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 Ensco plc Reports Fourth Quarter and Full-Year 2017 Results
   Monday, February 26, 2018 5:36:55 PM ET

Ensco plc (ESV ) today reported a loss of $0.49 per share for fourth quarter 2017 compared to earnings of $0.13 per share a year ago. Results from discontinued operations were zero cents per share in fourth quarter 2017 compared to earnings per share of $0.03 in fourth quarter 2016.

Several items influenced these comparisons:

-- $183 million or $0.43 per share of non-cash asset impairments recognized in fourth quarter 2017

-- $49 million or $0.11 per share of transaction costs related to the Atwood acquisition in fourth quarter 2017, of which $42 million is included in general and administrative expense and $7 million in contract drilling expense

-- $140 million or $0.33 per share bargain purchase gain related to the Atwood acquisition included in fourth quarter 2017 other income

-- $19 million or $0.05 per share of discrete tax expense in fourth quarter 2017 tax provision primarily related to recent changes in U.S. tax legislation

-- $9 million or $0.03 per share gain included in fourth quarter 2016 other income related to an exchange of debt for equity

-- $7 million or $0.02 per share of discrete tax expense in fourth quarter 2016 tax provision

Adjusted for the items noted above, the loss from continuing operations was $0.23 per share in fourth quarter 2017 compared to earnings of $0.09 per share a year ago.

Chief Executive Officer and President Carl Trowell said, "During the fourth quarter, we successfully completed the Atwood acquisition, which significantly enhanced the technical capabilities of our rig fleet and improved our ability to meet increasing customer demand for high-specification assets. Integration continues to progress as planned and we remain on track to achieve targeted synergies."

Mr. Trowell continued, "We took additional steps to improve our financial position by extending our revolving credit facility and refinancing our nearest-term debt maturities through a senior notes offering and debt tender earlier this year. These actions provide us with the financial flexibility to continue positioning Ensco as a leading offshore service provider."

Mr. Trowell concluded, "Our offshore crews and onshore employees achieved outstanding results despite challenging market conditions during 2017. Operational uptime was 99% for the second consecutive year and we set a new company record for safety performance by lowering our total recordable incident rate to 0.15, significantly outperforming the industry average that increased year over year. This strong operational and safety performance was recognized by our customers, who rated Ensco first in total satisfaction for the eighth consecutive year in the independent EnergyPoint survey, and helped us to win 15% of the new rig years awarded globally -- more than any other offshore driller and double that of our nearest independent competitor."

Fourth Quarter Results

Revenues were $454 million in fourth quarter 2017 compared to $505 million a year ago. Revenues declined 10% compared to the year-ago period primarily due to a decline in the average day rate for the fleet to $157,000 from $177,000 last year. The addition of $23 million of revenue from Atwood, net of $16 million of contract intangible asset amortization, partially offset lower average day rates across the fleet.

Contract drilling expense increased to $334 million in fourth quarter 2017 from $289 million a year ago due to the addition of $53 million of costs associated with 11 Atwood rigs and $7 million of integration-related transaction costs. Disciplined cost management, including more efficient stacking of rigs, partially offset this increase.

Fourth quarter 2017 results included a non-cash asset impairment of $183 million primarily related to two non-core floaters. There was no impairment charge recognized in the year-ago period.

Depreciation expense increased to $120 million in fourth quarter 2017 from $110 million a year ago due to the addition of Atwood rigs. General and administrative expense increased to $71 million from $25 million a year ago due to $42 million of transaction costs noted above and $4 million of Atwood support costs.

Other income was $87 million in fourth quarter 2017 compared to other expense of $46 million a year ago. As noted above, the year-to-year comparison was influenced by a $140 million bargain purchase gain recognized upon closing the Atwood acquisition and a $9 million gain from a debt for equity exchange a year ago.

Tax expense increased to $42 million in fourth quarter 2017 from $4 million a year ago. As noted above, fourth quarter 2017 tax provision included $19 million of discrete tax expense compared to $7 million of discrete tax items in fourth quarter 2016. The increase in discrete tax expense was primarily related to recently enacted U.S. tax legislation.

