Conference call set 9 a.m. Central time Friday, May 6, 2016
-
EBITDA(a) for first-quarter of $112.9 million, representing
an EBITDA margin(b) of 55.0 percent
-
Record high revenue efficiency(c) of 97.7% yielded revenues
of $205.4 million
-
Operating and G&A costs of $94.1 million, a reduction of 20% from
fourth-quarter 2015 and 30% from first-quarter 2015
LUXEMBOURG--(BUSINESS WIRE)--
Pacific Drilling S.A. (NYSE:PACD) today announced a net loss for
first-quarter 2016 of $2.5 million or $0.01 per diluted share, compared
to a net loss of $13.6 million or $0.06 per diluted share for
fourth-quarter 2015 and net income of $51.7 million or $0.24 per diluted
share for first-quarter 2015.
CEO Chris Beckett said, "Notwithstanding the commodity price uncertainty
and challenging industry conditions, we delivered strong financial
results with a record revenue efficiency of 97.7% and an EBITDA of $113
million, representing an impressive 55% EBITDA margin, despite only four
out of our seven drillships operating during the quarter. We also
continued to reduce our costs, while maintaining a strong focus on safe
and efficient operations for our clients.”
First-Quarter 2016 Operational and Financial
Commentary
Contract drilling revenue for first-quarter 2016 was $205.4 million,
which included $12.7 million of deferred revenue amortization, compared
to fourth-quarter 2015 contract drilling revenue of $267.6 million,
which included $20.4 million of deferred revenue amortization. Contract
drilling revenue decreased in the first-quarter primarily as a result of
the Pacific Khamsin being idle during first-quarter 2016. During
the three months ended March 31, 2016, our operating fleet achieved
average revenue efficiency of 97.7 percent, a further improvement from
fourth-quarter 2015’s previous record high of 97.3 percent.
Operating expenses for first-quarter 2016 were $79.0 million, compared
to $104.9 million for fourth-quarter 2015. The reduction in operating
expenses was primarily the result of the Pacific Khamsin being
idle during first-quarter 2016. Operating expenses for first-quarter
2016 included $5.0 million in reimbursable costs, $8.1 million in
shore-based and other support costs, and $2.8 million in amortization of
deferred costs.
Direct rig-related daily operating expenses for operating rigs,
excluding reimbursable costs, averaged $145,800 per rig in first-quarter
2016, down from an average of $150,300 per operating rig in
fourth-quarter 2015. The reduction in direct rig-related daily operating
expenses was primarily the result of continued fleet-wide cost saving
measures. Direct rig-related daily operating expenses for our three idle
rigs averaged $36,500 per rig in first-quarter 2016. This includes the Pacific
Khamsin, which transitioned from full operating mode to
smart-stacked mode during the first-quarter 2016.
General and administrative expenses for first-quarter 2016 were $15.1
million, compared to $12.6 million for fourth-quarter 2015. The increase
in general and administrative expenses in the first-quarter 2016 is due
to increased legal fees related to ongoing litigation. Such costs are
anticipated to decrease in future quarters.
EBITDA for first-quarter 2016 was $112.9 million, compared to Adjusted
EBITDA(a) of $149.8 million for fourth-quarter 2015. A
reconciliation of net income to EBITDA and Adjusted EBITDA is included
in the schedules accompanying this release.
Interest expense for first-quarter was $45.5 million, compared to $50.1
million for the fourth-quarter 2015. The decrease in interest expense
was primarily due to the write-off of the unamortized deferred financing
costs related to the termination of the 2014 revolving credit facility
in fourth-quarter 2015.
Liquidity and Capital Expenditures
During first-quarter 2016, cash flow from operations was $86.7 million.
Our liquidity as of March 31, 2016 was $622.3 million, consisting of
$407.3 million in cash and $215.0 million in available and undrawn
liquidity under our 2013 revolving credit facility.
Capital expenditures for the three months ended March 31, 2016 were
$28.6 million and primarily consisted of the purchases of fleet spare
equipment committed to in prior years to support our operations.
CFO Paul Reese commented, “During first-quarter 2016, we continued to
reduce our daily operating expenses and net debt, which is consistent
with our objective to strengthen our balance sheet in the current
difficult market environment.”
