SDRL - Seadrill reports fourth quarter and preliminary 2012 results

Seadrill Limited (SDRL) - Fourth quarter and preliminary 2012 results

Highlights

• Seadrill generates fourth quarter 2012 EBITDA*⁾ of US$604 million
• Seadrill reports fourth quarter 2012 net income of US$50 million and earnings per share of US$0.04
• Seadrill prepaid US$0.85 per share in dividend for the fourth quarter 2012 in December 2012.
• Seadrill Partners LLC listed its common units on the NYSE raising US$207 million
• Seadrill secured a five-year commitment with Husky for the newbuild ultra-deepwater semi-submersible rig West Mira for operations offshore Canada, with an estimated total revenue potential of US$1.2 billion
• Seadrill secured a two-year extension for the jack-up West Epsilon with a total estimated revenue potential of US$215 million
• Seadrill added in total US$2.3 billion to the orderbacklog during the fourth quarter
• Seadrill increases ownership in Asia Offshore Drilling to 66.16 percent

Subsequent events

• Seadrill announces the signing of the sale and purchase agreement for the sale of 18 tender rigs to SapuraKencana Petroleum Bhd. for a total enterprise value of US$2.9 billion
• Seadrill secures a two-year extension for the ultra-deepwater semi-submersible rig West Leo with a total estimated revenue potential of US$430 million
• Seadrill completes the acquisition of the ultra-deepwater semi-submersible rig Songa Eclipse for a total consideration of US$590 million
• Seadrill orders two jack-ups for a total estimated project price of US$230 million per rig, with deliveries in the first and second quarter 2015
• Seadrill takes delivery of the newbuild tender rig T15
• Seadrill participates in a private placement in Archer Limited, maintaining its shareholding at 39.9 percent
• Seadrill participates in a private placement in Sevan Drilling ASA, increasing the ownership from 28.5 to 30.31 percent

*) EBITDA is defined as earnings before interest, depreciation and amortization equal to operating profit plus depreciation and amortization.

Condensed consolidated income statements
Fourth quarter and preliminary 2012 results

Consolidated revenues for the fourth quarter of 2012 amounted to US$1,215 million compared to US$1,092 million in the third quarter 2012.

Operating profit for the quarter was US$441 million compared to US$413 million in the preceding quarter.

Net financial items for the quarter showed a loss of US$335 million compared to a loss of US$158 million in the previous quarter, mainly related to recording an impairment charge of US$221 million on our investment in Archer in the fourth quarter 2012. In addition, we recorded a gain of US$17 million on forwards and cross currency interest rate swap agreements during the quarter.

Income taxes for the fourth quarter were US$56 million, an increase of US$17 million in the previous quarter.

Net income for the quarter was US$50 million representing basic earnings per share of US$0.04.

The Company reports operating revenues of US$4,478 million, operating income of US$1,791 million and a net income of US$1,257 million for the year 2012. This compares to operating revenues of US$4,192 million, operating income of US$1,774 million and a net income of US$1,482 million for the year 2011.

Balance sheet
As of December 31, 2012, total assets amounted to US$19,633 million, an increase of US$154 million compared to September 30, 2012.

Total current assets increased from US$2,298 million to US$2,355 million over the course of the quarter primarily related to an increase in accounts receivable and marketable securities offset by a decrease in cash and cash equivalents. 

Total non-current assets increased from US$17,181 million to US$17,278 million mainly due to payments for the yard installments for T-15 and West Mira.

Total current liabilities increased from US$2,896 million to US$3,561 million largely due to an increase in current portion of long-term debt. 

Long-term interest bearing debt decreased from US$9,296 million to US$8,695 million over the course of the quarter and net interest bearing debt increased from $10,354 million to US$11,039 million.

Total equity decreased from US$6,567 million to US$6,077 million as of December 31, 2012. The decrease is mainly due to the paid dividend for the third quarter and the accelerated payment for the fourth quarter, offset by net income and the proceeds from the private placement in our subsidiary Seadrill Partners LLC in October 2012.   

Cash flow
As of December 31, 2012, cash and cash equivalents amounted to US$318 million, which corresponds to a decrease of US$200 million compared to the previous quarter. Net cash from operating activities for the period was US$1,590 million whereas net cash used in investing activities for the same period amounted to US$1,360 million, primarily related to additions to newbuilds. Net cash used for financing activities was US$395 million mainly due to dividend payments and net proceeds from debt.

Outstanding shares
As of December 31, 2012, the issued common shares in Seadrill Limited totaled 469,178,074 adjusted for our holding of 72,859 treasury shares. In addition, we had stock options for 3.9 million shares outstanding under various share incentive programs for management, out of which approximately 1.2 million have vested and are exercisable.

For further information, please see the fourth quarter and preliminary 2012 report attached.