Strong Operational, Safety and Financial
PerformanceDebt Refinancing Further Improves Capital Management
Flexibility#1 in Total Customer Satisfaction for Fifth Consecutive
YearHighgrading Continues With Delivery of Ultra-Deepwater
Drillship ENSCO DS-9and Premium Jackup ENSCO 110
Ensco plc (NYSE: ESV) today announced earnings per share
increased to $1.38 in first quarter 2015 from $1.25 a year ago.
Results from discontinued operations were zero cents per share
compared to a loss of $0.01 per share in first quarter 2014.
Earnings per share from continuing operations increased to $1.38 in
first quarter 2015 from $1.26 a year ago. Adjusted for $27 million,
or $0.11 per share, of other expense to retire debt ahead of
maturity, earnings per share from continuing operations increased
18% to $1.49 from $1.26 in first quarter 2014.
Chief Executive Officer and President Carl Trowell said,
“Notwithstanding challenging market conditions, first quarter
results were highlighted by strong operational, safety and
financial performance. Operational utilization for our jackup
fleet, in particular, was very high at 99.6%. Our total recordable
incident rate, a key safety metric, reached a new record of 0.34
for the first quarter. And earnings per share were up significantly
year to year.”
Mr. Trowell added, “We recently refinanced upcoming debt
maturities through a $1.1 billion debt offering composed of 10- and
30-year notes and now have no significant debt maturities until
second quarter 2019. Our improved debt maturity schedule, $1.6
billion of cash and short-term investments, $2.25 billion revolving
credit facility and $8.4 billion revenue backlog give us
significant liquidity and capital management flexibility. We
benefit from having the top credit ratings among major offshore
drillers and are well positioned to navigate through the current
downcycle and capitalize on a future upturn in the market.”
During first quarter 2015, Ensco earned the #1 rating in total
customer satisfaction for the fifth year in a row in the
independent EnergyPoint Research survey. Ensco’s investments in new
rig technology benefit customers. The Company recently delivered
ENSCO DS-9, an ultra-deepwater drillship contracted for a
three-year term in the U.S. Gulf of Mexico, and ENSCO 110, a
premium jackup.
First Quarter Results
Continuing Operations
Revenues grew 9% to $1.164 billion in first quarter 2015, up
from $1.067 billion a year ago. The increase was driven by more
operating days for three semisubmersibles - ENSCO 5004, ENSCO 5005
and ENSCO 5006 - that underwent shipyard upgrades during first
quarter 2014. Three new ENSCO 120 Series jackups also contributed
to the increase. The average day rate for the fleet rose slightly
to $244,000 in first quarter 2015 from $243,000 a year ago.
Reported utilization, which includes the impact of uncontracted
rigs and planned downtime, increased to 86% from 82% in first
quarter 2014 due to three semisubmersibles returning to the
operating fleet.
Contract drilling expense was $518 million in first quarter
2015, down from $520 million last year, as lower compensation and
repair and maintenance expense more than offset $45 million of
additional expense related to growth in the operating fleet.
Depreciation expense increased to $137 million from $131 million
in first quarter 2014, as several rigs were added to the active
fleet. General and administrative expense declined to $30 million
in first quarter 2015 from $38 million last year, mostly due to
lower discretionary compensation costs and disciplined expense
management.
Other expense increased to $73 million from $29 million a year
ago, mostly due to debt refinancing noted above that resulted in a
$27 million loss to settle a cash tender offer for $855 million of
retired 3.25% senior notes. Interest expense increased $17 million
to $52 million, net of $20 million of interest that was
capitalized, from $35 million in first quarter 2014, net of $21
million of interest that was capitalized. This year-to-year
increase was due to more debt outstanding, primarily from the
previously reported $1.25 billion debt raise during third quarter
2014.
The effective tax rate was 19.1% compared to 14.2% in first
quarter 2014. The year-to-year comparison was influenced by tax
legislation enacted by the U.K. government that became effective in
second quarter 2014 and the mix of earnings from various tax
jurisdictions.
Discontinued Operations
Discontinued operations include five floaters and two jackups
held for sale, as well as rigs and other assets no longer on the
Company’s balance sheet. The net loss from discontinued operations
was $0.2 million for first quarter 2015 compared to a net loss of
$2.0 million a year ago. A $13 million discrete tax benefit in
first quarter 2015 and a $19 million gain on the sale of ENSCO 69
and the Wisconsin in first quarter 2014 influenced this comparison.
