NEWS RELEASE
5847 San Felipe, Suite 3300• Houston, Texas 77057 • (713) 789-1400
| | | | | |
FOR IMMEDIATE RELEASE | | Contact: | | Robert E. Warren |
| | | | Steven D. Oldham |
| | | | (713) 789-1400 |
Pride International Reports First Quarter Results
Houston, Texas, April 28, 2005- Pride International, Inc. (NYSE: PDE) reported net earnings and income from continuing operations for the first quarter of 2005 of $16,323,000 ($.11 per diluted share) on revenues of $467,509,000. For the same period in 2004, Pride reported a net loss of $5,900,000 ($.04 per diluted share) and income from continuing operations of $4,660,000 ($.03 per diluted share) on revenues of $403,675,000.
Results for the first quarter of 2005 included a gain on sale of assets, net of tax, of $3,626,000 and non-cash charges of $707,000, net of tax, related to the early retirement of debt. These items collectively increased diluted earnings per share by $.01.
Operations
Demand for the Company’s drilling rigs continued to improve during the first quarter of 2005, as consolidated operating income (excluding the effects of asset sales in both periods and impairment charges in the earlier quarter) increased 19% over the fourth quarter of 2004.
In the U.S. Gulf of Mexico segment, operating income (excluding the 2004 impairment charges and gain from sale of assets) for the quarter improved 24% over the fourth quarter of 2004 due to improving dayrates and the operation of one additional jackup. Average daily jackup revenues during the first quarter of 2005 increased to $38,200, up from $35,000 during the fourth quarter of 2004 and $27,700 during the first quarter of 2004. Of the Company’s ten jackups located in the U.S. Gulf of Mexico, nine are operating, and the remaining rig is contracted to begin work during the second quarter of 2005.
The Company’s Latin America Land segment increased operating income (excluding the 2004 impairment charges) 62% sequentially as a result of increased utilization and pricing driven by strong demand throughout the region. Drilling and workover activity in Argentina reached record levels during the quarter. Operating income for the E&P Services segment increased 6% from the fourth quarter of 2004, reflecting continued strong market conditions.
For the Eastern Hemisphere segment, operating income (excluding the effects of asset sales in both periods and impairment charges in the earlier quarter) increased 11% from the fourth quarter of 2004, driven partly by the return of the drillshipPride Africato service following planned shipyard maintenance in the fourth quarter. Also, the previously idle semisubmersiblePride Venezuelacommenced operations in the first quarter, and the deepwater semisubmersiblePride South Pacificworked at a significantly higher dayrate.
The Western Hemisphere segment’s operating income declined 16% from the fourth quarter due to the redeployment of a jackup and two semisubmersibles to other business segments and reduced profitability related to two managed jackups.
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Asset Sales
In the first quarter of 2005, a foreign subsidiary of the Company sold theEnergy Explorer IV (Pride Ohio) and received $40 million in cash. The Company used the proceeds from this transaction to repay debt.
Also in the first quarter of 2005, the Company entered into agreements to sell the tender-assisted barge rigsPiranhaandIle de Sein, currently working in Southeast Asia. Pursuant to these agreements, the sale of thePiranhaclosed in April 2005, and the Company is working to complete the closing conditions for the sale of theIle de Sein, which is anticipated to be completed late in the second quarter or early third quarter of 2005. Total proceeds for the two rigs are expected to be approximately $50 million in cash.
Debt Reduction
The Company reduced debt during the first quarter of 2005 by approximately $84 million. In addition, on March 25, 2005 the Company issued a call notice to redeem the remaining $298.6 million outstanding principal amount of its 2.5% Convertible Senior Notes Due 2007. During the call period, which ended April 25, 2005, substantially all of the notes were converted into approximately 18.1 million shares of common stock.
Since the beginning of 2004 through April 28, 2005, the Company has reduced outstanding debt by approximately $700 million.
The Company will host a conference call at 9:00 a.m. central time on Friday, April 29, 2005 to discuss results for the quarter, recent events and management’s operational outlook. Individuals who wish to participate in the conference call may do so by dialing (888) 455-0031 in the United States or (517) 308-9002 outside of the United States. The conference leader will be Paul Bragg, President and Chief Executive Officer of Pride, and the password is “Pride.” The conference call will also be broadcast live, on a listen-only basis, over the Internet athttp://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=72166&eventID=1056614. A replay of the conference call, as well as an update of the contract status of the Company’s rig fleet and historical financial statements will be available on the Company’s corporate web site at http://www.prideinternational.com.
Pride International, Inc., headquartered in Houston, Texas, is one of the world’s largest drilling contractors. The Company provides onshore and offshore drilling and related services in more than 30 countries, operating a diverse fleet of 289 rigs, including two ultra-deepwater drillships, 12 semisubmersible rigs, 29 jackup rigs, and 19 tender-assisted, barge and platform rigs, as well as 227 land rigs.
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.
