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8-K - FORM 8-K - PRIDE INTERNATIONAL INC | h77426e8vk.htm |
Exhibit 99.1
NEWS RELEASE
5847 San Felipe, Suite 3300 Houston, Texas 77057 (713) 789-1400
FOR IMMEDIATE RELEASE
|
Analyst Contact: Media Contact: |
Jeffrey L. Chastain (713) 917-2020 Kate Perez (713) 917-2343 |
Pride International, Inc. Reports Third Quarter 2010 Financial Results
HOUSTON, November 4, 2010 Pride International, Inc. (NYSE: PDE) today reported income
from continuing operations, net of tax, for the three months ended September 30, 2010 of $42.8
million, or $0.24 per diluted share. Results for the quarter included refinancing charges totaling
$16.7 million, or $0.06 per diluted share, resulting from the early retirement of debt associated
with the refinancing transactions that occurred during the quarter.
In addition, results for the quarter were negatively affected by an on-going dispute with a
client relating to the responsibility for payment of the time required for equipment inspection and
maintenance at the specific request of the client on an unscheduled basis. As a result, we did not
recognize the disputed $30 million of revenue pending resolution of the matter. This impacted results for the
quarter by $0.11 per diluted share.
Finally, the company recorded in the third quarter a benefit of $0.08 per diluted share
associated with tax benefits related to the change in estimate of the companys prior year tax
liability.
The third quarter 2010 results compared to income from continuing operations, net of tax, for
the three months ended June 30, 2010 of $57.7 million, or $0.32 per diluted share. For the three
months ended September 30, 2009, income from continuing operations, net of tax, was $79.9 million,
or $0.45 per diluted share, which included severance costs of $6.9 million, or $0.03 per diluted
share. Revenues totaled $346.2 million during the third quarter of 2010 compared to $350.3 million
and $386.1 million during the second quarter of 2010 and third quarter of 2009, respectively.
Louis A. Raspino, President and Chief Executive Officer of Pride International, Inc.,
commented, Our third quarter was highlighted by additional milestones achieved in our deepwater
rig expansion program. In September, we took delivery of the second deepwater drillship to be added
to our fleet, the Deep Ocean Clarion, following the on-time completion of construction activities
in Korea. The rig is currently in transit to the U.S. Gulf of Mexico, where it is expected to
commence a five-year contract with BP during late-first quarter of 2011, following the completion
of integrated acceptance testing. Also, initial revenues were recognized
on the first new drillship added to our deepwater fleet, the Deep Ocean Ascension, with the
commencement in August, prior to the completion of client acceptance testing, of a special standby
dayrate of $360,000, which will continue until the start up of the rigs original five-year term that
will occur no later than April 1, 2011. The special dayrate resulted from concentrated efforts by
Pride and BP to identify an acceptable, temporary solution regarding the near-term operation of the
rig in light of numerous delays resulting from the drilling moratorium and related U. S. government
actions in the U.S. Gulf of Mexico. The rig has since completed integrated testing and
commissioning activities and remains on the special standby dayrate awaiting instructions from our
client regarding an initial drilling location.
Also during the quarter, we completed a successful $1.2 billion issuance of senior notes and
an amendment to our revolving credit facility that increased availability under the facility to
$720 million, which has now been increased to $750 million. The notes issuance allowed us to
refinance a portion of our long-term debt, moving our nearest debt maturity to 2019. Both the new
notes and the amended credit facility provide us with enhanced liquidity and financial flexibility
as we move toward the 2011 completion of our four-drillship expansion program and continue to
pursue other alternatives for growth in the deepwater sector.
Net income for the three months ended September 30, 2010 was $36.5 million, or $0.20 per
diluted share, including a loss from discontinued operations of $6.3 million, or $0.04 per diluted
share. The results compared to net income of $57.5 million, or $0.32 per diluted share, for the
three months ended June 30, 2010. For the three months ended September 30, 2009, net income totaled
$35.6 million, or $0.20 per diluted share, including a loss from discontinued operations of $44.3
million, or $0.25 per diluted share.
For the nine months ended September 30, 2010, income from continuing operations totaled $181.2
million, or $1.02 per diluted share, while net income was $166.9 million, or $0.94 per diluted
share, inclusive of a loss from discontinued operations of $14.3 million, or $0.08 per diluted
share. The results compared to income from continuing operations for the nine months ended
September 30, 2009 of $363.5 million, or $2.06 per diluted share, with net income of $318.6
million, or $1.80 per diluted share, including a loss from discontinued operations of $44.9
million, or $0.26 per diluted share.
