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Noble Corporation Reports Earnings of $5.85 per Share for 2008 on Revenues of $3.4 Billion
Posted by: gurufocus (IP Logged)
Date: January 21, 2009 06:01PM

Press Release: Noble Corporation Reports Earnings of $5.85 per Share for 2008 on Revenues of $3.4 Billion

SUGAR LAND, Texas, Jan. 21 /PRNewswire-FirstCall/ -- Noble Corporation (NYSE: NE) today reported fourth quarter 2008 earnings of $418.6 million, or $1.59 per diluted share, versus $347.4 million, or $1.29 per diluted share, for the fourth quarter of 2007. Per-share earnings were up 23.3 percent from the fourth quarter of 2007 and up 11.2 percent from the $1.43 per share reported for the third quarter of 2008. Earnings for the full year 2008 totaled $5.85 per diluted share compared with $4.48 per diluted share in 2007.

"Our fourth quarter results capped off a record year for the Company," said Chairman, President and Chief Executive Officer David W. Williams. "We held the line on costs, coming in well under our full-year guidance and delivered top-tier margins. We achieved solid improvements in safety, with Recordable Incidents down by 30 percent over 2007. Our revenue outlook remains strong, with over $11.5 billion of backlog at year-end. We are on track with our capital spending program to deliver our remaining newbuilds and we successfully executed on our opportunistic share repurchase plan."

Contract drilling services revenues for the 2008 fourth quarter were $882.5 million, up 16.0 percent from the year-earlier quarter. Contract drilling margins for the fourth quarter 2008 were approximately 70 percent, generating $560 million in net cash provided by operating activities during the quarter and $1.9 billion for full year 2008. The Company invested $351.2 million in capital projects during the quarter, bringing the year-to-date total to $1.2 billion. Debt as a percentage of total capitalization increased to 14.9 percent at December 31, 2008, from approximately 12.8 percent at the end of the third quarter due to the issuance of $250 million in unsecured notes in November 2008.

The Company repurchased 2.0 million of its ordinary shares during the fourth quarter 2008 at a total cost of $43.2 million and at an average price per share of $21.60. For the full year 2008, Noble repurchased approximately 8.0 million ordinary shares at an average price per share of $41.62 for a total cost of $331.5 million.

Operations Highlights

At year end 2008, approximately 79 percent of the Company's total rig operating days were committed for 2009 and approximately 40 percent were committed for 2010. The Company made a number of strategic moves within its fleet during the quarter, including the mobilization of the Noble Roy Butler and Noble Carl Norberg from West Africa to Mexico under separate contracts with PEMEX. In the Middle East, the Noble George McLeod secured a three-year bareboat contract with ONGC at a dayrate of $133,000. That unit has now been relocated to India from the Arabian Gulf. Also in the Middle East, we entered into short-term contracts for the Noble Cees van Diemen at a dayrate of $170,000 and the Noble Gene House at a dayrate of approximately $162,000. Finally, in the U.S. Gulf of Mexico, we secured a four month extension on the Noble Clyde Boudreaux at a dayrate of $605,000.

The Company also took delivery during the fourth quarter 2008 of the Noble Hans Deul, an F&G JU 2000E design jackup rated for water depths of 400 feet and drilling depths of 30,000 feet. That unit is now fully crewed and undergoing inspection and customer acceptance before commencing initial drilling activities in the North Sea. This new high-specification jackup drilling unit is the second of three such rigs being built for the Company, with the final unit, the Noble Scott Marks, expected to be delivered in the third quarter 2009.

Outlook

"While we believe the long-term fundamentals of our industry are sound, the condition of the global economic environment is clearly a cause of concern and a reason for caution," said Williams. "That said, the strength of our balance sheet, the extent of our contract coverage and the quality of our customer base should position us well to both weather the current economic storm and capitalize on opportunities for growth in a disciplined manner."