Investor Toolkit
Updated schedules of expected amortization of deferred revenue,
depreciation expense, and interest expense for our existing financing
are available in the “Quarterly and Annual Results” subsection of the
“Investor Relations” section of our website, www.pacificdrilling.com.
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 schedule included in
this release.
(b) EBITDA margin is defined as 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.
Conference Call
Pacific Drilling will conduct a conference call at 9 a.m. Central time
on Friday, May 6, 2016 to discuss first-quarter 2016 results. To
participate in the May 6 call, please dial +1 913-312-1377 or
1-888-213-3710 and refer to confirmation code 9053456 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. 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 seven 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, and are generally identifiable
by the use of words such as “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “our ability to,” “plan,” “potential,” “project,”
“should,” “will,” “would,” or other similar words, which are generally
not historical in nature. Our forward-looking statements express our
current expectations or forecasts of possible future results or events,
including revenues, operating results and revenue efficiency, future
client contract opportunities and availability of vessels. Although we
believe that these forward-looking statements are reasonable as and when
made, these statements are not guarantees, and actual future results may
differ materially due to a variety of factors. These 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 projections include: future levels of offshore
drilling activity; our ability to secure new and maintain existing
drilling contracts, including possible cancellation or suspension of
drilling contracts as a result of market conditions, mechanical
difficulties, performance or other reasons; changes in worldwide rig
supply and demand, competition and technology; actual contract
commencement dates; our ability to repay debt and adequacy of and access
to sources of liquidity; and downtime and other risks associated with
offshore rig operations, including unscheduled repairs or maintenance,
relocations, severe weather or hurricanes. For additional information
regarding 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 Operations
|
|
(in thousands, except per share amounts) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
2016
|
|
|
December 31,
2015
|
|
|
March 31,
2015
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling
|
|
|
|
$
|
205,378
|
|
|
|
$
|
267,600
|
|
|
|
$
|
283,392
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(78,973
|
)
|
|
|
(104,870
|
)
|
|
|
(117,669
|
)
|
|
General and administrative expenses
|
|
|
|
(15,126
|
)
|
|
|
(12,609
|
)
|
|
|
(16,366
|
)
|
|
Depreciation expense
|
|
|
|
(68,076
|
)
|
|
|
(67,679
|
)
|
|
|
(57,072
|
)
|
|
|
|
|
|
(162,175
|
)
|
|
|
(185,158
|
)
|
|
|
(191,107
|
)
|
|
Loss from construction contract rescission
|
|
|
|
—
|
|
|
|
(40,155
|
)
|
|
|
—
|
|
|
Operating income
|
|
|
|
43,203
|
|
|
|
42,287
|
|
|
|
92,285
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(45,493
|
)
|
|
|
(50,064
|
)
|
|
|
(36,709
|
)
|
|
Other income (expense)
|
|
|
|
1,632
|
|
|
|
(364
|
)
|
|
|
(2,051
|
)
|
|
Income (loss) before income taxes
|
|
|
|
(658
|
)
|
|
|
(8,141
|
)
|
|
|
53,525
|
|
|
Income tax expense
|
|
|
|
(1,853
|
)
|
|
|
(5,451
|
)
|
|
|
(1,795
|
)
|
|
Net income (loss)
|
|
|
|
$
|
(2,511
|
)
|
|
|
$
|
(13,592
|
)
|
|
|
$
|
