DALLAS--(BUSINESS WIRE)--
Ensco International Incorporated (NYSE: ESV) reported net income
of $282.3 million ($1.99 per diluted share) on revenues of $635.8
million for the quarter ended September 30, 2008, as compared to
$266.7 million ($1.82 per diluted share) on revenues of $536.4 million
for the year earlier quarter.
The Company incurred a loss from discontinued operations for the
third quarter of 2008 (net of tax) of $18.9 million ($0.13 per diluted
share) related to the loss of ENSCO 74, a Gulf of Mexico jackup rig
that was presumed to have sunk in the aftermath of Hurricane Ike in
September. Income from continuing operations was $301.2 million ($2.13
per diluted share) for the quarter ended September 30, 2008, as
compared to income from continuing operations of $259.4 million ($1.77
per diluted share) for the quarter ended September 30, 2007.
For the nine months ended September 30, 2008, net income was
$851.0 million ($5.97 per diluted share) on revenues of $1,828.3
million as compared to $753.4 million ($5.08 per diluted share) on
revenues of $1,570.9 million for the year earlier nine month period.
Income from continuing operations for the nine months ended September
30, 2008 was $859.5 million ($6.03 per diluted share) as compared to
income from continuing operations of $733.3 million ($4.94 per diluted
share) for the nine months ended September 30, 2007.
The average day rate for Ensco's 43-rig jackup fleet for the
quarter ended September 30, 2008, increased 10% to $156,900, as
compared to $142,100 in the prior year quarter. Utilization of the
Company's jackup fleet was 97% in the third quarter of 2008 compared
to 90% in the third quarter of 2007.
Dan Rabun, Chairman, President and Chief Executive Officer,
commented on the Company's results, strategic deepwater initiative and
outlook: "We reported another solid quarter despite weather-related
issues that adversely impacted financial results, most notably the
loss of one of our Gulf of Mexico jackup rigs as a result of Hurricane
Ike. We also experienced $16.3 million of deferred revenues related to
waiting on weather on two rigs in New Zealand, where we earned day
rates but deferred recognition of the revenue until commencement of
drilling operations in accordance with applicable accounting
standards. Increases in average day rates in all regions and higher
utilization of our jackup rig fleet contributed to the sequential
improvement in our third quarter results.
"The first of our seven new ENSCO 8500 Series(R) ultra-deepwater
semis, ENSCO 8500, was delivered in late September and currently is
mobilizing to the Gulf of Mexico. Following completion of rig
commissioning, mobilization and final outfitting, the rig is scheduled
to commence operations under a four-year drilling contract by
mid-first quarter 2009. With the expected total fleet addition of the
seven new 8500 Series deepwater rigs by 2012, we anticipate that our
deepwater rig fleet will contribute approximately one-third of our
revenue once all the new rigs are delivered and operational.
"Our balance sheet remains strong. We ended the third quarter with
more cash and liquid investments than debt, $486 million of cash and
short-term investments against $300 million of debt. Half of our debt
is not due until 2027, and our debt repayments on the balance are less
than $20 million annually.
"Although it is difficult to predict the impact of the current
global financial crisis upon our customers and markets, we believe our
strong balance sheet, favorable contract backlog, conservative
approach to internally funding our new rig expansion program and the
growing contribution from our 8500 Series ultra-deepwater rigs will be
a competitive advantage for the Company in years to come."
