<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

        (MARK ONE)

        [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR
             15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

             For the quarterly period ended September 30, 2001

                                      OR

        [ ]  TRANSITION REPORT PURSUANT TO SECTION 13
             OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 1-5471

                              GLOBAL MARINE INC.
            (Exact name of registrant as specified in its charter)


            Delaware                                95-1849298
(State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization)                  Identification No.)


      777 N. Eldridge Parkway,  Houston, Texas         77079-4493
      (Address of principal executive offices)         (Zip Code)

       Registrant's telephone number, including area code: (281) 596-5100

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   Yes [X]   No [ ]

The number of shares of the registrant's Common Stock, par value $.10 per share,
outstanding as of October 31, 2001, was 176,621,576.
<PAGE>

                               GLOBAL MARINE INC.

                         TABLE OF CONTENTS TO FORM 10-Q

                        QUARTER ENDED SEPTEMBER 30, 2001


                                                        Page
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

      Report of Independent Accountants                   2

      Condensed Consolidated Statement of Income
       for the Three and Nine Months Ended
       September 30, 2001 and 2000                        3

      Condensed Consolidated Balance Sheet as of
       September 30, 2001 and December 31, 2000           4

      Condensed Consolidated Statement of Cash
       Flows for the Nine Months Ended
       September 30, 2001 and 2000                        6

      Notes to Condensed Consolidated Financial
       Statements                                         7

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations   13

Item 3.  Quantitative and Qualitative Disclosures
         About Market Risk                               20

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings                              20

Item 6.   Exhibits and Reports on Form 8-K               20

SIGNATURE                                                22

                                       1
<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders
   of Global Marine Inc.

We have reviewed the accompanying condensed consolidated balance sheet of Global
Marine Inc. and subsidiaries as of September 30, 2001, and the related condensed
consolidated statements of income for the three and nine-month periods ended
September 30, 2001 and 2000 and the condensed consolidated statement of cash
flows for the nine months ended September 30, 2001 and 2000.  These financial
statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants.  A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters.  It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole.  Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated interim financial statements
for them to be in conformity with accounting principles generally accepted in
the United States of America.

We previously audited, in accordance with auditing standards generally accepted
in the United States of America, the consolidated balance sheet as of December
31, 2000, and the related consolidated statements of income, stockholders'
equity, and of cash flows for the year then ended (not presented herein), and in
our report dated February 16, 2001, we expressed an unqualified opinion on those
consolidated financial statements.  In our opinion, the information set forth in
the accompanying condensed consolidated balance sheet as of December 31, 2000,
is fairly stated in all material respects in relation to the consolidated
balance sheet from which it has been derived.



/s/ PricewaterhouseCoopers LLP

Houston, Texas
November 12, 2001

                                       2
<PAGE>

                      GLOBAL MARINE INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
                    (In millions, except per-share amounts)
<TABLE>
<CAPTION>


                                Three Months Ended  Nine Months Ended
                                   September 30,      September 30,
                                ------------------  -----------------
                                  2001      2000      2001      2000
                                 ------    ------    ------    ------
<S>                              <C>       <C>       <C>       <C>
Revenues:
 Contract drilling               $222.6    $154.4    $626.4    $412.8
 Drilling management               88.5     111.9     326.6     281.1
 Oil and gas                        2.7       5.7      12.0      13.5
                                 ------    ------    ------    ------
   Total revenues                 313.8     272.0     965.0     707.4

Expenses:
 Contract drilling                105.1      77.4     290.4     216.6
 Drilling management               78.7     105.4     305.9     261.4
 Oil and gas                         .8       1.3       2.2       2.3
 Depreciation, depletion, and
  amortization                     33.3      27.8      98.7      77.6
 Restructure costs                    -         -         -       5.2
 General and administrative         5.4       5.5      17.3      17.7
                                 ------    ------    ------    ------
   Total operating expenses       223.3     217.4     714.5     580.8
                                 ------    ------    ------    ------
   Operating income                90.5      54.6     250.5     126.6

Other income (expense):
 Interest expense                 (14.4)    (15.5)    (42.6)    (49.6)
 Interest capitalized                 -       5.0         -      22.8
 Interest income                    3.7       1.2       9.7       2.7
 Gain on sale of rig                  -         -      35.1         -
                                 ------    ------    ------    ------
   Total other income
    (expense)                     (10.7)     (9.3)      2.2     (24.1)
                                 ------    ------    ------    ------
   Income before income taxes      79.8      45.3     252.7     102.5

Provision for income taxes:
 Current tax provision              4.3       5.9      11.9       9.4
 Deferred tax provision            13.4       7.1      53.7      20.1
                                 ------    ------    ------    ------
   Total provision for
    income taxes                   17.7      13.0      65.6      29.5
                                 ------    ------    ------    ------
Net income                       $ 62.1    $ 32.3    $187.1    $ 73.0
                                 ======    ======    ======    ======
Earnings per share:
 Basic                           $ 0.35    $ 0.18    $ 1.06    $ 0.42
 Diluted                         $ 0.34    $ 0.18    $ 1.03    $ 0.41
</TABLE>

           See notes to condensed consolidated financial statements.

                                       3
<PAGE>

                      GLOBAL MARINE INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                ($ in millions)

                                     ASSETS
<TABLE>
<CAPTION>

                                                                  September 30,   December 31,
                                                                       2001           2000
                                                                  -------------   ------------
<S>                                                               <C>             <C>
Current assets:
 Cash and cash equivalents                                            $  290.9       $  144.3
 Marketable securities                                                    59.2              -
 Accounts receivable, net of allowances                                  196.6          189.7
 Costs incurred on turnkey drilling contracts in progress                   .3           11.2
 Prepaid expenses                                                         14.8            8.2
 Future income tax benefits                                               50.3           50.0
 Other current assets                                                      1.2            1.4
                                                                      --------       --------
    Total current assets                                                 613.3          404.8

Properties and equipment:
 Rigs and drilling equipment, less accumulated
  depreciation of $637.2 at September 30, 2001, and
  $546.9 at December 31, 2000                                          1,900.1        1,933.6
 Oil and gas properties, full-cost method, less accumulated
  depreciation, depletion, and amortization of $20.2 at
  September 30, 2001, and $18.5 at December 31, 2000                       5.6            6.5
                                                                      --------       --------
    Net properties and equipment                                       1,905.7        1,940.1

Future income tax benefits                                                   -           20.1
Other assets                                                              89.7           31.8
                                                                      --------       --------
    Total assets                                                      $2,608.7       $2,396.8
                                                                      ========       ========
</TABLE>

           See notes to condensed consolidated financial statements.