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PRIDE INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
| | | | | | | | | |
| | | Three Months Ended March 31, | |
| | | 2005 | | | 2004(1) | |
| | | | | | | RESTATED | |
| Revenues | | $ | 467,509 | | | $ | 403,675 | |
| Operating costs, excluding depreciation and amortization | | | 324,616 | | | | 273,690 | |
| Depreciation and amortization | | | 65,142 | | | | 65,946 | |
| General and administrative, excluding depreciation and amortization | | | 19,567 | | | | 12,598 | |
| Gain on sale of assets, net | | | (11,703 | ) | | | (121 | ) |
| | | | | | | |
| Earnings from operations | | | 69,887 | | | | 51,562 | |
| | | | | | | |
| Other income (expense) | | | | | | | | |
| Interest expense | | | (24,997 | ) | | | (29,809 | ) |
| Interest income | | | 349 | | | | 307 | |
| Other expense, net | | | (1,360 | ) | | | (1,427 | ) |
| | | | | | | |
| Other expense, net | | | (26,008 | ) | | | (30,929 | ) |
| | | | | | | |
| Income from continuing operations before income taxes & minority interest | | | 43,879 | | | | 20,633 | |
| Income tax provision | | | 23,127 | | | | 10,128 | |
| Minority interest | | | 4,429 | | | | 5,845 | |
| | | | | | | |
| Income from continuing operations | | | 16,323 | | | | 4,660 | |
| Loss on discontinued operations | | | – | | | | (10,560 | ) |
| | | | | | | |
| | | | | | | | | |
| Net earnings (loss) | | $ | 16,323 | | | $ | (5,900 | ) |
| | | | | | | |
| | | | | | | | | |
| Net earnings (loss) per share: | | | | | | | | |
| Basic | | | | | | | | |
| Income from continuing operations | | $ | 0.12 | | | $ | 0.03 | |
| Discontinued operations | | $ | – | | | $ | (0.08 | ) |
| Net earnings (loss) | | $ | 0.12 | | | $ | (0.05 | ) |
| | | | | | | | | |
| Diluted | | | | | | | | |
| Income from continuing operations | | $ | 0.11 | | | $ | 0.03 | |
| Discontinued operations | | $ | – | | | $ | (0.07 | ) |
| Net earnings (loss) | | $ | 0.11 | | | $ | (0.04 | ) |
| | | | | | | | | |
| Shares used in per share calculations | | | | | | | | |
| Basic | | | 137,685 | | | | 135,542 | |
| Diluted | | | 158,648 | | | | 138,094 | |
| (1) | | The three months ended March 31, 2004 results reflect a reclassification of certain costs from “general and administrative expenses” to “operating expenses”. In addition, the results have been restated to reflect the discontinuation of operations for the fixed-fee construction line of business and the correction of errors described in the Company’s 2004 Form 10-K. |
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PRIDE INTERNATIONAL, INC.
RESULTS BY OPERATING SEGMENT
(in thousands)
(unaudited)
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31, | |
| | | 2005 | | | 2004(1) | |
| | | | | | | RESTATED | |
| Revenues: | | | | | | | | |
| Eastern Hemisphere | | $ | 143,872 | | | $ | 142,971 | |
| Western Hemisphere | | | 109,169 | | | | 109,161 | |
| U.S. Gulf of Mexico | | | 50,221 | | | | 27,020 | |
| Latin America Land | | | 111,872 | | | | 88,960 | |
| E & P Services | | | 50,634 | | | | 34,224 | |
| Corporate and other | | | 1,741 | | | | 1,339 | |
| | | | | | | |
| Total | | $ | 467,509 | | | $ | 403,675 | |
| | | | | | | |
| | | | | | | | | |
| Earnings (loss) from operations: | | | | | | | | |
| Eastern Hemisphere | | $ | 39,972 | | | $ | 38,213 | |
| Western Hemisphere | | | 17,288 | | | | 22,020 | |
| U.S. Gulf of Mexico | | | 7,516 | | | | (4,527 | ) |
| Latin America Land | | | 13,564 | | | | 1,443 | |
| E & P Services | | | 5,783 | | | | 2,840 | |
| Corporate and other | | | (14,236 | ) | | | (8,427 | ) |
| | | | | | | |
| Total | | $ | 69,887 | | | $ | 51,562 | |
| | | | | | | |
| (1) | | The three months ended March 31, 2004 results have been restated to reflect the discontinuation of operations for the fixed-fee construction line of business and the correction of errors described in the Company’s 2004 Form 10-K. |
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PRIDE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except par values)
(unaudited)
| | | | | | | | | |
| | | March 31, | | | December 31, | |
| | | 2005 | | | 2004 | |
