Noble Corporation Reports 2009 Earnings of $6.42 per Share on Revenues of $3.6 Billion; Fourth Quarter Earnings Increased to $1.72 per Diluted Share on Revenues of $940 Million
ZUG, Switzerland, Jan. 27 /PRNewswire-FirstCall/ -- Noble Corporation (NYSE: NE) today reported fourth quarter 2009 earnings of $446 million, or $1.72 per diluted share, versus $419 million, or $1.58 per diluted share, for the fourth quarter of 2008. Per-share earnings were up 8.9 percent from the fourth quarter of 2008 and up 5.5 percent from the $1.63 per share reported for the third quarter of 2009. Earnings for the full year 2009 totaled $6.42 per diluted share compared with $5.81 per diluted share in 2008. Results for the fourth quarter include $6.5 million or $0.03 per diluted share benefit related to a settlement of tax-related issues in the Middle East.
"Noble's efforts to manage costs, advance our safety culture and deliver top-tier margins continued through the fourth quarter of 2009," said David W. Williams, Chairman, President and Chief Executive Officer. "In spite of a turbulent year in both the financial and drilling markets, our team's focused efforts enabled us to end the year with our best ever safety results, a strong balance sheet and record earnings per share. At the same time, we continued to fund the expansion and modernization of our fleet, repurchase shares, provide outstanding service to our customers and drive value for our shareholders."
Contract drilling services revenues for the fourth quarter 2009 were $894 million, up 1.3 percent from the year-earlier quarter. Contract drilling margins for the fourth quarter 2009 were approximately 70 percent, generating $622 million in net cash provided by operating activities during the quarter and $2.1 billion for full year 2009. The Company invested $539 million in capital projects during the quarter, bringing full-year capital spending for 2009 to $1.4 billion. Debt as a percentage of total capitalization decreased to 10 percent at December 31, 2009, from approximately 10.5 percent at the end of the third quarter 2009.
The Company repurchased 1.75 million of its shares during the fourth quarter 2009 at a total cost of $74 million and at an average price per share of $42.06. For the full year 2009, Noble repurchased approximately 5.5 million of its shares at an average price per share of $34.10 for a total cost of $187 million.
Operations Highlights
At year end 2009, approximately 54 percent of the Company's available rig operating days was committed for 2010 and approximately 26 percent was committed for 2011. The Company's total backlog at December 31, 2009 was approximately $8.1 billion.
Noble's newbuild 10,000-foot dynamically positioned deepwater semisubmersible Noble Danny Adkins, which has recently arrived in the U.S. Gulf of Mexico, is expected to commence drilling operations with Shell in the first quarter of 2010.
In Brazil, the newbuild dynamically positioned deepwater semisubmersible Noble Dave Beard is undergoing acceptance trials and is expected to commence operations under its five year contract with Petrobras in February.
In Mexico, Noble executed short term extensions for the Noble Leonard Jones and the Noble Eddie Paul, currently working for Pemex. The Noble Eddie Paul has been extended until June 3, 2010 and the Noble Leonard Jones has been extended until June 22, 2010. The extensions on both units are at a rate of $127,900 per day. Additionally, Noble has commenced a dialogue regarding short-term extensions on the Noble Lewis Dugger and the Noble John Sandifer, also in Mexico.
Outlook
"We expect to begin to realize the benefits of our fleet expansion program in 2010," continued Williams. "The commencements of operations of three new ultra-deepwater units, coupled with our outstanding backlog, give us positive momentum for the year ahead. At the same time, we will stay focused on fundamentals and work hard to create value for the shareholders."
