Exhibit 99.1
Noble Corporation | ![]() | |
Dorfstrasse 19a | ||
6340 Baar | ||
Switzerland |
PRESS RELEASE
Noble Corporation Reports 2010 Earnings of $3.02 per Share on Revenues of $2.8 Billion
ZUG, Switzerland, January 26, 2011 — Noble Corporation (NYSE: NE) today reported fourth quarter 2010 earnings of $99 million, or $0.39 per diluted share, versus $446 million, or $1.72 per diluted share, for the fourth quarter of 2009. Contract drilling services revenues for the fourth quarter of 2010 were $614 million versus $894 million in the fourth quarter of 2009. Earnings for the full year 2010 totaled $3.02 per diluted share compared with $6.42 per diluted share in 2009.
“2010 will be remembered as one of the most challenging years this industry has ever experienced,” said David Williams, Chairman, President and Chief Executive Officer. “However, Noble’s core values and strengths enabled us to not only weather the storm, but to do so while maintaining operational excellence, improving safety, expanding our geographic diversity and adding significant contract backlog with key customers.”
Contract drilling services revenues for the fourth quarter 2010 were $614 million, down 31 percent from the year-earlier quarter. Contract drilling margins for the fourth quarter 2010 were approximately 46 percent, generating $369 million in net cash provided by operating activities during the quarter and $1.7 billion for full year 2010. The Company invested $537 million in capital projects during the quarter, bringing full-year capital spending for 2010 to $1.4 billion. Debt as a percentage of total capitalization increased slightly to 27.5 percent at December 31, 2010, from approximately 27.4 percent at the end of the third quarter 2010.
Fourth Quarter Highlights
At year end 2010, approximately 53 percent of the Company’s available rig operating days was committed for 2011 and approximately 31 percent was committed for 2012. The Company’s total backlog at December 31, 2010 was approximately $12.7 billion.
In the U.S. Gulf of Mexico, theNoble Danny Adkinsresumed work for Shell on full rate in late December. The completion work being performed by theAdkinsis expected to last until early February after which time the rig could return to standby rate if Shell does not have another work scope approved. Subsea systems in the Gulf of Mexico, including BOP stacks, have been certified by third parties on theNoble Amos Runner, Noble Clyde Boudreaux, Noble Danny Adkins,Noble Jim Day, Noble Paul Romano,and most recently, theNoble Jim Thompson.
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In Mexico, theNoble John Sandiferand theNoble Sam Nobleeach received short-term extensions beginning early January at dayrates of $74,000-$76,000. In the North Sea, theNoble Byron Welliver received a contract for approximately six months plus two priced option wells beginning early June at a dayrate of $88,000-$91,000. TheNoble Lynda Bossler’swork with its current customer has been extended by approximately three months. TheNoble Homer Ferringtonis expected to begin a two-well assignment at the end of the first quarter.
In West Africa, theNoble Lloyd Nobleis expected to begin a six-month contract in early February 2011. In the Middle East, theNoble Roy Rhodesreceived a two—month contract beginning early April 2011 at a dayrate of $88,000-$90,000, after which it will move to a dayrate of $92,000-$94,000 for a five-month contract as of mid May 2011. Also during the quarter, theNoble Joe Beallbegan a six-month contract for accommodation work at a dayrate of $53,000-$55,000.
In December, Noble announced the construction of two JU3000N high-specification jackups with total costs of $220 million per rig. The Company has options to construct up to four additional units exercisable before year-end 2011. In January, Noble also announced plans to construct two ultra-deepwater drillships at a cost of $605 million per unit. This contract contains options for up to two additional units which must be exercised by early May 2011. One of the drillships has received a Letter of Intent to work for Shell upon delivery in 2013 at a base dayrate of $410,000. The unit will be eligible for a 15 percent performance bonus.
