Conference call set 10 a.m. Central time Monday, Feb. 23
-
EBITDA(a) for the fourth quarter of $179.1 million,
representing an EBITDA margin(b) of 56.0 percent, and
EBITDA for the full year of $563.3 million, an increase of 57.3
percent over the prior year's adjusted EBITDA(a)
-
Revenue efficiency(c) of 96.7 percent for the fourth
quarter yielded revenue of $319.7 million, a 59 percent increase over
the prior year’s fourth-quarter revenue
-
Cash flow from operations for the full year of $396.4 million, an
increase of 72 percent over the prior year
-
4.2 million shares repurchased to date pursuant to share repurchase
program
-
Board defers initiation of distributions in recognition of market
conditions
LUXEMBOURG--(BUSINESS WIRE)--
Pacific Drilling S.A. (NYSE:PACD) today announced net income for
fourth-quarter 2014 of $68.0 million or $0.32 per diluted share,
compared to net income for third-quarter 2014 of $48.1 million or $0.22
per diluted share. Net income for fourth-quarter 2013 was $25.7 million
or $0.12 per diluted share.
For the year ended Dec. 31, 2014, net income was $188.3 million or $0.87
per diluted share, an increase of $96.1 million over the prior-year net
income excluding charges(d). A reconciliation of net income
excluding charges to reported net income is included in an accompanying
schedule to this release.
CEO Chris Beckett said, “Pacific Drilling had another outstanding
quarter capping a year of strong operations in 2014. We demonstrated
again that our focus on performance excellence can result in
industry-leading financial results. In the fourth quarter, we delivered
our eighth consecutive quarter of revenue growth, as well as a company
record EBITDA and EBITDA margin. I am extremely proud of what our team
accomplished in 2014.”
Mr. Beckett continued, "The current oil price environment continues to
impact clients' abilities to plan their major capital spending in 2015
and beyond. Although visibility of new offshore rig contract
opportunities is limited, we also see limited competitive supply between
now and the end of the year, with only two or three rigs available with
latest-generation 2.5 million pound hook loads. In light of current
market conditions, our board of directors has deferred the decision on
further distributions to shareholders (beyond purchases under our
existing share buyback program) in 2015. In weak markets, customers
become much more discerning, and we believe that the strategic focus on
service and asset quality upon which we built the company will prove to
be a differentiator."
Fourth-Quarter and Full-Year 2014 Operational
and Financial Commentary
Contract drilling revenue for fourth-quarter 2014 was $319.7 million,
which included $25.9 million of deferred revenue amortization, compared
to contract drilling revenue of $279.6 million for third-quarter 2014,
which included $27.3 million of deferred revenue amortization. Revenue
benefited from higher average dayrates during the quarter, driven by a
full quarter of operations for Pacific Sharav and extension of
the contract for Pacific Bora in August, which brought our
average contractual dayrate in the fourth quarter to more than $540,000
per day. Contract drilling revenue for the year ended Dec. 31, 2014, was
$1,085.8 million, including $109.2 million of deferred revenue
amortization, as compared to contract drilling revenue of $745.6
million, including $72.5 million of deferred revenue amortization, for
the year ended Dec. 31, 2013.
During the three months ended Dec. 31, 2014, our operating fleet of six
drillships achieved average revenue efficiency of 96.7
percent as compared to 94.4 percent in the prior quarter. The increase
in revenue efficiency resulted from strong operational uptime on our
five mature rigs, partially offset by the impact of shakedown on the Pacific
Sharav, which performed above our expectations for a rig during its
first few months of operations.
Contract drilling expenses for fourth-quarter 2014 were $123.8 million
as compared to $116.9 million for third-quarter 2014. Contract drilling
expenses for fourth-quarter 2014 included $11.5 million in amortization
of deferred costs, $6.5 million in reimbursable expenses, and $9.6
million in shore-based and other support costs. Direct rig-related daily
operating expenses, excluding reimbursable costs, averaged $174,200 in
fourth-quarter 2014, as compared to $175,500 for third-quarter 2014.
Contract drilling expenses for full-year 2014 were $459.6 million as
compared to $337.3 million for full-year 2013. The year-over-year
increase in contract drilling costs was primarily due to a full year of
operations from Pacific Khamsin and a partial year of operations
from Pacific Sharav, which commenced its contract on Aug. 27,
2014. In 2014, contract drilling expenses included $51.2 million in
amortization of deferred costs, $26.0 million in reimbursable expenses,
and $35.9 million in shore-based and other support costs.