                                       4
<PAGE>

                      GLOBAL MARINE INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEET (Continued)
                                ($ in millions)

                      LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                             September 30,    December 31,
                                                                  2001            2000
                                                             -------------    ------------
<S>                                                          <C>              <C>
Current liabilities:
  Accounts payable                                              $   77.4        $  116.7
  Accrued compensation and related employee costs                   30.8            34.5
  Accrued income taxes                                              16.5            12.0
  Accrued interest                                                   8.8             8.9
  Other accrued liabilities                                         15.6            11.2
                                                                --------        --------
   Total current liabilities                                       149.1           183.3

Long-term debt                                                     909.5           901.3
Capital lease obligation                                            16.6            17.3
Deferred income taxes                                               31.0               -
Other long-term liabilities                                         35.5            24.0
Contingencies (Note 7)                                                 -               -

Shareholders' equity:
Preferred stock, $0.01 par value, 10 million
  shares authorized, no shares issued or outstanding                   -               -
Common stock, $0.10 par value, 300 million shares
  authorized, 176,611,767 shares and 176,021,490
  shares issued and outstanding at September 30, 2001
  and December 31, 2000, respectively                               17.7            17.6
Additional paid-in capital                                         359.5           350.1
Retained earnings                                                1,092.1           905.0
Accumulated other comprehensive loss                                (2.3)           (1.8)
                                                                --------        --------
   Total shareholders' equity                                    1,467.0         1,270.9
                                                                --------        --------
         Total liabilities and shareholders' equity             $2,608.7        $2,396.8
                                                                ========        ========
</TABLE>

           See notes to condensed consolidated financial statements.

                                       5
<PAGE>

                      GLOBAL MARINE INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (In millions)

<TABLE>
<CAPTION>

                                                                         Nine Months Ended
                                                                            September 30,
                                                                      ------------------------
                                                                        2001             2000
                                                                      -------          -------
<S>                                                                  <C>              <C>
Cash flows from operating activities:
Net income                                                            $ 187.1          $  73.0
Adjustments to reconcile net income to net
  cash flow provided by operating activities:
  Depreciation, depletion, and amortization                              98.7             77.6
  Deferred income taxes                                                  53.7             20.1
  Gain on sale of rig                                                     (35.1)               -
  (Decrease) increase in accounts payable                               (39.3)             5.7
  (Increase) decrease in prepaid expenses and other current assets       (6.7)             1.1
  Increase in accounts receivable                                        (2.9)           (33.8)
  (Decrease) increase in other accrued liabilities                       (1.4)            13.7
  Decrease (increase) in costs incurred
       on turnkey drilling contracts in progress                         10.9             (2.0)
  Other, net                                                             (2.3)              .8
                                                                      -------          -------
     Net cash flow provided by operating activities                     262.7            156.2

Cash flows from investing activities:
Capital expenditures                                                    (68.8)          (133.6)
Proceeds from sales of properties and equipment                           9.0              1.8
Purchases of held-to-maturity securities                                (59.2)               -
Other                                                                    (2.0)              .3
                                                                      -------          -------
  Net cash flow used in investing activities                           (121.0)          (131.5)

Cash flows from financing activities:
Proceeds from exercises of employee stock options                         6.7             12.9
Increases in long-term debt                                                 -            754.2
Reductions of long-term debt                                                -           (804.3)
Debt issue costs                                                            -             (7.0)
Other                                                                    (1.8)            (1.8)
                                                                      -------          -------
  Net cash flow provided by (used in) financing activities                4.9            (46.0)
                                                                      -------          -------
Increase (decrease) in cash and cash equivalents                        146.6            (21.3)
Cash and cash equivalents at beginning of period                        144.3             83.3
                                                                      -------          -------
Cash and cash equivalents at end of period                            $ 290.9          $  62.0
                                                                      =======          =======
</TABLE>

           See notes to condensed consolidated financial statements.

                                       6
<PAGE>

                      GLOBAL MARINE INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              SEPTEMBER 30, 2001

NOTE 1 - GENERAL

The financial statements reflect all adjustments which are, in the opinion of
management, necessary for a fair statement of the results for the interim
periods.  Such adjustments are considered to be of a normal recurring nature
unless otherwise identified.  Interim-period results may not be indicative of
results for the full year.

The year-end condensed consolidated balance sheet was derived from audited
financial statements but does not include all disclosures required by accounting
principles generally accepted in the United States of America.

The term "Company" refers to Global Marine Inc. and, unless the context
otherwise requires, to the Company's consolidated subsidiaries.

These interim financial statements should be read in conjunction with the
audited financial statements included in the Company's Annual Report on Form
10-K for the year ended December 31, 2000.

NOTE 2 - EARNINGS PER SHARE

A reconciliation of the numerators and denominators of the basic and diluted
per-share computations for net income follows:

<TABLE>
<CAPTION>
                                                   Three Months                  Nine Months
                                                  Ended Sept. 30,              Ended Sept. 30,
                                                -------------------          -------------------
                                                 2001         2000            2001         2000
                                                ------       ------          ------       ------
                                                   ($ in millions, except per-share data)
<S>                                         <C>            <C>            <C>            <C>
Net income (numerator):
 Net income - Basic                         $       62.1   $       32.3   $      187.1   $       73.0
 Add:  Interest savings (net of tax)
  on assumed conversion of Zero
  Coupon Convertible Debentures                      1.8              -            5.2              -
                                            ------------   ------------   ------------   ------------
 Net income - Diluted                       $       63.9   $       32.3   $      192.3   $       73.0
                                            ============   ============   ============   ============
Shares (denominator):
 Shares - Basic                              176,602,233    175,586,481    176,466,007    175,135,889
 Add:
  Employee stock options                       2,231,183      4,518,352      3,216,739      4,018,224
  Shares issuable upon assumed
    conversion of Zero Coupon
    Convertible Debentures                     7,330,920              -      7,330,920           -
                                            ------------   ------------   ------------   ------------
 Shares - Diluted                            186,164,336    180,104,833    187,013,666    179,154,113
                                            ============   ============   ============   ============
Earnings per share:
 Basic                                      $       0.35   $       0.18   $       1.06   $       0.42
 Diluted                                    $       0.34   $       0.18   $       1.03   $       0.41
</TABLE>

                                       7
<PAGE>

                      GLOBAL MARINE INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              SEPTEMBER 30, 2001

Holders of the Zero Coupon Convertible Debentures have the right to require the
Company to repurchase the debentures on June 23, 2005, June 23, 2010, and June
23, 2015.  The Company may pay the repurchase price with either cash or shares
of the Company's common stock or a combination thereof. The Company does not
anticipate using common stock to satisfy any such future purchase obligation.

