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TheStreet Open House

Ensco Plc Reports Third Quarter 2012 Results

“We also continued to high-grade our fleet by selling a barge rig in the third quarter and a jackup rig in early October.”

Mr. Swent concluded, “Ensco was reinstated into the S&P 500 Index during the third quarter after we converted our NYSE listing to ordinary shares in the second quarter.”

Ensco will conduct a conference call at 10:00 a.m. Central Time (3:00 p.m. London time) on Thursday, 1 November 2012 to discuss third quarter 2012 results. The call will be webcast live at www.enscoplc.com. Interested parties may listen to the call by dialing (866) 524-3160 from within the United States and +1 (412) 317-6760 from outside the U.S. Please ask for the Ensco conference call. It is recommended that participants call fifteen minutes before the scheduled start time.

A replay of the conference call will be available by telephone one hour after the completion of the call through 12 November 2012 by dialing (877) 344-7529 or, if calling from outside the U.S. +1 (412) 317-0088 (Conference ID 10011411). A webcast replay, MP3 download and transcript of the call will be available at www.enscoplc.com.

Ensco plc (NYSE: ESV) brings energy to the world as a global provider of offshore drilling services to the petroleum industry. For 25 years, the company has focused on operating safely and exceeding customer expectations. Ensco is ranked #1 for total customer satisfaction with top honors in 13 of 17 categories in the most recent annual survey by EnergyPoint Research. Operating the world’s newest ultra-deepwater fleet and largest fleet of active premium jackups, Ensco has a major presence in the most strategic offshore basins across six continents. Ensco plc is an English limited company (England No. 7023598) with its registered office and corporate headquarters located at 6 Chesterfield Gardens, London W1J 5BQ. To learn more, visit our website at www.enscoplc.com.

Statements contained in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “could,” “may,” “might,” “should,” “will” and similar words and specifically include statements regarding expected financial performance, day rates and backlog; the expected synergies from the integration of Pride International’s operations; the timing of delivery, mobilization, contract commencement, relocation or other movement of rigs; and general market, business and industry conditions, trends and outlook. Such statements are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including downtime and other risks associated with offshore rig operations, relocations, severe weather or hurricanes; changes in worldwide rig supply and demand, competition and technology; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties; terrorism, piracy and military action; risks inherent to shipyard rig construction, repair, maintenance or enhancement; possible cancellation or suspension of drilling contracts as a result of mechanical difficulties, performance or other reasons; the outcome of litigation, legal proceedings, investigations or other claims or contract disputes; governmental regulatory, legislative and permitting requirements affecting drilling operations; our ability to attract and retain skilled personnel on commercially reasonable terms; environmental or other liabilities, risks or losses; debt restrictions that may limit our liquidity and flexibility; our ability to realize the expected benefits from our redomestication and actual contract commencement dates. In addition to the numerous factors described above, you should also carefully read and consider “Item 1A. Risk Factors” in Part I and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our most recent annual report on Form 10-K, as updated in our subsequent quarterly reports on Form 10-Q, which are available on the SEC’s website at www.sec.gov or on the Investor Relations section of our website at www.enscoplc.com . Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements, except as required by law.

 
ENSCO PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
(Unaudited)
                                 
 
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
 
OPERATING REVENUES $ 1,123.6 $ 915.6 $ 3,222.0 $ 1,841.3
 
OPERATING EXPENSES
Contract drilling (exclusive of depreciation) 523.1 477.5 1,533.0 955.4
Depreciation 145.2 135.8 424.1 278.8
General and administrative   40.2     40.8     113.9     118.3  
  708.5     654.1     2,071.0     1,352.5  
 
OPERATING INCOME 415.1 261.5 1,151.0 488.8
 
OTHER INCOME (EXPENSE)
Interest income 5.5 6.5 17.2 9.0
Interest expense, net (30.9 ) (30.8 ) (95.5 ) (54.5 )
Other, net   0.2     10.8     2.4     16.1  
  (25.2 )   (13.5 )   (75.9 )   (29.4 )
 
INCOME BEFORE INCOME TAXES 389.9 248.0 1,075.1 459.4
 
PROVISION FOR INCOME TAXES 44.5 41.9 119.6 84.2
 
NET INCOME 345.4 206.1 955.5 375.2
 
NONCONTROLLING INTERESTS (1.9 ) (1.6 ) (5.3 ) (4.2 )
 
