listed on the New York Stock Exchange under the symbol "GLM." At January 31, 1996, there were 8,015 stockholders of record of the Common Stock. The high and low sales prices of the Common Stock as reported on the New York Stock Exchange Composite Transactions Tape for each full quarterly period within the past two years appear under "Consolidated Selected Quarterly Financial Data," which follows the notes to the consolidated financial statements.
The Company has not declared any dividends on its common stock since 1985. Subject to the preferential dividend rights of holders of the Company's preferred stock, if any, the holders of the Common Stock will be entitled to receive when, as and if declared by the Board of Directors out of funds legally available therefor, all other dividends payable in cash, in property, or in shares of Common Stock. The indenture governing the Company's Senior Secured Notes contains certain restrictions with respect to the payment of dividends on the Common Stock (other than stock dividends). (See Note 6 of Notes to Consolidated Financial Statements.) It is not expected that dividends will be declared or paid on the Common Stock in the foreseeable future.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operating Results
Summary
For 1995, operating income increased to $60.3 million from $26.1 million for 1994. The improvement in operating results was primarily due to generally higher contract drilling dayrates and utilization, lower depreciation expense due to a change in estimated rig service lives, the commencement of operations in 1995 of three offshore drilling rigs purchased in 1994, and an increase in the number of turnkey wells completed.
For 1994, operating income increased to $26.1 million from $3.2 million for 1993. The improvement in operating results was due to (i) higher revenues and lower operating expenses attributable to operating five additional rigs in the lower-cost Gulf of Mexico market during 1994 compared to 1993, when the rigs were operating for a portion of the year in weaker, higher-cost foreign markets, (ii) the full-year effect of three rigs acquired from Transocean Drilling AS in September 1993, (iii) lower mobilization expense attributable to moving fewer rigs during 1994, (iv) increased contract drilling dayrates in the U.S. Gulf of Mexico for 1994 compared to 1993, and (v) an increase in the number of turnkey drilling contracts completed. These improvements were partially offset by lower turnkey profit margins, normal declines in oil and gas production and lower oil and gas sales prices.
Data relating to the Company's operations by business segment follows:
The Company reported net income of $51.9 million for 1995 as compared with net income of $1.3 million for 1994 and a net loss of $26.5 million for 1993. Net income for 1995 included a $14.7 million gain on the sale of the offshore drilling rig, Glomar Main Pass III. Net income for 1994 included a $3.5 million charge for the cumulative effect of a required change in accounting for postemployment benefits. Excluding such nonrecurring items, net income for 1995 and 1994 was $37.2 million and $4.8 million, respectively, compared to a net loss of $26.5 million for 1993.
In the U.K. sector of the North Sea, increased rig demand and a decrease in the number of rigs available have resulted in higher contract drilling dayrates in 1995 as compared with 1994, particularly for semisubmersible rigs. A current oversupply of natural gas in the North Sea's U.K. sector, however, has created uncertainty regarding future demand for North Sea jackups. An oversupply of jackups in the North Sea, which could result from any reduction in future demand, could put downward pressure on dayrates and utilization rates for the Company's two jackup drilling rigs which operate in the U.K. sector of the North Sea. Demand in other sectors of the North Sea remains strong. Offshore West Africa, industry utilization and dayrates have steadily improved since the end of 1994. In the U.S. Gulf of Mexico, industry demand began weakening in late December 1994 due to seasonal factors, but stabilized during the first quarter of 1995. Since March 1995, demand in the U.S. Gulf of Mexico has increased, and, as of December 31, 1995, 141 Gulf rigs were under contract, up from a low of 109 earlier in the year.
Contract Drilling Operations
Data with respect to the Company's contract drilling operations follows:
Of the $43.0 million increase in contract drilling revenues for 1995 compared to 1994, $26.4 million was attributable to increases in dayrates, $14.2 million was attributable to increases in rig utilization, and $2.4 million was attributable to an increase in non-dayrate revenue. On a regional basis, revenues from the North Sea increased by $26.5 million due to higher utilization and dayrates. The $23.5 million increase in revenues attributable to offshore West Africa was primarily the result of the full-year effect of two rigs mobilized to West Africa from other areas in 1994 and the commencement of operations of the Glomar Adriatic IX and Glomar Adriatic X in 1995. The $6.2 million decline in revenues in the "other" category for 1995 compared to 1994 was due to the mobilization of the two rigs to West Africa in 1994 noted above.
Of the $12.3 million increase in contract drilling revenues for 1994 compared to 1993, $16.7 million was attributable to increases in rig utilization and $2.0 million was attributable to increases in dayrates. Such increases were partially offset by a decrease of $6.4 million in non-dayrate revenue primarily attributable to the completion of an integrated services contract in the North Sea in December 1993. Regionally, revenues from the Gulf of Mexico increased by $37.3 million due to (i) the 1993 mobilization to the Gulf of two rigs from West Africa and three rigs from the North Sea, (ii) the full-year effect of two of three rigs acquired from Transocean Drilling AS and (iii) higher dayrates for the Company's other rigs in the Gulf of Mexico. Revenues from the North Sea decreased by $28.1 million due to (i) the mobilization of the three rigs from the North Sea to the Gulf of Mexico in 1993, (ii) the sale of the offshore drilling rig, Glomar Moray Firth, to Transocean Drilling AS in September 1993 and the termination of a management contract with respect to that rig in December 1993, and (iii) lower North Sea dayrates and utilization. The $2.9 million increase in revenues in the "other" category for 1994 compared to 1993 was due to higher dayrates and utilization with respect to one rig in the Far East, the 1993 mobilization of one rig to Trinidad from the Gulf of Mexico, and the full-year effect of one of the three rigs acquired from Transocean Drilling AS in September 1993, partially offset by the mobilization of one rig from Alaska to West Africa in the fourth quarter of 1994 and the termination of a management contract in Alaska during 1993.
Effective January 1, 1995, the Company increased to 25 years the estimated useful lives of its jackup drilling rigs and increased to 20 years the estimated useful lives of its semisubmersible drilling rigs and drillship. In addition, salvage values were reduced to $500,000 per rig for jackups and $1,000,000 per rig for both semisubmersibles and the drillship. The effect of the change in estimated service lives and salvage values was to decrease 1995 depreciation expense by approximately $11.2 million. Depreciation expense for contract drilling operations totaled $27.4 million for 1995, $34.9 million for 1994 and $32.0 million for 1993. The number of rigs subject to depreciation averaged 25 rigs in 1995 and 1994 and 24 rigs in 1993. Three rigs, the Glomar Adriatic IX, Glomar Adriatic X, and Glomar Adriatic XI, were not in service nor subject to depreciation for part of 1995. The Glomar Adriatic IX and Glomar Adriatic X were purchased by the Company in February 1994 and began undergoing refurbishment at that time. Refurbishment of the Glomar Adriatic IX was completed in March 1995, and the rig was mobilized to Nigeria where it began drilling in May. Refurbishment of the Glomar Adriatic X was completed in October 1995, and the rig was mobilized to Angola where it began drilling for a customer in November. The Glomar Adriatic XI was purchased by the Company in November 1994 and began operations for a customer in the North Sea in October 1995 after extensive modifications were completed.
The Company's operating profit margin for contract drilling operations for 1995 increased to 21 percent from 12 percent in 1994 and 2 percent in 1993. The increase in operating profit margin in 1995 compared to 1994 was due to the decrease in depreciation expense discussed above as well as to higher dayrates earned on the Company's rigs in 1995. Operating expenses other than depreciation increased by $21.5 million in 1995 compared to 1994. The increase in operating expenses in 1995 was due in part to (i) the 1995 commencement of operations of the Glomar Adriatic IX, Glomar Adriatic X and Glomar Adriatic XI, (ii) a higher payout under a net revenue-sharing arrangement with Transocean Drilling AS with respect to two rigs, (iii) the March 1995 commencement of a drilling contract in Nigeria for a rig which was mobilized from Alaska where it had been on standby for a customer in 1994, (iv) the September 1994 commencement of a drilling contract in Angola for a rig which was previously leased to an operator in Saudi Arabia under a bareboat charter agreement, and (v) higher utilization of three North Sea rigs which were idle for a significant part of 1994. The operating profit margin for 1993 was relatively low primarily as a result of the cost of mobilizing a number of rigs from the North Sea and West Africa to the Gulf of Mexico in 1993, as well as to lower dayrates and utilization in 1993.