General and administrative expenses for fourth-quarter 2014 were $14.9
million as compared to $16.5 million for third-quarter 2014. General and
administrative expenses for full-year 2014 were $57.7 million as
compared to $48.6 million for the prior year. The increase in general
and administrative expenses is primarily related to planned employee
headcount additions required to support our expanding fleet.
EBITDA for fourth-quarter 2014 was $179.1 million, compared to EBITDA of
$145.5 million in the prior quarter. EBITDA for the year ended Dec. 31,
2014, was $563.3 million, compared to adjusted EBITDA(a) of
$358.1 million for the year ended Dec. 31, 2013. EBITDA margin for
full-year 2014 was 51.9 percent, as compared to adjusted EBITDA margin(b)
of 48.0 percent for full-year 2013. A reconciliation of EBITDA and
adjusted EBITDA to net income is included in the accompanying schedules
to this release.
Interest expense for fourth-quarter 2014 was $39.9 million, as compared
to $35.6 million for third-quarter 2014. Interest expense for full-year
2014 was $130.1 million.
Liquidity and Capital Expenditures
For full-year 2014, cash flow from operations was $396.4 million. Cash
balances totaled $167.8 million as of Dec. 31, 2014, and total
outstanding debt was $3.15 billion. We used a portion of our cash on
hand and $180 million under our 2014 revolving credit facility to fund
the repayment of the outstanding principal and interest on our unsecured
bonds on Feb. 20, 2015. As of Feb. 23, 2015, we have more than $800
million of available liquidity, including up to approximately $720
million of undrawn capacity under existing credit facilities. Our solid
liquidity position consists of cash on hand, $300 million available and
undrawn capacity on the 2013 revolving credit facility, and $170 million
available and undrawn capacity on the 2014 revolving credit facility.
Additionally, we will have access to approximately $100 million
available on the senior secured credit facility and $150 million
available on the 2014 revolving credit facility upon entry into
satisfactory drilling contracts for the Pacific Meltem and Pacific
Zonda, respectively.
During fourth-quarter 2014, capital expenditures were $386.5 million, of
which $354.8 million related to construction of newbuild drillships,
including the delivery payment for Pacific Meltem. Capitalized
interest amounted to $11.1 million. The remaining expenditures primarily
related to fleet spares. We estimate the remaining capital expenditures
required to complete construction of our newbuild drillship and develop
spare blowout preventer, riser and thruster capacity will be
approximately $479.3 million, excluding capitalized interest. We expect
to cover these capital expenditures with a combination of existing cash
balances, future operating cash flows, and undrawn capacity on existing
credit facilities.
To date, under the share repurchase program approved by shareholders in
November 2014, we have repurchased 4.2 million shares at an average
price of $4.17 per share. We intend to continue share repurchases up to
the full 8 million shares as approved in our share repurchase program.
CFO Paul Reese commented, “Beginning with the refinancing of our project
facilities agreement in 2013, we have continued to proactively
strengthen the company's financial position. In October, we put in place
the necessary financing for Pacific Zonda at a very attractive
rate. Last week, we repaid our unsecured bonds, which was our most
expensive debt outstanding. Our average cost of debt now stands at below
5 percent. We are also in the process of obtaining remaining bank
approvals needed for amending some of our financial covenants to address
the delays in newbuild deliveries. Additionally, our exceptional
operational performance in 2014 translated into strong cash flow, which
supports our liquidity position going into 2015. We believe that our
future operating cash flow based on existing contracted backlog and
current available financing will provide ample liquidity to meet our
commitments until late 2017, when our 7.25 percent bonds mature.”
2015 Guidance
We reiterate our guidance on revenue efficiency provided with our fleet
status report on Feb. 6, 2015. The average revenue efficiency ranges
apply to our operating rigs on contract and include our expectations for
unplanned downtime as well as planned events such as maintenance. With
respect to our newbuild rigs, we expect an average revenue efficiency of
90 percent during a rig's first six months of operations and 95 percent
thereafter. However, revenue efficiency for individual rigs tends to be
volatile on a monthly and even on a quarterly basis.