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, future
revenue contributions of the 8500 Series rigs, industry trends or
conditions and the business environment; statements regarding future
levels of, or trends in, day rates, utilization, revenues, operating
expenses, contract backlog, capital expenditures, insurance, financing
and funding; statements regarding future construction (including rig
construction in progress and timing of completion thereof),
enhancement, upgrade or repair of rigs and timing thereof; future
mobilization, relocation or other movement of rigs and timing thereof;
future availability or suitability of rigs and timing thereof; and
statements regarding the likely outcome of litigation, legal
proceedings, investigations or 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 current global
economic crisis and its impact upon capital markets and liquidity,
(iii) prices of oil and natural gas in general, and the recent
precipitous drop in prices in particular, and the impact of commodity
prices upon future levels of drilling activity and expenditures, (iv)
material changes in recognition of revenue resulting from the deferral
of revenues payable by our customers for mobilization of our drilling
rigs, waiting on weather or time in shipyards that are deferred until
we commence drilling operations, (v) excess rig availability or supply
resulting from delivery of new drilling rigs, (vi) heavy concentration
of our rig fleet in premium jackups, (vii) cyclical nature of the
industry, (viii) worldwide expenditures for oil and gas drilling, (ix)
operational risks, including hazards created by severe storms and
hurricanes, (x) risks associated with offshore rig operations or rig
relocations in general, and in foreign jurisdictions in particular,
(xi) renegotiation, nullification 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, (xii) changes in the dates new contracts actually commence,
(xiii) changes in the dates our rigs will enter a shipyard, be
delivered, return to or enter service, (xiv) risks inherent to
domestic and foreign shipyard rig construction, repair or enhancement,
including risks associated with concentration of our ENSCO 8500
Series(R) rig construction contracts in a single foreign shipyard,
unexpected delays in equipment delivery and engineering or design
issues following shipyard delivery, (xv) availability of transport
vessels to relocate rigs, (xvi) environmental or other liabilities,
risks or losses, whether related to hurricane equipment damage, losses
or liabilities (including wreckage or debris removal) in the Gulf of
Mexico or otherwise, that may arise in the future which are not
covered by insurance or indemnity in whole or in part, (xvii) limited
availability of economic insurance coverage for certain perils such as
hurricanes in the Gulf of Mexico or associated removal of wreckage or
debris, (xviii) self-imposed or regulatory limitations on drilling
locations in the Gulf of Mexico during hurricane season, (xix) impact
of current and future government laws and regulation affecting the oil
and gas industry in general and our operations in particular,
including taxation as well as repeal or modification of same, (xx)
political and economic uncertainties, (xxi) our ability to attract and
retain skilled personnel, (xxii) expropriation, nationalization,
deprivation, terrorism or military action impacting our operations,
assets or financial performance, (xxiii) outcome of litigation, legal
proceedings, investigations or claims, (xxiv) adverse changes in
foreign currency exchange rates, (xxv) potential reduction in fair
value of our auction rate securities, and (xxvi) 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 the investor relations section of our website at
http://www.enscointernational.com. All information in this press
release is as of October 23, 2008. 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, headquartered in Dallas, Texas, provides contract drilling
services to the global petroleum industry.
Ensco will conduct a conference call at 10:00 a.m. Central Time on
Thursday, October 23, 2008, to discuss its third quarter 2008 results.
The call will be broadcast live over the Internet at
www.enscointernational.com. Interested parties also may listen to the
call by dialing (719) 325-4897. 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 4169213).
A transcript of the call and access to a replay or MP3 download can be
found on-line on the Ensco web site www.enscointernational.com in the
Investors Section.
ENSCO INTERNATIONAL INCORPORATED
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In millions, except per share data)
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------------- -------------------
2008 2007 2008 2007
--------- --------- --------- ---------