NOTE 3 - SEGMENT INFORMATION

Information by operating segment, together with reconciliations to the
consolidated totals, is presented in the following table:

<TABLE>
<CAPTION>

                                                  Three Months Ended    Nine Months Ended
                                                      September 30,        September 30,
                                                   -----------------    -----------------
                                                    2001       2000       2001       2000
                                                   ------     ------     ------     ------
                                                                (In millions)
<S>                                                <C>        <C>        <C>        <C>
Revenues from  external customers:
 Contract drilling                                 $222.6     $154.4     $626.4     $412.8
 Drilling management services                        88.5      111.9      326.6      281.1
 Oil and gas                                          2.7        5.7       12.0       13.5
                                                   ------     ------     ------     ------
 Consolidated                                      $313.8     $272.0     $965.0     $707.4
                                                   ======     ======     ======     ======
Intersegment revenues:
 Contract drilling                                 $  2.3     $  2.5     $ 11.4     $  4.4
 Drilling management services                         1.5        2.9        5.4        7.8
 Intersegment eliminations                           (3.8)      (5.4)     (16.8)     (12.2)
                                                   ------     ------     ------     ------
 Consolidated                                      $    -     $    -     $    -     $    -
                                                   ======     ======     ======     ======
Total revenues:
 Contract drilling                                 $224.9     $156.9     $637.8     $417.2
 Drilling management services                        90.0      114.8      332.0      288.9
 Oil and gas                                          2.7        5.7       12.0       13.5
 Intersegment eliminations                           (3.8)      (5.4)     (16.8)     (12.2)
                                                   ------     ------     ------     ------
 Consolidated                                      $313.8     $272.0     $965.0     $707.4
                                                   ======     ======     ======     ======
Operating income:
 Contract drilling                                 $ 85.3     $ 50.6     $240.4     $123.8
 Drilling management services                         9.8        6.4       20.6       19.5
 Oil and gas                                          1.4        3.4        8.2        7.8
 Restructure costs                                      -          -          -       (5.2)
 Corporate expenses                                  (6.0)      (5.8)     (18.7)     (19.3)
                                                   ------     ------     ------     ------
 Consolidated                                      $ 90.5     $ 54.6     $250.5     $126.6
                                                   ======     ======     ======     ======
</TABLE>

                                       8
<PAGE>

                      GLOBAL MARINE INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              SEPTEMBER 30, 2001

NOTE 4 - RESTRUCTURE COSTS

In the first quarter of 2000, the Company implemented a restructuring designed
to streamline its organization and improve efficiency.  The restructuring
involved a workforce reduction of 82 positions, a consolidation of
administrative offices in Houston and Europe, and closure of a materials control
facility in Houston.  The employee functions affected were primarily corporate
support in nature and included materials control, engineering, accounting, and
information technology, among others. Approximately 80 percent of the affected
positions were located in Houston, and the remaining 20 percent were located in
Europe.  The Company recorded a $5.2 million pretax charge in the first quarter
of 2000 in connection with the restructuring, consisting of $4.3 million for
employee severance costs and $0.9 million for office and facility closures.  As
of September 30, 2001, substantially all payments contemplated under the
restructuring had been completed.

NOTE 5 - SUPPLEMENTAL CASH FLOW INFORMATION - NONCASH INVESTING ACTIVITY

In June 2001 the Company completed the sale of the Glomar Beaufort Sea I
concrete island drilling system to Exxon Neftegas Limited for $45 million.  The
Company received $5 million in cash at closing with the remainder of the
purchase price in the amount of $40 million, plus interest, being due on or
before March 1, 2003.  The receivable was classified in Other Assets on the
Condensed Consolidated Balance Sheet as of September 30, 2001.

NOTE 6 - MERGER ANNOUNCEMENT

On August 31, 2001, the Company entered into an agreement to merge with a
subsidiary of Santa Fe International Corporation ("Santa Fe") and become a
wholly-owned subsidiary of Santa Fe, which will be renamed GlobalSantaFe
Corporation at the time of the merger. Under the agreement, each outstanding
share of Global Marine Inc. common stock will be converted into the right to
receive 0.665 newly issued ordinary shares of GlobalSantaFe Corporation.  A
Special Meeting of the Company's stockholders and an Extraordinary General
Meeting of Santa Fe's shareholders to approve the merger are scheduled for
November 20, 2001, which is the expected closing date.

Based on the number of shares of the Company and Santa Fe expected to be
outstanding at the time of the merger, stockholders of the Company will own
slightly more than 50%, and shareholders of Santa Fe will own slightly less than
50% of the outstanding shares of GlobalSantaFe Corporation.

The merger will be accounted for as a purchase business combination in
accordance with accounting principles generally accepted in the United States of
America, with the Company treated as the acquiring entity and Santa Fe treated
as the acquired entity. Accordingly, the historical basis in assets and
liabilities of the Company will be carried forward to the financial statements
of GlobalSantaFe. Assets and liabilities of Santa Fe will be revalued to
estimated fair value at the date of the merger in the financial statements of
GlobalSantaFe. The excess of the merger purchase price over Santa Fe's revalued
net assets will be recorded as goodwill.  Based on the price of the Company's
common stock immediately before and after the merger announcement date, as
adjusted for the merger exchange ratio, the purchase price is estimated to be
$2.6 billion, with goodwill estimated at $450 million.

                                       9
<PAGE>

                      GLOBAL MARINE INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              SEPTEMBER 30, 2001

NOTE 7 - CONTINGENCIES

In 1998 the Company entered into fixed-price contracts with Harland and Wolff
Shipbuilding and Heavy Industries Limited (the "Shipbuilder") totaling $315
million for the construction of two dynamically positioned, ultra-deepwater
drillships, the Glomar C.R. Luigs and the Glomar Jack Ryan, originally scheduled
for delivery in the fourth quarter of 1999 and first quarter of 2000,
respectively.  Pursuant to two 20-year, capital lease agreements, the Company
subsequently novated the construction contracts to two financial institutions
(the "Lessors"), which now own the drillships and lease them to the Company. The
Company has deposited with three large foreign banks (the "Payment Banks")
amounts equal to the progress payments that the Lessors were required to make
under the construction contracts, less a lease benefit of approximately $64
million. In exchange for the deposits, the Payment Banks have assumed liability
for making rental payments required under the leases, and have legally released
the Company as the primary obligor of such rental payments. Accordingly, the
Company has recorded no capital lease obligations on its balance sheet with
respect to the two drillships.

The Company acted as the Lessors' construction supervisor and has paid on behalf
of the Lessors, or provided for the Lessors' payment of, all amounts it believes
were required under the terms of the construction contracts, including payments
for all approved change orders.

In October 1999 the Company and the Lessors received a claim from the
Shipbuilder alleging breach of contract in connection with the Company's
obligations regarding design of the drillships, the timely delivery to the
Shipbuilder of owner-furnished equipment, and design change orders.  In its
claim, the Shipbuilder also requested additional compensation totaling $50
million for increases in the drillships' steel weight.  The amount of the
Shipbuilder's claim in excess of the contract price totals GBP 133 million ($191
million).  It is unclear whether the Shipbuilder's claim includes some or all of
the steel-weight claim.  With the exception of a small portion of the steel-
weight claim, the Company believes that the claim is totally without merit.  The
contracts provide that such claims are to be resolved through arbitration in
London.