Excluding these items, the net loss from discontinued operations
improved to $13 million in first quarter 2015 from $21 million a
year ago.
Segment Highlights for Continuing Operations
Floaters
Floater revenues grew 7% to $695 million in first quarter 2015
from $652 million a year ago, primarily due to ENSCO 5004, ENSCO
5005 and ENSCO 5006 returning to the operating fleet. Reported
utilization increased to 86% from 75% a year ago, mostly due to
more operating days for three semisubmersibles noted above.
Adjusted for uncontracted rigs and planned downtime, operational
utilization was 93.2% compared to 95.4% a year ago.
Floater contract drilling expense declined 4% to $294 million
from $307 million in first quarter 2014. Lower compensation and
repair and maintenance expense more than offset a $24 million
increase in contract drilling expense related to the reactivation
of three rigs.
Jackups
Jackup revenues grew 7% to $428 million from $399 million a year
ago. The increase was mostly due to adding three new ENSCO 120
Series jackups, partially offset by the classification of three
rigs to the Other segment that were previously sold and are now
managed by Ensco on behalf of the buyer. Reported utilization was
87%, up from 86% a year ago. Adjusted for uncontracted rigs and
planned downtime, operational utilization further improved to 99.6%
from 99.5% a year ago.
Contract drilling expense decreased 5% to $192 million in first
quarter 2015. The decline was due in part to lower compensation and
repair and maintenance expense as well as the classification of
three jackup rigs to the Other segment as noted above. These items
were partially offset by a $21 million increase in contract
drilling expense from three new ENSCO 120 Series jackups.
Other
Other is composed of managed drilling rigs. As noted above,
three jackups classified to the Other segment increased both
revenues and contract drilling expense year to year. Revenues
increased to $41 million from $17 million in first quarter 2014.
Contract drilling expense increased to $33 million from $11 million
a year ago.
First Quarter
(in millions of $,
Floater Jackup Other
Reconciling Items
Consolidated Total
except %)
2015 2014 Chg
2015 2014
Chg 2015
2014
Chg
2015 2014
2015
2014
Chg
Revenues
695.0 651.6 7 %
428.3 398.5 7 %
40.6 16.6 145 %
-
-
1,163.9
1,066.7
9
%
Operating expenses Contract drilling
293.5 306.6 (4 )%
191.5 202.3 (5 )%
33.3 11.3 195 %
-
-
518.3 520.2 0 % Depreciation
93.0 90.7 3 %
41.5 38.5 8 %
-
-
-
%
2.6 1.9
137.1 131.1 5 % General and admin.
-
-
-
%
-
-
-
%
-
-
-
%
30.1 38.1
30.1 38.1 (21 )%
Operating income (loss)
308.5 254.3
21 %
195.3 157.7
24 %
7.3 5.3
38 %
(32.7 ) (40.0
)
478.4
377.3
27
%
Financial Position — 31 March 2015
- $8.4 billion of contracted revenue
backlog excluding bonus opportunities
- No significant debt maturities until
second quarter 2019
- $1.6 billion of cash and short-term
investments
- Net debt-to-capital ratio of 31% (net
of $1.6 billion of cash and short-term investments)
- $2.25 billion fully available revolving
credit facility
Ensco will conduct a conference call at 10:00 a.m. Central Time
(4:00 p.m. London time) on Thursday, 30 April 2015, to discuss
first quarter 2015 results. The call will be webcast live at
www.enscoplc.com. Interested parties
may listen to the call by dialing (866) 652-5200 from within the
United States and +1 (412) 317-6060 from outside the U.S. Please
ask for the Ensco conference call. It is recommended that
participants call fifteen minutes before the scheduled start
time.
A replay of the conference call will be available by phone
through 30 May 2015 by dialing 1-877-344-7529 within the United
States or +1-412-317-0088 from outside the U.S. (conference ID
10062268). A webcast replay, MP3 download and transcript of the
call will be available at www.enscoplc.com.
Ensco plc (NYSE: ESV) brings energy to the world as a global
provider of offshore drilling services to the petroleum industry.
For more than 27 years, the company has focused on operating safely
and going beyond customer expectations. Ensco is ranked first in
total customer satisfaction in the latest independent survey by
EnergyPoint Research — the fifth consecutive year that Ensco has
earned this distinction. Operating one of the newest
ultra-deepwater rig fleets and the largest premium jackup fleet,
Ensco has a major presence in the most strategic offshore basins
across six continents. Ensco plc is an English limited company
(England No. 7023598) with its registered office and corporate
headquarters located at 6 Chesterfield Gardens, London W1J 5BQ. To
learn more, visit our website at www.enscoplc.com.