For the offshore drilling industry as a whole, the number of rigs under contract in the Gulf of Mexico increased throughout 1993 due to stronger domestic natural gas prices and a growing number of drilling prospects developed from enhanced seismic technology. As demand in the Gulf increased, drilling contractors during 1993 and 1994 relocated a significant number of offshore rigs from weak overseas markets to the Gulf, resulting in downward pressure on Gulf dayrates. A seasonal decline in demand beginning in December 1994 was exacerbated by low natural gas prices, and the number of rigs under contract industry-wide fell substantially from December 1994 to February 1995. As a result of this weakening in demand, dayrates received for newly contracted jackups in the Gulf of Mexico trended downward between November 1994 and March 1995. Despite stagnant natural gas prices in the first half of 1995, drilling demand in the Gulf increased significantly since March and, as of December 31, 1995, 141 Gulf rigs were under contract. As demand increased, dayrates for jackups in the Gulf began recovering. Aside from the seasonal recovery, the strength in demand in the U.S. Gulf of Mexico beginning in the second quarter of 1995 can be attributed to, among other things, (i) improved seismic and drilling technologies which have lowered the finding costs of oil and gas and lower oil and gas producers' operating costs, making exploration and production economical at lower oil and natural gas prices, and (ii) expectations of higher future natural gas prices. For the full year, average demand in the Gulf increased to 134 rigs under contract (76 percent utilization) for 1995 from 131 rigs (75 percent utilization) for 1994 and 118 rigs (78 percent utilization) for 1993. As of February 15, 1996, all eleven of the Company's rigs in the Gulf of Mexico were under contract. The Company averaged 100 percent utilization for its rigs in the Gulf of Mexico for 1995, 99 percent for 1994 and 95 percent for 1993.
In the U.K. sector of the North Sea, (i) promising oil discoveries west of the Shetland Islands, (ii) operators' increased drilling to fulfill commitments to drill previously awarded blocks, (iii) fewer available North Sea rigs, (iv) increasing optimism with respect to the outlook for stable oil prices, and (v) increased levels of operators' cash flow, among other factors, have resulted in higher dayrates and utilization in the U.K. sector of the North Sea in 1995 compared to 1994, particularly for semisubmersible rigs. However, an oversupply of natural gas in the U.K. sector of the North Sea has caused some gas drilling programs to be delayed and has created uncertainty over future demand for North Sea jackups, which in the U.K. drill predominantly for gas. An oversupply of jackups in the North Sea, which could result from any reduction in future demand, could put downward pressure on dayrates and utilization rates for the Company's Glomar Labrador I and Glomar Adriatic XI jackups. Under the Glomar Labrador I's current contract, which is expected to terminate in April 1996, the dayrate is subject to adjustment periodically based on an index of market dayrates. The Glomar Adriatic XI is under contract through approximately October 1996 at dayrates higher than or equal to the dayrate the rig is presently receiving. The Company's two semisubmersible rigs operating in the North Sea, the Glomar Arctic I and Glomar Arctic III, compete in markets driven primarily by oil prices and are not expected to be affected by any weakness caused by low natural gas prices. For the fourth quarter of 1995, average drilling industry demand in the North Sea decreased to 76 rigs under contract (94 percent utilization) from 77 rigs (96 percent utilization) for the third quarter of 1995. For the full year, average demand in the North Sea increased to 71 rigs under contract (90 percent utilization) for 1995 from 64 rigs (76 percent utilization) for 1994. For 1993, North Sea demand averaged 81 rigs (79 percent utilization). As of February 15, 1996, all four of the Company's rigs in the North Sea were under contract. The Company averaged 100 percent utilization for its drilling rigs in the North Sea for 1995, 68 percent for 1994 and 83 percent for 1993.
During 1993, the civil war in Angola, a reduction of the Nigerian national oil company's participation in ongoing projects and volatile oil prices caused a reduction in the demand for drilling rigs offshore West Africa and, accordingly, a reduction in dayrates. Despite the unrest, supply and demand stabilized in 1994. As a result, the Company mobilized two offshore drilling rigs, the Glomar High Island IX and the Glomar Adriatic VIII, from weakening other markets to West Africa during 1994. In 1995, the Company placed into service the recently acquired Glomar Adriatic IX and Glomar Adriatic X, which commenced drilling operations offshore West Africa in May and November, respectively. For the fourth quarter of 1995, average drilling industry demand offshore West Africa increased to 35 rigs under contract (87 percent utilization) from 32 rigs (84 percent utilization) for the third quarter of 1995. For the full year, average demand offshore West Africa increased to 31 rigs under contract (83 percent utilization) for 1995 from 24 rigs (75 percent utilization) for 1994. For 1993, West African demand averaged 26 rigs (70 percent utilization). In February 1996, the Company began mobilizing the Glomar High Island III from the U.S. Gulf of Mexico to Angola where it will begin drilling for a customer in March. The cost of the mobilization is expected to be substantially reimbursed by the client. As of February 15, 1996, all eight of the Company's rigs located offshore West Africa, including the Glomar High Island III, were under contract. The Company's average utilization rate for its rigs located offshore West Africa was 95 percent for 1995, 98 percent for 1994 and 88 percent for 1993.
As of December 31, 1995, the worldwide industry utilization rate for competitive offshore rigs was 83 percent, with 91 of the 546 worldwide competitive rigs unemployed. The Company anticipates that contracts on 18 of the Company's 26 rigs under contract as of February 15, 1996, will expire at varying times on or prior to May 31, 1996. No assurance can be made that the Company will obtain drilling contracts for its rigs upon the completion of current contracts; however, short-term contracts have been typical in the industry for the past decade, and the Company considers its upcoming contract expirations typical of prevailing market conditions and consistent with the normal course of business.
Drilling Management Services
Revenues for drilling management services increased by $70.0 million to $212.8 million in 1995 from $142.8 million in 1994. Operating income increased by $6.5 million to $17.3 million in 1995 from $10.8 million in 1994. The $70.0 million increase in revenues for the year consisted of (i) a $41.9 million increase attributable to an increase in the number of wells drilled, from 52 in 1994 to 67 in 1995, (ii) a $12.3 million increase attributable to higher average turnkey revenues per well, (iii) $13.9 million from the completion work on a multi-well North Sea turnkey project in 1995, and (iv) a $1.9 million increase in other drilling management revenues. Average turnkey revenues per well were higher because a higher percentage of the wells drilled in 1995 were directional and/or deep, high-pressured wells as compared with those completed in the prior year.
For 1994, drilling management services reported an $82.9 million increase in revenues to $142.8 million from $59.9 million in 1993, and a $3.2 million increase in operating income to $10.8 million from $7.6 million in 1993. The improvement resulted from the completion of 52 wells in 1994 as compared to 18 wells in 1993, partially offset by lower average profit margins on the 1994 wells.
The increase in the number of turnkey wells drilled in 1995 and in 1994 was attributable in part to a more competitive pricing policy and oil and gas operators' increased reliance on turnkey contractors to supplement internal drilling staffs.
Operating income for drilling management services expressed as a percentage of drilling management revenues declined to 8 percent for each of 1995 and 1994 as compared with 13 percent for 1993. Four wells in 1995 incurred losses aggregating $5.7 million, compared to losses on seven wells aggregating $5.4 million in 1994, and no losses on wells in 1993.
Oil and Gas Operations
Data related to the Company's oil and gas production follows:
Despite higher oil and natural gas production and higher oil prices, revenues from oil and gas were unchanged at $9.8 million for each of 1995 and 1994 due to a decline in the average price received for gas. The increase in oil and gas production was due to production from new properties, partially offset by normal production declines. Operating income of $3.4 million for 1995 was slightly lower than for 1994 due principally to higher depletion expense.
Oil and gas revenues in the amount of $9.8 million for 1994 were lower than the $11.6 million of revenues reported for 1993 due to lower volumes of oil and gas produced and lower oil and gas prices. Oil and gas production decreased as a result of normal production declines, the 1993 sale of an oil producing property, and the temporary suspension of production in order to repair an oil and gas well in 1994, partially offset by production from two new properties. Operating income of $3.7 million for 1994 was lower than the $5.3 million of operating income reported for 1993 due to the lower revenues discussed above and higher costs associated with the development of new prospects, offset in part by a lower depletion rate in 1994 as compared with 1993. Depletion expense decreased to $1.9 million for 1994 from $3.3 million for 1993. The lower depletion rate resulted in part from the property sale in 1993, and from the deferral of net profits earned on certain turnkey drilling contracts, which reduced the depletable base.