Because the Company was concerned about the Shipbuilder's financial viability
and the satisfactory completion of the drillships in a timely manner, in
November 1999 the Company and the Lessors agreed to provide additional funding
to the Shipbuilder for completion of the two drillships in exchange for certain
assurances by the Shipbuilder and its parent, Fred. Olsen Energy ASA (the
"Funding Agreement").

Under the terms of the Funding Agreement, the Company and the Lessors released
two cash collateralized letters of credit, giving the Shipbuilder access to $40
million of its own funds.  In addition, the Company and the Lessors agreed to
advance to the Shipbuilder, without prejudice to any issues of liability under
the shipbuilding contracts, GBP 57 million above the drillships' $315 million
contract price.  The Company and the Lessors also agreed to advance amounts
equal to half of subsequent cost overruns until the Company's total advances
under the Funding Agreement reached GBP 65 million.  The Company and the Lessors
have advanced a total of GBP 63.9 million ($103.1 million) under the Funding
Agreement, including GBP 6.9 million ($10.5 million) in connection with its
share of cost overruns.  The Funding Agreement provided that if the maximum
advances of GBP 65 million were made by the Company and the Lessors, the
Shipbuilder's parent, Fred. Olsen Energy ASA, would provide all

                                       10
<PAGE>

                      GLOBAL MARINE INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              SEPTEMBER 30, 2001

additional funds necessary to keep the Shipbuilder solvent and working in an
expeditious and diligent manner and to enable it to deliver the two completed
drillships. In addition, the Shipbuilder's parent agreed to pay, under certain
circumstances, up to GBP 3 million ($4.3 million) of the Shipbuilder's warranty
on the two drillships.

The Funding Agreement did not settle any portion of the Shipbuilder's claim of
GBP 133 million ($191 million).  The agreement provides that the Shipbuilder
will repay amounts advanced under the Funding Agreement to the extent the amount
of the advanced funds exceeds any arbitration award in favor of the Shipbuilder
and that the Company will pay the Shipbuilder to the extent any arbitration
award in favor of the Shipbuilder exceeds the funds so advanced.  In view of the
current financial condition of the Shipbuilder, collection from the Shipbuilder
of any amounts to which the Company may be entitled under the Funding Agreement
is doubtful.

Following its completion by the Shipbuilder, the Glomar C.R. Luigs began
operating under a drilling contract in April 2000.  On August 1, 2000, the
Company delivered notice to the Shipbuilder of its intent to take possession of
the Glomar Jack Ryan following the Shipbuilder's failure to timely deliver the
vessel in accordance with the construction contract as amended by the Funding
Agreement.  Following the Shipbuilder's refusal to grant possession of the
vessel to the Company, the Company filed an application for a mandatory
injunction with the London Commercial Court requesting that the Shipbuilder be
ordered to do so.  The Court granted the injunction on August 11, 2000, on the
condition that the Company post a bond in the amount of $100 million to secure
the Shipbuilder's lien for the delivery installment in the amount of $35.8
million, inclusive of $4.8 million for change orders and shipyard expenses, and
the unsecured balance of the Shipbuilder's previously disclosed claims. The
Company posted the bond, took possession, and completed the Glomar Jack Ryan in
another shipyard, following which the drillship began operating under a drilling
contract in December 2000.

In September 2000 the Shipbuilder requested that the arbitration panel consider
whether the Lessor had an obligation to pay the final delivery installment upon
completion of the Glomar Jack Ryan even if the Shipbuilder was in default of its
obligation to deliver the vessel, as the Company contends.  The arbitration
panel determined that the contract did so obligate the Lessor to make the final
delivery installment and issued a preliminary award requiring the payment to the
Shipbuilder of $31.8 million of the $35.8 million contractual delivery
installment.  The Company appealed that decision to the Commercial Court in
London.  In November 2000 the Commercial Court overturned the decision of the
arbitration panel.  The Shipbuilder appealed that decision to the Court of
Appeals, and arguments were heard in late March 2001.  In June 2001 the Court of
Appeals ruled in favor of the Shipbuilder, and the Lessor was required to pay
the Shipbuilder $31.8 million. Because the Company had previously deposited in
the Payment Banks in September 2000 the amount required to satisfy its remaining
obligation under the capital lease agreement with the Lessors, the decision by
the Court of Appeals had no effect on the Company's cash flow in 2001.  The net
effect is that the Company has provided to date for the payment of the full $315
million contract price plus certain agreed change orders less the $4.0 million
that the arbitration panel preliminarily allowed the Lessor to withhold from the
final delivery installment.  This excludes amounts totaling $103.1 million that
the Company and the Lessors have advanced under the Funding Agreement.  The
Company's liability for the Shipbuilder's previously disclosed claims of GBP 133
million ($191 million), plus any additional steel-weight claim not included
therein, and the $4.0 million balance of the contract price, as well as the
parties' rights to the advances

                                       11
<PAGE>

                      GLOBAL MARINE INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              SEPTEMBER 30, 2001

under the Funding Agreement, will be determined in the arbitration proceedings
that are currently underway in London. Final claims should be presented prior to
December 31, 2001.

The Company and a number of other participants in the offshore contract drilling
business in the Gulf of Mexico are defendants in a purported antitrust class
action lawsuit filed in the federal district court in Galveston, Texas.  The
complaint alleges a conspiracy among the defendants to depress wages and
benefits paid to their offshore employees.  In July 2001, counsel for the
putative class and certain defendants, including the Company, entered into a
settlement agreement pursuant to which the members of the class would grant the
settling defendants a full and final release from all claims under the lawsuit
in consideration of the settling defendants' payment of varying amounts. In
November 2001, the Court entered a preliminary approval of the settlements
previously agreed to among the parties. Most of the Company's payment and
defense costs will be covered by insurance, with the Company contributing an
amount not considered to be material. The settlement, including the amount to be
paid by the Company and the Company's release, is contingent upon final court
approval of the settlement and upon an acceptable number of members of the
plaintiff class not opting out of the settlement.

Applied Drilling Technology Inc., which is a wholly-owned subsidiary of the
Company ("ADTI"), Patterson Energy Services, Inc. and Eagle Oilfield Inspection
Services, Inc. are defendants in a civil lawsuit filed in September 2001 by
Newfield Exploration Co. and its insurance underwriters in the United States
District Court for the Eastern District of Louisiana.  The lawsuit arises out of
damage caused to an offshore well owned by Newfield which had been drilled by
ADTI in the U.S. Gulf of Mexico pursuant to a turnkey drilling contract and in
respect of which Patterson Services, Inc. and Eagle Oilfield Inspection
Services, Inc. also performed services.  The well was damaged following
completion of the turnkey contract when the well head was struck by a fishing
vessel.  The plaintiffs allege breach of contract, negligence, and breach of
warranty on the part of the defendants and have sued for damages of
approximately $13 million.  The Company has not made any determination as to the
merits of these claims or the availability of insurance coverage, if any, in the
event ADTI incurs any liability.