In closing, Raspino added, The offshore drilling industry has dealt with a highly uncertain
environment since April 2010, given the unfortunate consequences stemming from the Deepwater
Horizon incident. However, the latter half of the third quarter brought to light some promising
developments in the deepwater segment of the industry with potentially positive implications over
the coming year. Specifically, the number of client tenders requiring deepwater rigs in 2011
noticeably increased, while several rigs, including new deepwater rig capacity with 2011
availability, were awarded contracts, thereby reducing available deepwater capacity in the near- to
intermediate-term, as clients increasingly display a preference toward the industrys most advanced
offshore drilling units. In addition, our industry is experiencing the second consecutive record
year for announced discoveries in global deepwater areas, including many emerging and frontier
basins, such as the recent announced discovery in the Sergipe-Alagoas Basin in the ultra-deep
waters offshore northern Brazil. Strong deepwater geology bodes well for continued long-term
sector visibility and is a primary reason why we remain committed to strategic growth in the
sector.
2
Cash and cash equivalents at September 30, 2010 were $640 million, more than twice the level
at June 30, 2010 of $311 million. The increase resulted primarily from the companys August 2010
$1.2 billion senior notes offering. Approximately $517 million of the offering proceeds were used
for the redemption in September 2010 of all of the companys outstanding 7 3/8% senior notes due
2014. Total debt at September 30, 2010 was $1.9 billion compared to $1.2 billion at June 30, 2010,
while stockholders equity at the end of the third quarter of 2010 was $4.5 billion, resulting in a
debt-to-total-capital ratio of 30%, remaining within the companys targeted range of 20% to 40%.
Capital expenditures in the third quarter of 2010 were $366 million, resulting in capital
expenditures in the first nine months of 2010 of $976 million. These amounts include capital
expenditures relating to the companys deepwater drillship construction program, which were $287
million in the third quarter, primarily reflecting a final payment on the Deep Ocean Clarion,
resulting in $741 million in capital expenditures associated with the construction program through
the first nine months of the year. The companys capital expenditures target for 2010 has been
revised to an estimated $1.13 billion from $1.05 billion. The company estimates an additional $840
million, including rig mobilization costs, capital spares and other startup costs, will be spent to
complete the remaining two drillships under construction, the Deep Ocean Mendocino, with an
expected January 2011 delivery, and the Deep Ocean Molokai, which is expected to be delivered in
December 2011. Capital expenditure amounts stated above exclude capitalized interest.
Deepwater Segment
Revenues from the companys Deepwater segment, consisting of four drillships and six
semisubmersible rigs, were $216.2 million during the third quarter of 2010 compared to $222.5
million for the second quarter of the year. The decline in revenues was largely attributable to
several items in the quarter and the impact of retroactive dayrate escalations on several rigs that
were recognized in the second quarter of 2010. More specifically, third quarter results reflected
the companys inability to recognize an estimated $30 million of revenues relating to approximately
60 contracted rig days on the semisubmersible rig Pride North America due to a dispute with the
client. Though there can be no assurances as to the outcome, the company currently anticipates that
an ultimate resolution of the dispute should allow it to collect all or a substantial portion of
the revenues. Also contributing to the decline in third quarter revenues, the drillship Pride
Angola completed a scheduled five-year survey and other maintenance, requiring 13 days of
out-of-service time, while the semisubmersible rigs Pride South Pacific and Pride Portland incurred
a total of 11 days of out-of-service time for mechanical repairs. These events were partially
offset by earlier than expected revenues from the drillship Deep Ocean Ascension following the
commencement of a special standby dayrate on August 23, 2010 and higher utilization of the
semisubmersible rig Pride Carlos Walter following a scheduled shipyard program and other repairs
during the second quarter of 2010. Given these operating events, average daily revenues in the
third quarter of 2010 declined to $294,800 from $340,800 in the second quarter of the year, while
segment utilization increased to 95% from 90% over the same comparative period. Segment operating
costs, before client reimbursables, were $121.1 million in the third quarter of 2010 compared to
$115.2 million in the preceding quarter of the year. The increase was due primarily to the start up
of the Deep Ocean Ascension. Earnings from operations totaled $66.9 million in the third quarter
of 2010 compared to $83.0 million in the
3
preceding quarter of the year, with segment EBITDA reaching $91.6 million, down from $104.9 million
over the same comparative period. At September 30, 2010, 100% of the remaining rig days in 2010
were under contract, with 83% under contract in 2011, 67% in 2012 and 55% in 2013.