Statements contained in this press release that are not
historical facts are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements include
words or phrases such as “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “plan,” “project,” “could,” “may,” “might,”
“should,” “will” and similar words and specifically include
statements involving expected financial performance, effective tax
rate, day rates and backlog, estimated rig availability; rig
commitments; scheduled delivery dates for rigs; the timing of
delivery, mobilization, contract commencement, relocation or other
movement of rigs; and general market, business and industry
conditions, trends and outlook. Such statements are subject to
numerous risks, uncertainties and assumptions that may cause actual
results to vary materially from those indicated, including
commodity price fluctuations, customer demand, new rig supply,
downtime and other risks associated with offshore rig operations,
relocations, severe weather or hurricanes; changes in worldwide rig
supply and demand, competition and technology; future levels of
offshore drilling activity; governmental action, civil unrest and
political and economic uncertainties; terrorism, piracy and
military action; risks inherent to shipyard rig construction,
repair, maintenance or enhancement; possible cancellation,
suspension or termination of drilling contracts as a result of
mechanical difficulties, performance, customer finances, the
decline or the perceived risk of a further decline in oil and/or
natural gas prices, or other reasons, including terminations for
convenience (without cause); the outcome of litigation, legal
proceedings, investigations or other claims or contract disputes;
governmental regulatory, legislative and permitting requirements
affecting drilling operations; our ability to attract and retain
skilled personnel on commercially reasonable terms; environmental
or other liabilities, risks or losses; debt restrictions that may
limit our liquidity and flexibility; our ability to realize the
expected benefits from our redomestication and actual contract
commencement dates; cybersecurity risks and threats; and the
occurrence or threat of epidemic or pandemic diseases or any
governmental response to such occurrence or threat. In addition to
the numerous factors described above, you should also carefully
read and consider “Item 1A. Risk Factors” in Part I and “Item 7.
Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in Part II of our most recent annual report
on Form 10-K, which is available on the SEC’s website at
www.sec.gov or on the Investor
Relations section of our website at www.enscoplc.com. Each forward-looking statement
speaks only as of the date of the particular statement, and we
undertake no obligation to publicly update or revise any
forward-looking statements, except as required by law.
ENSCO PLC AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
INCOME(In millions, except per share
amounts)(Unaudited)
Three Months Ended March
31,
2015 2014
OPERATING REVENUES $ 1,163.9 $ 1,066.7 OPERATING EXPENSES
Contract drilling (exclusive of depreciation) 518.3 520.2
Depreciation 137.1 131.1 General and administrative
30.1 38.1 685.5
689.4 OPERATING INCOME 478.4 377.3
OTHER INCOME (EXPENSE) Interest income 2.4 3.6 Interest expense,
net (52.4 ) (34.6 ) Other, net (22.6 )
1.9 (72.6 ) (29.1 )
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 405.8 348.2
PROVISION FOR INCOME TAXES 77.7
49.5 INCOME FROM CONTINUING OPERATIONS 328.1 298.7 LOSS FROM
DISCONTINUED OPERATIONS, NET (.2 ) (2.0
) NET INCOME 327.9 296.7 NET INCOME ATTRIBUTABLE TO NONCONTROLLING
INTERESTS (3.2 ) (4.2 ) NET INCOME
ATTRIBUTABLE TO ENSCO $ 324.7 $
292.5 EARNINGS (LOSS) PER SHARE - BASIC AND DILUTED
Continuing operations $ 1.38 $ 1.26 Discontinued operations
-
(0.01 ) $ 1.38
$ 1.25 NET INCOME ATTRIBUTABLE TO ENSCO SHARES
- BASIC AND DILUTED $ 321.0 $ 289.5 WEIGHTED-AVERAGE SHARES
OUTSTANDING Basic 231.9 231.3 Diluted 231.9 231.4
ENSCO PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions)
March 31,2015
December 31,2014
(Unaudited) ASSETS CURRENT ASSETS Cash and