51,730
|
|
|
Earnings (loss) per common share, basic
|
|
|
|
$
|
(0.01
|
)
|
|
|
$
|
(0.06
|
)
|
|
|
$
|
0.24
|
|
|
Weighted average number of common shares, basic
|
|
|
|
211,209
|
|
|
|
210,771
|
|
|
|
213,627
|
|
|
Earnings (loss) per common share, diluted
|
|
|
|
$
|
(0.01
|
)
|
|
|
$
|
(0.06
|
)
|
|
|
$
|
0.24
|
|
|
Weighted average number of common shares, diluted
|
|
|
|
211,209
|
|
|
|
210,771
|
|
|
|
213,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PACIFIC DRILLING S.A. AND SUBSIDIARIES
|
|
|
|
Condensed Consolidated Balance Sheets
|
|
(in thousands, except par value) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2016
|
|
|
December 31,
2015
|
|
Assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
407,273
|
|
|
|
$
|
116,033
|
|
|
Accounts receivable
|
|
|
|
137,459
|
|
|
|
168,050
|
|
|
Materials and supplies
|
|
|
|
96,233
|
|
|
|
98,243
|
|
|
Deferred costs, current
|
|
|
|
10,714
|
|
|
|
10,582
|
|
|
Prepaid expenses and other current assets
|
|
|
|
18,783
|
|
|
|
14,312
|
|
|
Total current assets
|
|
|
|
670,462
|
|
|
|
407,220
|
|
|
Property and equipment, net
|
|
|
|
5,097,755
|
|
|
|
5,143,556
|
|
|
Long-term receivable
|
|
|
|
202,575
|
|
|
|
202,575
|
|
|
Other assets
|
|
|
|
38,210
|
|
|
|
39,369
|
|
|
Total assets
|
|
|
|
$
|
6,009,002
|
|
|
|
$
|
5,792,720
|
|
|
Liabilities and shareholders’ equity:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
23,292
|
|
|
|
$
|
44,167
|
|
|
Accrued expenses
|
|
|
|
36,347
|
|
|
|
44,221
|
|
|
Long-term debt, current
|
|
|
|
76,724
|
|
|
|
76,793
|
|
|
Accrued interest
|
|
|
|
36,997
|
|
|
|
16,442
|
|
|
Derivative liabilities, current
|
|
|
|
7,084
|
|
|
|
7,483
|
|
|
Deferred revenue, current
|
|
|
|
47,904
|
|
|
|
49,227
|
|
|
Total current liabilities
|
|
|
|
228,348
|
|
|
|
238,333
|
|
|
Long-term debt, net of current maturities
|
|
|
|
3,005,557
|
|
|
|
2,768,877
|
|
|
Deferred revenue
|
|
|
|
49,304
|
|
|
|
60,639
|
|
|
Other long-term liabilities
|
|
|
|
36,339
|
|
|
|
32,816
|
|
|
Total long-term liabilities
|
|
|
|
3,091,200
|
|
|
|
2,862,332
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
Common shares, $0.01 par value per share, 5,000,000 shares
authorized, 232,770 shares issued and 211,209 and 211,207 shares
outstanding as of March 31, 2016 and December 31, 2015, respectively
|
|
|
|
2,185
|
|
|
|
2,185
|
|
|
Additional paid-in capital
|
|
|
|
2,383,584
|
|
|
|
2,381,420
|
|
|
Treasury shares, at cost
|
|
|
|
(30,000
|
)
|
|
|
(30,000
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
(25,744
|
)
|
|
|
(23,490
|
)
|
|
Retained earnings
|
|
|
|
359,429
|
|
|
|
361,940
|
|
|
Total shareholders’ equity
|
|
|
|
2,689,454
|
|
|
|
2,692,055
|
|
|
Total liabilities and shareholders’ equity
|
|
|
|
$
|
6,009,002
|
|
|
|
$
|
5,792,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PACIFIC DRILLING S.A. AND SUBSIDIARIES
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(in thousands) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
2016
|
|
|
December 31,
2015
|
|
|
March 31,
2015
|
|
Cash flow from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
|
$
|
(2,511
|
)
|
|
|
$
|
(13,592
|
)
|
|
|
$
|
51,730
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation expense
|
|
|
|
68,076
|
|
|
|
67,679
|
|
|
|
57,072
|
|
|
Amortization of deferred revenue
|
|
|
|
(12,658
|
)
|
|
|
(20,449
|
)
|
|
|
(22,689
|
)
|
|
Amortization of deferred costs
|
|
|
|
2,835
|
|
|
|
5,832
|
|
|
|
8,483
|
|
|
Amortization of deferred financing costs
|
|
|
|
3,625
|
|
|
|
3,307
|
|
|
|
2,725
|
|
|
Amortization of debt discount
|
|
|
|
323
|
|
|