OPERATING REVENUES $ 635.8 $ 536.4 $1,828.3 $1,570.9
OPERATING EXPENSES
Contract drilling (exclusive
of depreciation) 193.4 175.5 591.5 500.6
Depreciation 47.7 46.2 141.6 136.0
General and administrative 15.2 11.5 41.7 46.6
--------- --------- --------- ---------
256.3 233.2 774.8 683.2
--------- --------- --------- ---------
OPERATING INCOME 379.5 303.2 1,053.5 887.7
OTHER INCOME (EXPENSE)
Interest income 3.2 7.1 11.9 19.6
Interest expense, net - - - (1.9)
Other, net (9.7) 2.7 (7.1) 9.5
--------- --------- --------- ---------
(6.5) 9.8 4.8 27.2
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS
BEFORE INCOME TAXES 373.0 313.0 1,058.3 914.9
PROVISION FOR INCOME TAXES 71.8 53.6 198.8 181.6
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS 301.2 259.4 859.5 733.3
DISCONTINUED OPERATIONS, NET (18.9) 7.3 (8.5) 20.1
--------- --------- --------- ---------
NET INCOME $ 282.3 $ 266.7 $ 851.0 $ 753.4
========= ========= ========= =========
EARNINGS (LOSS) PER SHARE -
BASIC
Continuing operations $ 2.13 $ 1.78 $ 6.04 $ 4.96
Discontinued operations (0.13) 0.05 (0.06) 0.14
--------- --------- --------- ---------
$ 2.00 $ 1.83 $ 5.98 $ 5.10
========= ========= ========= =========
EARNINGS (LOSS) PER SHARE -
DILUTED
Continuing operations $ 2.13 $ 1.77 $ 6.03 $ 4.94
Discontinued operations (0.13) 0.05 (0.06) 0.14
--------- --------- --------- ---------
$ 1.99 $ 1.82 $ 5.97 $ 5.08
========= ========= ========= =========
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING
Basic 141.1 145.9 142.2 147.8
Diluted 141.6 146.6 142.6 148.4
ENSCO INTERNATIONAL INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions)
September December
30, 31,
2008 2007
----------- -----------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 447.6 $ 629.5
Short-term investments 38.4 -
Accounts receivable, net 519.5 383.2
Other 126.3 116.6
----------- -----------
Total current assets 1,131.8 1,129.3
PROPERTY AND EQUIPMENT, NET 3,774.4 3,358.9
GOODWILL 336.2 336.2
LONG-TERM INVESTMENTS 70.2 -
OTHER ASSETS, NET 144.6 144.4
----------- -----------
$ 5,457.2 $ 4,968.8
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 352.5 $ 484.4
Current maturities of long-term debt 17.2 19.1
----------- -----------
Total current liabilities 369.7 503.5
LONG-TERM DEBT 282.9 291.4
DEFERRED INCOME TAXES 346.7 352.0
OTHER LIABILITIES 81.8 69.9
STOCKHOLDERS' EQUITY 4,376.1 3,752.0
----------- -----------
$ 5,457.2 $ 4,968.8
=========== ===========
ENSCO INTERNATIONAL INCORPORATED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
Nine Months Ended
September 30,
-----------------
2008 2007
-------- --------
OPERATING ACTIVITIES
Net income $ 851.0 $ 753.4
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense 141.6 136.0
Changes in operating assets and liabilities (317.7) (60.6)
Other 68.5 15.2
-------- --------
Net cash provided by operating activities of
continuing operations 743.4 844.0
-------- --------
INVESTING ACTIVITIES
Additions to property and equipment (654.1) (407.6)
Other (33.3) 5.6
-------- --------
Net cash used in investing activities (687.4) (402.0)
-------- --------
FINANCING ACTIVITIES
Repurchase of common stock (259.5) (423.3)
Proceeds from exercise of stock options 27.3 29.8
Cash dividends paid (10.7) (11.2)
Reduction of long-term borrowings (10.5) (8.6)
Other 5.3 5.5
-------- --------
Net cash used in financing activities (248.1) (407.8)
-------- --------
Effect of exchange rate fluctuations on cash and
cash equivalents (7.6) (0.1)
Net cash provided by operating activities of
discontinued operations 17.8 23.0
-------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (181.9) 57.1
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 629.5 565.8
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 447.6 $ 622.9
======== ========
ENSCO INTERNATIONAL INCORPORATED
OPERATING STATISTICS
(Unaudited)
Second
Third Quarter Quarter
-------------------
2008 2007 2008
--------- --------- ---------
Contract drilling
----------------------------------------
Average day rates
Jackup rigs
Asia Pacific $156,951 $132,876 $152,906
Europe / Africa 226,080 203,117 217,710
North and South America 108,174 106,183 94,796
--------- --------- ---------
Total jackup rigs 156,860 142,118 148,441
Semisubmersible rig - N. America 361,612 200,716 365,496
Barge rig - Asia Pacific 73,080 71,496 72,132
--------- --------- ---------
Total $160,077 $141,785 $151,932
========= ========= =========
Utilization
Jackup rigs
Asia Pacific 96% 99% 91%
Europe / Africa 96% 90% 97%
North and South America 98% 77% 100%
--------- --------- ---------
Total jackup rigs 97% 90% 95%
Semisubmersible rig - N. America 87% 97% 98%
Barge rig - Asia Pacific 50% 100% 100%
--------- --------- ---------
Total 96% 90% 96%
========= ========= =========
Source: Ensco International Incorporated
