Press release from PR Newswire
Noble Corporation Reports Third Quarter 2011 Earnings of $0.53 per Diluted Share
Wednesday, October 19, 2011
Noble Corporation Reports Third Quarter 2011 Earnings of $0.53 per Diluted Share17:01 EDT Wednesday, October 19, 2011Higher Fleet Activity and Daily Revenues Drive Improvement Compared to Second Quarter 2011 ResultsZUG, Switzerland, Oct. 19, 2011 /PRNewswire/ -- Noble Corporation (NYSE: NE) today reported third quarter 2011 earnings of $135 million, or $0.53 per diluted share, compared to $54 million, or $0.21 per diluted share, for the second quarter of 2011. Contract drilling services revenues totaled $705 million in the third quarter of 2011, up 20 percent from $590 million in the second quarter of 2011. Contract drilling margin percentage for the third quarter of 2011 improved to approximately 49 percent compared to 43 percent in the prior quarter, reflecting higher fleet utilization and average daily revenues. Third quarter results included a benefit of approximately $0.04 per diluted share relating to certain discrete tax items. Noble invested $559 million in capital projects during the third quarter, resulting in capital expenditures for the nine months ended September 30, 2011 of approximately $2 billion.At September 30, 2011, approximately 81 percent of the Company?s available rig operating days in the floating rig fleet were committed to contracts for the remainder of 2011, with approximately 87 percent of the days committed for the jackup rig fleet. For 2012, approximately 62 percent and 52 percent of rig operating days were committed for the floating and jackup rig fleets, respectively.David W. Williams, Chairman, President and Chief Executive Officer, noted, ?The third quarter was highlighted by a number of accomplishments that further advance the strategic transformation of our fleet. Options for two additional JU3000N design high specification jackup rigs were exercised, bringing the total number of these units to six currently under construction. Additionally, we ordered a fourth ultra-deepwater drillship from Hyundai Heavy Industries Co. Ltd., increasing the total number of new, dynamically positioned drillships being added to our fleet to eight. Furthermore, this quarter our ongoing projects have achieved several milestones including the delivery of the drillship Noble Bully I, which is now in transit to the Gulf of Mexico. The drillship Noble Bully II has departed the dock to begin sea trials and the Noble Globetrotter I is undergoing the installation of topsides and commissioning.??During the quarter, there were a number of contract awards and extensions throughout our fleet of floating and jackup units. These awards contributed to a revenue backlog at September 30, 2011 of $12.8 billion, which was essentially flat with the measure at June 30, 2011,? Williams said.Operations HighlightsIn Mexico, where fleet utilization improved to 86 percent in the third quarter from 65 percent in the second quarter of 2011, two of the Company?s jackup rigs received contract extensions; the Noble Earl Fredrickson, to late December 2011, at a dayrate of $58,000, level with the previous contract, and the Noble Carl Norberg to late August 2014 at a dayrate of $68,000, up from $58,000 on the previous contract. Noble now has 11 of its 12 jackup rigs and the deepwater semisubmersible rig Noble Max Smith under contract in Mexico into late 2011 or beyond, with promising jackup contract opportunities in the region continuing into 2012.In the North Sea, jackup fleet utilization remained at 100 percent in the third quarter, while the Company continued to benefit from steady customer demand, supporting an improving dayrate environment. The jackup rig Noble Lynda Bossler was awarded a contract extension to early December 2012 at a dayrate of $125,000, up from a previous dayrate of $105,000. Also, the Noble George Sauvageau was awarded a one-year contract at $115,000 per day, up from $92,000 per day on the previous contract. This rig, along with four of the Company?s other jackups in the region are now contracted through mid-2012 or beyond.In the Middle East and India, where fleet utilization was 83 percent in the third quarter of 2011 compared to 