Segment Highlights

Floaters

Floater revenues of $303 million in fourth quarter 2017 were consistent with a year ago as a decline in the average day rate to $307,000 from $358,000 in fourth quarter 2016 was offset by an increase in the number of operating days mostly due to the Atwood acquisition. Fourth quarter 2017 floater revenues included $19 million related to the acquired Atwood rigs, net of $16 million of non-cash contract intangible asset amortization. Adjusted for uncontracted rigs and planned downtime, operational utilization was 97% compared with 98% a year ago.

Contract drilling expense increased to $193 million in fourth quarter 2017 from $151 million a year ago. The year-on-year increase was primarily due to $48 million from the addition of six legacy Atwood floaters, partially offset by cost savings from more efficient stacking of rigs.

Jackups

Jackup revenues were $137 million in fourth quarter 2017 compared to $187 million a year ago primarily due to a decline in the average day rate to $76,000 from $101,000 in fourth quarter 2016. Fourth quarter 2017 jackup revenues included $4 million related to the acquired Atwood rigs. Adjusted for uncontracted rigs and planned downtime, operational utilization was 98% up from 96% a year ago.

Contract drilling expense of $128 million in fourth quarter 2017 compared to $127 million a year ago as increased costs from five acquired Atwood jackups were largely offset by cost savings from stacked rigs that operated during the year-ago period.

Other

Other is composed of managed drilling rigs. Revenues of $15 million were consistent with the prior-year period. Contract drilling expense increased to $13 million in fourth quarter 2017 from $11 million a year ago.

 
                                                                                                                                                                                                                                                                     Fourth Quarter
                                                                                                            ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
(in millions of $,                                                                                                                                                                                      Floaters                                                                                                                                                                                             Jackups                                                                                                                                                                                              Other                                                                                                                                                     Reconciling                                                                                                                           Consolidated Total
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 Items
                                                                                                            --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                    --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                    --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                    ------------------------------------------------------------------------------------------------------------                                                -------------------------------------------------------------------------------------------------------------------------------------------------
 except %)                                                                                                                  2017                                    2016                                     Chg                                    2017                                    2016                                     Chg                                    2017                                    2016                                     Chg                                    2017                                    2016                                2017                                2016                      Chg
                                                                                                            -------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- ------------------------------------------------ -------------------- -------------------------------------------------------- -------------------- -------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Revenues                                                                                                             302.8                                                                         302.8                                                                --                    %                                                    136.5                                                                         186.5                                                                           (27                   )%                                                     14.9                                                                          15.3                                                                            (3 )%                                                             --                                                                --                                                                 454.2                                                                         504.6                                                                (10 )%
Operating expenses
  Contract drilling                                                                                                  193.1                                                                         151.4                                                                            28                    %                                                    128.3                                                                         126.8                                                                             1                    %                                                     12.9                                                                          10.8                                                                            19 %                                                              --                                                                --                                                                 334.3                                                                         289.0                                                                 16  %
  Loss on impairment                                                                                                 174.7                                                                --                                                                                                 nm                                                      8.2                                                                --                                                                                                 nm                                           --                                                                --                                                                --                                                                --                                                                --                                                                 182.9                                                                --                                                                    nm
  Depreciation                                                                                                        79.9                                                                          73.1                                                                             9                    %                                                     36.2                                                                          32.9                                                                            10                    %                                           --                                                                --                                                                --                                                                           3.4                                                                           4.2                                                                 119.5                                                                         110.2                                                                  8  %
  General and admin.                                                                                        --       --       --       --       --       --       --       --       --                 70.9                 24.7         70.9                 24.7           nm
                                                                                                            -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------
Operating income (loss)                                                                                             (144.9 )                                  78.3                                        nm              (36.2 )                                  26.8                                        nm                2.0                  4.5                  (56 )%                                (74.3 )                                 (28.9 )                        (253.4 )                                  80.7           nm
                                                                                                            -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------------------------------------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------
 

Financial Position -- 31 December 2017

-- $2.8 billion of contracted revenue backlog excluding bonus opportunities

-- $2.9 billion of liquidity -- $0.9 billion of cash and short-term investments

-- $2.0 billion available under our revolving credit facility

-- $4.8 billion of long-term debt

Pro Forma Financial Position - 31 December 2017

On 10 January 2018, the Company issued $1.0 billion of new senior notes due 2026 and, more recently, repurchased $650 million aggregate principal amount of senior notes. Adjusting for these transactions, the Company’s pro forma financial position as of 31 December 2017 reflected:

-- $2.8 billion of contracted revenue backlog excluding bonus opportunities

-- $3.2 billion of liquidity -- $1.2 billion of cash and short-term investments

-- $2.0 billion available under our revolving credit facility

-- No debt maturities until third quarter 2020 and only $308 million of debt maturing before 2024

-- $5.1 billion of long-term debt

-- $8.7 billion of Ensco shareholders’ equity

-- 31% net debt-to-capital ratio (net of $1.2 billion of cash and short-term investments)

Ensco will conduct a conference call to discuss fourth quarter 2017 results at 10:00 a.m. CT (11:00 a.m. ET and 4:00 p.m. London) on Tuesday, 27 February 2018. The conference call will be webcast live at www.enscoplc.com. Alternatively, callers may dial 1-855-239-3215 within the United States or +1-412-542-4130 from outside the U.S. Please ask for the Ensco conference call. It is recommended that participants call 20 minutes ahead of the scheduled start time. Callers may avoid delays by pre-registering to receive a dial-in number and PIN at http://dpregister.com/10115866 .

A webcast replay and transcript of the call will be available at www.enscoplc.com. A replay will also be available through 27 March 2018 by dialing 1-877-344-7529 within the United States or +1-412-317-0088 from outside the U.S. (conference ID 10115866).

Ensco plc (ESV ) brings energy to the world as a global provider of offshore drilling services to the petroleum industry. For more than 30 years, the company has focused on operating safely and going beyond customer expectations. Ensco is ranked first in total customer satisfaction in the latest independent survey by EnergyPoint Research - the eighth consecutive year that Ensco has earned this distinction. Operating one of the newest ultra-deepwater rig fleets and a leading premium jackup fleet, 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 corporate headquarters located at 6 Chesterfield Gardens, London W1J 5BQ. To learn more, visit our website at www.enscoplc.com.

Forward-Looking Statements

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 involving expected financial performance; effective tax rate, day rates and backlog; estimated rig availability; rig commitments and contracts; contract duration, status, terms and other contract commitments; letters of intent, letters of award or other correspondence indicating an award; scheduled delivery dates for rigs; the timing of delivery, mobilization, contract commencement, relocation or other movement of rigs; our intent to sell or scrap rigs; and general market, business and industry conditions, trends and outlook. In addition, statements included in this press release regarding the acquisition of Atwood and the anticipated benefits, opportunities, synergies and effects of the transaction are forward-looking statements. The forward-looking statements contained in this press release are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including actions by regulatory authorities, rating agencies or other third parties; actions by our security holders; costs and difficulties related to the integration of Atwood and the related impact on our financial results and performance; our ability to repay debt and the timing thereof; availability and terms of any financing; commodity price fluctuations, customer demand, new rig supply, 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, suspension or termination of drilling contracts as a result of mechanical difficulties, performance, customer finances, the decline or the perceived risk of a further decline in oil and/or natural gas prices, or other reasons, including terminations for convenience (without cause); the cancellation of letters of intent or letters of award or any failure to execute definitive contracts following announcements of letters of intent or letters of award; 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; and cybersecurity risks and threats. 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 OPERATIONS
                                                                                                                                                                                                 (In millions, except per share amounts)
 
                                                                                                                            Three Months Ended                                                                                                      Twelve Months Ended
                                                                                                                                                                                                           December 31,                                                                                                                                                  December 31,
                                                                                                                                                       ------------------------------------------------------------------------------------------------------------                                                  ------------------------------------------------------------------------------------------------------------
                                                                                                                                                                       2017                                     2016                                                                           2017                                     2016
                                                                                                                                                       -------------------------------------                                          -------------------------------------                                          -------------------------------------                                          -------------------------------------
                                                                                                                                                                                                            (unaudited)                                                                                                           (unaudited)
                                                                                                                                                                                                                                                                                                                                                                                                     
OPERATING REVENUES                                                                                                                                           $   454.2                                                                      $   504.6                                                                      $ 1,843.0                                                                      $ 2,776.4
                                                                                                                                                                                                                                                                                                                                                                                                     