Other Income and Expense
Interest expense was $30.2 million for each of 1995 and 1994 compared to $32.1 million in 1993. The decrease in interest expense from 1993 to 1994 was due to the reduction in long-term debt resulting from the retirement of the rig mortgage note for the Glomar Baltic I in August 1993.
Interest capitalized increased by $1.9 million to $5.6 million in 1995 from $3.7 million in 1994. Interest capitalized in 1994 was attributable to the acquisition and refurbishment of two offshore drilling rigs, the Glomar Adriatic IX and Glomar Adriatic X, which were acquired in February 1994. The increase in interest capitalized in 1995 was primarily due to the construction work on the Glomar Adriatic XI, which was acquired in November 1994, and to higher amounts capitalized with respect to the Glomar Adriatic IX and Glomar Adriatic X as a result of continuing capital expenditures. The higher interest capitalization was offset in part by the completion of the refurbishment of the Glomar Adriatic IX in the second quarter of 1995. Work on the Glomar Adriatic X and Glomar Adriatic XI was completed in the fourth quarter of 1995.
Interest income increased by $0.9 million to $4.7 million in 1995 from $3.8 million in 1994 primarily due to higher short-term investment balances. Interest income increased to $3.8 million for 1994 from $2.7 million for 1993, primarily due to the recognition of $0.8 million in connection with the favorable 1994 settlement of the Company's demobilization obligations with respect to a third-party owned rig aboard the Glomar Beaufort Sea I.
In June 1995 the Company completed the sale of its offshore drilling rig, the Glomar Main Pass III, for $22.4 million in cash, net of expenses, and recognized a gain of $14.7 million.
Other income for 1994 consisted of $1.4 million in dividend income and a $0.6 million gain on the sale of marketable equity securities.
For 1995, the provision for income taxes was not significant due to the utilization of net operating loss carryforwards for U.S. federal income tax purposes. Income tax expense for 1995, 1994 and 1993 primarily consisted of income taxes applicable to foreign countries in which the Company had no loss carryforwards.
As of December 31, 1995, the Company had approximately $1.1 billion of net operating loss carryforwards ("NOLs") expiring in various amounts at various times from the year 2000 to 2009. The NOLs may be used to reduce taxable income in future years prior to their expiration. The Company's ability to utilize the NOLs is dependent on the amount and timing of future earnings. Due to the uncertain nature of their ultimate realization, the Company has not recognized on its balance sheet an asset for the amount of the future tax benefits of the NOLs. Instead, the Company has recorded a valuation allowance against the deferred tax asset in the amount of $381.8 million as of December 31, 1995. The amount of the valuation allowance is subject to periodic review. A reasonable possibility exists that the conditions which existed at December 31, 1995 giving rise to the recognition of the valuation allowance as of that date may change in the near term. If the allowance is reduced in a future period, the adjustment would be recorded as a reduction to income tax expense.
During 1994, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 112, "Employers' Accounting for Postemployment Benefits." The cumulative impact of this change was to decrease 1994 net income by $3.5 million.
In October 1995, the Financial Accounting Standards Board issued SFAS No. 123, "Accounting for Stock-Based Compensation," which sets forth accounting and disclosure requirements for stock-based compensation arrangements. The new statement encourages, but does not require, companies to measure stock-based compensation cost using a fair-value method, rather than the intrinsic-value method prescribed by Accounting Principles Board ("APB") Opinion No. 25. Companies choosing to continue to measure stock-based compensation using the intrinsic-value method must disclose on a pro forma basis net income and net income per share as if the fair-value method were used. The Company intends to adopt the disclosure requirements of SFAS No. 123 in 1996 and to continue to measure stock-based compensation cost using the intrinsic-value approach prescribed by APB Opinion No. 25. Adoption of the new standard is not expected to have a material effect on the Company's earnings.
Liquidity and Capital Resources
During the three-year period ended December 31, 1995, the Company entered into a number of transactions designed to improve its financial and competitive positions. In 1993 the Company sold 21,150,000 shares of common stock for $74.2 million, of which $26.0 million was used to retire a rig mortgage note and $17.0 million was used to pay part of the purchase price of three offshore drilling rigs. In 1994 the Company sold marketable securities received in connection with a 1992 settlement of natural gas take-or-pay litigation for total cash proceeds of $30.8 million. The Company used the $30.8 million sale proceeds plus available cash, for a total of $39.8 million, to purchase three offshore drilling rigs in 1994. In 1994 and 1995, the Company spent an additional $56 million to refurbish and upgrade the three rigs purchased in 1994. Finally, in 1995 the Company sold a jackup rig for $22.4 million, recognizing a gain of $14.7 million.
In 1995, cash flow provided by operating activities amounted to $75.0 million. An additional $23.9 million was provided from sales of properties and equipment, primarily the sale of the Glomar Main Pass III. From the $98.9 million sum of cash flow from operations and proceeds from sales of properties and equipment, plus available cash, $73.5 million was used for capital expenditures, and $28.8 million was used for purchases of marketable securities (net of maturities). In 1994, cash flow provided by operating activities totaled $61.3 million, including $17.9 million in proceeds from the liquidation of a promissory note received in connection with the 1992 settlement of the Company's take-or-pay litigation.
As of December 31, 1995, the Company's long-term debt totaled $225.0 million, consisting entirely of 12-3/4% Senior Secured Notes due 1999 (the "Senior Secured Notes"), and shareholders' equity totaled $269.0 million. The annual interest on the Senior Secured Notes is $28.7 million, payable semiannually, each June and December.
The Senior Secured Notes do not require any payments of principal prior to their stated maturity in December 1999, but the Company is required to make offers to purchase Senior Secured Notes upon the occurrence of certain events defined in the indenture, such as asset sales, or a change of control, or if the annual cash flow of the Company exceeds certain specified levels. In the first quarter of 1996, the Company will make an offer to purchase, at a price of 100 percent of principal, $39.3 million aggregate principal amount of Senior Secured Notes from the sum of the excess cash flow for 1995 and the proceeds of asset sales that were not applied to the purchase of Replacement Assets as defined in the indenture. As of February 9, 1996, the quoted market price of the Senior Secured Notes was 110 percent of principal, which exceeds the price at which the Company is required to make its purchase offer. The amount of Senior Secured Notes the Company will purchase, if any, is not expected to be material. The portion of the $39.3 million of cash that is not used to purchase Senior Secured Notes will become unrestricted and available to the Company for general purposes upon termination of the Company's purchase offer in the second quarter of 1996.
The Senior Secured Notes are not redeemable at the option of the Company prior to December 15, 1997. On or after December 15, 1997, the Senior Secured Notes are redeemable at the option of the Company, in whole at any time or in part from time to time, at a price of 102 percent of principal if redeemed during the twelve months beginning December 15, 1997, or at a price of 100 percent of principal if redeemed on or after December 15, 1998, in each case together with interest accrued to the redemption date. The Company presently expects that, absent unforeseen circumstances, it will seek to retire the Senior Secured Notes from the Company's cash and marketable securities, to the extent available, and/or the proceeds of debt financings as early as December 1997.
The indenture under which the Senior Secured Notes are issued imposes significant operating and financial restrictions on the Company and requires that a first lien in favor of the trustee be maintained, for the benefit of the holders of Senior Secured Notes, on a significant portion of the Company's material assets. Such restrictions affect, and in many respects limit or prohibit, among other things, the ability of the Company to incur additional indebtedness, make capital expenditures, create liens, sell assets, engage in mergers or acquisitions, and make dividends or other payments. The restrictive covenants contained in and liens provided for under the indenture could significantly limit the ability of the Company to respond to changing business or economic conditions or to respond to substantial declines in operating results.
Capital expenditures for 1996 are estimated to be $35 million, principally for improvements to the Company's drilling fleet.
As of December 31, 1995, the Company had $86.6 million in cash, cash equivalents and marketable securities, including $42.1 million which was restricted from use for general corporate purposes. The restricted amount includes (i) $27.7 million in proceeds from asset sales and $11.6 million in excess cash flow for 1995, which will become unrestricted only after and to the extent not used to purchase Senior Secured Notes in the Senior Secured Notes purchase offer in the first quarter of 1996, and (ii) $2.8 million collateralizing outstanding operating letters of credit. As of December 31, 1994, the Company had $57.9 million in cash and marketable securities, net of restricted amounts of $19.3 million.