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 63 offshore drilling units (including five rigs currently under construction) located worldwide, including in the Middle East, India, the U.S. Gulf of Mexico, Mexico, the North Sea, Brazil, and West Africa. Noble's ordinary 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 :0a15:http://www.noblecorp.com:/0a15:.

Statements regarding contract commitments, dayrates, contract commencements, newbuilds, industry fundamentals, global economic conditions, financial strength, contract backlog, customer base, 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 customers and other third parties, factors affecting the level of activity in the oil and gas industry, supply and demand of drilling rigs, factors affecting the duration of contracts, 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 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 will hold its fourth quarter and full year earnings conference call on Thursday, January 22, 2009, at 1:00 p.m., Central Time. The call may be accessed live via telephone at 1-866-461-7129 (+1-706-679-3084 for international callers), using pass code 72475181. The call also will be available over the Internet through the "Investor Relations" section of the Company's Web site, using the "Web cast" link. A replay of the conference call will be available on Thursday, January 22, 2009, beginning at 5:00 p.m., Central Time, through Wednesday, January 28, 2009, ending at 5:00 p.m., Central Time. The phone number for the conference call replay is 1-800-642-1687 (+1-706-645-9291 for international callers), using the access code 72475181. 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."

NOBLE CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                     (In thousands, except per share amounts)
                                   (Unaudited)

                                  Three Months Ended    Twelve Months Ended
                                     December 31,           December 31,
                                     ------------           ------------
                                    2008      2007        2008        2007
                                    ----      ----        ----        ----
    OPERATING REVENUES
      Contract drilling services  $882,538  $761,075  $3,298,850  $2,714,250
      Reimbursables                 19,340    30,012      90,849     121,241
      Labor contract
       drilling services             7,732    40,166      55,078     156,508
      Engineering,
       consulting and other            544       359       1,724       3,312
                                       ---       ---       -----       -----
                                   910,154   831,612   3,446,501   2,995,311
                                   -------   -------   ---------   ---------

    OPERATING COSTS AND EXPENSES
      Contract drilling services   265,765   243,882   1,011,882     880,049
      Reimbursables                 15,541    26,123      79,327     105,952
      Labor contract
       drilling services             5,279    32,443      42,573     125,624
      Engineering,
       consulting and other              -       150           -      17,520
      Depreciation and
       amortization                 93,252    82,607     356,658     292,987
      Selling, general and
       administrative               17,176    26,686      74,143      85,831
      Hurricane losses and
       recoveries, net                   -    (5,114)     10,000      (3,514)
      Gain on disposal of
       assets, net                    (964)        -     (36,485)          -
                                      ----       ---     -------         ---
                                   396,049   406,777   1,538,098   1,504,449
                                   -------   -------   ---------   ---------

    OPERATING INCOME               514,105   424,835   1,908,403   1,490,862

    OTHER INCOME (EXPENSE)
       Interest expense, net of
        amount capitalized          (1,956)   (1,230)     (4,388)    (13,111)
       Interest income and
        other, net                   1,430     2,527       8,443      11,151
                                     -----     -----       -----      ------

    INCOME BEFORE INCOME TAXES     513,579   426,132   1,912,458   1,488,902
    INCOME TAX PROVISION           (95,012)  (78,752)   (351,463)   (282,891)
                                   -------   -------    --------    --------

    NET INCOME                    $418,567  $347,380  $1,560,995  $1,206,011
                                  ========  ========  ==========  ==========

    NET INCOME PER SHARE:
      Basic                       $   1.60  $   1.30  $     5.90  $     4.52
      Diluted                     $   1.59  $   1.29  $     5.85  $     4.48

    WEIGHTED AVERAGE SHARES
     OUTSTANDING:
      Basic                        261,501   267,074     264,782     266,700
      Diluted                      262,452   269,508     266,805     269,330



                        NOBLE CORPORATION AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
                                  (In thousands)
                                    (Unaudited)