The following table summarizes our full-year 2015 guidance for certain
items:
|
Item
|
|
|
|
Range
|
|
Average revenue efficiency
|
|
|
|
92% - 96%
|
|
Contract drilling expenses
|
|
|
|
$500 million - $525 million
|
|
General & administrative expenses
|
|
|
|
$63 million - $66 million
|
|
Income tax expense as percent of total contract drilling revenue
|
|
|
|
4% - 4.5%
|
|
|
|
|
|
|
The following table summarizes our first-quarter 2015 guidance for
certain items:
|
Item
|
|
|
|
Range
|
|
Average revenue efficiency
|
|
|
|
91% - 95%
|
|
Contract drilling expenses
|
|
|
|
$115 million - $120 million
|
|
General & administrative expenses
|
|
|
|
$15 million - $16 million
|
|
Income tax expense as percent of total contract drilling revenue
|
|
|
|
4.5% - 5.0%
|
|
|
|
|
|
|
The contract drilling expenses guidance reflects reduced operating
expenses during anticipated idle time prior to or between drilling
contracts for our rigs that are currently uncontracted and available to
work in 2015.
Updated schedules of expected amortization of deferred revenue,
depreciation and interest expense for our existing financing, as well as
capital expenditures are available in the “Quarterly and Annual Results”
subsection of the “Investor Relations” section of our website, www.pacificdrilling.com.
Please note the guidance provided above is based on management’s current
expectations about the future, and both stated and unstated assumptions,
and does not constitute any form of guarantee, assurance or promise that
the matters indicated will actually be achieved. Actual conditions and
assumptions are subject to change. The guidance set forth above is
subject to all cautionary statements and limitations described under the
“Forward-Looking Statements” section of this press release.
|
|
|
Footnotes
|
|
|
|
|
|
|
(a)
|
|
|
EBITDA and adjusted EBITDA are non-GAAP financial measures. For a
definition of EBITDA and adjusted EBITDA and a reconciliation to net
income, please refer to the schedules included in this release.
|
|
|
|
|
|
|
(b)
|
|
|
EBITDA margin is defined as EBITDA divided by contract drilling
revenue. Adjusted EBITDA margin is defined as adjusted EBITDA
divided by contract drilling revenue. Management uses this
operational metric to track company results and believes that this
measure provides additional information that consolidates the impact
of our operating efficiency as well as the operating and support
costs incurred in achieving the revenue performance.
|
|
|
|
|
|
|
(c)
|
|
|
Revenue efficiency is defined as actual contractual dayrate revenue
(excluding mobilization fees, upgrade reimbursements and other
revenue sources) divided by the maximum amount of contractual
dayrate revenue that could have been earned during such period.
|
|
|
|
|
|
|
(d)
|
|
|
Net income excluding charges is a non-GAAP financial measure. For a
definition of net income excluding charges and a reconciliation to
net income, please refer to the schedules included in this release.
|
|
|
|
|
|
Conference Call
Pacific Drilling will conduct a conference call at 10 a.m. Central time
on Monday, Feb. 23, to discuss fourth-quarter and full-year 2014
results. To participate, please dial +1 719-457-2085 or 1-888-401-4669
and refer to confirmation code 1202536 five to 10 minutes prior to the
scheduled start time. The call also will be webcast on www.pacificdrilling.com
and can be accessed by a link posted in the “Events & Presentations”
subsection of the “Investor Relations” section.
An audio replay of the call may be accessed after noon Central time on
Monday, Feb. 23, 2015, by dialing +1 719-457-0820 or 1-888-203-1112, and
using access code 1202536. A replay of the call also will be available
on the company’s website.
About Pacific Drilling
With its best-in-class drillships and highly experienced team, Pacific
Drilling is committed to becoming the industry’s preferred
high-specification, floating-rig drilling contractor. Pacific Drilling’s
fleet of eight drillships represents one of the youngest and most
technologically advanced fleets in the world. For more information about
Pacific Drilling, including our current Fleet Status, please visit our
website at www.pacificdrilling.com.