An additional source of liquidity is the cash flow from the Company's oil and gas properties and drilling management service operations, both of which are available to service the Company's debt and to fund its working capital requirements and capital expenditures. Cash flow from the Company's drilling management services may be limited by certain factors, in particular, the ability of the Company to obtain and successfully perform turnkey drilling contracts based on competitive bids, which in turn is largely dependent on the number of such contracts available for bid. Accordingly, results of the Company's drilling management service operations may vary widely from quarter to quarter and from year to year. Furthermore, turnkey operations may be constrained by the availability of rigs as demand for rigs increases. In the U.S. Gulf of Mexico, ADTI relied on third-party rigs for approximately 97 percent of its rig-time in 1995, and had an average of five rigs under short-term contracts during the year. To minimize the risk of not having a rig available for a turnkey job, ADTI considers and may undertake to commit to several rigs under term contracts of from three to twelve months. In the North Sea and West Africa, the market for turnkey drilling is not well established, and growth in these markets may be constrained by rig availability in 1996.
In February 1996, the Company entered into an agreement to extend to December 1998 its $25 million revolving credit and letter of credit facility with a major international bank. Under the credit facility, the Company may borrow an amount of up to 80 percent of eligible accounts receivable. Borrowings under the facility would accrue interest at the lowest of three market-based interest rates. The unused portion of the line of credit is subject to an annual commitment fee of .1875 percent. There were no borrowings or letters of credit outstanding under the facility as of December 31, 1995 or 1994. As of December 31, 1995, the Company was eligible to borrow the full $25 million under the revolving credit facility.
The Company believes that it will be able to meet all of its current obligations, including capital expenditures and debt service, from its cash flow from operations and its cash, cash equivalents and marketable securities.
As part of upgrading and expanding its rig fleet and other assets, the Company considers and pursues the acquisition of suitable additional rigs and other assets on an ongoing basis. If the Company decides to undertake an acquisition, the issuance of additional shares of stock or additional debt could be required. The Company may also consider the disposition of rigs and other assets if and when a disposition can be effected on favorable terms. Disposition proceeds, to the extent available, could also be used as a source of acquisition financing.
In April 1995, the Company filed with the Securities and Exchange Commission a Registration Statement on Form S-3 for the proposed offering from time to time of (i) debt securities, which may be subordinated to other indebtedness of the Company, (ii) shares of preferred stock, $0.01 par value per share, and/or (iii) shares of common stock, $0.10 par value per share, for an aggregate initial public offering price not to exceed $75 million. Any net proceeds from the sale of offered securities would be used for general corporate purposes which may include, but are not limited to, capital expenditures and the financing of acquisitions. The Registration Statement was declared effective by the Commission in June 1995. The Company has not yet offered for sale or sold any securities under the Registration Statement.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Global Marine Inc.
We have audited the consolidated balance sheet of Global Marine Inc. and subsidiaries as of December 31, 1995 and 1994, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 1995. 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. 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 financial statements referred to above present fairly, in all material respects, the consolidated financial position of Global Marine Inc. and subsidiaries as of December 31, 1995 and 1994, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1995 in conformity with generally accepted accounting principles.
As discussed in Note 1 to the consolidated financial statements, in 1994 the Company adopted the new method of accounting for postemployment benefits, as prescribed by Statement of Financial Accounting Standards No. 112.
/s/ Coopers & Lybrand L.L.P.
Houston, Texas February 9, 1996
Note 1 - Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of Global Marine Inc. and its majority-owned subsidiaries. Unless the context otherwise requires, the term "Company" refers to Global Marine Inc. and its consolidated subsidiaries. Intercompany accounts and transactions have been eliminated.
Cash Equivalents
Cash equivalents consist of all highly liquid debt instruments with remaining maturities of three months or less at the time of purchase.
Properties and Depreciation
Rigs and Drilling Equipment. Rigs and drilling equipment are carried at an amount equal to the fair market values of the rigs in the fleet as of December 31, 1988, plus the cost of rig acquisitions and other additions and improvements to the existing fleet thereafter. Included in the cost of rigs and drilling equipment is an allocation of the interest cost incurred during the period required to construct or refurbish a rig. Expenditures for maintenance and repairs are charged to expense as incurred. Costs of property sold or retired and the related accumulated depreciation are removed from the accounts; resulting gains or losses are included in income.
Effective January 1, 1995, the Company increased to 25 years the estimated useful lives of its jackups and increased to 20 years the estimated useful lives of its semisubmersibles and drillship. In addition, salvage values were reduced to $500,000 per rig for jackups and $1,000,000 per rig for semisubmersibles and the drillship. The effect of the change in estimated service lives and salvage values was to decrease 1995 depreciation expense by approximately $11.2 million.
Effective January 1, 1995, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long- Lived Assets and for Long-Lived Assets to Be Disposed Of," which requires that certain long-lived assets be reviewed for impairment whenever events indicate that the carrying amount of an asset may not be recoverable, and that an impairment loss be recognized under certain circumstances in the amount by which the carrying value exceeds the fair value of the asset. The adoption of SFAS No. 121 had no effect on the Company's results of operations or financial position.
Oil and Gas Properties. The Company capitalizes all costs attributable to the acquisition, exploration and development of oil and gas reserves under the full cost method of accounting. The depreciation, depletion and amortization provision is computed using the units-of-production method. The depletable base consists of capitalized costs, estimated future costs to develop proved reserves and estimated future dismantlement costs, and is reduced by the aggregate net profit earned on the Company's turnkey drilling contracts for wells drilled on properties in which the Company has working interests. In addition, the depletable base is reduced by proceeds from sales of oil and gas properties, unless the sale involves a significant quantity of reserves in relation to total reserves, in which case a gain or loss would be recognized. The costs of unproved properties and major development projects are not subject to depreciation, depletion and amortization until they are fully evaluated. All unproved properties are reviewed at least annually to ascertain if impairment has occurred. Costs of proved oil and gas properties which exceed the present value of estimated future net revenues are charged to expense.
Revenue Recognition
Contract drilling services are performed generally on a daily-rate basis under individual contracts for either a stated period of time or the time required to drill a well or number of wells. Revenues from contract drilling services and the related expenses are recognized on a per-day basis as the work progresses. Revenues from turnkey drilling contracts, which are classified under drilling management revenues, are derived from the design and execution of a specific offshore drilling program at a fixed price to the oil and gas operator. Revenues from turnkey drilling contracts and the related expenses are recognized upon completion of the turnkey contract.
Foreign Currency Translation
The U.S. dollar is the functional currency for all of the Company's operations. Realized and unrealized foreign currency transaction gains and losses are recorded in income.
The Company may be exposed to the risk of foreign currency exchange losses in connection with its foreign operations. Such losses are the result of holding net monetary assets (cash and receivables in excess of payables) denominated in foreign currencies during periods of a strengthening U.S. dollar. The Company's foreign exchange gains and losses, which are primarily attributable to the British pound, have not been and are not expected to be material. This is because the Company's revenues are primarily denominated in U.S. dollars, revenues in each foreign currency are approximately equal to the Company's local expenses in that currency, and the Company does not speculate in foreign currencies or maintain significant foreign currency cash balances.
Postemployment Benefits
Effective January 1, 1994, the Company adopted Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits." SFAS No. 112 requires the recognition of expense for postemployment benefits on an accrual basis rather than the cash basis used previously. Postemployment benefits include severance pay, disability-related benefits and certain health care benefits during the period after termination of employment but before retirement. The cumulative effect of the change as of January 1, 1994, was a charge to earnings in the amount of $3.5 million ($0.02 per share). Other than the cumulative effect, the effect of the change on earnings was not material.
Note 2 - Investments
At December 31, 1995 and 1994, all of the Company's investments in cash equivalents and marketable securities consisted of debt securities which were classified as held-to-maturity and were carried at amortized cost. A summary of the estimated fair values of investments as of December 31 follows:
The estimated fair values of investments approximated their amortized cost; therefore, there were no unrealized gains or losses as of December 31, 1995 or 1994.
The estimated fair values of investments as of December 31 grouped by contractual maturities were as follows:
As of December 31, 1995, $42.1 million of the Company's marketable securities was restricted from general use. The restricted amount is comprised of (i) $27.7 million in proceeds from asset sales and $11.6 million in excess cash flow for 1995 which will become unrestricted only after and to the extent not used in the offering to purchase Senior Secured Notes in the first quarter of 1996 (see Note 3) and (ii) $2.8 million collateralizing outstanding operating letters of credit.