“These newbuild announcements reinforce our strategy of adding high-specification rigs to our fleet at investment levels we believe will generate solid returns,” said Williams. “Since 2005, we have more than doubled Noble’s floating fleet, and upon completion of our existing newbuild program, we expect to have twelve ultra-deepwater units deployed in major petroleum basins around the world. Likewise, the JU3000N units will continue the modernization of our jackup fleet and be some of the most capable rigs in the world. These newbuilds, each to be constructed under turnkey contracts with proven shipyards, are expected to deliver value for many years to come.”
About Noble
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 73 offshore drilling units (including eight drilling 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, West Africa and Asian Pacific. Noble also owns and operates a dynamically positioned floating production, storage, offloading vessel. 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.
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Statements regarding contract backlog, earnings, costs, revenue, rig demand, fleet condition or performance, shareholder value, timing of delivery of newbuilds, contract commitments, dayrates, contract commencements, contract extensions or renewals, letters of intent or award, industry fundamentals, customer relationships, 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 regulatory authorities, customers and other third parties, legislation and regulations affecting drilling operations, compliance with regulatory requirements, costs and difficulties relating to the integration of acquired businesses, factors affecting the level of activity in the oil and gas industry, supply and demand of drilling rigs, factors affecting the duration of contracts, delays in the construction of newbuilds, 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 also has scheduled a conference call and webcast related to its fourth-quarter and full-year 2010 results on Thursday, January 27, 2011, 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: 27248251 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 27, 2011, beginning at 11:00 a.m. U.S. Central Standard Time, through Thursday, February 10, 2011, 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: 27248251. 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.”
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1/26/2011
For additional information, contact:
For Investors: | Lee M. Ahlstrom, Vice President — Investor Relations and Planning, Noble Drilling Services Inc., 281-276-6440 | |
For Media: | John S. Breed, Director of Corporate Communications, Noble Drilling Services Inc., 281-276-6729 |
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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating revenues | ||||||||||||||||
Contract drilling services | $ | 614,418 | $ | 894,184 | $ | 2,695,493 | $ | 3,509,755 | ||||||||
Reimbursables | 19,668 | 37,234 | 76,831 | 99,201 | ||||||||||||
Labor contract drilling services | 8,816 | 8,455 | 32,520 | 30,298 | ||||||||||||
Other | 883 | 253 | 2,332 | 1,530 | ||||||||||||
643,785 | 940,126 | 2,807,176 | 3,640,784 | |||||||||||||
Operating costs and expenses | ||||||||||||||||
Contract drilling services | 331,930 | 264,012 | 1,177,800 | 1,006,764 | ||||||||||||
Reimbursables | 14,955 | 32,954 | 59,414 | 85,035 | ||||||||||||
Labor contract drilling services | 5,486 | 4,928 | 22,056 | 18,827 | ||||||||||||
Depreciation and amortization | 154,463 | 112,667 | 539,829 | 408,313 | ||||||||||||