                                                             December 31,
                                                             ------------
                                                           2008        2007
                                                           ----        ----
    ASSETS
    CURRENT ASSETS
      Cash and cash equivalents                       $  513,311  $  161,058
      Accounts receivable                                644,840     613,115
      Insurance receivables                               13,516      39,066
      Prepaid expenses                                    21,207      20,721
      Other current assets                                47,467      26,231
                                                          ------      ------
    Total current assets                               1,240,341     860,191
                                                       ---------     -------

    PROPERTY AND EQUIPMENT
      Drilling equipment and facilities                7,423,440   6,354,782
      Other                                              105,340      80,169
                                                         -------      ------
                                                       7,528,780   6,434,951
      Accumulated depreciation                        (1,886,231) (1,639,035)
                                                      ----------  ----------
                                                       5,642,549   4,795,916
                                                       ---------   ---------

    OTHER ASSETS                                         219,441     219,899
                                                         -------     -------
                                                      $7,102,331  $5,876,006
                                                      ==========  ==========

    LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES
      Current maturities of long-term debt            $  172,698  $   10,334
      Accounts payable                                   259,107     198,395
      Accrued payroll and related costs                   76,842     115,914
      Taxes payable                                      107,211      85,641
      Interest payable                                    11,325       9,951
      Other current liabilities                           53,541      72,537
                                                          ------      ------
    Total current liabilities                            680,724     492,772
                                                         -------     -------

    LONG-TERM DEBT                                       750,789     774,182
    DEFERRED INCOME TAXES                                264,618     240,621
    OTHER LIABILITIES                                    120,886      65,705
                                                         -------      ------
                                                       1,817,017   1,573,280
                                                       ---------   ---------

    COMMITMENTS AND CONTINGENCIES

    MINORITY INTEREST                                     (4,468)     (5,596)
                                                          ------      ------

    SHAREHOLDERS' EQUITY
      Ordinary shares - par value $0.10 per share;
       400,000 shares authorized; 261,899 and 268,223
       shares issued and outstanding at December 31,
       2008 and 2007, respectively                        26,190      26,822
      Capital in excess of par value                     402,115     683,697
      Retained earnings                                4,919,667   3,602,870
      Accumulated other comprehensive loss               (58,190)     (5,067)
                                                         -------      ------
                                                       5,289,782   4,308,322
                                                       ---------   ---------
                                                      $7,102,331  $5,876,006
                                                      ==========  ==========



                        NOBLE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (In thousands)
                                   (Unaudited)
                                                         Twelve Months Ended
                                                             December 31,
                                                             ------------
                                                           2008        2007
                                                           ----        ----
    CASH FLOWS FROM OPERATING ACTIVITIES
      Net income                                      $1,560,995  $1,206,011
      Adjustments to reconcile net income to net
       cash from operating activities:
        Depreciation and amortization                    356,658     292,987
        Impairment loss on assets                              -      10,189
        Hurricane losses and recoveries, net              10,000      (3,514)
        Deferred income tax provision                     51,026      20,509
        Share-based compensation expense                  35,899      34,681
        Pension contributions                            (21,439)    (54,233)
        Gain on disposal of assets, net                  (36,485)          -
        Other, net                                        (2,884)     56,027
      Other changes in current assets and liabilities:
          Accounts receivable                            (31,725)   (204,874)
          Hurricane insurance receivables                  3,803           -
          Other current assets                           (22,040)     23,276
          Accounts payable                                 2,490     (25,671)
          Other current liabilities                      (14,639)     58,985
                                                         -------      ------
            Net cash from operating activities         1,891,659   1,414,373
                                                       ---------   ---------

    CASH FLOWS FROM INVESTING ACTIVITIES
      New construction                                  (799,736)   (754,967)
      Other capital expenditures                        (323,955)   (423,657)
      Major maintenance expenditures                    (107,630)   (108,419)
      Accrued capital expenditures                        40,830      45,260
      Hurricane insurance receivables                     21,747           -
      Proceeds from disposal of assets                    39,451       7,910
      Proceeds from sale of business unit                      -      10,000
                                                             ---      ------
            Net cash from investing activities        (1,129,293) (1,223,873)
                                                      ----------  ----------