About Noble Corporation
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, dayrates, contract commencements, contract extensions or renewals, newbuilds, fleet expansion or composition, industry fundamentals, global economic conditions, financial strength, contract backlog, customer base, 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'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 Call
Noble has scheduled a conference call and webcast related to its fourth quarter and full year 2009 results on Thursday, January 28, 2010, at 8:00 a.m. U.S. Central Standard 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: 38607606 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, January 28, 2010, beginning at 10:00 a.m. U.S. Central Standard Time, through Friday, February 12, 2010, ending at 5:00 p.m. U.S. Central Standard 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: 38607606. 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 Ended | Twelve Months Ended | |||||||||
December 31, | December 31, | |||||||||
2009 | 2008 | 2009 | 2008 | |||||||
Operating revenues | ||||||||||
Contract drilling services | $ 894,184 | $ 882,538 | $ 3,509,755 | $ 3,298,850 | ||||||
Reimbursables | 37,234 | 19,340 | 99,201 | 90,849 | ||||||
Labor contract drilling services | 8,455 | 7,732 | 30,298 | 55,078 | ||||||
Other | 253 | 544 | 1,530 | 1,724 | ||||||
940,126 | 910,154 | 3,640,784 | 3,446,501 | |||||||
Operating costs and expenses | ||||||||||
Contract drilling services | 264,012 | 265,765 | 1,006,764 | 1,011,882 | ||||||
Reimbursables | 32,954 | 15,541 | 85,035 | 79,327 | ||||||
Labor contract drilling services | 4,928 | 5,279 | 18,827 | 42,573 | ||||||
Depreciation and amortization | 112,667 | 93,252 | 408,313 | 356,658 | ||||||
Selling, general and administrative | 19,361 | 17,176 | 80,262 | 74,143 | ||||||
(Gain)/loss on asset disposal/involuntary conversion, net | (214) | (964) | 30,839 | (26,485) | ||||||
433,708 | 396,049 | 1,630,040 | 1,538,098 | |||||||
Operating income | 506,418 | 514,105 | 2,010,744 | 1,908,403 | ||||||
Other income (expense) | ||||||||||
Interest expense, net of amount capitalized | (424) | (1,956) | (1,685) | (4,388) | ||||||
Interest income and other, net | 1,848 | 1,430 | 6,843 | 8,443 | ||||||
Income before income taxes | 507,842 | 513,579 | 2,015,902 | 1,912,458 | ||||||
Income tax provision | (61,427) | (95,012) | (337,260) | (351,463) | ||||||
Net income | $ 446,415 | $ 418,567 | $ 1,678,642 | $ 1,560,995 | ||||||
Net income per share | ||||||||||
Basic | $ 1.72 | $ 1.59 | $ 6.44 | $ 5.85 | ||||||
Diluted | $ 1.72 | $ 1.58 | $ 6.42 | $ 5.81 | ||||||
NOBLE CORPORATION AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(In thousands) | ||||||
(Unaudited) | ||||||
December 31, | ||||||
2009 | 2008 | |||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ 735,493 | $ 513,311 | ||||
Accounts receivable | 647,454 | 644,840 | ||||
Insurance receivables | 6,971 | 13,516 | ||||
Prepaid expenses | 26,938 | 21,207 | ||||
Other current assets | 66,334 | 47,467 | ||||
Total current assets | 1,483,190 | 1,240,341 | ||||
Property and equipment | ||||||
Drilling equipment and facilities | 8,666,750 | 7,427,908 | ||||
Other | 143,477 | 105,340 | ||||
8,810,227 | 7,533,248 | |||||
Accumulated depreciation | (2,175,775) | (1,886,231) | ||||
6,634,452 | 5,647,017 | |||||
Other assets | 279,254 | 219,441 | ||||
Total assets | $ 8,396,896 | $ 7,106,799 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current liabilities | ||||||
Current maturities of long-term debt | $ - | $ 172,698 | ||||
Accounts payable | 197,800 | 259,107 | ||||
Accrued payroll and related costs | 100,167 | 75,449 | ||||
Taxes payable | 68,760 | 107,211 | ||||
Interest payable | 11,258 | 11,325 | ||||
Other current liabilities | 55,962 | 53,203 | ||||
Total current liabilities | 433,947 | 678,993 | ||||
Long-term debt | 750,946 | 750,789 | ||||