Selling, general and administrative | 20,736 | 19,361 | 91,997 | 80,262 | ||||||||||||
Loss on asset disposal/involuntary conversion, net | — | (214 | ) | — | 30,839 | |||||||||||
527,570 | 433,708 | 1,891,096 | 1,630,040 | |||||||||||||
Operating income | 116,215 | 506,418 | 916,080 | 2,010,744 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest expense, net of amount capitalized | (4,338 | ) | (424 | ) | (9,457 | ) | (1,685 | ) | ||||||||
Interest income and other, net | 2,693 | 1,848 | 9,886 | 6,843 | ||||||||||||
Income before income taxes | 114,570 | 507,842 | 916,509 | 2,015,902 | ||||||||||||
Income tax provision | (16,276 | ) | (61,427 | ) | (143,077 | ) | (337,260 | ) | ||||||||
Net income | 98,294 | 446,415 | 773,432 | 1,678,642 | ||||||||||||
Net income attributable to noncontrolling interests | 464 | — | (3 | ) | — | |||||||||||
Net income attributable to Noble Corporation | $ | 98,758 | $ | 446,415 | $ | 773,429 | $ | 1,678,642 | ||||||||
Net income per share | ||||||||||||||||
Basic | $ | 0.39 | $ | 1.72 | $ | 3.03 | $ | 6.44 | ||||||||
Diluted | $ | 0.39 | $ | 1.72 | $ | 3.02 | $ | 6.42 |
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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 337,871 | $ | 735,493 | ||||
Accounts receivable | 387,414 | 647,454 | ||||||
Prepaid expenses and other current assets | 105,443 | 100,243 | ||||||
Total current assets | 830,728 | 1,483,190 | ||||||
Property and equipment | ||||||||
Drilling equipment and facilities | 12,471,283 | 8,666,750 | ||||||
Other | 172,583 | 143,477 | ||||||
Total property and equipment | 12,643,866 | 8,810,227 | ||||||
Accumulated depreciation | (2,595,779 | ) | (2,175,775 | ) | ||||
Net property and equipment | 10,048,087 | 6,634,452 | ||||||
Other assets | 342,506 | 279,254 | ||||||
Total assets | $ | 11,221,321 | $ | 8,396,896 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities | ||||||||
Current maturities of long term debt | $ | 80,213 | $ | — | ||||
Accounts payable | 374,814 | 197,800 | ||||||
Accrued payroll and related costs | 125,663 | 100,167 | ||||||
Taxes payable | 15,382 | 68,760 | ||||||
Other current liabilities | 124,309 | 67,220 | ||||||
Total current liabilities | 720,381 | 433,947 | ||||||
Long-term debt | 2,686,484 | 750,946 | ||||||
Deferred income taxes | 258,822 | 300,231 | ||||||
Other liabilities | 268,001 | 123,340 | ||||||
Total liabilities | 3,933,688 | 1,608,464 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ equity | ||||||||
Shares | 917,684 | 1,130,607 | ||||||
Additional paid-in capital | 39,006 | — | ||||||
Retained earnings | 6,630,500 | 5,855,737 | ||||||
Treasury shares | (373,967 | ) | (143,031 | ) | ||||
Accumulated other comprehensive loss | (50,220 | ) | (54,881 | ) | ||||
Total shareholders’ equity | 7,163,003 | 6,788,432 | ||||||
Noncontrolling interests | 124,630 | — | ||||||
Total equity | 7,287,633 | 6,788,432 | ||||||
Total liabilities and equity | $ | 11,221,321 | $ | 8,396,896 | ||||
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NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Twelve Months Ended | ||||||||
December 31, | ||||||||
2010 | 2009 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 773,432 | $ | 1,678,642 | ||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||
Depreciation and amortization | 539,829 | 408,313 | ||||||
Loss on asset disposal/involuntary conversion, net | — | 30,839 | ||||||
Deferred income tax provision | (41,409 | ) | 36,866 | |||||
Share-based compensation expense | 34,930 | 37,995 | ||||||
Pension contributions | (16,464 | ) | (17,639 | ) | ||||