NET INCOME ATTRIBUTABLE TO ENSCO $ 343.5   $ 204.5   $ 950.2   $ 371.0  
 
EARNINGS PER SHARE
Basic $ 1.48 $ 0.89 $ 4.10 $ 2.04
Diluted $ 1.48 $ 0.88 $ 4.10 $ 2.03
NET INCOME ATTRIBUTABLE TO ENSCO SHARES
Basic $ 339.9 $ 202.2 $ 940.4 $ 366.7
Diluted $ 339.9 $ 202.2 $ 940.4 $ 366.7
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic 229.6 228.1 229.2 180.0
Diluted 229.9 228.6 229.5 180.4
 
 
ENSCO PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
                 
 
September 30, December 31,
2012 2011
(Unaudited)
 
ASSETS
 
CURRENT ASSETS
Cash and cash equivalents $ 159.8 $ 430.7
Accounts receivable, net 853.2 851.7
Other   397.6   398.9
Total current assets 1,410.6 1,681.3
 
PROPERTY AND EQUIPMENT, NET 13,120.0 12,421.9
 
GOODWILL 3,274.0 3,274.0
 
OTHER ASSETS, NET   429.7   521.6
 
$ 18,234.3 $ 17,898.8
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES
Accounts payable and accrued liabilities and other $ 867.4 $ 1,160.1
Short-term debt - 125.0
Current maturities of long-term debt   47.5   47.5
Total current liabilities 914.9 1,332.6
 
LONG-TERM DEBT 4,822.9 4,877.6
 
DEFERRED INCOME TAXES 327.0 339.5
 
OTHER LIABILITIES 475.6 464.6
 
TOTAL EQUITY   11,693.9   10,884.5
 
$ 18,234.3 $ 17,898.8
 
 
ENSCO PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
                 
 
Nine Months Ended
September 30,
2012 2011
 
OPERATING ACTIVITIES
Net income $ 955.5 $ 375.2
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation expense 424.1 278.8
Other 31.6 28.2
Changes in operating assets and liabilities   176.4     (280.2 )
Net cash provided by operating activities   1,587.6     402.0  
 
INVESTING ACTIVITIES
Additions to property and equipment (1,583.8 ) (498.4 )
Acquisition of Pride International, Inc., net of cash acquired - (2,656.0 )
Other   66.8     41.6  
Net cash used in investing activities   (1,517.0 )   (3,112.8 )
 
FINANCING ACTIVITIES
Cash dividends paid (260.9 ) (211.4 )
Commercial paper borrowings, net (125.0 ) 175.0
Equity issuance (cost) reimbursement 66.7 (70.5 )
Reduction of long-term borrowings (30.9 ) (196.7 )
Proceeds from issuance of senior notes - 2,462.8
Debt financing costs - (31.9 )
Other   6.7     13.4  
Net cash (used in) provided by financing activities   (343.4 )   2,140.7  
 
Effect of exchange rate changes on cash and cash equivalents 1.9 (0.7 )
 
DECREASE IN CASH AND CASH EQUIVALENTS (270.9 ) (570.8 )
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   430.7     1,050.7  
 
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 159.8   $ 479.9  
 
 
ENSCO PLC AND SUBSIDIARIES
OPERATING STATISTICS
(Unaudited)
                         
Second
Third Quarter Quarter
2012 2011 2012
 
Rig utilization (1)
 
Deepwater 90 % 74 % 91 %
Midwater 74 % 89 % 79 %
Jackup 83 % 77 % 83 %
     
Total   84 %   77 %   85 %
 
 
Average day rates (2)
 
Deepwater $ 402,489 $ 391,129 $ 389,761
Midwater 221,420 239,379 227,378
Jackup 108,588 99,775 105,356
     
Total $ 200,409 $ 178,006 $ 191,663
 
(1)         Rig utilization is derived by dividing the number of days under contract by the number of days in the period. Days under
contract equals the total number of days that rigs have earned a day rate, including days associated with compensated
downtime and mobilizations. For newly-constructed or acquired rigs, the number of days in the period begins upon
commencement of drilling operations for rigs with a contract or when the rig becomes available for drilling operations
for rigs without a contract.
 
(2) Average day rates are derived by dividing contract drilling revenues, adjusted to exclude certain types of non-recurring
reimbursable revenues, lump sum revenues and revenues attributable to amortization of drilling contract intangibles, by
the aggregate number of contract days, adjusted to exclude contract days associated with certain mobilizations,
demobilizations, shipyard contracts and standby contracts.




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