Forward-Looking Statements
Certain statements and information contained in this press release (and
oral statements made regarding the subjects of this press release,
including the conference call announced herein) constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Where any
forward-looking statement includes a statement about the assumptions of
bases underlying the forward-looking statement, we caution that, while
we believe these assumptions or bases to be reasonable and made in good
faith, assumed facts or bases almost always vary from actual results,
and the differences between assumed facts or bases and actual results
can be material, depending on the circumstances. Where, in any
forward-looking statement, our management expresses an expectation or
belief as to future results, such expectation or belief is expressed in
good faith and is believed to have a reasonable basis. We cannot assure
you, however, that the statement of expectation or belief will result or
be achieved or accomplished. These statements relate to analyses and
other information that are based on forecasts of future results and
estimates of amounts not yet determinable. These statements also relate
to our future prospects, developments and business strategies.
Forward-looking statements typically include words or phrases such as
“believe,” “expect,” “anticipate,” “project,” “plan,” “intend,” “tends
to,” “foresee,” “our ability to,” “estimate,” “potential,” “will,”
“should,” “would,” “could” or other similar words, which are generally
not historical in nature. Such forward-looking statements specifically
include statements involving: future client contract opportunities;
contract dayrate amounts; future operational performance; revenue
efficiency levels; market outlook; estimated duration of client
contracts; future contract commencement dates and locations; backlog;
construction, timing and delivery of newbuild drillships; capital
expenditures; cost adjustments; estimated rig availability; direct rig
operating costs; shore based support costs; general and administrative
expenses; income tax expense; expected amortization of deferred revenue
and deferred mobilization expenses; growth opportunities and expected
depreciation and interest expense for the existing credit facilities and
senior bonds. These forward-looking statements are based on our current
expectations and beliefs concerning future developments and their
potential effect on us. While management believes that these
forward-looking statements are reasonable as and when made, there can be
no assurance that future developments affecting us will be those that we
anticipate. All comments concerning our expectations for future revenue
and operating results are based on our forecasts for our existing
operations and do not include the potential impact of any future
acquisitions. Our forward-looking statements involve significant risks
and uncertainties (many of which are beyond our control) and assumptions
that could cause actual results to differ materially from our historical
experience and our present expectations or projections. Important
factors that could cause actual results to differ materially from
projected cash flows and other projections in the forward-looking
statements include, but are not limited to: our ability to secure new
and maintain existing drilling contracts, including possible
cancellation or suspension of drilling contracts as a result of
mechanical difficulties, performance, market changes or other reasons;
changes in worldwide rig supply and demand, competition and technology;
future levels of offshore drilling activity; actual contract
commencement dates; downtime and other risks associated with offshore
rig operations, including unscheduled repairs or maintenance;
relocations, severe weather or hurricanes; governmental action, civil
unrest and political and economic uncertainties; future levels of
offshore drilling activity; impact of potential licensing or patent
litigation; risks inherent to shipyard rig construction, repair,
maintenance or enhancement; environmental or other liabilities, risks or
losses; governmental regulatory, legislative and permitting requirements
affecting drilling operations; our ability to attract and retain skilled
personnel on commercially reasonable terms; terrorism, piracy and
military action; and the outcome of litigation, legal proceedings,
investigations or other claims or contract disputes.
For additional information regarding known material risk factors that
could cause our actual results to differ from our projected results,
please see our filings with the Securities and Exchange Commission
(SEC), including our Annual Report on Form 20-F and Current Reports on
Form 6-K. These documents are available through our website at www.pacificdrilling.com
or through the SEC’s Electronic Data and Analysis Retrieval System at www.sec.gov.
Readers are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date hereof. We undertake no
obligation to publicly update or revise any forward-looking statements
after the date they are made, whether as a result of new information,
future events or otherwise.