Net change in other assets and liabilities | 364,058 | (38,300 | ) | |||||
Net cash from operating activities | 1,654,376 | 2,136,716 | ||||||
Cash flows from investing activities | ||||||||
New construction | (653,269 | ) | (717,148 | ) | ||||
Other capital expenditures | (666,673 | ) | (594,957 | ) | ||||
Major maintenance expenditures | (103,542 | ) | (119,393 | ) | ||||
Accrued capital expenditures | 139,185 | (63,561 | ) | |||||
Acquisition of FDR Holdings Limited, net of cash acquired | (1,629,644 | ) | — | |||||
Net cash from investing activities | (2,913,943 | ) | (1,495,059 | ) | ||||
Cash flows from financing activities | ||||||||
Borrowings on bank credit facilities | 40,000 | — | ||||||
Payments of long-term debt | — | (172,700 | ) | |||||
Proceeds from issuance of joint venture partner notes | 35,000 | — | ||||||
Proceeds from issuance of long-term debt, net | 1,238,074 | — | ||||||
Proceeds from employee stock transactions | 11,828 | 12,168 | ||||||
Settlements of interest rate swap agreements | (6,186 | ) | — | |||||
Dividends/par value reduction payments | (227,326 | ) | (47,939 | ) | ||||
Repurchases of employee shares for taxes | (10,115 | ) | (7,106 | ) | ||||
Repurchases of shares | (219,330 | ) | (203,898 | ) | ||||
Net cash from financing activities | 861,945 | (419,475 | ) | |||||
Net change in cash and cash equivalents | (397,622 | ) | 222,182 | |||||
Cash and cash equivalents, beginning of period | 735,493 | 513,311 | ||||||
Cash and cash equivalents, end of period | $ | 337,871 | $ | 735,493 | ||||
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NOBLE CORPORATION AND SUBSIDIARIES
FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT
(In thousands, except utilization amounts, operating days and average dayrates)
(Unaudited)
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, | |||||||||||||||||||||||||||||||||||
2010 | 2009 | 2010 | ||||||||||||||||||||||||||||||||||
Contract | Contract | Contract | ||||||||||||||||||||||||||||||||||
Drilling | Drilling | Drilling | ||||||||||||||||||||||||||||||||||
Services | Other | Total | Services | Other | Total | Services | Other | Total | ||||||||||||||||||||||||||||
Operating revenues | ||||||||||||||||||||||||||||||||||||
Contract drilling services | $ | 614,418 | $ | — | $ | 614,418 | $ | 894,184 | $ | — | $ | 894,184 | $ | 584,919 | $ | — | $ | 584,919 | ||||||||||||||||||
Reimbursables | 19,179 | 489 | 19,668 | 36,199 | 1,035 | 37,234 | 18,488 | 689 | 19,177 | |||||||||||||||||||||||||||
Labor contract drilling services | — | 8,816 | 8,816 | — | 8,455 | 8,455 | — | 7,887 | 7,887 | |||||||||||||||||||||||||||
Other | 883 | — | 883 | 253 | — | 253 | 635 | — | 635 | |||||||||||||||||||||||||||
$ | 634,480 | $ | 9,305 | $ | 643,785 | $ | 930,636 | $ | 9,490 | $ | 940,126 | $ | 604,042 | $ | 8,576 | $ | 612,618 | |||||||||||||||||||
Operating costs and expenses | ||||||||||||||||||||||||||||||||||||
Contract drilling services | $ | 331,930 | $ | — | $ | 331,930 | $ | 264,012 | $ | — | $ | 264,012 | $ | 315,844 | $ | — | $ | 315,844 | ||||||||||||||||||
Reimbursables | 14,483 | 472 | 14,955 | 31,967 | 987 | 32,954 | 13,696 | 655 | 14,351 | |||||||||||||||||||||||||||
Labor contract drilling services | — | 5,486 | 5,486 | — | 4,928 | 4,928 | — | 5,302 | 5,302 | |||||||||||||||||||||||||||
Depreciation and amortization | 151,256 | 3,207 | 154,463 | 110,054 | 2,613 | 112,667 | 140,199 | 3,083 | 143,282 | |||||||||||||||||||||||||||
Selling, general and administrative | 20,571 | 165 | 20,736 | 19,297 | 64 | 19,361 | 25,220 | 262 | 25,482 | |||||||||||||||||||||||||||