The Company is involved in various lawsuits resulting from personal injury and
property damage.  In the opinion of management, resolution of these matters will
not have a material adverse effect on the Company's results of operations,
financial position, or cash flows.

                                       12
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OPERATING RESULTS

Summary

Data relating to the Company's operations by business segment follows:

<TABLE>
<CAPTION>

                                                              Three Months Ended September 30,  Nine Months Ended September 30,
                                                             ---------------------------------  -------------------------------
                                                                                    % Increase                     % Increase
                                                               2001         2000    (Decrease)    2001     2000    (Decrease)
                                                              ------       ------    ---------   ------   ------    ---------
                                                                                        ($ in millions)
<S>                                                           <C>           <C>        <C>       <C>       <C>       <C>
Revenues:
  Contract drilling                                           $224.9        $156.9        43%    $637.8    $417.2       53%
  Drilling management                                           90.0         114.8       (22%)    332.0     288.9       15%
  Oil and gas                                                    2.7           5.7       (53%)     12.0      13.5      (11%)
  Less: Intersegment revenues                                   (3.8)         (5.4)      (30%)    (16.8)    (12.2)      38%
                                                              ------        ------               ------    ------
                                                              $313.8        $272.0        15%    $965.0    $707.4       36%
                                                              ======        ======               ======    ======
Operating income:
  Contract drilling                                           $ 85.3        $ 50.6        69%    $240.4    $123.8       94%
  Drilling management                                            9.8           6.4        53%      20.6      19.5        6%
  Oil and gas                                                    1.4           3.4       (59%)      8.2       7.8        5%
  Restructure costs                                                -             -        na          -      (5.2)    (100%)
  Corporate expenses                                            (6.0)         (5.8)        3%     (18.7)    (19.3)      (3%)
                                                              ------        ------               ------    ------
                                                              $ 90.5        $ 54.6        66%    $250.5    $126.6       98%
                                                              ======        ======               ======    ======
</TABLE>

Operating income increased by $35.9 million to $90.5 million for the third
quarter of 2001 from $54.6 million for the third quarter of 2000, and by $123.9
million to $250.5 million for the nine months ended September 30, 2001, from
$126.6 million for the nine months ended September 30, 2000.  The increases were
primarily attributable to increases in average rig utilization and dayrates for
contract drilling and the addition to the fleet of the Glomar C.R. Luigs and
Glomar Jack Ryan ultra-deepwater drillships in April and December 2000,
respectively.

Results for the quarter and nine months ended September 30, 2001 reflect strong
utilization and dayrates received for the Company's rigs across geographic
areas. While the Company's third quarter utilization rate of 95 percent was high
on an absolute basis, it declined from the 99 percent reported for the second
quarter of 2001. The decline was due primarily to the Glomar Baltic I, which was
in the shipyard for most of the third quarter for upgrades prior to its 180-day
contract in Trinidad, and the Glomar Grand Banks, which was idle for three weeks
during the quarter while between contracts in the North Sea. The Company's
average dayrate increased to $78,000 in the third quarter from $75,500 in the
second quarter of 2001 due to increases primarily in West Africa.

Although not significantly reflected in its results, the Company has recently
experienced weakening conditions in the U.S. Gulf of Mexico jackup market, which
is strongly influenced by the price of natural gas.  A decline in natural gas
prices beginning earlier this year resulted in many operators reducing their
level of drilling activity in the U.S. Gulf of Mexico, impacting both jackup
utilization and dayrates.  The Company believes jackup dayrates in the U.S. Gulf
of Mexico could reach cash-breakeven levels and does not expect strengthening to
occur until the current downward pressure on natural gas prices abates.

                                       13
<PAGE>

As a result of the strong international markets, the Company mobilized two rigs
from the U.S. Gulf of Mexico during the third quarter - the Glomar Adriatic IX
jackup to West Africa and the Glomar Baltic I jackup to Trinidad.  In addition,
the Glomar Adriatic III jackup is expected to depart the U.S. Gulf of Mexico in
December to begin a multi-well program in Trinidad.

On August 31, 2001, the Company entered into an agreement to merge with a
subsidiary of Santa Fe International Corporation and become a wholly-owned
subsidiary of Santa Fe, which will be renamed GlobalSantaFe Corporation at the
time of the merger. Under the agreement, each outstanding share of Global Marine
Inc. common stock will be converted into the right to receive 0.665 newly issued
ordinary shares of GlobalSantaFe Corporation.  A Special Meeting of the
Company's stockholders and an Extraordinary General Meeting of Santa Fe's
shareholders to approve the merger are scheduled for November 20, 2001, which is
the expected closing date.

Based on the number of shares of the Company and Santa Fe expected to be
outstanding at the time of the merger, stockholders of the Company will own
slightly more than 50%, and shareholders of Santa Fe will own slightly less than
50% of the outstanding shares of GlobalSantaFe Corporation.

The merger will be accounted for as a purchase business combination in
accordance with accounting principles generally accepted in the United States of
America, with the Company treated as the acquiring entity and Santa Fe treated
as the acquired entity. Accordingly, the historical basis in assets and
liabilities of the Company will be carried forward to the financial statements
of GlobalSantaFe. Assets and liabilities of Santa Fe will be revalued to
estimated fair value at the date of the merger in the financial statements of
GlobalSantaFe. The excess of the merger purchase price over Santa Fe's revalued
net assets will be recorded as goodwill.  Based on the price of the Company's
common stock immediately before and after the merger announcement date, as
adjusted for the merger exchange ratio, the purchase price is estimated to be
$2.6 billion, with goodwill estimated at $450 million.

In June 2001 the Company completed the sale of the Glomar Beaufort Sea I
concrete island drilling system to Exxon Neftegas Limited for $45 million,
resulting in a pretax gain in the amount of $35.1 million.  The Company received
$5 million in cash at closing with the remainder of the purchase price in the
amount of $40 million, plus interest, being due on or before March 1, 2003.

At September 30, 2001, the Company had $683 million of contract drilling
backlog, which it expects to realize as follows: $204 million during the
remainder of 2001, $340 million in 2002, and $139 million in 2003.  Contract
drilling backlog at December 31, 2000, was $772 million.