Notable positive trends have recently surfaced in the deepwater sector that further support
the positive long-term sector outlook and the visibility and attractiveness of the business. Since
mid-year 2010, a growing list of client tenders have emerged covering new exploration, appraisal
and development drilling opportunities in a number of locations, including offshore Brazil,
Nigeria, Angola, Ivory Coast, Brunei, Australia and countries along the Mediterranean Sea. The
tenders, most having commencement dates in 2011, cover contract durations of up to four years.
Also, these clients requirements, and other needs that are currently in a preliminary stage of
evaluation, are increasingly dictating a preference toward the advanced technical features and more
efficient well construction attributes of the industrys latest generation of deepwater rigs, such
as the companys Deep Ocean Molokai. Recent contract awards for some of the industrys newest and
most advanced deepwater drilling rigs are evidence of this growing preference. The company expects
this factor to result in a stable to improving dayrate environment as the industrys new
uncommitted capacity is selected for contracts, and utilization of the global fleet remains
effectively full.
As evidence of near- to immediate-term sector strength emerges, the long-term outlook for the
deepwater sector continues to add further visibility, supported by geologic success and growing
access to promising new basins. Through October 2010, a total of 26 deepwater discoveries have
already been announced by clients, eclipsing the previous record of 25 announced discoveries
recorded in all of 2009. In addition to the traditional deepwater basins offshore Brazil, the U.S.
Gulf of Mexico and Angola, other discoveries have been announced offshore the Ivory Coast, Ghana,
Mozambique, Tanzania, Mexico and the Philippines, highlighting the expanding geographic reach of
the activity. A number of countries have recently completed or are contemplating new deepwater
licensing rounds that will provide increased exploration access to some of the promising offshore
areas around the world, including Gabon, Sao Tomé, Príncipe, Nigeria, Norway and the Black Sea. The
successful geology and increasing access, together with a stable trading range for crude oil
prices, which have averaged approximately $78 per barrel over the past twelve months, reinforce the
compelling long-term outlook for deepwater drilling.
Midwater Segment
Revenues from the companys Midwater segment, consisting of six semisubmersible rigs, were
$86.2 million during the third quarter of 2010 compared to $89.3 million in the second quarter of
the year. Segment utilization declined slightly in the third quarter to 58% from 61% in the
preceding quarter of the year, as 42 days of out-of-service time on the Pride South America to
complete scheduled maintenance was substantially offset by higher utilization on the Pride South
Atlantic and Pride Mexico. Operating costs, before reimbursables, declined to $60.4 million in the
third quarter of 2010 from $63.9 million in the preceding quarter due primarily to lower survey and
inspection costs associated with the Pride South Atlantic, which was in the shipyard during the
second quarter of 2010. Segment earnings from operations were largely unchanged in the third
quarter of 2010, totaling $12.5 million compared to $12.7 million in the
4
preceding quarter. Third quarter 2010 EBITDA contribution was $25.7 million compared to $25.2
million in the second quarter of 2010. At September 30, 2010, the Midwater segment had 81% of the
available rigs days remaining in 2010 under contract, with 78% under contract in 2011, 35% in 2012
and 14% committed in 2013.
Utilization of the industrys midwater fleet was 88% at September 30, 2010, largely unchanged
from utilization at the conclusion of the second quarter of the year. A total of 14 units were idle
around the world, with an additional 15 units expected to complete contracts over the fourth
quarter of 2010. Increased demand has been seen in the North Sea region, especially offshore
Norway, and offshore the northwest shelf of Australia. Outside of these regions, client demand
remains minimal at present, with existing opportunities characterized largely by short contract
durations. Available deepwater rigs with conventional mooring technology remain a near-term threat
to the sector as these rigs compete more effectively for the limited drilling opportunities located
in the traditional water depths for many midwater rigs of approximately 2,000 feet to 4,000 feet.
Independent Leg Jackup Segment
Revenues from the companys Independent Leg Jackup segment, consisting of seven units, were
$24.7 million during the third quarter of 2010, up from $21.6 million in the second quarter of the
year. The segment incurred a loss from operations of $0.2 million in the third quarter of 2010
compared to a loss from operations in the preceding quarter of $12.1 million, while segment EBITDA
totaled $6.8 million, up from negative EBITDA of $3.5 million over the same comparative period. The
improved segment results were driven by higher utilization and average daily revenues. The higher
utilization, which reached 41% in the third quarter of 2010, up from 39% in the second quarter of
the year, resulted primarily from a full quarter of service on the Pride Montana following 26 days
of out-of-service time during the second quarter of the year to complete scheduled maintenance. The
improvement in average daily revenues, from $87,000 in the second quarter to $92,400 in the third
quarter, was due in part to higher contract revenues on the Pride Cabinda. Segment operating costs,
before reimbursables, declined to $17.9 million in the third quarter of 2010 from $24.7 million in
the preceding quarter due primarily to a reduction in demobilization costs associated with the
Pride Hawaii. At September 30, 2010, the Independent Leg Jackup segment had 17% of the remaining
rig days in 2010 under contract, with 21% committed in 2011 and 14% committed in both 2012 and
2013.
