Attached files
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| 8-K - Vantage Drilling CO | rrd418066.htm |
Vantage Drilling Company Reports Third Quarter 2014 Results
HOUSTON, TX--(MARKET WIRE)-October 31, 2014 -- Vantage Drilling Company ("Vantage" or the "Company") (NYSE MKT: VTG) reports net income for the three months ended September 30, 2014 of $751,000 or $0.00 per diluted share, excluding gains for the early retirement of debt and an upward revision to the tax provision, as compared to earnings of $6.8 million or $.02 per diluted share for the three months ended September 30, 2013. Including approximately $1.1 million gain on the early retirement of debt and a $7.4 million revision to the tax provision for the three months ended September 30, 2014, the Company reported a net loss of $5.6 million or ($0.02) per diluted share.
The $1.1 million gain on the early retirement of debt represents discount to the face value of debt that we purchased in the open market, net of writing off related deferred financing costs. The total debt paydown for the quarter, including scheduled maturities and open market purchases of our Senior Notes, totaled $52.9 million.
During the third quarter, we revised our estimated annual effective tax rate based on changes to the timing of drilling programs and planned rig moves. The duration of our drilling activities has been extended in certain higher tax countries. These revisions resulted in the recognition of an additional $7.4 million tax provision for the third quarter.
Paul Bragg, Chairman and Chief Executive Officer, commented, "The highlight of the quarter was our debt paydown of nearly $53 million. We remain on track to reach our 2014 debt reduction goal, given our high level of contracted backlog."
Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of three ultra-deepwater drillships, the Platinum Explorer, the Titanium Explorer and the Tungsten Explorer, as well as an additional ultra-deepwater drillship, the Cobalt Explorer, now under construction, and four Baker Marine Pacific Class 375 ultra-premium jackup drilling rigs. Vantage's primary business is to contract drilling units, related equipment and work crews primarily on a dayrate basis to drill oil and natural gas wells. Vantage also provides construction supervision services for, and will operate and manage, drilling units owned by others. Through its fleet of seven owned drilling units, Vantage is a provider of offshore contract drilling services globally to major, national and large independent oil and natural gas companies.
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 company's 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.
Public & Investor Relations Contact:
Paul A. Bragg
Chairman & Chief Executive Officer
Vantage Drilling Company
(281) 404-4700
Vantage Drilling Company
Consolidated Statement of Operations
(In thousands, except per share amounts)
(Unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2014 |
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2013 |
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2014 |
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2013 |
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Revenue |
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|
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|
|
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|
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Contract drilling services |
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$ |
189,648 |
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$ |
158,887 |
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|
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602,859 |
|
|
|
449,354 |
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Management fees |
|
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1,923 |
|
|
|
3,903 |
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|
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12,474 |
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|
|
9,511 |
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Reimbursables |
|
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15,947 |
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|
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13,095 |
|
|
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44,368 |
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|
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34,658 |
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Total revenue |
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207,518 |
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175,885 |
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659,701 |
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493,523 |
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Operating costs and expenses |
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Operating costs |
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111,271 |
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84,132 |
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310,995 |
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236,566 |
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General and administrative |
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9,980 |
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8,891 |
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26,461 |
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23,372 |
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Depreciation |
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31,639 |
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24,886 |
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|
94,894 |
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|
|
74,727 |
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Total operating costs and expenses |
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152,890 |
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|
117,909 |
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432,350 |
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|
334,665 |
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Income from operations |
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54,628 |
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|
57,976 |
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227,351 |
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158,858 |
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Other income (expense) |
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Interest income |
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14 |
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26 |
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38 |
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|
195 |
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Interest expense and other financing charges |
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(53,376 |
) |
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(47,379 |
) |
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(162,149 |
) |
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(158,296 |
) |
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Gain (loss) on debt extinguishment |
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1,051 |
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|
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- |
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|
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(462 |
) |
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(98,327 |
) |
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Other, net |
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|
376 |
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|
|
305 |
|
|
|
616 |
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|
|
2,195 |
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Total other income (expense) |
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(51,935 |
) |
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(47,048 |
) |
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(161,957 |
) |
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|
(254,233 |
) |
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Income (loss) before income taxes |
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2,693 |
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|
|
10,928 |
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|
|
65,394 |
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|
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(95,375 |
) |
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Income tax provision |
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8,309 |
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|
|
4,084 |
|
|
|
36,008 |
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|
|
16,766 |
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Net income (loss) |
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$ |
(5,616 |
) |
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$ |
6,844 |
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$ |
29,386 |
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$ |
(112,141 |
) |
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|
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|
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Earnings (loss) per share |
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|
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Basic |
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$ |
(0.02 |
) |
|
$ |
0.02 |
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|
$ |
0.10 |
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|
$ |
(0.37 |
) |
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Diluted |
|
$ |
(0.02 |
) |
|
$ |
0.02 |
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|
$ |
0.10 |
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|
$ |
(0.37 |
) |
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Vantage Drilling Company |
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Supplemental Operating Data |
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(Unaudited, in thousands, except percentages) |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2014 |
2013 |
2014 |
2013 |
|||||