    CASH FLOWS FROM FINANCING ACTIVITIES
      Short-term debt borrowing                                -     685,000
      Short-term debt payment                                  -    (685,000)
      Borrowings on bank credit facilities                30,000     220,000
      Payments on bank credit facilities                (130,000)   (120,000)
      Payments of other long-term debt                   (10,335)     (9,630)
      Net proceeds from employee stock transactions        9,304      38,995
      Proceeds from issuance of senior notes, net        249,238           -
      Tax benefit of employee stock transactions               -       7,477
      Dividends paid                                    (244,198)    (32,197)
      Repurchases of ordinary shares                    (314,122)   (195,797)
                                                        --------    --------
            Net cash from financing activities          (410,113)    (91,152)
                                                        --------     -------

    NET INCREASE IN CASH AND CASH EQUIVALENTS            352,253      99,348

    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD       161,058      61,710
                                                         -------      ------

    CASH AND CASH EQUIVALENTS, END OF PERIOD          $  513,311  $  161,058
                                                        ========    ========



                      NOBLE CORPORATION AND SUBSIDIARIES
               FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT
     (In thousands, except utilization amounts, operating days and average
                                   dayrates)
                                  (Unaudited)

                                                   Three Months Ended
                                                      December 31,
                                                   ------------------
                                                          2008
                                                          ----
                                              Contract
                                              Drilling
                                              Services   Other     Total
                                              --------   -----     -----
    OPERATING REVENUES
      Contract drilling services              $882,538   $    -  $882,538
      Reimbursables                             18,060    1,280    19,340
      Labor contract drilling services               -    7,732     7,732
      Engineering, consulting and other            530       14       544
                                                   ---       --       ---
                                              $901,128   $9,026  $910,154
                                              ========   ======  ========

    OPERATING COSTS AND EXPENSES
      Contract drilling services              $265,765   $    -  $265,765
      Reimbursables                             14,329    1,212    15,541
      Labor contract drilling services               -    5,279     5,279
      Engineering, consulting and other              -        -         -
      Depreciation and amortization             91,104    2,148    93,252
      Selling, general and administrative       17,073      103    17,176
      Hurricane losses and recoveries, net           -        -         -
      Gain on disposal of assets, net                -     (964)     (964)
                                                   ---     ----      ----
                                              $388,271   $7,778  $396,049
                                              ========   ======  ========

    OPERATING INCOME                          $512,857   $1,248  $514,105
                                              ========   ======  ========

    OPERATING STATISTICS
      Jackups:
        Average Rig Utilization                     88%
        Operating Days                           3,354
        Average Dayrate                       $151,601

      Semisubmersibles - (6,000 feet or greater):
        Average Rig Utilization                    100%
        Operating Days                             644
        Average Dayrate                       $364,180

      Semisubmersibles - (less than 6,000 feet):
        Average Rig Utilization                    100%
        Operating Days                             276
        Average Dayrate                       $249,603

      Drillships:
        Average Rig Utilization                     67%
        Operating Days                             184
        Average Dayrate                       $326,170

      Submersibles:
        Average Rig Utilization                     67%
        Operating Days                             184
        Average Dayrate                       $ 56,903

      Total:
        Average Rig Utilization                     88%
        Operating Days                           4,642
        Average Dayrate                       $190,137




                      NOBLE CORPORATION AND SUBSIDIARIES
               FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT
     (In thousands, except utilization amounts, operating days and average
                                   dayrates)
                                  (Unaudited)

                                                   Three Months Ended
                                                      December 31,
                                                   ------------------
                                                          2007
                                                          ----
                                              Contract
                                              Drilling
                                              Services   Other     Total
                                              --------   -----     -----
    OPERATING REVENUES
      Contract drilling services              $761,075  $     -  $761,075
      Reimbursables                             20,233    9,779    30,012
      Labor contract drilling services               -   40,166    40,166
      Engineering, consulting and other            319       40       359
                                                   ---       --       ---
                                              $781,627  $49,985  $831,612
                                              ========  =======  ========