The industry count for idle independent leg jackup rigs increased to 91 units at September 30,
2010 from 79 at the end of the second quarter of 2010. The majority of the increase in idle
capacity was attributable to units with standard features and dated technology. Utilization and
dayrates for jackup rigs with these limiting features are expected to remain flat into 2011, while
new, more technologically advanced units remain the preference for many clients. This preference
for high specification features is expected to lead to improvements in utilization and dayrates
among these rigs in the near-term with further additions to industry capacity already beginning. At
present, five of the companys seven standard independent leg jackup rigs are idle, with two units,
the Pride Cabinda and Pride Tennessee likely to return to work in the first half of 2011.
5
Pride International, Inc., headquartered in Houston, Texas, operates a fleet of 25 rigs,
including four deepwater drillships, 12 semisubmersible rigs, seven independent leg jackups, and
two managed deepwater rigs. The company also has two ultra-deepwater drillships under construction.
The companys floating rig fleet operates primarily offshore Brazil and West Africa.
Pride International, Inc. will host a conference call at 11:00 a.m. Eastern time on Thursday,
November 4, 2010 to discuss results for the third quarter of 2010, recent events and managements
operational and marketing outlook. Individuals who wish to participate in the conference call
should dial 913-312-1272 and refer to confirmation code 1479882 approximately five to 10 minutes
before the scheduled start of the call. In addition, the conference call will be simulcast through
a listen-only broadcast over the Internet and can be accessed by selecting the Investor Relations
link at www.prideinternational.com. A telephonic replay of the conference call should be available
after 2:00 p.m. Eastern time on November 4 and can be accessed by dialing 719-457-0820 and
referring to pass code 1479882. Also, a replay will be available through the Internet and can be
accessed by visiting the companys worldwide web address. The replay options will be available for
approximately 30 days.
The information above includes forward-looking statements within the meaning of the Securities
Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements are subject
to certain risks, uncertainties and assumptions identified above or as disclosed from time to time
in the companys filings with the Securities and Exchange Commission. As a result of these
factors, actual results may differ materially from those indicated or implied by such
forward-looking statements.
6
Pride International, Inc.
Consolidated Statements of Operations
(Unaudited)
(In millions, except per share amounts)
Consolidated Statements of Operations
(Unaudited)
(In millions, except per share amounts)
Three Months Ended | ||||||||
September 30, | ||||||||
2010 | 2009 | |||||||
REVENUES |
||||||||
Revenues excluding reimbursable revenues |
$ | 337.8 | $ | 379.5 | ||||
Reimbursable revenues
|
8.4 | 6.6 | ||||||
346.2 | 386.1 | |||||||
COSTS AND EXPENSES |
||||||||
Operating costs, excluding depreciation and amortization |
213.0 | 210.6 | ||||||
Reimbursable costs
|
7.5 | 5.8 | ||||||
Depreciation and amortization
|
46.7 | 39.5 | ||||||
General and administrative, excluding depreciation and amortization
|
22.6 | 30.2 | ||||||
Loss (gain) on sales of assets, net
|
0.4 | (0.1 | ) | |||||
290.2 | 286.0 | |||||||
EARNINGS FROM OPERATIONS |
56.0 | 100.1 | ||||||
OTHER INCOME (EXPENSE), NET |
||||||||
Interest expense, net of amounts capitalized |
(6.5 | ) | | |||||
Refinancing charges
|
(16.7 | ) | | |||||
Interest income
|
1.1 | 0.6 | ||||||
Other expense, net
|
(6.1 | ) | (2.7 | ) | ||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
27.8 | 98.0 | ||||||
INCOME TAXES
|
15.0 | (18.1 | ) | |||||
INCOME FROM CONTINUING OPERATIONS, NET OF TAX |
42.8 | 79.9 | ||||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX
|
(6.3 | ) | (44.3 | ) | ||||
NET INCOME |
$ | 36.5 | $ | 35.6 | ||||
BASIC EARNINGS PER SHARE: |
||||||||
Income from continuing operations attributable to common shareholders |
$ | 0.24 | $ | 0.45 | ||||
Loss from discontinued operations
|
(0.04 | ) | (0.26 | ) | ||||
Net income
|
$ | 0.20 | $ | 0.19 | ||||
DILUTED EARNINGS PER SHARE: |
||||||||
Income from continuing operations attributable to common shareholders |
$ | 0.24 | $ | 0.45 | ||||
Loss from discontinued operations
|
(0.04 | ) | (0.25 | ) | ||||
Net income
|
$ | 0.20 | $ | 0.20 | ||||
SHARES USED IN PER SHARE CALCULATIONS |
||||||||
Basic |
175.7 | 173.5 | ||||||
Diluted
|
176.2 | 174.0 |
7
Pride International, Inc.