|
|
|
|
|
|
|
|
|
PACIFIC DRILLING S.A. AND SUBSIDIARIES
|
|
|
|
Condensed Consolidated Statements of Income
|
|
(in thousands, except per share amounts) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Years Ended December 31,
|
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling
|
|
|
$
|
319,737
|
|
|
$
|
279,637
|
|
|
$
|
200,546
|
|
|
|
$
|
1,085,794
|
|
|
$
|
745,574
|
|
|
$
|
638,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling
|
|
|
(123,836
|
)
|
|
(116,850
|
)
|
|
(90,636
|
)
|
|
|
(459,617
|
)
|
|
(337,277
|
)
|
|
(331,495
|
)
|
|
General and administrative expenses
|
|
|
(14,889
|
)
|
|
(16,467
|
)
|
|
(12,956
|
)
|
|
|
(57,662
|
)
|
|
(48,614
|
)
|
|
(45,386
|
)
|
|
Depreciation expense
|
|
|
(56,547
|
)
|
|
(50,187
|
)
|
|
(39,713
|
)
|
|
|
(199,337
|
)
|
|
(149,465
|
)
|
|
(127,698
|
)
|
|
|
|
|
(195,272
|
)
|
|
(183,504
|
)
|
|
(143,305
|
)
|
|
|
(716,616
|
)
|
|
(535,356
|
)
|
|
(504,579
|
)
|
|
Loss of hire insurance recovery
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
23,671
|
|
|
Operating income
|
|
|
124,465
|
|
|
96,133
|
|
|
57,241
|
|
|
|
369,178
|
|
|
210,218
|
|
|
157,142
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs on interest rate swap termination
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(38,184
|
)
|
|
—
|
|
|
Interest expense
|
|
|
(39,874
|
)
|
|
(35,626
|
)
|
|
(25,770
|
)
|
|
|
(130,130
|
)
|
|
(94,027
|
)
|
|
(104,685
|
)
|
|
Total interest expense
|
|
|
(39,874
|
)
|
|
(35,626
|
)
|
|
(25,770
|
)
|
|
|
(130,130
|
)
|
|
(132,211
|
)
|
|
(104,685
|
)
|
|
Costs on extinguishment of debt
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(28,428
|
)
|
|
—
|
|
|
Other income (expense)
|
|
|
(1,902
|
)
|
|
(870
|
)
|
|
(608
|
)
|
|
|
(5,171
|
)
|
|
(1,554
|
)
|
|
3,245
|
|
|
Income before income taxes
|
|
|
82,689
|
|
|
59,637
|
|
|
30,863
|
|
|
|
233,877
|
|
|
48,025
|
|
|
55,702
|
|
|
Income tax expense
|
|
|
(14,645
|
)
|
|
(11,536
|
)
|
|
(5,173
|
)
|
|
|
(45,620
|
)
|
|
(22,523
|
)
|
|
(21,713
|
)
|
|
Net income
|
|
|
$
|
68,044
|
|
|
$
|
48,101
|
|
|
$
|
25,690
|
|
|
|
$
|
188,257
|
|
|
$
|
25,502
|
|
|
$
|
33,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share, basic
|
|
|
$
|
0.32
|
|
|
$
|
0.22
|
|
|
$
|
0.12
|
|
|
|
$
|
0.87
|
|
|
$
|
0.12
|
|
|
$
|
0.16
|
|
|
Weighted average number of common shares, basic
|
|
|
217,132
|
|
|
217,344
|
|
|
217,022
|
|
|
|
217,223
|
|
|
216,964
|
|
|
216,901
|
|
|
Earnings per common share, diluted
|
|
|
$
|
0.32
|
|
|
$
|
0.22
|
|
|
$
|
0.12
|
|
|
|
$
|
0.87
|
|
|
$
|
0.12
|
|
|
$
|
0.16
|
|
|
Weighted average number of common shares, diluted
|
|
|
217,197
|
|
|
217,547
|
|
|
217,429
|
|
|
|
217,376
|
|
|
217,421
|
|
|
216,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PACIFIC DRILLING S.A. AND SUBSIDIARIES
|
|
|
|
Condensed Consolidated Balance Sheets
|
|
(in thousands, except par value) (unaudited)
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
2014
|
|
2013
|
|
Assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
167,794
|
|
|
$
|
204,123
|
|
|
Accounts receivable
|
|
|
231,027
|
|
|
206,078
|
|
|
Materials and supplies
|
|
|
95,660
|
|
|
65,709
|
|
|
Deferred financing costs, current
|
|
|
14,665
|
|
|
14,857
|
|
|
Deferred costs, current
|
|
|
25,199
|
|
|
48,202
|
|
|
Prepaid expenses and other current assets
|
|
|
17,056
|
|
|
13,889
|
|
|
Total current assets
|
|
|
551,401
|
|
|