Note 3 - Long-term Debt
Long-term debt as of December 31, 1995 and 1994, consisted entirely of 12-3/4% Senior Secured Notes due 1999 (the "Senior Secured Notes") in the aggregate principal amount of $225.0 million, due December 15, 1999. Interest on the Senior Secured Notes is payable semiannually each June and December. The Senior Secured Notes do not require any payments of principal prior to their stated maturity on December 15, 1999, but the Company is required to make offers to purchase Senior Secured Notes upon the occurrence of certain events defined in the indenture, such as asset sales, or a change of control, or if the annual cash flow of the Company exceeds certain specified levels. In the first quarter of 1996, the Company will make an offer to purchase, at a price of 100 percent of principal, $39.3 million aggregate principal amount of Senior Secured Notes from the sum of the excess cash flow for 1995 and the proceeds of asset sales that were not applied to the purchase of Replacement Assets as defined in the Senior Secured Note indenture. As of February 9, 1996, the quoted market price of the Senior Secured Notes was 110 percent of principal, which exceeds the price at which the Company is required to make its purchase offer. The amount of Senior Secured Notes the Company will purchase, if any, is not expected to be material. The portion of the $39.3 million of cash that is not used to purchase Senior Secured Notes will become unrestricted and available to the Company for general purposes upon termination of the Company's purchase offer in the second quarter of 1996.
The Senior Secured Notes are not redeemable at the option of the Company prior to December 15, 1997. On or after December 15, 1997, the Senior Secured Notes are redeemable at the option of the Company, in whole at any time or in part from time to time, at a price of 102 percent of principal if redeemed during the twelve months beginning December 15, 1997, or at a price of 100 percent of principal if redeemed on or after December 15, 1998, in each case together with interest accrued to the redemption date. The Company presently expects that, absent unforeseen circumstances, it will seek to retire the Senior Secured Notes from the Company's cash and marketable securities, to the extent available, and/or the proceeds of debt financing as early as December 1997.
The Senior Secured Notes are collateralized by 22 rigs and all of the capital stock of the Company's direct or indirect subsidiaries, excluding the stock of Petdrill, Inc., and certain other subsidiaries as defined in the indenture. The indenture under which the Senior Secured Notes are issued imposes significant operating and financial restrictions on the Company. Such restrictions affect, and in many respects limit or prohibit, among other things, the ability of the Company to incur additional indebtedness, make capital expenditures, create liens, sell assets, engage in mergers or acquisitions, and make dividends or other payments.
In February 1996, the Company entered into an agreement to extend to December 1998 its $25 million revolving credit and letter of credit facility with a major international bank. Under the credit facility, the Company may borrow an amount of up to 80 percent of eligible accounts receivable. Borrowings under the facility would accrue interest at the lowest of three market-based interest rates. The unused portion of the line of credit is subject to an annual commitment fee of .1875 percent. There were no borrowings or letters of credit outstanding under the facility as of December 31, 1995 or 1994. As of December 31, 1995, the Company was eligible to borrow the full $25 million under the revolving credit facility.
Note 4 - Commitments and Contingencies
The Company has numerous noncancelable operating leases for office facilities and equipment. The leases have remaining terms ranging up to six years, some of which may be renewed at the Company's option. Certain leases are subject to rent revisions based on the Consumer Price Index or increases in building operating costs. Rent expense for 1995, 1994, and 1993 was $4.9 million, $6.9 million, and $6.1 million, respectively.
Future minimum rental payments for the Company's lease obligations as of December 31, 1995, were as follows:
During 1995 the Company completed the purchase of a concrete island drilling system ("CIDS"), the Glomar Beaufort Sea I, which was previously chartered by the Company under a long-term lease. The Company has agreed to pay a purchase price of up to $9.3 million out of the rig's future cash flow or proceeds from the sale of the rig, if any. The full $9.3 million will be paid only if the Company's share of future cash flow or rig sale proceeds exceeds $48 million. The Company will have no obligation to pay any amount if the rig fails to generate any future cash flow. The Glomar Beaufort Sea I is a special-purpose mobile offshore rig designed for arctic operations and was last under contract in 1990.
The Company is involved in various lawsuits resulting from personal injury and, from time to time, performance of services and property damage. The Company maintains insurance coverage against certain general and marine public liability, including liability for personal injury, in the amount of $200 million, subject to a self-insured retention of no more than $250,000 per occurrence. In addition, the Company's rigs and related equipment are separately insured under hull and machinery policies against certain marine and other perils, subject to a self-insured retention generally of no more than $300,000 per occurrence. The Company accrues for its share of the anticipated cost of settlement of claims in the normal course of business; actual costs have generally been within management's expectations. In the opinion of management, resolution of these matters will not have a material adverse effect on its results of operations, financial position or cash flows.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Note 5 - Financial Instruments
Concentrations of Credit Risk
The market for the Company's services and products is the offshore oil and gas industry, and the Company's customers consist primarily of major integrated international oil companies and independent oil and gas producers. The Company performs ongoing credit evaluations of its customers and generally does not require material collateral. The Company maintains reserves for potential credit losses, and such losses have been within management's expectations.
At December 31, 1995 and 1994, the Company had cash deposits concentrated primarily in four major banks. In addition, the Company had certificates of deposits, commercial paper and Eurodollar time deposits with a variety of companies and financial institutions with strong credit ratings. As a result of the foregoing, the Company believes that credit risk in such instruments is minimal.
Fair Values of Financial Instruments
The estimated fair value of the Company's $225.0 million carrying value of long-term debt approximated $248.0 million and $240.8 million as of December 31, 1995 and 1994, respectively. The estimates of fair values were based on quoted market prices. The fair values of the Company's cash equivalents, marketable securities, trade receivables and trade payables approximated their carrying values due to the short-term maturities of these instruments (see Note 2).
Note 6 - Capital Stock
The Company is authorized to issue 300,000,000 shares of common stock, $0.10 par value per share, and 10,000,000 shares of preferred stock, $0.01 par value per share. As of December 31, 1995, 133,541,917 shares of common stock were unissued, including 13,541,852 shares reserved for issuance under stock option and incentive plans. None of the preferred stock was issued or outstanding as of December 31, 1995.
The indenture governing the Senior Secured Notes contains certain restrictions with respect to the payment of dividends on the common stock (other than stock dividends). Specifically, the indenture restricts the payment of dividends based on (i) availability of funds under a formula based on previously unapplied cumulative net income since September 30, 1992 plus certain stock sale proceeds after December 23, 1992 and (ii) satisfaction of the then applicable minimum interest coverage ratio for debt incurrence. Cumulative net income for purposes of the test excludes gains or losses on asset sales and certain other nonrecurring charges or credits specified in the indenture. Although the Company was not prohibited from paying cash dividends under the terms of the indenture as of December 31, 1995, management does not intend to declare any cash dividends in the foreseeable future.
The Company has three stock option plans, the Global Marine Inc. 1989 Stock Option and Incentive Plan (the "Employee Plan"), the Global Marine Inc. 1994 Non-Employee Stock Option and Incentive Plan (the "Non-Employee Plan"), and the 1990 Non-Employee Director Stock Option Plan (the "Director Plan"). Under the Employee Plan, incentive and non-qualified options to purchase shares of common stock may be granted to key employees; under the Non-Employee Plan, non-qualified options may be granted to certain non-employees; and under both plans, shares of common stock may be sold at prices below the market price at the time of the sale. Under the Director Plan, non-qualified options to purchase shares of common stock are automatically granted each year to outside directors of the Company. Under the Plans, one-half of each option grant outstanding at December 31, 1995 was exercisable beginning one year after the date of grant with the remainder exercisable after two years. Options expire ten years after the date of grant. Options become exercisable in full if more than 50 percent of the Company's outstanding common stock is acquired by a person or a single group of persons.
The following is a summary of stock option transactions:
During 1995 and 1994, up to 262,500 and 200,000 shares of common stock, respectively, were offered for conditional sale under the Employee Plan to certain key employees at a price of $0.10 per share. The exact number of shares to be offered is dependent on the performance of the Company as measured against certain long-term performance goals. To the extent the performance goals are met, shares offered in 1995 and 1994 will be issued in 1998 and 1997, respectively.
Shares of common stock available for future option grants and incentive stock sales under the option plans totaled 3,243,951 and 5,830,637 at December 31, 1995 and 1994, respectively.
Note 7 - Net Income (Loss) per Common Share
Primary and fully diluted net income per common share were computed by dividing net income by the weighted average number of common shares outstanding and, for those periods in which they had a dilutive effect, shares contingently issuable due to outstanding employee stock options and incentive sales. The net loss per common share was computed by dividing the net loss by the weighted average number of common shares outstanding.
Primary net income or loss per common share was based on 165,142,881 shares for 1995, 163,828,711 shares for 1994, and 151,984,669 shares for 1993. Primary shares excluded contingently issuable shares because their effect was either immaterial or antidilutive.