Consolidated Statements of Operations
(Unaudited)
(In millions, except per share amounts)
Consolidated Statements of Operations
(Unaudited)
(In millions, except per share amounts)
Nine Months Ended | ||||||||
September 30, | ||||||||
2010 | 2009 | |||||||
REVENUES |
||||||||
Revenues excluding reimbursable revenues |
$ | 1,039.2 | $ | 1,253.0 | ||||
Reimbursable revenues
|
20.1 | 24.4 | ||||||
1,059.3 | 1,277.4 | |||||||
COSTS AND EXPENSES |
||||||||
Operating costs, excluding depreciation and amortization |
631.9 | 615.9 | ||||||
Reimbursable costs
|
16.9 | 21.6 | ||||||
Depreciation and amortization
|
133.4 | 118.3 | ||||||
General and administrative, excluding depreciation and amortization
|
77.7 | 85.3 | ||||||
Gain on sales of assets, net
|
(0.1 | ) | (0.5 | ) | ||||
859.8 | 840.6 | |||||||
EARNINGS FROM OPERATIONS |
199.5 | 436.8 | ||||||
OTHER INCOME (EXPENSE), NET |
||||||||
Interest expense, net of amounts capitalized |
(6.5 | ) | (0.1 | ) | ||||
Refinancing charges
|
(16.7 | ) | | |||||
Interest income
|
2.2 | 2.6 | ||||||
Other income (expense), net
|
5.6 | (3.3 | ) | |||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
184.1 | 436.0 | ||||||
INCOME TAXES
|
(2.9 | ) | (72.5 | ) | ||||
INCOME FROM CONTINUING OPERATIONS, NET OF TAX |
181.2 | 363.5 | ||||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX
|
(14.3 | ) | (44.9 | ) | ||||
NET INCOME |
$ | 166.9 | $ | 318.6 | ||||
BASIC EARNINGS PER SHARE: |
||||||||
Income from continuing operations attributable to common shareholders |
$ | 1.02 | $ | 2.06 | ||||
Loss from discontinued operations
|
(0.08 | ) | (0.26 | ) | ||||
Net income
|
$ | 0.94 | $ | 1.80 | ||||
DILUTED EARNINGS PER SHARE: |
||||||||
Income from continuing operations attributable to common shareholders |
$ | 1.02 | $ | 2.06 | ||||
Loss from discontinued operations
|
(0.08 | ) | (0.26 | ) | ||||
Net income
|
$ | 0.94 | $ | 1.80 | ||||
SHARES USED IN PER SHARE CALCULATIONS |
||||||||
Basic |
175.5 | 173.4 | ||||||
Diluted
|
176.0 | 173.7 |
8
Pride International, Inc.