75 percent in the second quarter of 2011, five of the Company?s jackup rigs were awarded contracts, including the Noble Jimmy Puckett, from April 2012 to April 2014 at a dayrate of $80,000; the Noble Gus Androes, from early October 2011 to late December 2011 at a dayrate of $58,000, while operating in accommodation mode; the Noble Harvey Duhaney, from early February 2012 to early August 2012 at a dayrate of $66,000; the Noble Dick Favor, from late November 2011 to late February 2012 at a dayrate of $95,000; and the drillship Noble Duchess, which has been contracted from mid-March 2012 to mid-March 2015 at a dayrate of $180,000. Both the Noble Dick Favor and Noble Duchess were previously stacked units and have, or will soon, begin reactivation efforts. In closing, Williams commented, ?We are witnessing an intensified effort by a number of customers to secure jackup and floating rigs for drilling operations in 2012 and beyond, supporting higher fleet utilization and improving dayrates, in spite of the unstable global macroeconomic picture. This effort, pertaining to jackup rig needs, remains most evident in Mexico, the North Sea, the Middle East and increasingly in Asia. In the floating rig fleet, especially ultra-deepwater rigs, the increased demand is apparent in numerous regions, but is most pronounced in Brazil, Africa, and the Gulf of Mexico, with all three regions displaying exceptional hydrocarbon potential.??Our fleet is well positioned to benefit from this continued increase in activity, with available jackup rig capacity in Mexico and the North Sea, along with available deepwater capacity expected in the Gulf of Mexico and Brazil, where the semisubmersible rigs Noble Jim Day and Noble Clyde Boudreaux, respectively, are expected to complete contracts in early 2012.? About Noble CorporationNoble is a leading offshore drilling contractor for the oil and gas industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 79 offshore drilling units (including seven ultra-deepwater rigs and six jackup drilling rigs currently under construction), located worldwide, including in the Middle East, India, the U.S. Gulf of Mexico, Mexico, the Mediterranean, the North Sea, Brazil, West Africa and Asian Pacific. Noble?s shares are traded on the New York Stock Exchange under the symbol "NE". Additional information on Noble Corporation is available via the worldwide web at http://www.noblecorp.com.Statements regarding contract backlog, earnings, costs, revenue, rig demand, fleet condition or performance, shareholder value, timing of delivery of newbuilds, contract commitments, dayrates, contract commencements, contract extensions or renewals, letters of intent or award, industry fundamentals, customer relationships, future performance, growth opportunities, market outlook, as well as any other statements that are not historical facts in this release, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to operating hazards and delays, risks associated with operations outside of the U.S., actions by regulatory authorities, customers and other third parties, legislation and regulations affecting drilling operations, compliance with regulatory requirements, factors affecting the level of activity in the oil and gas industry, supply and demand of drilling rigs, factors affecting the duration of contracts, delays in the construction of newbuilds, the actual amount of downtime, factors that reduce applicable dayrates, violations of anti-corruption laws, hurricanes and other weather conditions, the future price of oil and gas and other factors detailed in the Company?s most recent Form 10-K, Form 10-Q?s and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. Conference CallNoble also has scheduled a conference call and webcast related to its third quarter 2011 results on Thursday, October 20, 2011, at 8:00 a.m. U.S. Central Daylight Time. Interested parties are invited to listen to the call by dialing 1-866-461-7129, or internationally 1-706-679-3084, using access code: 27255925, or by asking for the Noble Corporation conference call. Interested parties may also listen over the Internet through a link posted in the Investor Relations section of the Company?s Web site. A replay of the conference