(Source: Business Wire)
Ensco International Incorporated (NYSE: ESV) reported diluted earnings
per common share from continuing operations of $1.05 for third quarter
2009, compared to $2.06 per share in third quarter 2008. Earnings from
discontinued operations were zero cents per share in third quarter 2009,
compared to a loss of $0.09 per share a year ago. Diluted earnings per
share were $1.05 in third quarter 2009, compared to $1.97 in third
quarter 2008. Discontinued operations relate to rigs no longer in the
Company's fleet.
Chairman, President and Chief Executive Officer Dan Rabun stated, "We
recently added ENSCO 8501 to our active fleet of ultra-deepwater
semisubmersibles, and we expect deepwater segment revenues to grow
significantly in 2010 and 2011. We also are pleased to report that new
and existing customers recently contracted several of our premium
jackups. Jackup utilization is projected to rise, which will help to
lessen the impact of declining day rates."
On October 14, 2009, Ensco filed a Current Report on Form 8-K with the
SEC updating the Company's Annual Report on Form 10-K for the year ended
December 31, 2008 to reflect the retrospective application of two
accounting standards adopted on January 1, 2009, and the
reclassification of ENSCO 69 as discontinued operations in 2008 and
prior periods. Prior period results in this news release and the
attached schedules reflect the updated amounts in the Current Report.
On September 4, 2009, the Company reported that unplanned downtime for
ENSCO 7500 and ENSCO 8500 would reduce diluted earnings per share for
third quarter 2009. Based on the actual downtime incurred for repairs
required on these two rigs in the third quarter, earnings were reduced
by $0.19 per share.
Revenues in third quarter 2009 declined to $425 million from $620
million a year ago. Average day rates increased year-to-year for the
deepwater segment, but declined for the premium jackup fleet. Rig
utilization in third quarter 2009 declined in all of the operating
segments, compared to the prior year. Total third quarter 2009 operating
expenses increased to $250 million from $247 million last year,
primarily due to an increase in depreciation related to ENSCO 8500
commencing operations.
Segment Highlights
Deepwater
Deepwater segment revenues grew by 131% year-to-year to $63 million in
third quarter 2009, mostly driven by commencement of ENSCO 8500
operations in early-June 2009. The average deepwater rig day rate
increased to $387,000 from $362,000 a year ago, however, utilization
declined to 64% from 87% in third quarter 2008. Contract drilling
expense increased 318% year-to-year, primarily due to adding ENSCO 8500
to the active fleet and ENSCO 7500 incurring both higher operating costs
in Australia and increased mobilization expense that is deferred and
recognized over the term of the contract.
Total Jackup Segments
Revenues from Ensco's worldwide premium jackup fleet totaled $363
million in third quarter 2009, down from $592 million a year ago. The
decline was largely due to a decrease in utilization to 61% from 97%
last year and an $8,000 decline in the average day rate to $148,000.
Contract drilling expense declined 16% year-over-year, mostly due to
reduced personnel and other costs related to lower utilization.
Third Quarter
Deepwater Total Jackup Segments Reconciling Items Consolidated Total
($ in millions) 2009 2008 % Chng 2009 2008 % Chng 2009 2008 2009 2008 % Chng
Revenues $ 62.5 $ 27.1 131 % $ 362.9 $ 592.4 -39 % $ ----- $ ----- $ 425.4 $ 619.5 -31 %
Operating expenses
Contract drilling 34.7 8.3 318 % 148.6 176.9 -16 % ----- ----- 183.3 185.2 -1 %
Depreciation 6.5 2.3 183 % 46.5 44.2 5 % 0.3 0.5 53.3 47.0 13 %
General and administrative ----- ----- ----- ----- ----- ----- 13.6 15.2 13.6 15.2 -11 %
Operating income (loss) $ 21.3 $ 16.5 29 % $ 167.8 $ 371.3 -55 % $ (13.9 ) $ (15.7 ) $ 175.2 $ 372.1 -53 %
-------------------------------------------------------------------------------
Strong Financial Position -- September 30,
2009
Ensco continues to maintain a strong financial position:
More than $1 billion of cash and cash equivalents
$350 million fully available revolving credit facility
Long-term debt remains low at $266 million
Long-term debt-to-capital ratio of 5%
Contract backlog equals $3.3 billion
Chief Financial Officer Jay Swent commented, "Cash now exceeds $1
billion, and we expect cash generation will continue to be strong as
total capital commitments for the ENSCO
8500 Series® newbuild program decline, just as deepwater segment
revenues begin to rise."