Consolidated Balance Sheets
(In millions)
Consolidated Balance Sheets
(In millions)
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
ASSETS |
||||||||
CURRENT ASSETS: |
||||||||
Cash and cash equivalents |
$ | 639.6 | $ | 763.1 | ||||
Trade receivables, net |
201.6 | 211.9 | ||||||
Deferred income taxes |
7.6 | 21.6 | ||||||
Other current assets |
154.3 | 167.6 | ||||||
Total current assets |
1,003.1 | 1,164.2 | ||||||
PROPERTY AND EQUIPMENT |
7,152.3 | 6,091.0 | ||||||
Less: accumulated depreciation |
1,326.4 | 1,200.7 | ||||||
Property and equipment, net |
5,825.9 | 4,890.3 | ||||||
OTHER ASSETS, NET |
90.5 | 88.4 | ||||||
Total assets |
$ | 6,919.5 | $ | 6,142.9 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
CURRENT LIABILITIES: |
||||||||
Current portion of long-term debt |
$ | 30.3 | $ | 30.3 | ||||
Accounts payable |
148.1 | 132.4 | ||||||
Accrued expenses and other current liabilities |
274.3 | 339.7 | ||||||
Total current liabilities |
452.7 | 502.4 | ||||||
OTHER LONG-TERM LIABILITIES |
103.9 | 118.3 | ||||||
LONG-TERM DEBT, NET OF CURRENT PORTION |
1,841.3 | 1,161.7 | ||||||
DEFERRED INCOME TAXES |
65.8 | 102.7 | ||||||
STOCKHOLDERS EQUITY: |
||||||||
Preferred stock |
| | ||||||
Common stock |
1.8 | 1.8 | ||||||
Paid-in capital |
2,093.9 | 2,058.7 | ||||||
Treasury stock |
(21.6 | ) | (16.4 | ) | ||||
Retained earnings |
2,377.7 | 2,210.8 | ||||||
Accumulated other comprehensive income |
4.0 | 2.9 | ||||||
Total stockholders equity |
4,455.8 | 4,257.8 | ||||||
Total liabilities and stockholders equity |
$ | 6,919.5 | $ | 6,142.9 | ||||
9
Pride International, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In millions)
Consolidated Statements of Cash Flows
(Unaudited)
(In millions)
Nine Months Ended | ||||||||
September 30, | ||||||||
2010 | 2009 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net income |
$ | 166.9 | $ | 318.6 | ||||
Adjustments to reconcile net income to net cash from operating activities: |
||||||||
Gain on sale of Eastern Hemisphere land rigs |
| (5.4 | ) | |||||
Depreciation and amortization |
133.4 | 155.8 | ||||||
Refinancing charges |
12.3 | | ||||||
Amortization and write-offs of deferred financing costs |
5.2 | 1.6 | ||||||
Amortization of deferred contract liabilities |
(40.3 | ) | (40.3 | ) | ||||
Impairment charges |
| 33.4 | ||||||
Gain on sales of assets, net |
(0.1 | ) | (0.5 | ) | ||||
Deferred income taxes |
(20.3 | ) | (23.9 | ) | ||||
Excess tax benefits from stock-based compensation |
(2.7 | ) | (1.0 | ) | ||||
Stock-based compensation |
25.0 | 28.8 | ||||||
Other, net |
2.0 | 0.6 | ||||||
Net effect of changes in operating accounts |
3.0 | 59.3 | ||||||
Change in deferred gain on asset sales and retirements |
| 4.9 | ||||||
Increase in deferred revenue |
12.7 | 0.6 | ||||||
Increase in deferred expense |
(31.8 | ) | (0.4 | ) | ||||
NET CASH FLOWS FROM OPERATING ACTIVITIES |
265.3 | 532.1 | ||||||
CASH FLOWS USED IN INVESTING ACTIVITIES: |
||||||||
Purchases of property and equipment |
(1,049.1 | ) | (698.6 | ) | ||||
Reduction of cash from spin-off of Seahawk |
| (82.4 | ) | |||||
Proceeds from dispositions of property and equipment |
1.3 | 7.3 | ||||||
Proceeds from the sale of Eastern Hemisphere land rigs, net |
| 9.6 | ||||||
NET CASH FLOWS USED IN INVESTING ACTIVITIES |
(1,047.8 | ) | (764.1 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Repayments of borrowings, including prepayment premiums |
(534.6 | ) | (22.3 | ) | ||||
Proceeds from debt borrowings |
1,200.0 | 498.2 | ||||||
Debt financing costs |
(16.6 | ) | (6.2 | ) | ||||
Net proceeds from employee stock transactions |
7.5 | 6.3 | ||||||
Excess tax benefits from stock-based compensation |
2.7 | 1.0 | ||||||
NET CASH FLOWS FROM FINANCING ACTIVITIES |
659.0 | 477.0 | ||||||
(Decrease) increase in cash and cash equivalents |
(123.5 | ) | 245.0 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
763.1 | 712.5 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD |
639.6 | 957.5 | ||||||
10
Pride International, Inc.