Fully diluted net income per common and common equivalent share was based on 172,540,316 and 166,996,378 shares for 1995 and 1994, respectively.
Note 8 - Income Taxes
The provision for income taxes consisted of the following:
A reconciliation of the differences between income taxes computed at the U.S. federal statutory rate of 35 percent and the Company's reported provision for income taxes follows:
Deferred tax assets and liabilities are recorded in recognition of the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. The significant components of the Company's deferred tax assets and liabilities as of December 31 were as follows:
The Company's ability to utilize the net operating loss carryforwards and other deferred tax assets is dependent on the amount and timing of future earnings. Due to the uncertain nature of their ultimate realization, the Company has recorded against the deferred tax assets a valuation allowance in the amount of $381.8 million as of December 31, 1995. The amount of the valuation allowance is subject to periodic review. A reasonable possibility exists that the conditions which existed at December 31, 1995 giving rise to the recognition of the valuation allowance as of that date may change in the near term. If the allowance is reduced in a future period, the adjustment would be recorded as a reduction to income tax expense.
As of December 31, 1995, the Company had $1,134.2 million in net operating loss carryforwards ("NOLs") and $28.7 million in investment tax credit carryforwards ("Credits") expiring as follows:
The NOLs and Credits are subject to review and potential disallowance by the Internal Revenue Service ("IRS") upon audit of the federal income tax returns of the Company. Section 382 of the Internal Revenue Code of 1986, as amended, may impair the future availability of the NOLs and the Credits if there is a change in ownership of more than 50 percent of the Company's common stock. This limitation, if it applied, would limit the utilization of the NOLs and the Credits in each taxable year to an amount equal to the product of the federal long-term tax-exempt bond rate prescribed monthly by the IRS and the fair market value of all the Company's stock at the time of the ownership change. The interpretation of Section 382 is subject to numerous uncertainties. Accordingly, while the Company believes its loss carryforwards are available to it without limitation, such availability is not certain, nor is it certain that such carryforwards, if presently available without limitation, will continue to be available without limitation.
Note 9 - Industry Segment Information
The Company provides offshore drilling services on a contract daily-rate basis principally in the U.S. Gulf of Mexico, the North Sea, and offshore West Africa and on a turnkey basis primarily in the U.S. Gulf of Mexico. In addition, the Company has oil and gas production interests principally in the U.S. Gulf of Mexico. In the industry segment data which follows, revenues from turnkey drilling services are included in drilling management services. Intersegment revenues are recorded at transfer prices which are intended to approximate the prices charged to unaffiliated customers and have been eliminated from consolidated revenues. Operating income consists of revenues less the related operating costs and expenses, excluding interest and unallocated corporate expenses. Adjustments and eliminations with respect to operating income represent the reduction to drilling management services operating income in the amount of the aggregate net profit earned in connection with service contracts on oil and gas properties in which the Company has economic interests.
In 1995 one customer provided $40.9 million of contract drilling revenues and $10.3 million of drilling management revenues. No single customer provided more than ten percent of revenues for 1994. In 1993 one customer provided $29.2 million of contract drilling revenues.
Export sales by geographic areas were as follows:
Note 10 - Retirement Plans
Pensions
The Company has defined benefit pension plans covering substantially all of its employees. For the most part, benefits are based on the employee's length of service and average earnings for the five highest consecutive calendar years of compensation during the last fifteen years of service. Substantially all benefits are paid from funds previously provided to trustees. The Company is the sole contributor to the plans, and its funding objective is to fund participants' benefits under the plans as they accrue, taking into consideration future salary increases. The components of net pension cost were as follows:
The following table sets forth the funded status of the plans by plan type (for federal income tax reporting purposes) and the amounts recognized in the Company's consolidated balance sheet as of December 31:
Plan assets consist primarily of listed stocks and bonds, fixed-income investments and real estate.
The Company has established grantor trusts to provide funding for the benefits payable under certain of the nonqualified plans. The trusts are irrevocable, and assets contributed to the trusts can only be used to pay such benefits with certain exceptions. Assets of the trusts consisted of interest-bearing cash in the amount of $1.6 million and $0.5 million as of December 31, 1995 and 1994, respectively, and were included in other assets on the consolidated balance sheet.
The expected long-term rate of return on plan assets used to compute pension cost was 9.0 percent for 1995, 1994, and 1993. The assumed rate of increase in future compensation levels ranged from 5.5 percent to 6.5 percent for each of 1995, 1994, and 1993. The discount rate used to compute the actuarial present value of the projected benefit obligation was 7.25 percent for 1995, 8.25 percent for 1994 and 7.5 percent for 1993.
The Company has a defined contribution savings plan in which substantially all of the Company's domestic employees are eligible to participate. Company contributions to the savings plan are based on the amount of employee contributions. Charges to expense with respect to this plan totaled $0.6 million for 1995 and $0.5 million for each of 1994 and 1993.
Other Postretirement Benefits
The Company provides, for a period of two years following retirement, health care benefits to retirees, their covered dependents and beneficiaries. In addition, the Company provides term life insurance to retirees. Generally, employees who have reached the age of 55 and have rendered a minimum of five years of service are eligible for such retirement benefits. For the most part, health care benefits are contributory while life insurance benefits are noncontributory.
Net postretirement life insurance and health care cost consisted of the following components:
Benefits under the Company's postretirement life insurance and health care plans are not funded. The status of the plans as of December 31 was as follows:
The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation was 8.0 percent for 1996, gradually declining to 6.0 percent by the year 2015 and remaining at that level thereafter. The effect of a one-percentage point increase in the assumed health care cost trend rate for each future year on (i) the portion of the accumulated postretirement benefit obligation applicable to health care benefits as of December 31, 1995 and (ii) the net postretirement health care cost for the year then ended would be immaterial. The assumed discount rate used in determining the accumulated postretirement benefit obligation was 7.0 percent for 1995 and 1994.
Note 11 - Supplemental Cash Flow Information
Cash interest payments totaled $28.7 million for 1995 and 1994 and $28.9 million for 1993. Cash payments for income taxes totaled $3.6 million in 1995, $1.1 million in 1994, and $5.4 million in 1993.
During 1994, the Company acquired one offshore drilling rig in an all-cash transaction and two other drilling rigs for $26.0 million in cash plus 750,000 shares of Global Marine Inc. common stock.
In September 1993, the Company acquired a 100 percent ownership interest in three offshore drilling rigs in exchange for a 100 percent ownership interest in its offshore drilling rig, the Glomar Moray Firth I, plus $17.0 million in cash.
SUPPLEMENTAL OIL AND GAS DISCLOSURE (Unaudited)
The Company's estimated net proved reserves and proved developed reserves of crude oil, natural gas and natural gas liquids are shown in the table below:
Users of this information should be aware that the process of estimating quantities of "proved" and "proved developed" natural gas and crude oil reserves is very complex, requiring significant subjective decisions in the evaluation of all available geological, engineering and economic data for each reservoir. The data for a given reservoir may also change substantially over time as a result of numerous factors including, but not limited to, additional development activity, evolving production history and continual reassessment of the viability of production under varying economic conditions. Consequently, material revisions to existing reserve estimates occur from time to time. Although every reasonable effort is made to ensure that reserve estimates reported represent the most accurate assessments possible, the significance of the subjective decisions required and variances in available data for various reservoirs make these estimates generally less precise than other estimates presented in connection with financial statement disclosures.
Proved reserves are estimated quantities of crude oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. All of the Company's proved reserves are located in the United States. Proved developed reserves are those proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.
The estimates of the Company's proved oil and gas reserves were prepared by Ryder Scott Company Petroleum Engineers and were based on data supplied to them by the Company. Ryder Scott Company Petroleum Engineers has issued reports that include descriptions of the bases used in preparing the reserve estimates. These reports are filed as exhibits to the Company's Annual Report on Form 10-K.
Capitalized costs of unproved oil and gas properties excluded from the full cost amortization pool as of December 31, 1995 and 1994 totaled $0.7 million and $1.1 million, respectively. Costs incurred related to oil and gas activities consisted of the following:
The calculation of estimated future net cash flows in the following table assumed the continuation of existing economic conditions. Future net cash inflows were computed by applying year-end prices (except for future price changes as allowed by contract) of oil and gas to the expected future production of proved reserves, less estimated future expenditures (based on year-end costs) expected to be incurred in developing and producing such reserves.