    OPERATING COSTS AND EXPENSES
      Contract drilling services              $243,882  $     -  $243,882
      Reimbursables                             16,644    9,479    26,123
      Labor contract drilling services               -   32,443    32,443
      Engineering, consulting and other              -      150       150
      Depreciation and amortization             79,679    2,928    82,607
      Selling, general and administrative       26,181      505    26,686
      Hurricane losses and recoveries, net      (5,114)       -    (5,114)
      Gain on disposal of assets, net                -        -         -
                                                   ---      ---       ---
                                              $361,272  $45,505  $406,777
                                              ========  =======  ========

    OPERATING INCOME                          $420,355  $ 4,480  $424,835
                                              ========   ======  ========

    OPERATING STATISTICS
      Jackups:
        Average Rig Utilization                     98%
        Operating Days                           3,697
        Average Dayrate                       $138,746

      Semisubmersibles - (6,000 feet or greater):
        Average Rig Utilization                     97%
        Operating Days                             626
        Average Dayrate                       $269,146

      Semisubmersibles - (less than 6,000 feet):
        Average Rig Utilization                    100%
        Operating Days                             276
        Average Dayrate                       $185,227

      Drillships:
        Average Rig Utilization                     74%
        Operating Days                             204
        Average Dayrate                       $118,581

      Submersibles:
        Average Rig Utilization                     31%
        Operating Days                              85
        Average Dayrate                       $ 50,695

      Total:
        Average Rig Utilization                     93%
        Operating Days                           4,888
        Average Dayrate                       $155,707




                      NOBLE CORPORATION AND SUBSIDIARIES
               FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT
     (In thousands, except utilization amounts, operating days and average
                                   dayrates)
                                  (Unaudited)

                                                   Three Months Ended
                                                      September 30,
                                                   ------------------
                                                          2008
                                                          ----
                                              Contract
                                              Drilling
                                              Services   Other     Total
                                              --------   -----     -----
    OPERATING REVENUES
      Contract drilling services              $835,198   $    -  $835,198
      Reimbursables                             17,227      860    18,087
      Labor contract drilling services               -    8,197     8,197
      Engineering, consulting and other             94      405       499
                                                    --      ---       ---
                                              $852,519   $9,462  $861,981
                                              ========   ======  ========

    OPERATING COSTS AND EXPENSES
      Contract drilling services              $253,729   $    -  $253,729
      Reimbursables                             15,604      890    16,494
      Labor contract drilling services               -    5,410     5,410
      Engineering, consulting and other              -        -         -
      Depreciation and amortization             90,923    1,748    92,671
      Selling, general and administrative       15,886      141    16,027
      Hurricane losses and recoveries, net      10,000        -    10,000
      Gain on disposal of assets, net                -        -         -
                                                   ---      ---       ---
                                              $386,142   $8,189  $394,331
                                              ========   ======  ========

    OPERATING INCOME                          $466,377   $1,273  $467,650
                                              ========   ======  ========

    OPERATING STATISTICS
      Jackups:
        Average Rig Utilization                     91%
        Operating Days                           3,444
        Average Dayrate                       $150,350

      Semisubmersibles - (6,000 feet or greater):
        Average Rig Utilization                     95%
        Operating Days                             613
        Average Dayrate                       $329,586

      Semisubmersibles - (less than 6,000 feet):
        Average Rig Utilization                    100%
        Operating Days                             276
        Average Dayrate                       $237,674

      Drillships:
        Average Rig Utilization                     67%
        Operating Days                             184
        Average Dayrate                       $214,758

      Submersibles:
        Average Rig Utilization                     67%
        Operating Days                             184
        Average Dayrate                       $ 55,117

      Total:
        Average Rig Utilization                     90%
        Operating Days                           4,701
        Average Dayrate                       $177,683

Source: PRNewsWire



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