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Noble Corporation Reports Third Quarter Earnings of $1.63 per Share
PR Newswire
Oct 21, 2009
ZUG, Switzerland, Oct. 21 /PRNewswire-FirstCall/ -- Noble Corporation (NYSE: NE) today reported third quarter 2009 earnings of $426 million, or $1.63 per diluted share, versus earnings of $383 million, or $1.42 per diluted share, for the third quarter of last year. The results for the third quarter 2009 include a net tax benefit of $0.05 per share related to the settlement of tax assessments in various locales and other discrete items.
Contract drilling services revenues for the third quarter 2009 were $875 million, up 4.8 percent from the third quarter 2008. Contract drilling margins for the third quarter 2009 were approximately 71 percent, generating $517 million in net cash provided by operating activities. Noble invested $367 million in capital projects during the quarter.
"At Noble, we are continuing to drive performance," said David W. Williams, Chairman, President and Chief Executive Officer. "Our earnings continue to benefit from the strength of our backlog, the revenue contribution from our newbuilds going into service and, most importantly, the outstanding performance of our crews."
During the third quarter 2009, the Company repurchased 2.0 million shares, bringing year-to-date total repurchases to 3.7 million shares at an average price per share of $30.35 and a total cost of $113 million.
Highlights
In the North Sea, the last of the Company's three newbuild jackups, the Noble Scott Marks, commenced operations in the third quarter under a two-year contract with Venture Production at a dayrate of approximately $213,000. Also in that region, the Company announced a series of new commitments during the quarter: the Noble Al White is undergoing upgrades and regulatory inspection before returning to work under an 18-month contract with Total in mid-December 2009 at a dayrate of $112,000; the Noble George Sauvageau has secured a contract for one year at a dayrate of $118,000; and the Noble Piet van Ede has secured an additional commitment which is expected to last into the fourth quarter of 2010 at dayrates ranging from $109,000 to $152,000. In West Africa, the Noble Lloyd Noble returned to work after securing a series of jobs in Nigeria at dayrates of between $90,000 and $95,000 through February 2010.
Subsequent to the quarter close, the dynamically positioned ultra-deepwater semisubmersible Noble Danny Adkins departed Singapore after conducting a series of successful sea trials. The unit is under wet tow to the U.S. Gulf of Mexico where it is expected to undergo final provisioning before commencing its four-year contract with Shell in the first quarter of 2010. The unit is contracted at a dayrate of $447,000.
"We believe that the current commodity price environment in the midst of the 2010 budget cycle bodes well for activity levels next year," said Williams.
About Noble
Noble is a leading offshore drilling contractor for the oil and gas industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 62 offshore drilling units (including three 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, and West Africa. 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 earnings, costs, revenue, rig demand, fleet performance, contract commitments and backlog, dayrates, contract commencements, newbuilds, industry fundamentals, 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 customers and other third parties, factors affecting the level of activity in the oil and gas industry, supply and demand of drilling rigs, factors affecting the duration of contracts, 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 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 Call
Noble will host a conference call and web cast related to its third quarter 2009 results on Thursday, October 22, 2009, at 8:00 a.m. Central 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: 72481445 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 22, 2009, beginning at 11:00 a.m., Central Time, through Friday, October 30, 2009, ending at 5:00 p.m., Central 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: 72481445. 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." All individuals listening to the conference call or the replay are reminded that all conference call material is copyrighted by the Company and cannot be recorded or rebroadcast without the Company's express written consent.
NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Operating revenues
Contract drilling
services $874,969 $835,198 $2,615,571 $2,416,312
Reimbursables 22,455 18,087 61,967 71,509
Labor contract
drilling services 7,490 8,197 21,843 47,346
Other 721 499 1,277 1,180
--- --- ----- -----
905,635 861,981 2,700,658 2,536,347
------- ------- --------- ---------
Operating costs and expenses
Contract drilling
services 250,842 253,729 742,752 746,117
Reimbursables 18,717 16,494 52,081 63,786
Labor contract
drilling services 4,642 5,410 13,899 37,294
Depreciation and
amortization 103,245 92,671 295,646 263,406
Selling, general and