                                       14
<PAGE>

Contract Drilling Operations

Data with respect to the Company's contract drilling operations follows:

<TABLE>
<CAPTION>

                                                      Three Months Ended September 30,    Nine Months Ended September 30,
                                                      --------------------------------    -------------------------------
                                                                            % Increase                         % Increase
                                                        2001       2000     (Decrease)      2001       2000    (Decrease)
                                                      -------    -------    ---------     -------     ------   ---------
<S>                                                  <C>         <C>        <C>           <C>         <C>       <C>
 Contract drilling revenues by area
  (in millions): /(1)/
   Gulf of Mexico                                     $ 128.6    $ 104.2         23%      $ 336.3     $ 235.7       43%
   West Africa                                           48.6       21.8        123%        114.0        78.0       46%
   North Sea                                             31.3       13.1        139%         79.2        51.0       55%
   Other                                                 16.4       17.8         (8%)       108.3        52.5      106%
                                                      -------    -------                  -------     -------
                                                      $ 224.9    $ 156.9         43%      $ 637.8     $ 417.2       53%
                                                      =======    =======                  =======     =======

Average rig utilization /(2)/                              95%        85%                      94%         82%
Average dayrate                                       $78,000    $59,200                  $75,000     $57,100
</TABLE>
------------------
(1) Includes revenues earned from affiliates.
(2) Excludes the Glomar Beaufort Sea I concrete island drilling system, which
    was sold in June 2001.

Of the $68.0 million increase in contract drilling revenues for the third
quarter of 2001 as compared with the third quarter of 2000, $26.4 million was
attributable to an increase in average dayrates primarily offshore West Africa
and in the U.S. Gulf of Mexico, $22.0 million was attributable to an increase in
average rig utilization, and $20.4 million was attributable to the addition of
the Glomar Jack Ryan drillship in December 2000.

Of the $220.6 million increase in contract drilling revenues for the nine months
ended September 30, 2001, as compared with the nine months ended September 30,
2000, $89.7 million was attributable to the addition of the Glomar C.R. Luigs
and Glomar Jack Ryan drillships, $68.0 million was attributable to an increase
in average rig utilization, and $63.8 million was attributable to an increase in
average dayrates primarily in the U.S. Gulf of Mexico and offshore West Africa.

In the third quarter of 2001, the Company averaged 100 percent utilization for
its rigs offshore West Africa, 99 percent in the U.S. Gulf of Mexico, and 89
percent in the North Sea.  This compares with 84 percent utilization offshore
West Africa, 100 percent in the U.S. Gulf of Mexico, and 49 percent in the North
Sea for the third quarter of 2000.

For the nine months ended September 30, 2001, the Company averaged 98 percent
utilization for its rigs in the U.S. Gulf of Mexico, 95 percent offshore West
Africa, and 88 percent in the North Sea.  This compares with 100 percent
utilization in the U.S. Gulf of Mexico, 74 percent offshore West Africa, and 56
percent in the North Sea for the comparable prior-year period.

The mobilization of rigs between the geographic areas shown in the preceding
table also affected each area's revenues over the periods indicated.
Specifically, the Company mobilized one jackup from the North Sea to the U.S.
Gulf of Mexico in January 2000, one drillship from offshore Peru to West Africa
in April 2000, one drillship from West Africa to the U.S. Gulf of Mexico in June
2000, one drillship from the U.S. Gulf of Mexico to offshore Brazil in February
2001 and back to the U.S. Gulf of Mexico in July 2001, one jackup from West
Africa to the U.S. Gulf of Mexico in March 2001, one drillship from

                                       15
<PAGE>

Trinidad to the U.S. Gulf of Mexico in May 2001, one semisubmersible from
offshore the east coast of Canada to the North Sea in June 2001, one jackup from
the U.S. Gulf of Mexico to West Africa in August 2001, and one jackup from the
U.S. Gulf of Mexico to Trinidad in September 2001.

The Company's operating profit margin for contract drilling operations increased
to 38 percent for the third quarter of 2001 from 32 percent for the third
quarter of 2000, and operating profit margin increased to 38 percent for the
nine months ended September 30, 2001, from 30 percent for the comparable prior-
year period.  The increases in margins were primarily due to higher average rig
utilization and dayrates. Contract drilling operating expenses increased by
$33.3 million in the third quarter of 2001 as compared to the third quarter of
2000, and by $104.0 million for the nine months ended September 30, 2001, as
compared to the same period last year.  The increases in operating expenses were
due to higher depreciation and other operating costs in connection with the
addition of the Glomar C.R. Luigs and Glomar Jack Ryan drillships, higher
operating costs due to an increase in rig utilization, and higher operating
costs incurred on the Maersk Jutlander, which was being leased from the Company
under a bareboat charter for most of 2000.  Under a bareboat charter, the
Company provides the customer with a rig, and the customer uses its own crews to
operate the rig.

As of November 6, 2001, sixteen of the Company's rigs were located in the U.S.
Gulf of Mexico, eight were offshore West Africa, six were in the North Sea, and
three were offshore Trinidad.  At November 6, 2001, one of the Company's rigs, a
jackup in the U.S. Gulf of Mexico, was without a contract.

Drilling Management Services

Drilling management services revenues decreased by $24.8 million to $90.0
million in the third quarter of 2001 from $114.8 million in the third quarter of
2000, and operating income increased by $3.4 million to $9.8 million in the
third quarter of 2001 from $6.4 million in the third quarter of 2000.  The
decrease in revenues consisted of a $19.0 million decrease attributable to a
decrease in the number of turnkey projects and a $9.0 million decrease
attributable to daywork and other revenues, partly offset by a $3.2 million
increase attributable to higher average revenues per turnkey project.  The
Company completed 29 turnkey projects in the third quarter of 2001 (24 wells
drilled and 5 well completions) as compared to 37 turnkey projects in the third
quarter of 2000 (26 wells drilled and 11 well completions).

Operating profit margin increased to 10.9 percent for the third quarter of 2001
as compared to 5.6 percent for the third quarter of 2000.  The increase in
margin was due in part to higher average turnkey revenues per project.  The
Company incurred losses totaling $1.3 million on 2 of the 29 turnkey projects
completed in the third quarter of 2001 as compared to losses totaling $2.4
million on 2 of the 37 turnkey projects in the third quarter of 2000.  In
addition, the third quarter of 2000 included loss provisions totaling $2.3
million on two wells in progress at September 30, 2000, that were expected to be
completed at a loss.

Drilling management services revenues increased by $43.1 million to $332.0
million for the nine months ended September 30, 2001, from $288.9 million for
the nine months ended September 30, 2000, and operating income increased by $1.1
million to $20.6 million for the nine months ended September 30, 2001, from
$19.5 million for the comparable prior-year period.  The increase in revenues
consisted of a $17.3 million increase attributable to daywork and other
revenues, a $13.0 million increase attributable to higher average revenues per
turnkey project, and a $12.8 million increase attributable to an increase in the
number of turnkey projects.  The Company completed 101 turnkey projects for the
nine months ended September 30, 2001 (83 wells drilled and 18 well completions),
as compared to 96 turnkey projects for the same period last year (75 wells
drilled and 21 well completions).