552,858
|
|
|
Property and equipment, net
|
|
|
5,431,823
|
|
|
4,512,154
|
|
|
Deferred financing costs
|
|
|
45,978
|
|
|
53,300
|
|
|
Other assets
|
|
|
48,099
|
|
|
45,728
|
|
|
Total assets
|
|
|
$
|
6,077,301
|
|
|
$
|
5,164,040
|
|
|
Liabilities and shareholders' equity:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
40,577
|
|
|
$
|
54,235
|
|
|
Accrued expenses
|
|
|
45,963
|
|
|
66,026
|
|
|
Long-term debt, current
|
|
|
369,000
|
|
|
7,500
|
|
|
Accrued interest
|
|
|
24,534
|
|
|
21,984
|
|
|
Derivative liabilities, current
|
|
|
8,648
|
|
|
4,984
|
|
|
Deferred revenue, current
|
|
|
84,104
|
|
|
96,658
|
|
|
Total current liabilities
|
|
|
572,826
|
|
|
251,387
|
|
|
Long-term debt, net of current maturities
|
|
|
2,781,242
|
|
|
2,423,337
|
|
|
Deferred revenue
|
|
|
108,812
|
|
|
88,465
|
|
|
Other long-term liabilities
|
|
|
35,549
|
|
|
927
|
|
|
Total long-term liabilities
|
|
|
2,925,603
|
|
|
2,512,729
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
Common shares, $0.01 par value per share, 5,000,000 shares
authorized, 232,770 and 224,100 shares issued and 215,784 and
217,035 shares outstanding as of December 31, 2014 and December 31,
2013, respectively
|
|
|
2,175
|
|
|
2,170
|
|
|
Additional paid-in capital
|
|
|
2,369,432
|
|
|
2,358,858
|
|
|
Treasury shares, at cost
|
|
|
(8,240
|
)
|
|
—
|
|
|
Accumulated other comprehensive loss
|
|
|
(20,205
|
)
|
|
(8,557
|
)
|
|
Retained earnings
|
|
|
235,710
|
|
|
47,453
|
|
|
Total shareholders' equity
|
|
|
2,578,872
|
|
|
2,399,924
|
|
|
Total liabilities and shareholders' equity
|
|
|
$
|
6,077,301
|
|
|
$
|
5,164,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PACIFIC DRILLING S. A. AND SUBSIDIARIES
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(in thousands) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Years Ended December 31,
|
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
68,044
|
|
|
$
|
48,101
|
|
|
$
|
25,690
|
|
|
|
$
|
188,257
|
|
|
$
|
25,502
|
|
|
$
|
33,989
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation expense
|
|
|
56,547
|
|
|
50,187
|
|
|
39,713
|
|
|
|
199,337
|
|
|
149,465
|
|
|
127,698
|
|
|
Amortization of deferred revenue
|
|
|
(25,884
|
)
|
|
(27,278
|
)
|
|
(20,179
|
)
|
|
|
(109,208
|
)
|
|
(72,515
|
)
|
|
(95,750
|
)
|
|
Amortization of deferred costs
|
|
|
11,531
|
|
|
12,885
|
|
|
10,332
|
|
|
|
51,173
|
|
|
39,479
|
|
|
70,660
|
|
|
Amortization of deferred financing costs
|
|
|
2,951
|
|
|
2,544
|
|
|
1,787
|
|
|
|
10,416
|
|
|
10,106
|
|
|
13,926
|
|
|
Amortization of debt discount
|
|
|
235
|
|
|
227
|
|
|
193
|
|
|
|
817
|
|
|
445
|
|
|
—
|
|
|
Write-off of unamortized deferred financing costs
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
27,644
|
|
|
—
|
|
|
Costs on interest rate swap termination
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
38,184
|
|
|
—
|
|
|
Deferred income taxes
|
|
|
15,281
|
|
|
(48
|
)
|
|
(614
|
)
|
|
|
18,661
|
|
|
(3,119
|
)
|
|
(3,766
|
)
|
|
Share-based compensation expense
|
|
|
2,952
|
|
|
2,876
|
|
|
2,351
|
|
|
|
10,484
|
|
|
9,315
|
|
|
5,318
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(46,736
|
)
|
|
(26,428
|
)
|
|
(74,826
|
)
|
|
|
(24,949
|
)
|
|
(53,779
|
)
|
|
(89,721
|
)
|
|
Materials and supplies
|
|
|
(3,564
|
)
|
|
(9,624
|
)
|
|
(6,328
|
)
|
|
|
(29,951
|
)
|
|
(16,083
|
)
|
|
(6,640
|
)
|
|
Prepaid expenses and other assets