Ensco will conduct a conference call at 10:00 a.m. Central Time on
Thursday, October 22, 2009, to discuss third quarter 2009 results. The
call will be broadcast live at www.enscointernational.com.
Interested parties also may listen to the call by dialing (719)
325-4777. We recommend that participants call five to ten minutes before
the scheduled start time.
A replay of the conference call will be available by phone for 48 hours
after the call by dialing (719) 457-0820 (access code 1457791). A
transcript of the call and access to the replay or MP3 download may be
found at www.enscointernational.com
in the Investors Section.
Ensco International Incorporated (NYSE: ESV) brings energy to the world
as a global provider of offshore drilling services to the petroleum
industry. With a fleet of ultra-deepwater semisubmersible and premium
jackup drilling rigs, Ensco serves customers with high-quality
equipment, a well-trained workforce and a strong record of safety and
reliability. To learn more about Ensco, please visit our website at www.enscointernational.com.
Statements contained in this news release that state the Company's or
management's intentions, hopes, beliefs, expectations, anticipations,
projections, confidence, schedules, or predictions of the future are
forward-looking statements made pursuant to the Private Securities
Litigation Reform Act of 1995.
Forward-looking statements include words or phrases such as
"anticipate," "believe," "estimate," "expect," "intend," "plan,"
"project," "could," "may," "might," "should," "will" and words and
phrases of similar import. The forward-looking statements include, but
are not limited to, statements regarding future operations, cash
generation, the impact of recently contracted premium jackups,
contributions from the deepwater expansion program and expense
management, industry trends or conditions and the business environment;
statements regarding future levels of, or trends in, utilization, day
rates, revenues, operating expenses, contract term, contract backlog,
capital expenditures, insurance, financing and funding;
statements regarding future construction (including construction in
progress and completion thereof), enhancement, upgrade or repair of rigs
and timing thereof; statements regarding future delivery, mobilization,
relocation or other movement of rigs and timing thereof; statements
regarding future availability or suitability of rigs and the timing
thereof, and statements regarding the likely outcome of litigation,
legal proceedings, investigations or insurance or other claims and
timing thereof.
Forward-looking statements are made pursuant to safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Numerous factors could cause actual results to differ materially from
those in the forward-looking statements, including: (i) industry
conditions and competition, including changes in rig supply and demand
or new technology, (ii) risks associated with the global economy and its
impact on capital markets and liquidity, (iii) prices of oil and natural
gas and their impact upon future levels of drilling activity and
expenditures, (iv) further declines in rig activity, which may cause us
to idle or stack additional rigs, (v) excess rig availability or supply
resulting from delivery of newbuild drilling rigs, (vi) heavy
concentration of our rig fleet in premium jackups, (vii) cyclical nature
of the industry, (viii) worldwide expenditures for oil and natural gas
drilling, (ix) the ultimate resolution of the ENSCO 69 situation in
general and the potential return of the rig or package policy political
risk insurance recovery in particular, (x) changes in the timing of
revenue recognition resulting from the deferral of certain revenues for
mobilization of our drilling rigs, time waiting on weather or time in
shipyards, which are recognized over the contract term upon commencement