Quarterly Continuing Operating Results by Segment
(Unaudited)
(In millions)
Quarterly Continuing Operating Results by Segment
(Unaudited)
(In millions)
Three Months Ended | ||||||||||||
September 30, | June 30, | September 30, | ||||||||||
2010 | 2010 | 2009 | ||||||||||
Deepwater revenues: |
||||||||||||
Revenues excluding reimbursables |
$ | 212.1 | $ | 219.0 | $ | 189.9 | ||||||
Reimbursable revenues |
4.1 | 3.5 | 1.9 | |||||||||
Total Deepwater revenues |
216.2 | 222.5 | 191.8 | |||||||||
Midwater revenues: |
||||||||||||
Revenues excluding reimbursables |
86.1 | 89.1 | 96.8 | |||||||||
Reimbursable revenues |
0.1 | 0.2 | 1.4 | |||||||||
Total Midwater revenues |
86.2 | 89.3 | 98.2 | |||||||||
Independent Leg Jackups revenues: |
||||||||||||
Revenues excluding reimbursables |
24.5 | 21.0 | 72.6 | |||||||||
Reimbursable revenues |
0.2 | 0.6 | 0.2 | |||||||||
Total Independent Leg Jackups revenues |
24.7 | 21.6 | 72.8 | |||||||||
Other |
19.0 | 16.7 | 21.7 | |||||||||
Corporate |
0.1 | 0.2 | 1.6 | |||||||||
Total revenues |
$ | 346.2 | $ | 350.3 | $ | 386.1 | ||||||
Earnings (loss) from continuing operations: |
||||||||||||
Deepwater |
$ | 66.9 | $ | 83.0 | $ | 71.8 | ||||||
Midwater |
12.5 | 12.7 | 25.7 | |||||||||
Independent Leg Jackups |
(0.2 | ) | (12.1 | ) | 32.6 | |||||||
Other |
2.1 | 1.0 | 1.6 | |||||||||
Corporate |
(25.3 | ) | (27.3 | ) | (31.6 | ) | ||||||
Total |
$ | 56.0 | $ | 57.3 | $ | 100.1 | ||||||
11
Pride International, Inc.
Quarterly Continuing Operating Results by Segment
(Unaudited)
(In millions)
Quarterly Continuing Operating Results by Segment
(Unaudited)
(In millions)
Nine Months Ended | ||||||||
September 30, | ||||||||
2010 | 2009 | |||||||
Deepwater revenues: |
||||||||
Revenues excluding reimbursables |
$ | 649.0 | $ | 634.4 | ||||
Reimbursable revenues |
10.6 | 10.7 | ||||||
Total Deepwater revenues |
659.6 | 645.1 | ||||||
Midwater revenues: |
||||||||
Revenues excluding reimbursables |
269.0 | 338.9 | ||||||
Reimbursable revenues |
0.7 | 4.8 | ||||||
Total Midwater revenues |
269.7 | 343.7 | ||||||
Independent Leg Jackups revenues: |
||||||||
Revenues excluding reimbursables |
76.9 | 220.7 | ||||||
Reimbursable revenues |
1.0 | 0.6 | ||||||
Total Independent Leg Jackups revenues |
77.9 | 221.3 | ||||||
Other |
51.8 | 65.5 | ||||||
Corporate |
0.3 | 1.8 | ||||||
Total revenues |
$ | 1,059.3 | $ | 1,277.4 | ||||
Earnings (loss) from continuing
operations: |
||||||||
Deepwater |
$ | 237.4 | $ | 300.9 | ||||
Midwater |
56.1 | 121.1 | ||||||
Independent Leg Jackups |
(13.5 | ) | 102.3 | |||||
Other |
3.7 | 3.9 | ||||||
Corporate |
(84.2 | ) | (91.4 | ) | ||||
Total |
$ | 199.5 | $ | 436.8 | ||||
12
Pride International, Inc.
Quarterly Selected Segment Metrics
Quarterly Selected Segment Metrics
Q3 2010 | Q2 2010 | Q3 2009 | ||||||||||||||||||||||
Average Daily | Utilization | Average Daily | Utilization | Average Daily | Utilization | |||||||||||||||||||
Revenues (1) | (2) | Revenues (1) | (2) | Revenues (1) | (2) | |||||||||||||||||||
Deepwater |
$ | 294,800 | 95 | % | $ | 340,800 | 90 | % | $ | 343,200 | 76 | % | ||||||||||||
Midwater |
$ | 269,800 | 58 | % | $ | 269,700 | 61 | % | $ | 264,100 | 67 | % | ||||||||||||
Independent Leg Jackups |
$ | 92,400 | 41 | % | $ | 87,000 | 39 | % | $ | 123,100 | 92 | % |
(1) | Average daily revenues are based on total revenues for each type of rig divided by actual days worked by all rigs of that type. Average daily revenues will differ from average contract dayrate due to billing adjustments for any non-productive time, mobilization fees, demobilization fees, performance bonuses and charges to the customer for ancillary services. | |
(2) | Utilization is calculated as the total days worked divided by the total days in the period. |
13
Pride International, Inc.