                                       16
<PAGE>

Operating profit margin decreased to 6.2 percent for the nine months ended
September 30, 2001, as compared to 6.7 percent for the nine months ended
September 30, 2000.  The Company incurred losses totaling $13.5 million on 10 of
the 101 turnkey projects completed in the nine months ended September 30, 2001,
as compared to losses totaling $5.5 million on 7 of the 96 turnkey projects
completed in the same period last year.

Other Income and Expense

General and administrative expenses decreased to $5.4 million in the third
quarter of 2001 from $5.5 million in the third quarter of 2000 due to lower
compensation expense, partly offset by an increase in professional fees.
General and administrative expenses decreased to $17.3 million for the nine
months ended September 30, 2001, from $17.7 million for the nine months ended
September 30, 2000, due to lower compensation expense, partly offset by an
increase in professional fees and information systems costs.

Interest expense decreased to $14.4 million in the third quarter of 2001 from
$15.5 million in the third quarter of 2000 primarily due to lower debt balances.
Interest expense decreased to $42.6 million for the nine months ended September
30, 2001, from $49.6 million for the comparable prior-year period due to lower
effective interest rates and debt balances.

The Company capitalized $5.0 million of interest expense in the third quarter of
2000 and $22.8 million for the nine months ended September 30, 2000, in
connection with construction of two drillships.  The Company did not capitalize
any interest expense for the three or nine months ended September 30, 2001.

Interest income increased to $3.7 million in the third quarter of 2001 from $1.2
million in the third quarter of 2000, and increased to $9.7 million for the nine
months ended September 30, 2001, from $2.7 million for the same period last
year.  The increases were primarily due to higher average cash and short-term
investment balances.

The Company's effective income tax rate for financial reporting purposes was
approximately 22 and 26 percent for the three and nine months ended September
30, 2001, respectively.  This compares to 29 percent for both the quarter and
nine months ended September 30, 2000, and the U.S. federal statutory rate of 35
percent.  The Company's effective tax rate for the nine months ended September
30, 2001, was negatively impacted by the effect of the second-quarter gain on
sale of the Glomar Beaufort Sea I, which has an effective tax rate of 35 percent
for financial reporting purposes.

In the first quarter of 2000, the Company implemented a restructuring designed
to streamline its organization and improve efficiency.  The restructuring
involved a workforce reduction of 82 positions, a consolidation of
administrative offices in Houston and Europe, and closure of a materials control
facility in Houston.  The employee functions affected were primarily corporate
support in nature and included materials control, engineering, accounting, and
information technology, among others. Approximately 80 percent of the affected
positions were located in Houston, and the remaining 20 percent were located in
Europe.  The Company recorded a $5.2 million pretax charge in the first quarter
of 2000 in connection with the restructuring, consisting of $4.3 million for
employee severance costs and $0.9 million for office and facility closures.  As
of September 30, 2001, substantially all payments contemplated under the
restructuring were completed.

The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards ("SFAS") No. 143, "Accounting for Asset Retirement
Obligations" and SFAS No. 144, "Accounting for

                                       17
<PAGE>

the Impairment or Disposal of Long-Lived Assets." SFAS No. 143 establishes
accounting standards for the recognition and measurement of liabilities in
connection with asset retirements, and SFAS No. 144 addresses financial
accounting and reporting for the impairment of long-lived assets and for long-
lived assets to be disposed of. The Company does not anticipate that the
adoption of SFAS No. 143 in 2003 or SFAS No. 144 in 2002 will have a material
effect on its results of operations, financial position or cash flows.

LIQUIDITY AND CAPITAL RESOURCES

For the nine months ended September 30, 2001, $262.7 million of cash flow was
provided by operating activities, $9.0 million was provided from sales of
properties and equipment, and $6.7 million was provided from exercises of
employee stock options.  From these amounts, $68.8 million was used for capital
expenditures, $59.2 million was used to purchase marketable securities, and $3.8
million was used for other purposes.

For the nine months ended September 30, 2000, $292.7 million of cash flow was
provided from issuance of the Zero Coupon Convertible Debentures (after
deduction for legal, accounting, and underwriting fees), $156.2 million was
provided by operating activities, $12.9 million was provided from exercises of
employee stock options, $1.8 million was provided from sales of properties and
equipment, and $0.3 million was provided from maturities of marketable
securities.  From these amounts, plus available cash, $349.8 million was used to
reduce long-term debt (net of borrowings), $133.6 million was used for capital
expenditures, and $1.8 million was used for other purposes.

Capital expenditures for the full year 2001 are anticipated to be $91 million,
consisting of $86 million for upgrades to drilling fleet equipment and $5
million for other capital expenditures.

As of September 30, 2001, the Company had $350.1 million in cash, cash
equivalents and marketable securities, all of which was unrestricted, as
compared to $144.3 million in cash and cash equivalents at December 31, 2000.

In October 2001 the Company terminated its $240 million committed revolving bank
credit facility, which had been unused since July 2000 and was scheduled to
expire December 2002. The Company believes it will be able to meet all of its
current obligations, including working capital requirements, capital
expenditures and debt service, from its cash and short-term investments and
future cash flow from operations.

                     _____________________________________

                           FORWARD-LOOKING STATEMENTS

Under the Private Securities Litigation Reform Act of 1995, companies are
provided a "safe harbor" for discussing their expectations regarding future
performance.  We believe it is in the best interests of our stockholders and the
investment community to use these provisions and provide such forward-looking
information.  We do so in this report and other communications.  Our forward-
looking statements include things such as our

  . belief that jackup dayrates in the U.S. Gulf of Mexico could reach cash-
    breakeven levels and expectation that strengthening will not occur until the
    current downward pressure on natural gas prices abates;

  . expectations regarding backlog amounts that will be realized in 2001 through
    2003;


                                       18
<PAGE>

  . statements regarding timing in connection with rigs that are being moved;

  . expectation that the merger with Santa Fe International Corporation will
    close on November 20, 2001;

  . statement regarding the relative amounts of the outstanding shares of
    GlobalSantaFe Corporation that will be owned by the stockholders of the
    Company and the shareholders of Santa Fe;

  . expectations regarding the accounting treatment of various items as a result
    of the merger;

  . estimates of the merger purchase price and amount of goodwill involved in
    the merger;

  . anticipation that adoption of SFAS 143 and 144 will not have a material
    effect on our results of operations, financial position or cash flows;

  . estimates regarding 2001 capital expenditures;

  . belief in our ability to meet our current obligations; and

  . other statements that are not historical facts.

Our forward-looking statements speak only as of the date of this report and are
based on currently available industry, financial, and economic data and our
operating plans.  They are also inherently uncertain, and investors must
recognize that events could turn out to be materially different from our
expectations.