cash equivalents $ 887.8 $ 664.8 Short-term investments 745.3 757.3
Accounts receivable, net 795.4 883.3 Other 625.3
629.4 Total current assets 3,053.8
2,934.8 PROPERTY AND EQUIPMENT, NET 12,725.3
12,534.8 GOODWILL 276.1 276.1 OTHER ASSETS, NET
291.0 314.2 $
16,346.2 $ 16,059.9
LIABILITIES AND
SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts
payable and accrued liabilities and other $ 922.1 $ 1,069.8 Current
maturities of long-term debt 211.5 34.8
Total current liabilities 1,133.6
1,104.6 LONG-TERM DEBT 5,919.3 5,885.6 DEFERRED
INCOME TAXES 182.1 179.5 OTHER LIABILITIES 596.1 667.3
TOTAL EQUITY 8,515.1 8,222.9
$ 16,346.2 $ 16,059.9
ENSCO PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
(Unaudited)
Three Months EndedMarch
31,
2015
2014
OPERATING ACTIVITIES Net income $ 327.9 $ 296.7 Adjustments
to reconcile net income to net cash provided by operating
activities of continuing operations: Discontinued operations, net
.2 2.0 Depreciation expense 137.1 131.1 Loss on extinguishment of
debt 26.6
-
Deferred income tax expense (benefit) 15.0 (5.7 ) Share-based
compensation expense 9.5 11.9 Amortization of intangibles and
other, net (4.0 ) (2.8 ) Other (6.8 ) (.1 ) Changes in operating
assets and liabilities (37.8 ) (.2 ) Net cash
provided by operating activities of continuing operations
467.7 432.9 INVESTING ACTIVITIES
Additions to property and equipment (397.1 ) (272.6 ) Maturities of
short-term investments 12.0
-
Other .4 .8 Net cash used in investing
activities of continuing operations (384.7 ) (271.8 )
FINANCING ACTIVITIES Proceeds from issuance of senior notes
1,078.7
-
Reduction of long-term borrowings (861.7 ) (7.1 ) Cash dividends
paid (35.2 ) (175.7 ) Premium paid on redemption of debt (23.4 )
-
Debt financing costs (8.9 )
-
Other (1.3 ) (6.2 ) Net cash provided by (used in)
financing activities 148.2 (189.0 )
DISCONTINUED OPERATIONS Operating activities (8.7 ) (16.3 )
Investing activities .4 1.0 Net cash
used in discontinued operations (8.3 ) (15.3 )
Effect of exchange rate changes on cash and cash equivalents .1 .1
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 223.0 (43.1 ) CASH
AND CASH EQUIVALENTS, BEGINNING OF PERIOD 664.8
165.6 CASH AND CASH EQUIVALENTS, END OF PERIOD
$ 887.8 $ 122.5
ENSCO PLC AND SUBSIDIARIES
OPERATING STATISTICS
(Unaudited)
First Quarter Fourth Quarter
2015
2014
2014
Rig Utilization(1) Floaters 86 % 75 %
81 % Jackups 87 % 86 % 88 %
Total
86 % 82 %
86 %
Average Day
Rates(2) Floaters $ 425,278 $ 466,662 $ 428,734
Jackups 144,139 134,634 147,052
Total
$ 243,902 $
243,171 $ 242,781
(1)
Rig utilization is derived by dividing the number of days under
contract by the number of days in the period. Days under contract
equals the total number of days that rigs have earned and
recognized day rate revenue, including days associated with
compensated downtime and mobilizations. When revenue is earned but
is deferred and amortized over a future period, for example when a
rig earns revenue while mobilizing to commence a new contract or
while being upgraded in a shipyard, the related days are excluded
from days under contract. For newly-constructed or acquired
rigs, the number of days in the period begins upon commencement of
drilling operations for rigs with a contract or when the rig
becomes available for drilling operations for rigs without a
contract.
(2)
Average day rates are derived by dividing contract drilling
revenues, adjusted to exclude certain types of non-recurring
reimbursable revenues, lump sum revenues and revenues attributable
to amortization of drilling contract intangibles, by the aggregate
number of contract days, adjusted to exclude contract days
associated with certain mobilizations, demobilizations, shipyard
contracts and standby contracts.
Ensco plcInvestor & Media ContactsSean
O'Neill, 713-430-4607Vice President - Investor Relations and
CommunicationsorNick Georgas, 713-430-4490Senior Manager - Investor
RelationsorThao Pham, 713-430-4658Manager - Communications
Ensco (NYSE:ESV)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ensco (NYSE:ESV)
Historical Stock Chart
From Apr 2023 to Apr 2024