OPERATING EXPENSES
   Contract drilling (exclusive of depreciation)                                                                                                                 334.3                                                                          289.0                                                                        1,189.5                                                                        1,301.0
   Loss on impairment                                                                                                                                            182.9                                                                 --                                                                          182.9                                                                 --
   Depreciation                                                                                                                                                  119.5                                                                          110.2                                                                          444.8                                                                          445.3
   General and administrative                                                         70.9                  24.7                 157.8                 100.8  
------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------
                                                                  707.6                 423.9               1,975.0               1,847.1  
------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                     
OPERATING INCOME (LOSS)                                                                                                                                         (253.4 )                                                                         80.7                                                                         (132.0 )                                                                        929.3
                                                                                                                                                                                                                                                                                                                                                                                                     
OTHER INCOME (EXPENSE)
   Interest income                                                                                                                                                 3.5                                                                            5.2                                                                           25.8                                                                           13.8
   Interest expense, net                                                                                                                                         (57.2 )                                                                        (56.3 )                                                                       (224.2 )                                                                       (228.8 )
   Other, net                                                                        141.0                   4.9                 134.4                 283.2  
------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------
                                                                   87.3                 (46.2 )                                  (64.0 )                                   68.2  
------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                     
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES                                                                                                    (166.1 )                                                                         34.5                                                                         (196.0 )                                                                        997.5
                                                                                                                                                                                                                                                                                                                                                                                                     
PROVISION FOR INCOME TAXES                                                            42.4                   3.9                 109.2                 108.5  
------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                     
INCOME (LOSS) FROM CONTINUING OPERATIONS                                                                                                                        (208.5 )                                                                         30.6                                                                         (305.2 )                                                                        889.0
                                                                                                                                                                                                                                                                                                                                                                                                     
DISCONTINUED OPERATIONS, NET                                                           1.4                   9.9                   1.0                   8.1  
------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                     
NET INCOME (LOSS)                                                                                                                                               (207.1 )                                                                         40.5                                                                         (304.2 )                                                                        897.1
                                                                                                                                                                                                                                                                                                                                                                                                     
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS                  --                  (1.5 )                                    0.5                  (6.9 )
------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                     
NET INCOME (LOSS) ATTRIBUTABLE TO ENSCO                                          $  (207.1 )                              $    39.0             $  (303.7 )                              $   890.2  
================================================================== ==================== ==================== ==================== ==================== ======= ======= ==================== ==================== ==================== ======= ======= ==================== ==================== ==================== ======= ======= ==================== ==================== ==================== ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                     
EARNINGS (LOSS) PER SHARE - BASIC AND DILUTED
   Continuing operations                                                                                                                                     $   (0.49 )                                                                    $    0.10                                                                      $   (0.91 )                                                                    $    3.10
   Discontinued operations                                                  --                  0.03        --                  0.03  
------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------------
                                                              $   (0.49 )                              $    0.13             $   (0.91 )                              $    3.13  
================================================================== ==================== ==================== ==================== ==================== ======= ======= ==================== ==================== ==================== ======= ======= ==================== ==================== ==================== ======= ======= ==================== ==================== ==================== ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                     
NET INCOME (LOSS) ATTRIBUTABLE TO ENSCO SHARES - BASIC AND DILUTED                                                                                           $  (207.2 )                                                                    $    38.2                                                                      $  (304.1 )                                                                    $   873.6
                                                                                                                                                                                                                                                                                                                                                                                                     
WEIGHTED-AVERAGE SHARES OUTSTANDING
   Basic                                                                                                                                                         426.3                                                                          300.4                                                                          332.5                                                                          279.1
   Diluted                                                                                                                                                       426.3                                                                          300.6                                                                          332.5                                                                          279.1
 
 
                                                                                                                                ENSCO PLC AND SUBSIDIARIES
                                                                                                                           CONDENSED CONSOLIDATED BALANCE SHEETS
                                                                                                                                       (In millions)
 
                                                                              December 31,                        December 31,
                                                                                                                                                                                 2017                                                                                         2016
                                                                                                                                                                --------------------------------------                                                               ----------------------
                                                                                                                                                                              (unaudited)
ASSETS
                                                                                                                                                                                                                                                                      