Factors that could cause or contribute to such differences include, but are not
limited to:

  .  changes in our customers' drilling programs or budgets due to changes in
     the markets and prices for oil and gas, or shifts in the relative strengths
     of various geographic drilling markets brought on by things such as changes
     in regional or worldwide economic trends;

  .  the discovery of significant additional oil and/or gas reserves or the
     construction of significant oil and/or gas delivery or storage systems that
     impact regional or worldwide energy markets;

  .  delays in commencing or completing drilling projects due to things such as
     contract disputes, governmental approval delays, weather conditions,
     political or social unrest, or engineering or other mechanical problems;

  .  unanticipated engineering, mechanical or construction problems that delay
     the completion of rig-related projects;

  .  unanticipated opposition to the merger on the part of stockholders or
     regulatory or other governmental authorities;

  .  unanticipated changes in the numbers of shares of the Company's and/or
     Santa Fe's stock outstanding;

  .  unanticipated challenges to the accounting treatment of items in the
     merger;

  .  unexpected changes in or interpretations of tax laws or regulations or
     accounting rules or standards that change our effective tax rates or the
     way we pay or account for various items;

  .  changes in oil and gas drilling technology or in our competitors' drilling
     rig fleets that could make our drilling rigs less competitive or require
     major capital investment to keep them competitive;

  .  changes in our business or in capital markets that affect our ability to
     finance our business or meet our financial obligations in the manner
     currently anticipated; and

  .  such other risk factors as may be discussed in the Company's reports filed
     with the U.S. Securities and Exchange Commission.

The Company disclaims any obligation or undertaking to disseminate any updates
or revisions to its statements, forward-looking or otherwise, to reflect changes
in the Company's expectations or any change in events, conditions, or
circumstances on which any such statements are based.

                                       19
<PAGE>

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

No material change from December 31, 2000.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

As previously reported under Item 3, "Legal Proceedings," in the Company's
Annual Report on Form 10-K for the year ended December 31, 2000, the Company and
a number of other participants in the offshore drilling business in the Gulf of
Mexico are defendants in a purported antitrust class action lawsuit filed in the
federal district court in Galveston, Texas.  The complaint alleges a conspiracy
among the defendants to depress wages and benefits paid to their offshore
employees. In July 2001, counsel for the putative class and certain defendants,
including the Company, entered into a settlement agreement. The settlement
agreement is discussed in note 7 of the financial statements in this Quarterly
Report on Form 10-Q, which discussion is incorporated herein by this reference
thereto.

Applied Drilling Technology Inc., which is a wholly-owned subsidiary of the
Company ("ADTI"), Patterson Energy Services, Inc. and Eagle Oilfield Inspection
Services, Inc. are defendants in a civil lawsuit filed in September 2001 by
Newfield Exploration Co. and its insurance underwriters in the United States
District Court for the Eastern District of Louisiana.  The lawsuit arises out of
damage caused to an offshore well owned by Newfield which had been drilled by
ADTI in the U.S. Gulf of Mexico pursuant to a turnkey drilling contract and in
respect of which Patterson Services, Inc. and Eagle Oilfield Inspection
Services, Inc. also performed services.  The well was damaged following
completion of the turnkey contract when the well head was struck by a fishing
vessel.  The plaintiffs allege breach of contract, negligence, and breach of
warranty on the part of the defendants and have sued for damages of
approximately $13 million.  The Company has not made any determination as to the
merits of these claims or the availability of insurance coverage, if any, in the
event ADTI incurs any liability.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

   2.1    Agreement and Plan of Merger dated as of August 31, 2001, among Santa
          Fe International Corporation, Silver Sub, Inc., Gold Merger Sub, Inc.
          and Global Marine Inc. (Incorporated herein by this reference to
          Exhibit 10.1 of the Company's Current Report on Form 8-K dated
          September 4, 2001.)

   2.2    Shareholder Agreement dated as of August 31, 2001, between Global
          Marine Inc. and SFIC Holdings (Cayman), Inc. (Incorporated herein by
          this reference to Exhibit 10.2 of the Company's Current Report on Form
          8-K dated September 4, 2001.)

  10.1    Global Marine Personal Financial Planning Assistance Program for
          Senior Executive Officers, adopted August 16, 2001.

  10.2    Global Marine Personal Financial Planning Assistance Program for Key
          Employees, adopted August 16, 2001.

  10.3    Amended and Restated Employment Agreement dated as of August 16, 2001,
          among the

                                       20
<PAGE>

          Company, Global Marine Corporate Services Inc. and Robert E. Rose; and
          First Amendment thereto dated August 31, 2001.

 10.4     Form of Severance Agreement dated August 16, 2001, between the Company
          and six executive officers, respectively.

 10.5     Global Marine Severance Program for Shorebased Staff Personnel, as
          amended and restated effective August 16, 2001.

 10.6     Resolution of the Compensation Committee of the Company's Board of
          Directors dated August 16, 2001, regarding Modification of Performance
          Stock Awards.

 10.7     Resolution of the Compensation Committee of the Company's Board of
          Directors dated August 16, 2001, regarding Grant of Restricted Stock.

 10.8     Resolution of the Company's Board of Directors dated August 31, 2001,
          regarding Director Compensation.

 15.1     Letter of Independent Accountants regarding Awareness of Incorporation
          by Reference.

(b) Reports on Form 8-K

     The Company filed the following reports on Form 8-K during the quarter
     ended September 30, 2001:

<TABLE>
<CAPTION>
   Date of Report               Items Reported             Financial Statements Filed
---------------------   ------------------------------   ------------------------------
<S>                     <C>                              <C>
July 6, 2001            Item 7, Financial Statements     None
                        and Exhibits; and Item 9,
                        Regulation FD Disclosure

July 17, 2001           Item 7, Financial Statements     Unaudited financial
                        and Exhibits; and Item 9,        statements for the three-month
                        Regulation FD Disclosure         period ended September 30, 2001*

August 3, 2001          Item 7, Financial Statements     None
                        and Exhibits; and Item 9,
                        Regulation FD Disclosure

September 4, 2001       Item 5, Other Events; and        None
                        Item 7, Financial Statements
                        and Exhibits

September 7, 2001       Item 7, Financial Statements     None
                        and Exhibits; and Item 9,
                        Regulation FD Disclosure
</TABLE>

                                       21
<PAGE>

<TABLE>
<S>                     <C>                             <C>
September 26, 2001      Item 9, Regulation FD            None
                        Disclosure

September 28, 2001      Item 5, Other Events; and        None
                        Item 7, Financial Statements
                        and Exhibits
</TABLE>
_____________________

* The financial statements were furnished pursuant to Item 9 and shall not be
deemed to be "filed" for the purposes of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section.


                                   SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                  GLOBAL MARINE INC.
                                  (Registrant)

Dated: November 13, 2001          /s/ Douglas C. Stegall
                                  ----------------------------------------
                                  Douglas C. Stegall
                                  Vice President and Controller
                                  (Duly Authorized Officer and Principal
                                  Accounting Officer of the Registrant)

                                       22