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

Jan 27, 2010, 16:35 ET from Noble Corporation

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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