call will be available on Thursday, October 20, 2011, beginning at 11:00 a.m. U.S. Central Daylight Time, through Thursday, November 3, 2011, ending at 5:00 p.m. U.S. Central Daylight Time. The phone number for the conference call replay is 1-800-642-1687 or, for calls from outside of the U.S., 1-706-645-9291, using access code: 27255925. The replay will also be available on the Company?s Web site following the end of the live call. The conference call may include non-GAAP financial measures. Noble will post a reconciliation of any such measures to the most directly comparable GAAP measures in the ?Investor Relations? section of the Company?s Web site under the heading ?Regulation G Reconciliations.? NOBLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Three Months EndedNine Months EndedSeptember 30,September 30,2011201020112010 Operating revenues Contract drilling services $ 704,892$ 584,919$ 1,837,047$ 2,081,075 Reimbursables 17,43819,17763,85157,163 Labor contract drilling services 15,5647,88743,12323,704 Other 86357661,449737,902612,6181,944,7872,163,391 Operating costs and expenses Contract drilling services 358,547315,8441,001,638845,870 Reimbursables 13,97114,35149,79744,459 Labor contract drilling services 8,0535,30225,32616,570 Depreciation and amortization 166,213143,282487,454385,366 Selling, general and administrative 27,53625,48272,88371,261 Gain on contract extinguishments, net --(21,202)-574,320504,2611,615,8961,363,526 Operating income 163,582108,357328,891799,865 Other income (expense) Interest expense, net of amount capitalized (11,530)(4,144)(45,400)(5,119) Interest income and other, net 1,1172,5613,1757,193 Income before income taxes 153,169106,774286,666801,939 Income tax provision (17,614)(20,287)(42,481)(126,801) Net income 135,55586,487244,185675,138 Net income attributable to noncontrolling interests (238)(467)(290)(467) Net income attributable to Noble Corporation $ 135,317$ 86,020$ 243,895$ 674,671 Net income per share Basic $ 0.53$ 0.34$ 0.96$ 2.63 Diluted $ 0.53$ 0.34$ 0.96$ 2.62NOBLE CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands)(Unaudited) September 30, December 31, 2011 2010 ASSETS Current assets Cash and cash equivalents $ 197,015$ 337,871 Accounts receivable 601,161387,414 Prepaid expenses and other current assets 203,268186,509 Total current assets 1,001,444911,794 Property and equipment 14,420,26712,643,866 Accumulated depreciation (2,999,235)(2,595,779) Property and equipment, net 11,421,03210,048,087 Other assets 529,057342,506 Total assets $ 12,951,533$ 11,302,387 LIABILITIES AND EQUITY Current liabilities Current maturities of long-term debt $ -$ 80,213 Accounts payable 320,053374,814 Accrued payroll and related costs 124,317125,663 Interest payable 22,12940,260 Other current liabilities 183,351180,497 Total current liabilities 649,850801,447 Long-term debt 3,811,8662,686,484 Deferred income taxes 299,625258,822 Other liabilities 218,523268,000 Total liabilities 4,979,8644,014,753 Commitments and contingencies Shareholders' equity Shares 796,067917,684 Additional paid-in capital 49,01039,006 Retained earnings 6,549,4416,630,500 Treasury shares (10,531)(373,967) Accumulated other comprehensive loss (56,212)(50,220) Total shareholders' equity 7,327,7757,163,003 Noncontrolling interests 643,894124,631 Total equity 7,971,6697,287,634 Total liabilities and equity $ 12,951,533$ 11,302,387NOBLE CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited)Nine Months EndedSeptember 30,20112010 Cash flows from operating activities Net income $ 244,185$ 675,138 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 487,454385,366 Gain on contract extinguishments, net (21,202)- Deferred income taxes (34,549)(29,586) Share-based compensation expense 26,85726,906 Net change in other assets and liabilities (228,299)227,873 Net cash from operating activities 474,4461,285,697 Cash flows from investing activities New construction (1,280,577)(334,928) Other capital expenditures (464,861)(435,833) Major maintenance expenditures (154,330)(64,244) Capitalized interest (88,220)(51,088) Refund from contract extinguishments 18,642- Change in accrued capital expenditures (48,782)4,213 Acquisition of FDR Holdings, Ltd., net of cash acquired -(1,629,644) Net cash from investing activities (2,018,128)(2,511,524) Cash flows from financing activities Increase in bank credit facilities, net 675,000- Payments of other long-term debt (693,494)- Proceeds from issuance of senior notes, net of debt issuance costs 1,087,8331,238,074 Contributions from joint venture partners 481,00035,000 Settlements of interest rate swaps (29,032)(2,041) Par value reduction payments (114,453)(193,869) Repurchases of shares -(219,330) Financing costs on credit facilities (2,835)- Proceeds from employee stock transactions 9,0189,703 Repurchases of employee shares surrendered for taxes (10,211)(9,961) Net cash from financing activities 1,402,826857,576 Net change in cash and cash equivalents (140,856)(368,251) Cash and cash equivalents, beginning of period 337,871735,493 Cash and cash equivalents, end of period $ 197,015$ 367,242NOBLE CORPORATION AND SUBSIDIARIESFINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT(In thousands, except operating statistics)(Unaudited)Three Months Ended September 30,Three Months Ended June 30,201120102011ContractContractContractDrillingDrillingDrillingServicesOtherTotalServicesOtherTotalServicesOtherTotal Operating revenues Contract drilling services $ 704,892$ -$ 704,892$ 584,919$ -$ 584,919$ 589,550$ -$ 589,550 Reimbursables 14,6462,79217,43818,48868919,17722,9821,14024,122 Labor contract drilling services -15,56415,564-7,8877,887-14,01214,012 Other 8-8635-635313-313$ 719,546$ 18,356$ 737,902$ 604,042$ 8,576$ 612,618$ 612,845$ 15,152$ 627,997 Operating costs and expenses Contract drilling services $ 358,547$ -$ 358,547$ 315,844$ -$ 315,844$ 336,728$ -$ 336,728 Reimbursables 11,3622,60913,97113,69665514,35117,6061,11718,723 Labor contract drilling services -8,0538,053-5,3025,302-8,7508,750 Depreciation and amortization 162,8373,376166,213140,1993,083143,282159,8433,276163,119 Selling, general and administrative 27,21232427,53625,22026225,48221,35927321,632 Gain on contract extinguishments, net ---------$ 559,958$ 14,362$ 574,320$ 494,959$ 9,302$ 504,261$ 535,536$ 13,416$ 548,952 Operating income $ 159,588$ 3,994$ 163,582$ 109,083$ (726)$ 108,357$ 77,309$ 1,736$ 79,045 Operating statistics Jackups: Average Rig Utilization 82%77%71% Operating Days 3,2293,0322,797 Average Dayrate $ 89,352$ 90,791$ 80,742 Semisubmersibles: Average Rig Utilization 84%90%85% Operating Days 1,0861,0571,088 Average Dayrate $ 315,034$ 172,727$ 269,798 Drillships: Average Rig Utilization 60%100%58% Operating Days 329468317 Average Dayrate $ 225,669$ 229,963$ 220,953 FPSO/Submersibles: Average Rig Utilization 0%26%0% Operating Days -64- Average Dayrate $ -$ 304,000$ - Total: Average Rig Utilization 76%79%70% Operating Days 4,6444,6214,202 Average Dayrate $ 151,782$ 126,581$ 140,296NOBLE CORPORATION AND SUBSIDIARIESCALCULATION OF BASIC AND DILUTED NET INCOME(In thousands, except per share amounts)(Unaudited) The following table sets forth the computation of basic and diluted net income per share: Three months ended Nine months ended September 30,September 30, 2011 2010 2011 2010 Allocation of net income Basic Net income attributable to Noble Corporation $ 135,317$ 86,020$ 243,895$ 674,671 Earnings allocated to unvested share-based payment awards (1,415)(828)(2,487)(6,416) Net income to common shareholders - basic $ 133,902$ 85,192$ 241,408$ 668,255 Diluted Net income attributable to Noble Corporation $ 135,317$ 86,020$ 243,895$ 674,671 Earnings allocated to unvested share-based payment awards (1,412)(825)(2,481)(6,394) Net income to common shareholders - diluted $ 133,905$ 85,195$ 241,414$ 668,277 Weighted average number of shares outstanding - basic 251,580252,513251,327253,944 Incremental shares issuable from assumed exercise of stock options 449671640855 Weighted average number of shares outstanding - diluted 252,029253,184251,967254,799 Weighted average unvested share-based payment awards 2,6582,4532,5892,438 Earnings per share Basic $ 0.53$ 0.34$ 0.96$ 2.63 Diluted $ 0.53$ 0.34$ 0.96$ 2.62SOURCE Noble CorporationFor further information: Investors, Jeffrey L. Chastain, Vice President - Investor Relations, +1-281-276-6383, or Media, John S. Breed, Director of Corporate Communications, +1-281-276-6729, both of Noble Drilling Services Inc.