|
313
|
|
|
|
227
|
|
|
Write-off of unamortized deferred financing costs
|
|
|
|
—
|
|
|
|
5,965
|
|
|
|
—
|
|
|
Loss from construction contract rescission
|
|
|
|
—
|
|
|
|
38,084
|
|
|
|
—
|
|
|
Deferred income taxes
|
|
|
|
1,715
|
|
|
|
8,534
|
|
|
|
(5,507
|
)
|
|
Share-based compensation expense
|
|
|
|
2,164
|
|
|
|
4,095
|
|
|
|
3,107
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
30,591
|
|
|
|
(21,606
|
)
|
|
|
65,374
|
|
|
Materials and supplies
|
|
|
|
2,010
|
|
|
|
3,739
|
|
|
|
(4,085
|
)
|
|
Prepaid expenses and other assets
|
|
|
|
(7,055
|
)
|
|
|
(11,071
|
)
|
|
|
2,412
|
|
|
Accounts payable and accrued expenses
|
|
|
|
(2,412
|
)
|
|
|
(10,654
|
)
|
|
|
(11,404
|
)
|
|
Deferred revenue
|
|
|
|
—
|
|
|
|
(509
|
)
|
|
|
491
|
|
|
Net cash provided by operating activities
|
|
|
|
86,703
|
|
|
|
59,667
|
|
|
|
147,936
|
|
|
Cash flow from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(28,588
|
)
|
|
|
(38,134
|
)
|
|
|
(57,503
|
)
|
|
Net cash used in investing activities
|
|
|
|
(28,588
|
)
|
|
|
(38,134
|
)
|
|
|
(57,503
|
)
|
|
Cash flow from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net payments from shares issued under share-based compensation plan
|
|
|
|
—
|
|
|
|
(80
|
)
|
|
|
(42
|
)
|
|
Proceeds from long-term debt
|
|
|
|
235,000
|
|
|
|
50,000
|
|
|
|
180,000
|
|
|
Payments on long-term debt
|
|
|
|
(1,875
|
)
|
|
|
(102,915
|
)
|
|
|
(288,375
|
)
|
|
Payments for financing costs
|
|
|
|
—
|
|
|
|
(3,570
|
)
|
|
|
(500
|
)
|
|
Purchases of treasury shares
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(16,442
|
)
|
|
Net cash provided by (used in) financing activities
|
|
|
|
233,125
|
|
|
|
(56,565
|
)
|
|
|
(125,359
|
)
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
291,240
|
|
|
|
(35,032
|
)
|
|
|
(34,926
|
)
|
|
Cash and cash equivalents, beginning of period
|
|
|
|
116,033
|
|
|
|
151,065
|
|
|
|
167,794
|
|
|
Cash and cash equivalents, end of period
|
|
|
|
$
|
407,273
|
|
|
|
$
|
116,033
|
|
|
|
$
|
132,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 from construction contract rescission,
taxes, depreciation and amortization. EBITDA and Adjusted EBITDA do not
represent and should not be considered an alternative 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. Management believes that EBITDA and Adjusted EBITDA present
useful information to investors regarding the company's operating
performance during the periods presented below.
|
|
|
|
|
|
|
PACIFIC DRILLING S.A. AND SUBSIDIARIES
|
|
|
|
Supplementary Data—Reconciliation of Net Income (Loss) to Non-GAAP
EBITDA and Adjusted EBITDA
|
|
(in thousands) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
2016
|
|
|
December 31,
2015
|
|
|
March 31,
2015
|
|
Net income (loss)
|
|
|
|
$
|
(2,511
|
)
|
|
|
$
|
(13,592
|
)
|
|
|
$
|
51,730
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Write-off of unamortized deferred financing costs
|
|
|
|
—
|
|
|
|
5,965
|
|
|
|
—
|
|
Interest expense
|
|
|
|
45,493
|
|
|
|
44,099
|
|
|
|
36,709
|
|
Interest expense
|
|
|
|
45,493
|
|
|
|
50,064
|
|
|
|
36,709
|
|
Depreciation expense
|
|
|
|
68,076
|
|
|
|
67,679
|
|
|
|
57,072
|
|
Income taxes
|
|
|
|
1,853
|
|
|
|
5,451
|
|
|
|
1,795
|
|
EBITDA
|
|
|
|
$
|
112,911
|
|
|
|
$
|
109,602
|
|
|
|
$
|
147,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Loss from construction contract rescission
|
|
|
|
—
|
|
|
|
40,155
|
|
|
|
—
|
|
Adjusted EBITDA
|
|
|
|
$
|
112,911
|
|
|
|
$
|
149,757
|
|
|
|
$
|
147,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160505006803/en/
Source: Pacific Drilling S.A.