of drilling operations, (xi) operational risks, including excessive
unplanned downtime and hazards created by severe storms and hurricanes,
(xii) risks associated with offshore rig operations or rig relocations
in general and in foreign jurisdictions in particular, (xiii)
renegotiation, nullification, cancellation or breach of contracts or
letters of intent with customers or other parties, including failure to
negotiate definitive contracts following announcements or receipt of
letters of intent, (xiv) inability to collect receivables, (xv) changes
in the dates new contracts actually commence, (xvi) changes in the dates
our rigs will enter a shipyard, be delivered, return to service or enter
service, (xvii) risks inherent to domestic and foreign shipyard rig
construction, repair or enhancement, including risks associated with
concentration of our ENSCO 8500 Series® rig construction contracts in a
single foreign shipyard, unexpected delays in equipment delivery and
engineering or design issues following shipyard delivery, (xviii)
availability of transport vessels to relocate rigs, (xix) environmental
or other liabilities, risks or losses, whether related to hurricane
damage, losses or liabilities (including wreckage or debris removal) in
the Gulf of Mexico or otherwise, that may arise in the future and are
not covered by insurance or indemnity in whole or in part, (xx) limited
availability or high cost of insurance coverage for certain perils such
as hurricanes in the Gulf of Mexico or associated removal of wreckage or
debris, (xxi) self-imposed or regulatory limitations on drilling
locations in the Gulf of Mexico during hurricane season, (xxii) impact
of current and future government laws and regulations affecting the oil
and gas industry in general and our operations in particular, including
taxation as well as repeal or modification of same, (xxiii) our ability
to attract and retain skilled personnel, (xxiv) governmental action and
political and economic uncertainties, including expropriation,
nationalization, confiscation or deprivation of our assets, (xxv)
terrorism or military action impacting our operations, assets or
financial performance, (xxvi) outcome of litigation, legal proceedings,
investigations, or insurance or other claims, (xxvii) adverse changes in
foreign currency exchange rates, including their impact on the fair
value measurement of our derivative financial instruments, (xxviii)
potential long-lived asset or goodwill impairments, (xxix) potential
reduction in fair value of our auction rate securities, and (xxx) other
risks as described from time to time as Risk Factors and otherwise in
the Company's SEC filings.
Copies of such SEC filings may be obtained at no charge by contacting
our Investor Relations Department at 214-397-3045 or by referring to our
website at www.enscointernational.com.
All information in this news release is as of today. The Company
undertakes no duty to update any forward-looking statement, to conform
the statement to actual results, or reflect changes in the Company's
expectations.
ENSCO INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
OPERATING REVENUES $ 425.4 $ 619.5 $ 1,446.3 $ 1,788.8
OPERATING EXPENSES
Contract drilling (exclusive of depreciation) 183.3 185.2 524.8 566.8
Depreciation 53.3 47.0 149.8 139.4
General and administrative 13.6 15.2 41.6 41.7
250.2 247.4 716.2 747.9
OPERATING INCOME 175.2 372.1 730.1 1,040.9
OTHER INCOME (EXPENSE), NET 3.6 (6.5 ) 6.2 4.8
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 178.8 365.6 736.3 1,045.7
PROVISION FOR INCOME TAXES 28.4 68.8 133.8 192.0
INCOME FROM CONTINUING OPERATIONS 150.4 296.8 602.5 853.7
DISCONTINUED OPERATIONS, NET 0.4 (13.1 ) (28.2 ) 1.6
NET INCOME 150.8 283.7 574.3 855.3
NONCONTROLLING INTERESTS (1.1 ) (1.4 ) (3.6 ) (4.3 )
NET INCOME ATTRIBUTABLE TO ENSCO $ 149.7 $ 282.3 $ 570.7 $ 851.0
EARNINGS (LOSS) PER SHARE - BASIC
Continuing operations $ 1.05 $ 2.07 $ 4.22 $ 5.91