| | | (unaudited) | | | | | |
ASSETS | | | | | | | | |
| CURRENT ASSETS | | | | | | | | |
| Cash and cash equivalents | | $ | 45,633 | | | $ | 37,100 | |
| Restricted cash | | | 9,800 | | | | 9,917 | |
| Trade receivables, net | | | 360,427 | | | | 329,309 | |
| Parts and supplies, net | | | 70,095 | | | | 66,692 | |
| Other current assets | | | 108,943 | | | | 116,533 | |
| | | | | | | |
| Total current assets | | | 594,898 | | | | 559,551 | |
| PROPERTY AND EQUIPMENT, net | | | 3,210,502 | | | | 3,281,848 | |
| OTHER ASSETS | | | | | | | | |
| Investments in and advances to affiliates | | | 51,683 | | | | 46,908 | |
| Goodwill | | | 68,450 | | | | 68,450 | |
| Other assets | | | 88,113 | | | | 81,567 | |
| | | | | | | |
| Total other assets | | | 208,246 | | | | 196,925 | |
| | | | | | | |
| | | $ | 4,013,646 | | | $ | 4,038,324 | |
| | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| CURRENT LIABILITIES | | | | | | | | |
| Accounts payable | | $ | 169,328 | | | $ | 162,602 | |
| Accrued expenses | | | 192,923 | | | | 214,843 | |
| Debt due within one year | | | 58,339 | | | | 48,481 | |
| | | | | | | |
| Total current liabilities | | | 420,590 | | | | 425,926 | |
| | | | | | | |
| OTHER LONG-TERM LIABILITIES | | | 39,248 | | | | 35,796 | |
| LONG-TERM DEBT | | | 1,592,851 | | | | 1,686,251 | |
| DEFERRED INCOME TAXES | | | 66,637 | | | | 60,984 | |
| MINORITY INTEREST | | | 117,715 | | | | 113,305 | |
| STOCKHOLDERS’ EQUITY | | | 1,776,605 | | | | 1,716,062 | |
| | | | | | | |
| | | $ | 4,013,646 | | | $ | 4,038,324 | |
| | | | | | | |
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PRIDE INTERNATIONAL, INC.
RECONCILIATION OF EARNINGS (LOSS) FROM OPERATIONS
TO EARNINGS FROM OPERATIONS (EXCLUDING
IMPAIRMENT CHARGES AND (GAIN) LOSS ON SALE OF ASSETS)
For the three-month periods ended March 31, 2005 and December 31, 2004
(In millions)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Eastern Hemisphere | | | Western Hemisphere | | | U.S. Gulf of Mexico | |
| | | 4th Qtr | | | 1st Qtr | | | 4th Qtr | | | 1st Qtr | | | 4th Qtr | | | 1st Qtr | |
| | | 2004 | | | 2005 | | | 2004 | | | 2005 | | | 2004 | | | 2005 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings (loss) from operations | | $ | 62.5 | | | $ | 40.0 | | | $ | 20.6 | | | $ | 17.3 | | | $ | 12.5 | | | $ | 7.5 | |
| Impairment charges | | | 4.6 | | | | – | | | | – | | | | – | | | | 3.6 | | | | – | |
| (Gain) loss on sale of assets | | | (41.1 | ) | | | (11.0 | ) | | | – | | | | – | | | | (10.0 | ) | | | – | |
| | | | | | | | | | | | | | | | | | | |
| Earnings from operations (excluding impairment charges and gain on sale of assets) | | $ | 26.0 | | | $ | 29.0 | | | $ | 20.6 | | | $ | 17.3 | | | $ | 6.1 | | | $ | 7.5 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Latin America Land | | | E&P Services | | | Corporate and Other | |
| | | 4th Qtr | | | 1st Qtr | | | 4th Qtr | | | 1st Qtr | | | 4th Qtr | | | 1st Qtr | |
| | | 2004 | | | 2005 | | | 2004 | | | 2005 | | | 2004 | | | 2005 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings (loss) from operations | | $ | (8.9 | ) | | $ | 13.6 | | | $ | 5.4 | | | $ | 5.8 | | | $ | (16.8 | ) | | $ | (14.2 | ) |
| Impairment charges | | | 16.8 | | | | – | | | | – | | | | – | | | | – | | | | – | |
| (Gain) loss on sale of assets | | | 0.1 | | | | (0.6 | ) | | | – | | | | (0.1 | ) | | | (0.3 | ) | | | (0.1 | ) |
| | | | | | | | | | | | | | | | | | | |
| Earnings from operations (excluding impairment charges and gain on sale of assets) | | $ | 8.0 | | | $ | 13.0 | | | $ | 5.4 | | | $ | 5.7 | | | $ | (17.1 | ) | | $ | (14.3 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | Total | |
| | | 4th Qtr | | | 1st Qtr | |
| | | 2004 | | | 2005 | |
| Earnings (loss) from operations | | $ | 75.4 | | | $ | 69.9 | |
| Impairment charges | | | 24.9 | | | | – | |
| (Gain) loss on sale of assets | | | (51.3 | ) | | | (11.7 | ) |
| | | | | | | |
| Earnings from operations (excluding impairment charges and gain on sale of assets) | | $ | 49.0 | | | $ | 58.2 | |
| | | | | | | |
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