|
|
|
(16,123
|
)
|
|
(20,952
|
)
|
|
(18,948
|
)
|
|
|
(56,493
|
)
|
|
(30,840
|
)
|
|
(61,548
|
)
|
|
Accounts payable and accrued expenses
|
|
|
(964
|
)
|
|
30,049
|
|
|
10,637
|
|
|
|
20,865
|
|
|
12,301
|
|
|
33,865
|
|
|
Deferred revenue
|
|
|
8,267
|
|
|
37,953
|
|
|
67,195
|
|
|
|
117,001
|
|
|
94,482
|
|
|
156,967
|
|
|
Net cash provided by operating activities
|
|
|
72,537
|
|
|
100,492
|
|
|
37,003
|
|
|
|
396,410
|
|
|
230,587
|
|
|
184,998
|
|
|
Cash flow from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(386,519
|
)
|
|
(115,802
|
)
|
|
(103,893
|
)
|
|
|
(1,136,205
|
)
|
|
(876,142
|
)
|
|
(449,951
|
)
|
|
Decrease in restricted cash
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
172,184
|
|
|
204,784
|
|
|
Net cash used in investing activities
|
|
|
(386,519
|
)
|
|
(115,802
|
)
|
|
(103,893
|
)
|
|
|
(1,136,205
|
)
|
|
(703,958
|
)
|
|
(245,167
|
)
|
|
Cash flow from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shares issued under share-based compensation plan
|
|
|
(79
|
)
|
|
(73
|
)
|
|
—
|
|
|
|
95
|
|
|
—
|
|
|
—
|
|
|
Proceeds from long-term debt
|
|
|
400,000
|
|
|
—
|
|
|
159,000
|
|
|
|
760,000
|
|
|
1,656,250
|
|
|
797,415
|
|
|
Payments on long-term debt
|
|
|
(36,208
|
)
|
|
(1,875
|
)
|
|
(21,875
|
)
|
|
|
(41,833
|
)
|
|
(1,480,000
|
)
|
|
(218,750
|
)
|
|
Payments for costs on interest rate swap termination
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(41,993
|
)
|
|
—
|
|
|
Payments for financing costs
|
|
|
(7,069
|
)
|
|
—
|
|
|
—
|
|
|
|
(7,569
|
)
|
|
(62,684
|
)
|
|
(19,853
|
)
|
|
Purchases of treasury shares
|
|
|
(7,227
|
)
|
|
—
|
|
|
—
|
|
|
|
(7,227
|
)
|
|
—
|
|
|
—
|
|
|
Net cash provided by financing activities
|
|
|
349,417
|
|
|
(1,948
|
)
|
|
137,125
|
|
|
|
703,466
|
|
|
71,573
|
|
|
558,812
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
35,435
|
|
|
(17,258
|
)
|
|
70,235
|
|
|
|
(36,329
|
)
|
|
(401,798
|
)
|
|
498,643
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
132,359
|
|
|
149,617
|
|
|
133,888
|
|
|
|
204,123
|
|
|
605,921
|
|
|
107,278
|
|
|
Cash and cash equivalents, end of period
|
|
|
$
|
167,794
|
|
|
$
|
132,359
|
|
|
$
|
204,123
|
|
|
|
$
|
167,794
|
|
|
$
|
204,123
|
|
|
$
|
605,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA and Adjusted EBITDA Reconciliation
EBITDA is defined as earnings before interest, taxes, depreciation and
amortization. Adjusted EBITDA is defined as earnings before interest,
costs from debt refinancing, loss of hire insurance, taxes, depreciation
and amortization. EBITDA and adjusted EBITDA do not represent and should
not be considered alternatives to net income, operating income, cash
flow from operations or any other measure of financial performance
presented in accordance with generally accepted accounting principles in
the United States of America (“GAAP”) and our calculation of EBITDA and
adjusted EBITDA may not be comparable to that reported by other
companies. EBITDA and adjusted EBITDA are included herein because they
are used by management to measure the company's operations and are
intended to exclude charges or credits of a non-routine nature that
would detract from an understanding of our operations. Management
believes that EBITDA and adjusted EBITDA present useful information to
investors regarding the company's operating performance during
fourth-quarter and full-year 2014.