Discontinued operations 0.00 (0.09 ) (0.20 ) 0.01
$ 1.05 $ 1.98 $ 4.02 $ 5.92
EARNINGS (LOSS) PER SHARE - DILUTED
Continuing operations $ 1.05 $ 2.06 $ 4.21 $ 5.90
Discontinued operations 0.00 (0.09 ) (0.20 ) 0.01
$ 1.05 $ 1.97 $ 4.01 $ 5.91
NET INCOME ATTRIBUTABLE TO ENSCO
COMMON SHARES - BASIC AND DILUTED $ 147.8 $ 278.8 $ 563.7 $ 842.1
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic 140.7 141.1 140.3 142.2
Diluted 140.7 141.4 140.4 142.6
-------------------------------------------------------------------------------
ENSCO INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
September 30, December 31,
2009 2008
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,017.2 $ 789.6
Accounts receivable, net of allowance of $25.1 and $20.6 341.2 482.7
Other 192.4 128.6
Total current assets 1,550.8 1,400.9
PROPERTY AND EQUIPMENT, NET 4,330.5 3,871.3
GOODWILL 336.2 336.2
LONG-TERM INVESTMENTS 60.9 64.2
OTHER ASSETS, NET 176.8 157.5
$ 6,455.2 $ 5,830.1
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities and other $ 385.8 $ 410.7
Current maturities of long-term debt 17.2 17.2
Total current liabilities 403.0 427.9
LONG-TERM DEBT 265.8 274.3
DEFERRED INCOME TAXES 372.0 340.5
OTHER LIABILITIES 122.9 103.8
TOTAL EQUITY 5,291.5 4,683.6
$ 6,455.2 $ 5,830.1
-------------------------------------------------------------------------------
ENSCO INTERNATIONAL INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Nine Months Ended
September 30,
2009 2008
OPERATING ACTIVITIES
Net income $ 574.3 $ 855.3
Adjustments to reconcile net income to net cash provided by operating
activities of continuing operations:
Depreciation expense 149.8 139.4
Other 108.6 58.0
Changes in operating assets and liabilities 105.5 (318.9 )
Net cash provided by operating activities of continuing operations 938.2 733.8
INVESTING ACTIVITIES
Additions to property and equipment (684.7 ) (653.9 )
Other 6.8 (33.3 )
Net cash used in investing activities (677.9 ) (687.2 )
FINANCING ACTIVITIES
Cash dividends paid (10.7 ) (10.7 )
Proceeds from exercise of stock options 9.0 27.3
Reduction of long-term borrowings (8.6 ) (10.5 )
Repurchase of common stock (6.3 ) (259.5 )
Other (5.1 ) 2.1
Net cash used in financing activities (21.7 ) (251.3 )
Effect of exchange rate changes on cash and cash equivalents 0.3 (7.6 )
Net cash (used in) provided by operating activities of discontinued operations (11.3 ) 30.4
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 227.6 (181.9 )
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 789.6 629.5
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,017.2 $ 447.6
-------------------------------------------------------------------------------
ENSCO INTERNATIONAL INCORPORATED AND SUBSIDIARIES
OPERATING STATISTICS
(Unaudited)
Second
Third Quarter Quarter
2009 2008 2009
Utilization(1)
Deepwater 64 % 87 % 96 %
Asia Pacific 62 % 96 % 63 %
Europe and Africa 63 % 96 % 87 %
North and South America 57 % 98 % 72 %
Total Jackups 61 % 97 % 72 %
Total 61 % 97 % 72 %
Average day rates(2)
Deepwater $ 387,407 $ 361,612 $ 490,865
Asia Pacific 141,945 156,951 144,517
Europe and Africa 175,861 226,080 219,715
North and South America 132,962 102,727 119,190
Total Jackups 147,655 156,322 158,849
Total $ 159,067 $ 160,472 $ 171,439
((1)) Rig utilization is derived by dividing the number of days under contract, including days associated with compensated mobilizations, by the number of days in the period.
((2)) Average day rates are derived by dividing contract drilling revenues, adjusted to exclude certain types of non-recurring reimbursable revenues and lump sum revenues, by the aggregate number of contract days, adjusted to exclude contract days associated with certain mobilizations, demobilizations, shipyard contracts and standby contracts.
-------------------------------------------------------------------------------
A service of YellowBrix, Inc.