Loss on asset disposal/involuntary conversion, net | — | — | — | — | (214 | ) | (214 | ) | — | — | — | |||||||||||||||||||||||||
$ | 518,240 | $ | 9,330 | $ | 527,570 | $ | 425,330 | $ | 8,378 | $ | 433,708 | $ | 494,959 | $ | 9,302 | $ | 504,261 | |||||||||||||||||||
Operating income | $ | 116,240 | $ | (25 | ) | $ | 116,215 | $ | 505,306 | $ | 1,112 | $ | 506,418 | $ | 109,083 | $ | (726 | ) | $ | 108,357 | ||||||||||||||||
Operating statistics | ||||||||||||||||||||||||||||||||||||
Jackups: | ||||||||||||||||||||||||||||||||||||
Average Rig Utilization | 76 | % | 81 | % | 77 | % | ||||||||||||||||||||||||||||||
Operating Days | 3,019 | 3,218 | 3,032 | |||||||||||||||||||||||||||||||||
Average Dayrate | $ | 83,023 | $ | 131,975 | $ | 90,791 | ||||||||||||||||||||||||||||||
Semisubmersibles | ||||||||||||||||||||||||||||||||||||
Average Rig Utilization | 69 | % | 100 | % | 90 | % | ||||||||||||||||||||||||||||||
Operating Days | 826 | 997 | 1,057 | |||||||||||||||||||||||||||||||||
Average Dayrate | $ | 241,483 | $ | 396,302 | $ | 172,727 | ||||||||||||||||||||||||||||||
Drillships: | ||||||||||||||||||||||||||||||||||||
Average Rig Utilization | 90 | % | 100 | % | 100 | % | ||||||||||||||||||||||||||||||
Operating Days | 495 | 276 | 468 | |||||||||||||||||||||||||||||||||
Average Dayrate | $ | 302,753 | $ | 269,615 | $ | 229,963 | ||||||||||||||||||||||||||||||
FPSO/Submersibles: | ||||||||||||||||||||||||||||||||||||
Average Rig Utilization | 11 | % | 0 | % | 26 | % | ||||||||||||||||||||||||||||||
Operating Days | 31 | — | 64 | |||||||||||||||||||||||||||||||||
Average Dayrate | $ | 465,616 | $ | — | $ | 304,000 | ||||||||||||||||||||||||||||||
Total: | ||||||||||||||||||||||||||||||||||||
Average Rig Utilization | 73 | % | 83 | % | 79 | % | ||||||||||||||||||||||||||||||
Operating Days | 4,371 | 4,491 | 4,621 | |||||||||||||||||||||||||||||||||
Average Dayrate | $ | 140,554 | $ | 199,122 | $ | 126,581 |
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NOBLE CORPORATION AND SUBSIDIARIES
CALCULATION OF BASIC AND DILUTED NET INCOME
(In thousands, except per share amounts)
(Unaudited)
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, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Allocation of net income | ||||||||||||||||
Basic | ||||||||||||||||
Net income attributable to Noble Corporation | $ | 98,758 | $ | 446,415 | $ | 773,429 | $ | 1,678,642 | ||||||||
Earnings allocated to unvested share-based payment awards | (952 | ) | (4,647 | ) | (7,497 | ) | (16,811 | ) | ||||||||
Net income to common shareholders — basic | $ | 97,806 | $ | 441,768 | $ | 765,932 | $ | 1,661,831 | ||||||||
Diluted | ||||||||||||||||
Net income attributable to Noble Corporation | $ | 98,758 | $ | 446,415 | $ | 773,429 | $ | 1,678,642 | ||||||||
Earnings allocated to unvested share-based payment awards | (950 | ) | (4,628 | ) | (7,481 | ) | (16,758 | ) | ||||||||
Net income to common shareholders — diluted | $ | 97,808 | $ | 441,787 | $ | 765,948 | $ | 1,661,884 | ||||||||
Weighted average number of shares outstanding — basic | 250,687 | 256,507 | 253,123 | 258,035 | ||||||||||||
Incremental shares issuable from assumed exercise of stock options | 687 | 1,090 | 813 | 856 | ||||||||||||
Weighted average number of shares outstanding — diluted | 251,374 | 257,597 | 253,936 | 258,891 | ||||||||||||
Weighted average unvested share-based payment awards | 2,439 | 2,699 | 2,438 | 2,611 | ||||||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 0.39 | $ | 1.72 | $ | 3.03 | $ | 6.44 | ||||||||
Diluted | $ | 0.39 | $ | 1.72 | $ | 3.02 | $ | 6.42 |
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