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Operating costs and expenses |
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Jackups |
$ 24,400 |
$ 23,614 |
$ 70,561 |
$ 67,966 |
||||
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Deepwater |
63,413 |
38,673 |
170,456 |
108,683 |
||||
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Operations support |
9,937 |
8,383 |
31,039 |
25,159 |
||||
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Reimbursables |
13,521 |
13,462 |
38,939 |
34,758 |
||||
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$ 111,271 |
$ 84,132 |
$ 310,995 |
$ 236,566 |
|||||
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Utilization |
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Jackups |
99.2% |
89.5% |
99.6% |
93.9% |
||||
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Deepwater |
83.1% |
97.3% |
89.8% |
92.9% |
||||
Vantage Drilling Company
Consolidated Balance Sheet
(In thousands, except par value information)
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September 30, 2014 |
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December 31, 2013 |
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(Unaudited) |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
81,315 |
|
|
$ |
54,686 |
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Restricted cash |
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|
- |
|
|
|
2,125 |
|
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Trade receivables |
|
|
224,572 |
|
|
|
168,654 |
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Inventory |
|
|
64,485 |
|
|
|
55,804 |
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Prepaid expenses and other current assets |
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|
15,821 |
|
|
|
23,717 |
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Total current assets |
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|
386,193 |
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|
304,986 |
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Property and equipment |
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Property and equipment |
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3,509,267 |
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3,472,407 |
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Accumulated depreciation |
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(376,280 |
) |
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(281,759 |
) |
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Property and equipment, net |
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3,132,987 |
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3,190,648 |
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Other assets |
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Investment in joint venture |
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1,571 |
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32,482 |
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Other assets |
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|
83,083 |
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|
100,027 |
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Total other assets |
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84,654 |
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|
132,509 |
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Total assets |
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$ |
3,603,834 |
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$ |
3,628,143 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities |
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Accounts payable |
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$ |
57,848 |
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$ |
65,115 |
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Accrued liabilities |
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|
131,168 |
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|
96,382 |
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Current maturities of long-term debt and revolving credit agreement |
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|
53,500 |
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|
63,500 |
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Total current liabilities |
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242,516 |
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|
224,997 |
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Long-term debt, net of discount of $30,253 and $39,325 |
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2,731,970 |
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2,852,050 |
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Other long-term liabilities |
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|
87,966 |
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|
45,640 |
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Commitments and contingencies |
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|
|
|
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|
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Shareholders' equity |
|
|
|
|
|
|
|
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Preferred shares, $0.001 par value, 10,000 shares authorized; none issued or outstanding |
|
|
- |
|
|
|
- |
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Ordinary shares, $0.001 par value, 500,000 shares authorized; 307,732 and 304,101 shares issued and outstanding |
|
|
308 |
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|
304 |
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Additional paid-in capital |
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|
903,464 |
|
|
|
896,928 |
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Accumulated deficit |
|
|
(362,390 |
) |
|
|
(391,776 |
) |
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Total shareholders' equity |
|
|
541,382 |
|
|
|
505,456 |
|
|
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Total liabilities and shareholders' equity |
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$ |
3,603,834 |
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|
$ |
3,628,143 |
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Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
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Nine Months Ended September 30, |
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|||||
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2014 |
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2013 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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|
|
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|
|
|
|
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Net income (loss) |
|
$ |
29,386 |
|
|
$ |
(112,141 |
) |
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
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Depreciation expense |
|
|
94,894 |
|
|
|
74,727 |
|
|
Amortization of debt financing costs |
|
|
8,713 |
|
|
|
9,425 |
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Amortization of debt discount |
|
|
8,496 |
|
|
|
4,605 |
|
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Non-cash loss on debt extinguishment |
|
|
462 |
|
|
|
6,070 |
|
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Share-based compensation expense |
|
|
6,540 |
|
|
|
5,431 |
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Deferred income tax expense (benefit) |
|
|
(184 |
) |
|
|
858 |
|
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Equity in loss of joint venture |
|
|
317 |
|
|
|
345 |
|
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Loss on disposal of assets |
|
|
558 |
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|
|
114 |
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Changes in operating assets and liabilities: |
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|
|
|
|
|
|
|
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Restricted cash |
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|
2,125 |
|
|
|
162 |
|
|
Trade receivables |
|
|
(55,917 |
) |
|
|
(25,463 |
) |
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Inventory |
|
|
(8,681 |
) |
|
|
(15,146 |
) |
|
Prepaid expenses and other current assets |
|
|
7,686 |
|
|
|
11,709 |
|
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Other assets |
|
|
6,660 |
|
|
|
(6,866 |
) |
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Accounts payable |
|
|
(7,267 |
) |
|
|
5,715 |
|
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Accrued liabilities and other long-term liabilities |
|
|
81,194 |
|
|
|
(25,146 |
) |
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Net cash provided by (used in) operating activities |
|
|
174,982 |
|
|
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(65,601 |
) |
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CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Additions to property and equipment |
|
|
(34,137 |
) |
|
|
(548,621 |
) |
|
Return of investment in joint venture |
|
|
23,250 |
|
|
|
- |
|
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Proceeds from sale of property and equipment |
|
|
- |
|
|
|
2 |
|
|
Net cash used in investing activities |
|
|
(10,887 |
) |
|
|
(548,619 |
) |
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CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
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Proceeds from issuance of senior secured notes, net |
|
|
- |
|
|
|
775,000 |
|
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Proceeds from issuance of term loan, net |
|
|
- |
|
|
|
344,750 |
|
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Proceeds from the issuance of senior convertible notes |
|
|
- |
|
|
|
100,000 |
|
|
Repayment of long-term debt |
|
|
(127,466 |
) |
|
|
(1,020,499 |
) |
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Proceeds from (repayment of) revolving credit agreement, net |
|
|
(10,000 |
) |
|
|
10,000 |
|
|
Debt issuance costs |
|
|
- |
|
|
|
(30,028 |
) |
|
Net cash provided by (used in) financing activities |
|
|
(137,466 |
) |
|
|
179,223 |
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
26,629 |
|
|
|
(434,997 |
) |
|
Cash and cash equivalents-beginning of period |
|
|
54,686 |
|
|
|
502,726 |
|
|
Cash and cash equivalents-end of period |
|
$ |
81,315 |
|
|
$ |
67,729 |
|
|