administrative 21,700 16,027 60,901 56,967
(Gain)/loss on asset
disposal/
involuntary
conversion, net 2,076 10,000 31,053 (25,521)
----- ------ ------ -------
401,222 394,331 1,196,332 1,142,049
------- ------- --------- ---------
Operating income 504,413 467,650 1,504,326 1,394,298
Other income (expense)
Interest expense, net of
amount capitalized (379) (601) (1,261) (2,432)
Interest income and
other, net 2,605 2,304 4,995 7,013
----- ----- ----- -----
Income before income taxes 506,639 469,353 1,508,060 1,398,879
Income tax provision (80,556) (86,831) (275,833) (256,451)
------- ------- -------- --------
Net income $426,083 $382,522 $1,232,227 $1,142,428
======== ======== ========== ==========
Net income per share
Basic $ 1.63 $ 1.43 $ 4.72 $ 4.26
Diluted $ 1.63 $ 1.42 $ 4.70 $ 4.23
NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30, December 31,
2009 2008
---- ----
ASSETS
Current assets
Cash and cash equivalents $ 756,093 $ 513,311
Accounts receivable 717,718 644,840
Insurance receivables 32,302 13,516
Prepaid expenses 41,897 21,207
Other current assets 55,505 47,467
------ ------
Total current assets 1,603,515 1,240,341
--------- ---------
Property and equipment
Drilling equipment and facilities 8,182,537 7,427,908
Other 114,908 105,340
------- -------
8,297,445 7,533,248
Accumulated depreciation (2,091,011) (1,886,231)
---------- ----------
6,206,434 5,647,017
--------- ---------
Other assets 279,426 219,441
------- -------
Total assets $8,089,375 $7,106,799
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $- $ 172,698
Accounts payable 232,713 259,107
Accrued payroll and related costs 87,569 75,449
Taxes payable 103,714 107,211
Interest payable 7,267 11,325
Other current liabilities 66,419 53,203
------ ------
Total current liabilities 497,682 678,993
------- -------
Long-term debt 750,906 750,789
Deferred income taxes 293,281 265,018
Other liabilities 130,566 121,284
------- -------
Total liabilities 1,672,435 1,816,084
--------- ---------
Commitments and contingencies
Shareholders' equity
Shares - par value 4.90 Swiss
francs per share; 414,399 shares
authorized, 138,133 additional shares
conditionally authorized, 276,266 shares
issued and 261,425 shares outstanding
as of September 30, 2009; 1,141,611 -
Ordinary shares - par value
$.10 per share; 400,000 shares
authorized; 261,899 shares issued and
outstanding at December 31, 2008 - 26,190
Capital in excess of par value - 402,115
Retained earnings 5,398,530 4,919,667
Treasury shares - 2,000 shares held (69,430) -
Accumulated other comprehensive loss (53,771) (57,257)
------- -------
Total shareholders' equity 6,416,940 5,290,715
--------- ---------
Total liabilities and
shareholders' equity $8,089,375 $7,106,799
========== ==========
NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
-------------
2009 2008
---- ----
Cash flows from operating activities
Net income $1,232,227 $1,142,428
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 295,646 263,406
(Gain)/loss on asset disposal/involuntary
conversion, net 31,053 (25,521)
Deferred income tax provision 29,916 14,102
Share-based compensation expense 28,543 28,274
Pension contributions (13,022) (17,445)
Other changes in current assets and liabilities:
Accounts receivable (88,773) (49,063)
Other current assets (45,607) (26,572)
Other assets 2,609 (8,853)
Accounts payable 10,099 (2,406)
Other current liabilities 39,273 8,397
Other liabilities (6,751) 4,918
------ -----
Net cash from operating activities 1,515,213 1,331,665
--------- ---------
Cash flows from investing activities
New construction (457,233) (563,349)
Other capital expenditures (342,399) (243,843)
Major maintenance expenditures (93,112) (72,918)
Accrued capital expenditures (44,493) 92,719
Hurricane insurance receivables - 21,747
Proceeds from disposal of assets - 39,134
--- ------
Net cash from investing activities (937,237) (726,510)
-------- --------
Cash flows from financing activities
Payments on bank credit facilities - (50,000)
Payments of other long-term debt (172,700) (7,682)
Net proceeds from employee stock transactions 2,896 10,070
Dividends/par value reduction payments paid (35,093) (233,638)
Repurchases of ordinary shares (130,297) (271,310)
-------- --------
Net cash from financing activities (335,194) (552,560)
-------- --------
Net increase in cash and cash equivalents 242,782 52,595
Cash and cash equivalents, beginning of period 513,311 161,058
------- -------
Cash and cash equivalents, end of period $ 756,093 $ 213,653
======== ========
NOBLE CORPORATION AND SUBSIDIARIES
FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT
(In thousands, except utilization amounts, operating days and average
dayrates)
(Unaudited)
Three Months Ended
September 30,
-------------
2009
----
Contract
Drilling
Services Other Total
-------- ----- -----
Operating revenues
Contract drilling services $874,969 $ - $874,969
Reimbursables 21,511 944 22,455
Labor contract drilling services - 7,490 7,490
Other 509 212 721
--- --- ---
$896,989 $8,646 $905,635
======== ====== ========
Operating costs and expenses
Contract drilling services $250,842 $ - $250,842
Reimbursables 17,811 906 18,717