|
|
|
|
|
|
|
|
|
PACIFIC DRILLING S.A. AND SUBSIDIARIES
|
|
|
|
Supplementary Data—Reconciliation of Net Income to Non-GAAP
EBITDA and Adjusted EBITDA
|
|
(in thousands) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Years Ended December 31,
|
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
2012
|
|
Net income
|
|
|
$
|
68,044
|
|
|
$
|
48,101
|
|
|
$
|
25,690
|
|
|
|
$
|
188,257
|
|
|
$
|
25,502
|
|
|
$
|
33,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs on interest rate swap termination
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
38,184
|
|
|
—
|
|
|
Interest expense
|
|
|
39,874
|
|
|
35,626
|
|
|
25,770
|
|
|
|
130,130
|
|
|
94,027
|
|
|
104,685
|
|
|
Interest expense
|
|
|
39,874
|
|
|
35,626
|
|
|
25,770
|
|
|
|
130,130
|
|
|
132,211
|
|
|
104,685
|
|
|
Depreciation expense
|
|
|
56,547
|
|
|
50,187
|
|
|
39,713
|
|
|
|
199,337
|
|
|
149,465
|
|
|
127,698
|
|
|
Income taxes
|
|
|
14,645
|
|
|
11,536
|
|
|
5,173
|
|
|
|
45,620
|
|
|
22,523
|
|
|
21,713
|
|
|
EBITDA
|
|
|
$
|
179,110
|
|
|
$
|
145,450
|
|
|
$
|
96,346
|
|
|
|
$
|
563,344
|
|
|
$
|
329,701
|
|
|
$
|
288,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs on extinguishment of debt
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
28,428
|
|
|
—
|
|
|
Loss of hire insurance recovery
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(23,671
|
)
|
|
Adjusted EBITDA
|
|
|
$
|
179,110
|
|
|
$
|
145,450
|
|
|
$
|
96,346
|
|
|
|
$
|
563,344
|
|
|
$
|
358,129
|
|
|
$
|
264,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Excluding Charges Reconciliation
During the second quarter of 2013, the company closed a refinancing
transaction that resulted in material non-recurring costs primarily
related to swap termination fees and the write-off of unamortized debt
issue costs. Management believes that net income excluding charges
related to our refinancing and loss of hire insurance recovery provides
useful and comparable information to investors regarding the company’s
operating performance. Specifically, the excluded charges are of a
non-routine nature and management believes they detract from an
understanding of our operating performance and comparisons with other
periods. Net income excluding charges does not represent and should not
be considered an alternative to or substitute for net income, operating
income, cash flow from operations or any other measure of financial
performance presented in accordance with GAAP, and our calculation of
net income excluding charges may not be comparable to that reported by
other companies.
|
|
|
|
|
|
|
|
|
PACIFIC DRILLING S.A. AND SUBSIDIARIES
|
|
|
|
Supplementary Data—Reconciliation of Net Income and Earnings per
Share to Non-GAAP Net Income Excluding
|
|
Charges and Earnings per Share Excluding Charges
|
|
(in thousands, except per share information) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
December 31,
|
|
|
Years Ended December 31,
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
2012
|
|
Net income
|
|
|
$
|
68,044
|
|
|
$
|
25,690
|
|
|
|
$
|
188,257
|
|
|
$
|
25,502
|
|
|
$
|
33,989
|
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss of hire insurance recovery
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(23,671
|
)
|
|
Costs on interest rate swap termination
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
38,184
|
|
|
—
|
|
|
Costs on extinguishment of debt
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
28,428
|
|
|
—
|
|
|
Net income excluding charges
|
|
|
$
|
68,044
|
|
|
$
|
25,690
|
|
|
|
$
|
188,257
|
|
|
$
|
92,114
|
|
|
$
|
10,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share, basic and diluted
|
|
|
$
|
0.32
|
|
|
$
|
0.12
|
|
|
|
$
|
0.87
|
|
|
$
|
0.12
|
|
|
$
|
0.16
|
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss of hire insurance recovery
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(0.11
|
)
|
|
Costs on interest rate swap termination
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
0.18
|
|
|
—
|
|
|
Costs on extinguishment of debt
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
0.13
|
|
|
—
|
|
|
Earnings excluding charges per common share, basic and diluted
|
|
|
$
|
0.32
|
|
|
$
|
0.12
|
|
|
|
$
|
0.87
|
|
|
$
|
0.43
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: Pacific Drilling S.A.