The standardized measure of discounted future net cash flows relating to proved oil and gas reserves as of December 31 follows:
Principal sources of changes in the standardized measure of discounted future net cash flows follow:
Results of operations from producing activities follow:
Net income for the second quarter of 1995 included a $14.7 million gain on the sale of an offshore drilling rig.
During the first quarter of 1994, the Company adopted Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits." The cumulative impact of the change as of January 1, 1994 was an increase in the net loss in the amount of $3.5 million ($0.02 per share). Other than the cumulative effect, the effect of the accounting change was not material.
The net loss for the first quarter of 1994 also included $1.1 million in dividend income.
Net income for the fourth quarter of 1994 included interest income of $0.8 million recognized in connection with the favorable settlement of the Company's demobilization obligations with respect to a third-party owned rig aboard the Glomar Beaufort Sea I.
The Company did not declare any dividends on its common stock in either 1995 or 1994.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Global Marine Inc.
Our report on the consolidated financial statements of Global Marine Inc. and subsidiaries is included on page 28 of this Form 10-K. In connection with our audits of such financial statements, we have also audited the related financial statement schedule listed in the index on page 56 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein.
/s/ Coopers & Lybrand L.L.P.
Houston, Texas February 9, 1996
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
As permitted by General Instruction G, the information called for by this item with respect to the Company's directors is incorporated by reference from the Company's definitive proxy statement to be filed pursuant to Regulation 14A within 120 days after the end of the last fiscal year. Information with respect to the Company's executive officers is set forth in Part I of this Annual Report on Form 10-K under the caption "Executive Officers of the Registrant."
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
As permitted by General Instruction G, the information called for by this item is incorporated by reference from the Company's definitive proxy statement to be filed pursuant to Regulation 14A within 120 days after the end of the last fiscal year.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As permitted by General Instruction G, the information called for by this item is incorporated by reference from the Company's definitive proxy statement to be filed pursuant to Regulation 14A within 120 days after the end of the last fiscal year.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As permitted by General Instruction G, the information called for by this item is incorporated by reference from the Company's definitive proxy statement to be filed pursuant to Regulation 14A within 120 days after the end of the last fiscal year.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Schedules other than those listed above are omitted for the reason that they are not applicable.
(3) Exhibits
The following instruments are included as exhibits to this Annual Report on Form 10-K and are filed herewith unless otherwise indicated. Exhibits incorporated by reference are so indicated by parenthetical information.
3(i).1 Restated Certificate of Incorporation of the Company as filed with the Secretary of State of Delaware on March 15, 1989, effective March 16, 1989. (Incorporated herein by this reference to Exhibit 3(i).1 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
3(i).2 Certificate of Amendment of the Restated Certificate of Incorporation of the Company as filed with the Secretary of State of Delaware on May 11, 1990. (Incorporated herein by this reference to Exhibit 3(i).2 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
3(i).3 Certificate of Correction of the Restated Certificate of Incorporation of the Company as filed with the Secretary of State of Delaware on September 25, 1990. (Incorporated herein by this reference to Exhibit 3(i).3 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
3(i).4 Certificate of Amendment of the Restated Certificate of Incorporation of the Company as filed with the Secretary of State of Delaware on May 11, 1992. (Incorporated herein by this reference to Exhibit 3(i).4 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
3 (i).5 Certificate of Amendment of the Restated Certificate of Incorporation of the Company as filed with the Secretary of State of Delaware on May 12, 1994. (Incorporated herein by this reference to Exhibit 4.5 of the Registrant's Registration Statement on Form S-3 (No. 33-53691) filed with the Commission on May 18, 1994.)
3(ii).1 By-laws of the Company as amended on May 10, 1989. (Incorporated herein by this reference to Exhibit 3(ii).1 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
4.1 Indenture, dated as of December 23, 1992, between the Company and Wilmington Trust Company, as Trustee, with respect to the Senior Secured Notes. (Incorporated herein by this reference to Exhibit 4.5 of Post-Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.2 First Priority Naval Mortgage, dated April 29, 1993, from Global Marine Drilling Company to Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.6 of the Registrant's Registration Statement on Form S-3 (No. 33-65272) filed with the Commission on June 30, 1993.)
4.3 First Preferred Fleet Mortgage, dated December 23, 1992, from Global Marine Drilling Company to Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.7 of Post- Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.4 Release of Vessel from Lien of First Preferred Fleet Mortgage, dated April 30, 1993, by Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.8 of the Registrant's Registration Statement on Form S-3 (No. 33-65272) filed with the Commission on June 30, 1993.)
4.5 First Preferred Fleet Mortgage, dated December 23, 1992, from Global Marine Deepwater Drilling Inc. to Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.8 of Post-Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.6 Release of Vessel from Lien of Mortgage, dated January 27, 1993, by Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.6 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
4.7 First Priority Naval Mortgage, dated March 17, 1993, from Global Marine Nautilus Inc. to Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.10 of the Registrant's Registration Statement on Form S-3 (No. 33-65272) filed with the Commission on June 30, 1993.)
4.8 Release of Vessel from Lien of First Priority Naval Fleet Mortgage, dated September 8, 1993, by Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.8 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
4.9 Supplement No. 1, dated September 8, 1993, to First Priority Naval Fleet Mortgage from Global Marine Nautilus Inc. to Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.9 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
4.10 Assumption Agreement and Supplement No. 2, dated December 16, 1993, to First Priority Naval Fleet Mortgage among Global Marine Drilling Company and Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.10 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
4.11 First Preferred Fleet Mortgage, dated December 23, 1992, from Global Marine West Africa Inc. to Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.10 of Post-Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.12 First Preferred Ship Mortgage, dated December 23, 1992, from Global Marine Adriatic Inc. to Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.11 of Post- Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.13 Assumption Agreement and Supplement No.1, dated March 4, 1993, to First Preferred Ship Mortgage among Global Marine Adriatic Inc., as Original Mortgagor, Global Marine Drilling Company, as Assuming Mortgagor, and Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.13 of the Registrant's Registration Statement on Form S-3 (No. 33-65272) filed with the Commission on June 30, 1993.)
4.14 First Preferred Ship Mortgage, dated December 23, 1992, from Global Marine Australia Inc. to Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.12 of Post- Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.15 Release of Vessel from Lien of Mortgage, dated May 19, 1995, by Wilmington Trust Company, as Trustee.
4.16 First Preferred Ship Mortgage, dated December 23, 1992, from Global Marine Bismarck Sea Inc. to Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.13 of Post- Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.17 First Priority Naval Mortgage, dated March 17, 1993, from Global Marine North Sea Inc. to Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.16 of the Registrant's Registration Statement on Form S-3 (No. 33-65272 ) filed with the Commission on June 30, 1993.)
4.18 Subsidiary Pledge Agreement, dated December 23, 1992, between Global Marine Adriatic Inc. and Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.15 of Post- Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.19 Subsidiary Pledge Agreement, dated December 23, 1992, between Global Marine Australia Inc. and Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.16 of Post- Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.20 Subsidiary Pledge Agreement, dated December 23, 1992, between Global Marine Bismarck Sea Inc. and Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.17 of Post- Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.21 Subsidiary Pledge Agreement, dated December 23, 1992, between Global Marine Deepwater Drilling Inc. and Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.18 of Post-Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.22 Subsidiary Pledge Agreement, dated December 23, 1992, between Global Marine Drilling Company Inc. and Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.19 of Post-Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.23 Subsidiary Pledge Agreement, dated December 23, 1992, between Global Marine Nautilus Inc. and Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.20 of Post- Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.24 Subsidiary Pledge Agreement, dated December 23, 1992, between Global Marine North Sea Inc. and Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.21 of Post-Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.25 Subsidiary Pledge Agreement, dated December 23, 1992, between Global Marine West Africa Inc. and Wilmington Trust Company, as Trustee. (Incorporated herein by this reference to Exhibit 4.22 of Post- Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (No. 33-34013) filed with the Commission on January 22, 1993.)
4.26 Subsidiary Pledge Agreement, dated December 21, 1995, between Global Marine International Services Corporation and Wilmington Trust Company, as Trustee.
10.1 Credit Agreement, dated June 24, 1993, among Global Marine Inc., Global Marine Drilling Company, Global Marine Australia Inc., Global Marine Baltic Inc., Global Marine Deepwater Drilling Inc. and Societe Generale, New York Branch. (Incorporated herein by this reference to Exhibit 10.1 of the Registrant's Registration Statement on Form S-3 (No. 33-65272) filed with the Commission on June 30, 1993.)
10.2 Amendment No. 1, dated February 26, 1996, to Credit Agreement among Global Marine Inc., Global Marine Drilling Company, Global Marine Australia Inc., Global Marine Baltic Inc., Global Marine Deepwater Drilling Inc. and Societe Generale, New York Branch.