Deferred income taxes | 300,231 | 265,018 | ||||
Other liabilities | 123,340 | 121,284 | ||||
Total liabilities | 1,608,464 | 1,816,084 | ||||
Commitments and contingencies | ||||||
Shareholders' equity | ||||||
Shares - par value 4.85 Swiss francs per share; 414,399 shares authorized, | ||||||
138,133 additional shares conditionally authorized, 276,266 shares issued | ||||||
and 261,975 shares outstanding as of December 31, 2009; | 1,130,607 | |||||
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 | 5,855,737 | 4,919,667 | ||||
Treasury shares - 3,750 shares held | (143,031) | - | ||||
Accumulated other comprehensive loss | (54,881) | (57,257) | ||||
Total shareholders' equity | 6,788,432 | 5,290,715 | ||||
Total liabilities and shareholders' equity | $ 8,396,896 | $ 7,106,799 | ||||
NOBLE CORPORATION AND SUBSIDIARIES | ||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
(In thousands) | ||||||
(Unaudited) | ||||||
Twelve Months Ended | ||||||
December 31, | ||||||
2009 | 2008 | |||||
Cash flows from operating activities | ||||||
Net income | $ 1,678,642 | $ 1,560,995 | ||||
Adjustments to reconcile net income to net cash from | ||||||
operating activities: | ||||||
Depreciation and amortization | 408,313 | 356,658 | ||||
(Gain)/loss on asset disposal/involuntary conversion, net | 30,839 | (26,485) | ||||
Deferred income tax provision | 36,866 | 51,026 | ||||
Share-based compensation expense | 37,995 | 35,899 | ||||
Pension contributions | (17,639) | (21,439) | ||||
Net change in other assets and liabilities | (38,300) | (68,462) | ||||
Net cash from operating activities | 2,136,716 | 1,888,192 | ||||
Cash flows from investing activities | ||||||
New construction | (717,148) | (799,736) | ||||
Other capital expenditures | (594,957) | (323,955) | ||||
Major maintenance expenditures | (119,393) | (107,630) | ||||
Accrued capital expenditures | (63,561) | 40,830 | ||||
Hurricane insurance receivables | - | 21,747 | ||||
Proceeds from disposal of assets | - | 39,451 | ||||
Net cash from investing activities | (1,495,059) | (1,129,293) | ||||
Cash flows from financing activities | ||||||
Borrowings on bank credit facilities | - | 30,000 | ||||
Payments on bank credit facilities | - | (130,000) | ||||
Proceeds from issuance of senior notes, net | - | 249,238 | ||||
Payments of other long-term debt | (172,700) | (10,335) | ||||
Net proceeds from employee stock transactions | 5,062 | 9,304 | ||||
Tax benefit of employee stock transactions | - | 3,467 | ||||
Dividends/par value reduction payments | (47,939) | (244,198) | ||||
Repurchases of shares | (203,898) | (314,122) | ||||
Net cash from financing activities | (419,475) | (406,646) | ||||
Net increase in cash and cash equivalents | 222,182 | 352,253 | ||||
Cash and cash equivalents, beginning of period | 513,311 | 161,058 | ||||
Cash and cash equivalents, end of period | $ 735,493 | $ 513,311 | ||||
NOBLE CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT | |||||||||||||||||||
(In thousands, except utilization amounts, operating days and average dayrates) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended December 31, | Three Months Ended September 30, | ||||||||||||||||||
2009 | 2008 | 2009 | |||||||||||||||||
Contract | Contract | Contract | |||||||||||||||||
Drilling | Drilling | Drilling | |||||||||||||||||
Services | Other | Total | Services | Other | Total | Services | Other | Total | |||||||||||
Operating revenues | |||||||||||||||||||
Contract drilling services | $ 894,184 | $ - | $ 894,184 | $ 882,538 | $ - | $ 882,538 | $ 874,969 | $ - | $ 874,969 | ||||||||||
Reimbursables | 36,199 | 1,035 | 37,234 | 18,060 | 1,280 | 19,340 | 21,511 | 944 | 22,455 | ||||||||||
Labor contract drilling services | - | 8,455 | 8,455 | - | 7,732 | 7,732 | - | 7,490 | 7,490 | ||||||||||
Other | 253 | - | 253 | 530 | 14 | 544 | 509 | 212 | 721 | ||||||||||