Labor contract drilling services - 4,642 4,642
Depreciation and amortization 100,669 2,576 103,245
Selling, general and administrative 21,629 71 21,700
(Gain)/loss on asset disposal/involuntary
conversion, net 2,076 - 2,076
----- --- -----
$393,027 $8,195 $401,222
======== ====== ========
Operating income $503,962 $ 451 $504,413
======== ==== ========
Operating statistics
Jackups:
Average Rig Utilization 80%
Operating Days 3,183
Average Dayrate $143,388
Semisubmersibles - (6,000 feet or greater):
Average Rig Utilization 98%
Operating Days 631
Average Dayrate $434,435
Semisubmersibles - (less than 6,000 feet):
Average Rig Utilization 100%
Operating Days 276
Average Dayrate $261,167
Drillships:
Average Rig Utilization 100%
Operating Days 276
Average Dayrate $243,186
Submersibles:
Average Rig Utilization 42%
Operating Days 78
Average Dayrate $ 65,944
Total:
Average Rig Utilization 83%
Operating Days 4,444
Average Dayrate $196,900
Three Months Ended
September 30,
-------------
2008
----
Contract
Drilling
Services Other Total
-------- ----- -----
Operating revenues
Contract drilling services $835,198 $ - $835,198
Reimbursables 17,227 860 18,087
Labor contract drilling services - 8,197 8,197
Other 94 405 499
--- --- ---
$852,519 $9,462 $861,981
======== ====== ========
Operating costs and expenses
Contract drilling services $253,729 $ - $253,729
Reimbursables 15,604 890 16,494
Labor contract drilling services - 5,410 5,410
Depreciation and amortization 90,923 1,748 92,671
Selling, general and administrative 15,886 141 16,027
(Gain)/loss on asset disposal/involuntary
conversion, net 10,000 - 10,000
------ --- ------
$386,142 $8,189 $394,331
======== ====== ========
Operating income $466,377 $1,273 $467,650
======== ====== ========
Operating statistics
Jackups:
Average Rig Utilization 91%
Operating Days 3,444
Average Dayrate $150,350
Semisubmersibles - (6,000 feet or greater):
Average Rig Utilization 95%
Operating Days 613
Average Dayrate $329,586
Semisubmersibles - (less than 6,000 feet):
Average Rig Utilization 100%
Operating Days 276
Average Dayrate $237,674
Drillships:
Average Rig Utilization 67%
Operating Days 184
Average Dayrate $214,758
Submersibles:
Average Rig Utilization 67%
Operating Days 184
Average Dayrate $ 55,117
Total:
Average Rig Utilization 90%
Operating Days 4,701
Average Dayrate $177,683
Three Months Ended
June 30,
--------
2009
----
Contract
Drilling
Services Other Total
-------- ----- -----
Operating revenues
Contract drilling services $868,205 $ - $868,205
Reimbursables 22,295 539 22,834
Labor contract drilling services - 7,419 7,419
Other 414 - 414
--- --- ---
$890,914 $7,958 $898,872
======== ====== ========
Operating costs and expenses
Contract drilling services $251,054 $ - $251,054
Reimbursables 18,754 527 19,281
Labor contract drilling services - 4,881 4,881
Depreciation and amortization 96,952 2,465 99,417
Selling, general and administrative 21,411 73 21,484
(Gain)/loss on asset disposal/involuntary
conversion, net 16,943 - 16,943
------ --- ------
$405,114 $7,946 $413,060
======== ====== ========
Operating income $485,800 $ 12 $485,812
======== === ========
Operating statistics
Jackups:
Average Rig Utilization 80%
Operating Days 3,076
Average Dayrate $157,381
Semisubmersibles - (6,000 feet or greater):
Average Rig Utilization 94%
Operating Days 596
Average Dayrate $408,510
Semisubmersibles - (less than 6,000 feet):
Average Rig Utilization 100%
Operating Days 273
Average Dayrate $251,945
Drillships:
Average Rig Utilization 100%
Operating Days 273
Average Dayrate $226,187
Submersibles:
Average Rig Utilization 88%
Operating Days 161
Average Dayrate $ 63,324
Total:
Average Rig Utilization 84%
Operating Days 4,379
Average Dayrate $198,270
NOBLE CORPORATION AND SUBSIDIARIES
CALCULATION 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,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Allocation of net income
Basic
Net income $426,083 $382,522 $1,232,227 $1,142,428
Earnings allocated to
unvested share-based
payment awards (4,520) (3,362) (12,176) (9,674)
------ ------ ------- ------
Net income to common
shareholders - basic $421,563 $379,160 $1,220,051 $1,132,754
======== ======== ========== ==========
Diluted
Net income $426,083 $382,522 $1,232,227 $1,142,428
Earnings allocated to
unvested share-based
payment awards (4,505) (3,342) (12,141) (9,622)
------ ------ ------- ------
Net income to common
shareholders -
diluted $421,578 $379,180 $1,220,086 $1,132,806
======== ======== ========== ==========
Weighted average
number of shares
outstanding - basic 257,913 264,746 258,550 265,883
Incremental shares
issuable from assumed
exercise of stock
options 925 1,656 778 1,862
--- ----- --- -----
Weighted average
number of shares
outstanding - diluted 258,838 266,402 259,328 267,745
======= ======= ======= =======
Weighted average
unvested share-
based payment awards 2,765 2,348 2,581 2,223
===== ===== ===== =====
Earnings per share
Basic $ 1.63 $ 1.43 $ 4.72 $ 4.26
Diluted $ 1.63 $ 1.42 $ 4.70 $ 4.23
SOURCE Noble Corporation
Copyright (2009) PR Newswire. All Rights Reserved.
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