10.3 Memorandum of Agreement, dated June 6, 1993, between Global Marine Inc. and Transocean Drilling AS, and Amendment No. 1 thereto dated June 16, 1993. (Incorporated herein by this reference to Exhibit 99.1 of the Registrant's Registration Statement on Form S-3 (No. 33-65272) filed with the Commission on June 30, 1993.)
10.4 Letter of Intent in Order to Form a Joint Venture, dated June 6, 1993, between Global Marine Inc. and Transocean Drilling AS. (Incorporated herein by this reference to Exhibit 99.2 of the Registrant's Registration Statement on Form S-3 (No. 33-65272) filed with the Commission on June 30, 1993.)
10.5 Purchase and Sale Agreement, dated August 24, 1993, between Global Marine Inc. and Transocean Drilling AS. (Incorporated herein by this reference to Exhibit 10.3 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993.)
10.6 Management Agreement (relating to Glomar Moray Firth I), dated September 10, 1993, between Global Marine Nautilus Inc. and Transocean Drilling AS. (Incorporated herein by this reference to Exhibit 10.4 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993.)
10.7 Management Agreement (relating to Transocean No. 5), dated September 10, 1993, between Global Marine Nautilus Inc. and Transocean Drilling AS. (Incorporated herein by this reference to Exhibit to 10.5 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993.)
* 10.8 Letter Employment Agreement dated February 14, 1995, between the Company and C. Russell Luigs. (Incorporated herein by this reference to Exhibit 10.7 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1994.)
* 10.9 Consulting Agreement dated February 14, 1986, between Challenger Minerals Inc. and Donald B. Brown. (Incorporated herein by this reference to Exhibit 10.2 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1987.)
* 10.10 Form of Letter Severance Agreement dated February 7, 1989, between the Company and six executive officers, respectively. (Incorporated herein by this reference to Exhibit 10.5 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1988.)
* 10.11 Letter Severance Agreement dated May 7, 1992,between the Company and one executive officer. (Incorporated herein by this reference to Exhibit 10.5 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992.)
* 10.12 Global Marine Inc. 1989 Stock Option and Incentive Plan. (Incorporated herein by this reference to Exhibit 10.6 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1988.)
* 10.13 First Amendment to Global Marine Inc. 1989 Stock Option and Incentive Plan. (Incorporated herein by this reference to Exhibit 10.6 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1990.)
* 10.14 Second Amendment to Global Marine Inc. 1989 Stock Option and Incentive Plan. (Incorporated herein by this reference to Exhibit 10.7 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1991.)
* 10.15 Third Amendment to Global Marine Inc. 1989 Stock Option and Incentive Plan. (Incorporated herein by this reference to Exhibit 10.19 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
* 10.16 Fourth Amendment to Global Marine Inc. 1989 Stock Option and Incentive Plan. (Incorporated herein by this reference to Exhibit 10.16 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1994.)
* 10.17 Form of Incentive Stock Sale Agreement dated February 14, 1995, between the Company and nine executive officers, respectively. (Incorporated herein by this reference to Exhibit 10.18 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1994.)
* 10.18 Form of Incentive Stock Sale Agreement dated February 20, 1996, between the Company and two executive officers, respectively.
* 10.19 Form of Performance Stock Memorandum dated June 7, 1994, regarding conditional opportunity to acquire Company stock granted to six executive officers, respectively. (Incorporated herein by this reference to Exhibit 10.1 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994.)
* 10.20 Form of Performance Stock Memorandum dated February 14, 1995, regarding conditional opportunity to acquire Company stock granted to six executive officers, respectively. (Incorporated herein by this reference to Exhibit 10.20 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1994.)
* 10.21 Form of Performance Stock Memorandum dated February 20, 1996, regarding conditional opportunity to acquire Company stock granted to six executive officers, respectively.
* 10.22 Executive Life Insurance Plan. (Incorporated herein by this reference to Exhibit 10.5 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1988.)
* 10.23 Global Marine Inc. Executive Supplemental Retirement Plan of 1990. (Incorporated herein by this reference to Exhibit 10.8 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1990.)
* 10.24 Global Marine Executive Deferred Compensation Trust as established effective January 1, 1995.
* 10.25 Global Marine Benefit Equalization Retirement Plan effective January 1, 1990. (Incorporated herein by this reference to Exhibit 10.8 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1989.)
* 10.26 Global Marine Benefit Equalization Retirement Trust as established effective January 1, 1990. (Incorporated herein by this reference to Exhibit 10.9 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1989.)
* 10.27 Form of Indemnification Agreement entered into between the Company and each of its directors and officers. (Incorporated herein by this reference to Exhibit 10.12 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1986.)
* 10.28 Resolutions dated August 3, 1994 regarding Directors' Compensation.
* 10.29 Amended and Restated Retirement Plan for Outside Directors. (Incorporated herein by this reference to Exhibit 10.12 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1990.)
* 10.30 Global Marine Inc. 1990 Non-Employee Director Stock Option Plan (Incorporated herein by this reference to Exhibit 10.18 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1991.)
* 10.31 First Amendment to Global Marine Inc. 1990 Non-Employee Director Stock Option Plan (Incorporated herein by this reference to Exhibit 10.1 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995.)
* 10.32 Global Marine Inc. 1995 Management Incentive Award Plan. (Incorporated herein by this reference to Exhibit 10.29 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1994.)
* 10.33 Global Marine Inc. 1996 Management Incentive Award Plan.
11.1 Computation of Earnings Per Common Share.
21.1 List of Subsidiaries.
23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants.
23.2 Consent of Independent Petroleum Engineers (Ryder Scott Company Petroleum Engineers).
27.1 Financial Data Schedule. (Exhibit 27.1 is being submitted as an exhibit only in the electronic format of this Annual Report on Form 10-K being submitted to the Securities and Exchange Commission. Exhibit 27.1 shall not be deemed filed for purposes of Section 11 of the Securities Act of 1933, Section 18 of the Securities Exchange Act of 1934 or Section 323 of the Trust Indenture Act, or otherwise be subject to the liabilities of such sections, nor shall it be deemed a part of any registration statement to which it relates.)
99.1 Report of Independent Petroleum Engineers dated February 8, 1996.
99.2 Report of Independent Petroleum Engineers dated February 8, 1995. (Incorporated herein by this reference to Exhibit 99.1 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1994.)
99.3 Reports of Independent Petroleum Engineers dated February 7, 1994. (Incorporated herein by this reference to Exhibit 99.1 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)
- --------------------------- * Management contract or compensatory plan or arrangement.
The Company hereby undertakes, pursuant to Regulation S-K, Item 601(b), paragraph (4) (iii), to furnish to the Securities and Exchange Commission on request agreements defining the rights of holders of long-term debt of the Company and its consolidated subsidiaries not filed herewith in accordance with said Item.
(b) Reports on Form 8-K
The Company did not file any Current Reports on Form 8-K during the last quarter of 1995.
SIGNATURES REQUIRED FOR FORM 10-K
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GLOBAL MARINE INC. (REGISTRANT)
Date: February 28, 1996 By: J. C. MARTIN --------------------------- (J. C. Martin) Senior Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date - --------- ----- ----
C. R. LUIGS Chairman of the Board, February 28, 1996 - ------------------- President and Chief (C. R. Luigs) Executive Officer
J. C. MARTIN Senior Vice President and February 28, 1996 - ------------------- Chief Financial Officer (J. C. Martin) (Principal Financial Officer) and Director
THOMAS R. JOHNSON Vice President and February 28, 1996 - ------------------- Corporate Controller (Thomas R. Johnson) (Principal Accounting Officer)
Director - ------------------- (Patrick M. Ahern)
DONALD B. BROWN Director February 28, 1996 - ------------------- (Donald B. Brown)
E. J. CAMPBELL Director February 28, 1996 - ------------------- (E. J. Campbell)
THOMAS CASON Director February 28, 1996 - ------------------- (Thomas Cason)
PETER T. FLAWN Director February 28, 1996 - ------------------- (Peter T. Flawn)
JOHN M. GALVIN Director February 28, 1996 - ------------------- (John M. Galvin)
L. L. LEIGH Director February 28, 1996 - ------------------- (L. L. Leigh)
PAUL J. POWERS Director February 28, 1996 - ------------------- (Paul J. Powers)
SIDNEY A. SHUMAN Director February 28, 1996 - ------------------- (Sidney A. Shuman)
W. R. THOMAS Director February 28, 1996 - ------------------- (W. R. Thomas)