$ 930,636 | $ 9,490 | $ 940,126 | $ 901,128 | $ 9,026 | $ 910,154 | $ 896,989 | $ 8,646 | $ 905,635 | |||||||||||
Operating costs and expenses | |||||||||||||||||||
Contract drilling services | $ 264,012 | $ - | $ 264,012 | $ 265,765 | $ - | $ 265,765 | $ 250,842 | $ - | $ 250,842 | ||||||||||
Reimbursables | 31,967 | 987 | 32,954 | 14,329 | 1,212 | 15,541 | 17,811 | 906 | 18,717 | ||||||||||
Labor contract drilling services | - | 4,928 | 4,928 | - | 5,279 | 5,279 | - | 4,642 | 4,642 | ||||||||||
Depreciation and amortization | 110,054 | 2,613 | 112,667 | 91,104 | 2,148 | 93,252 | 100,669 | 2,576 | 103,245 | ||||||||||
Selling, general and administrative | 19,297 | 64 | 19,361 | 17,073 | 103 | 17,176 | 21,629 | 71 | 21,700 | ||||||||||
(Gain)/loss on asset disposal/involuntary conversion, net | - | (214) | (214) | - | (964) | (964) | 2,076 | - | 2,076 | ||||||||||
$ 425,330 | $ 8,378 | $ 433,708 | $ 388,271 | $ 7,778 | $ 396,049 | $ 393,027 | $ 8,195 | $ 401,222 | |||||||||||
Operating income | $ 505,306 | $ 1,112 | $ 506,418 | $ 512,857 | $ 1,248 | $ 514,105 | $ 503,962 | $ 451 | $ 504,413 | ||||||||||
Operating statistics | |||||||||||||||||||
Jackups: | |||||||||||||||||||
Average Rig Utilization | 81% | 88% | 80% | ||||||||||||||||
Operating Days | 3,218 | 3,354 | 3,183 | ||||||||||||||||
Average Dayrate | $ 131,975 | $ 151,601 | $ 143,388 | ||||||||||||||||
Semisubmersibles - (6,000 feet or greater): | |||||||||||||||||||
Average Rig Utilization | 100% | 100% | 98% | ||||||||||||||||
Operating Days | 721 | 644 | 631 | ||||||||||||||||
Average Dayrate | $ 450,459 | $ 364,180 | $ 434,435 | ||||||||||||||||
Semisubmersibles - (less than 6,000 feet): | |||||||||||||||||||
Average Rig Utilization | 100% | 100% | 100% | ||||||||||||||||
Operating Days | 276 | 276 | 276 | ||||||||||||||||
Average Dayrate | $ 254,820 | $ 249,603 | $ 261,167 | ||||||||||||||||
Drillships: | |||||||||||||||||||
Average Rig Utilization | 100% | 67% | 100% | ||||||||||||||||
Operating Days | 276 | 184 | 276 | ||||||||||||||||
Average Dayrate | $ 269,615 | $ 326,170 | $ 243,186 | ||||||||||||||||
Submersibles: | |||||||||||||||||||
Average Rig Utilization | 0% | 67% | 42% | ||||||||||||||||
Operating Days | - | 184 | 78 | ||||||||||||||||
Average Dayrate | $ - | $ 56,903 | $ 65,944 | ||||||||||||||||
Total: | |||||||||||||||||||
Average Rig Utilization | 83% | 88% | 83% | ||||||||||||||||
Operating Days | 4,491 | 4,642 | 4,444 | ||||||||||||||||
Average Dayrate | $ 199,122 | $ 190,137 | $ 196,900 | ||||||||||||||||
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 | Twelve months ended | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | 2009 | 2008 | ||||||
Allocation of net income | |||||||||
Basic | |||||||||
Net income | $ 446,415 | $ 418,567 | $ 1,678,642 | $ 1,560,995 | |||||
Earnings allocated to unvested share-based payment awards | (4,647) | (3,534) | (16,811) | (13,195) | |||||
Net income to common shareholders - basic | $ 441,768 | $ 415,033 | $ 1,661,831 | $ 1,547,800 | |||||
Diluted | |||||||||
Net income | $ 446,415 | $ 418,567 | $ 1,678,642 | $ 1,560,995 | |||||
Earnings allocated to unvested share-based payment awards | (4,628) | (3,525) | (16,758) | (13,131) | |||||
Net income to common shareholders - diluted | $ 441,787 | $ 415,042 | $ 1,661,884 | $ 1,547,864 | |||||
Weighted average number of shares outstanding - basic | 256,507 | 261,501 | 258,035 | 264,782 | |||||
Incremental shares issuable from assumed exercise of stock options | 1,090 | 688 | 856 | 1,567 | |||||
Weighted average number of shares outstanding - diluted | 257,597 | 262,189 | 258,891 | 266,349 | |||||
Weighted average unvested share-based payment awards | 2,699 | 2,227 | 2,611 | 2,224 | |||||
Earnings per share | |||||||||
Basic | $ 1.72 | $ 1.59 | $ 6.44 | $ 5.85 | |||||
Diluted | $ 1.72 | $ 1.58 | $ 6.42 | $ 5.81 | |||||
SOURCE Noble Corporation
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