Quarterly Selected Segment Metrics
Quarterly Selected Segment Metrics
Nine Months Ended September 30, | ||||||||||||||||
2010 | 2009 | |||||||||||||||
Averarage Daily | Utilization | Average Daily | Utilization | |||||||||||||
Revenues (1) | (2) | Revenues (1) | (2) | |||||||||||||
Deepwater |
$ | 322,500 | 92 | % | $ | 338,600 | 87 | % | ||||||||
Midwater |
$ | 268,100 | 61 | % | $ | 260,900 | 80 | % | ||||||||
Independent Leg Jackups |
$ | 97,000 | 42 | % | $ | 123,100 | 94 | % |
(1) | Average daily revenues are based on total revenues for each type of rig divided by actual days worked by all rigs of that type. Average daily revenues will differ from average contract dayrate due to billing adjustments for any non-productive time, mobilization fees, demobilization fees, performance bonuses and charges to the customer for ancillary services. | |
(2) | Utilization is calculated as the total days worked divided by the total days in the period. |
14
Pride International, Inc.
Reconciliation of Earnings before Interest, Taxes and Depreciation and Amortization (EBITDA)
(In millions)
Reconciliation of Earnings before Interest, Taxes and Depreciation and Amortization (EBITDA)
(In millions)
We believe that this non-GAAP financial measure for EBITDA is meaningful information that our
management considers when making investment decisions. We believe it also provides supplemental
information regarding our operating results with respect to both the performance of our fundamental
business activities and our ability to meet our future debt service, capital expenditures and
working capital requirements. We also believe investors and analysts commonly use EBITDA as a
widely accepted financial indicator to analyze and compare companies on the basis of operating
performance that have different financing and capital structures and tax rates. EBITDA is not a
substitute for the U.S. GAAP measures of earnings or of cash flow and is not necessarily a measure
of the companys ability to fund its cash needs.
Three Months Ended | ||||||||||||
September 30, | June 30, | September 30, | ||||||||||
2010 | 2010 | 2009 | ||||||||||
Deepwater |
||||||||||||
Earnings from continuing operations |
$ | 66.9 | $ | 83.0 | $ | 71.8 | ||||||
Plus: Total interest expense, net |
| | | |||||||||
Plus: Income tax provision |
| | | |||||||||
Plus: Depreciation and amortization |
24.7 | 21.9 | 19.0 | |||||||||
EBITDA |
91.6 | 104.9 | 90.8 | |||||||||
Midwater |
||||||||||||
Earnings from continuing operations |
12.5 | 12.7 | 25.7 | |||||||||
Plus: Total interest expense, net |
| | | |||||||||
Plus: Income tax provision |
| | | |||||||||
Plus: Depreciation and amortization |
13.2 | 12.5 | 11.3 | |||||||||
EBITDA |
25.7 | 25.2 | 37.0 | |||||||||
Independent Leg Jackups |
||||||||||||
Earnings (loss) from continuing operations |
(0.2 | ) | (12.1 | ) | 32.6 | |||||||
Plus: Total interest expense, net |
| | | |||||||||
Plus: Income tax provision |
| | | |||||||||
Plus: Depreciation and amortization |
7.0 | 8.6 | 7.3 | |||||||||
EBITDA |
6.8 | (3.5 | ) | 39.9 | ||||||||
Other & Corporate |
||||||||||||
Loss from continuing operations |
(36.4 | ) | (25.9 | ) | (50.2 | ) | ||||||
Plus: Total interest expense, net |
5.4 | (0.9 | ) | (0.6 | ) | |||||||
Plus: Income tax provision (benefit) |
(15.0 | ) | 3.1 | 18.1 | ||||||||
Plus: Depreciation and amortization |
1.8 | 1.7 | 1.9 | |||||||||
EBITDA |
(44.2 | ) | (22.0 | ) | (30.8 | ) | ||||||
Total Pride International Inc. |
||||||||||||
Income from continuing operations |
42.8 | 57.7 | 79.9 | |||||||||
Plus: Total interest expense (income), net |
5.4 | (0.9 | ) | (0.6 | ) | |||||||
Plus: Income tax provision (benefit) |
(15.0 | ) | 3.1 | 18.1 | ||||||||
Plus: Depreciation and amortization |
46.7 | 44.7 | 39.5 | |||||||||
EBITDA |
$ | 79.9 | $ | 104.6 | $ | 136.9 | ||||||
15