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Ensco Plc Reports Fourth Quarter And Full-Year 2012 Results

Depreciation expense was $144 million, compared to $137 million a year ago. The $7 million increase was mostly due to the addition of ENSCO 8505 to the active fleet.

General and administrative expense declined to $35 million from $40 million in fourth quarter 2011. Acquisition-related costs in fourth quarter 2011 equaled $8 million as noted above.

Interest expense in fourth quarter 2012 was $28 million, net of $28 million of interest that was capitalized, compared to interest expense of $41 million in fourth quarter 2011, net of $17 million of interest that was capitalized.

Segment Highlights

In fourth quarter 2012, the Company changed its segment reporting. All drillships and semisubmersibles are now reflected in a Floaters segment. The Jackups and Other segments are unchanged.

Floaters

Floater revenues were $672 million in fourth quarter 2012, up 10% from $610 million a year ago. A full quarter of operations for ENSCO DS-5, the commencement of ENSCO 8505, and an increase in the average day rate and utilization contributed to this growth. The average day rate increased to $368,000 from $342,000 in fourth quarter 2011. Utilization improved three percentage points to 83%.

Floater contract drilling expense was $313 million in fourth quarter 2012, up from $312 million in fourth quarter 2011. Adjusted for warranty claim settlements of $11 million noted above and ENSCO 5005 and ENSCO DS-1 deferring expenses related to shipyard upgrades, contract drilling expense increased 9%. Commencement of operations for ENSCO 8505 and an increase in unit labor costs contributed to this increase.

Jackups

Jackup revenues grew 15% to $393 million, up from $341 million a year ago. The increase was due to a $14,000 increase in the average day rate to $111,000, partially offset by a one percentage point decline in utilization to 87%. A broad-based pickup in customer demand around the world drove the increase in average day rate. Contract drilling expense increased $29 million to $196 million, mostly due to an increase in unit labor costs.

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