CURRENT ASSETS
    Cash and cash equivalents                                                                                                                                         $    445.4                                                                                              $    1,159.7
    Short-term investments                                                                                                                                                 440.0                                                                                                   1,442.6
    Accounts receivable, net                                                                                                                                               345.4                                                                                                     361.0
    Other                                                                   381.2                         316.0
------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------- -------------------- -------------------- -------------------- ----------------------
        Total current assets                                              1,612.0                       3,279.3
------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------- -------------------- -------------------- -------------------- ----------------------
                                                                                                                                                                                                                                                                      
PROPERTY AND EQUIPMENT, NET                                                                                                                                             12,873.7                                                                                                  10,919.3
                                                                                                                                                                                                                                                                      
OTHER ASSETS, NET                                                           140.2                         175.9
------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------- -------------------- -------------------- -------------------- ----------------------
                                                                                                                                                                                                                                                                      
                                                    $ 14,625.9                  $   14,374.5
====================================================== ==================== ==================== ==================== ==================== ==================== ======= ======== ==================== ==================== ==================== ==================== ========== ==========
                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                      
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                                                                                                                                                                                                                                                      
CURRENT LIABILITIES
    Accounts payable and accrued liabilities and other                                                                                                                $    758.5                                                                                              $      522.5
    Current maturities of long-term debt                           --                         331.9
------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------- -------------------- -------------------- -------------------- ----------------------
        Total current liabilities                                           758.5                         854.4
------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------- -------------------- -------------------- -------------------- ----------------------
                                                                                                                                                                                                                                                                      
LONG-TERM DEBT                                                                                                                                                           4,750.7                                                                                                   4,942.6
                                                                                                                                                                                                                                                                      
OTHER LIABILITIES                                                                                                                                                          386.7                                                                                                     322.5
                                                                                                                                                                                                                                                                      
TOTAL EQUITY                                                              8,730.0                       8,255.0
------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------- -------------------- -------------------- -------------------- ----------------------
                                                    $ 14,625.9                  $   14,374.5
====================================================== ==================== ==================== ==================== ==================== ==================== ======= ======== ==================== ==================== ==================== ==================== ========== ==========
 
 
                                                                                                                                                   ENSCO PLC AND SUBSIDIARIES
                                                                                                                                         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                                                                          (In millions)
 
                                                                                                                                                    Twelve Months Ended
                                                                                                                                                                                                                                                      December 31,
                                                                                                                                                                                        -----------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                        2017                                       2016
                                                                                                                                                                                        -------------------------------------                                                               -------------------------------------
                                                                                                                                                                                                     (unaudited)
                                                                                                                                                                                                                                                                                             
OPERATING ACTIVITIES
  Net income (loss)                                                                                                                                                                           $  (304.2 )                                                                                         $   897.1
  Adjustments to reconcile net income (loss) to net cash provided by
  operating
    activities of continuing operations:
     Depreciation expense                                                                                                                                                                         444.8                                                                                               445.3
     Loss on impairment                                                                                                                                                                           182.9                                                                                      --
     Bargain purchase gain                                                                                                                                                                       (140.2 )                                                                                    --
     Amortization, net                                                                                                                                                                            (61.6 )                                                                                            (139.7 )
     Deferred income tax expense                                                                                                                                                                   55.0                                                                                                28.7
     Gain (loss) on debt extinguishment                                                                                                                                                             2.6                                                                                              (287.8 )
     Other                                                                                                                                                                                         14.7                                                                                                (6.8 )
     Changes in operating assets and liabilities                                                    65.4                   140.6  
------------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- -------------------- ------------------------------------
        Net cash provided by operating activities of continuing operations                         259.4                 1,077.4  
------------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- -------------------- ------------------------------------
                                                                                                                                                                                                                                                                                             
INVESTING ACTIVITIES
     Maturities of short-term investments                                                                                                                                                       2,042.5                                                                                             2,212.0
     Purchases of short-term investments                                                                                                                                                       (1,040.0 )                                                                                          (2,474.6 )
     Acquisition of Atwood, net of cash acquired                                                                                                                                                 (871.6 )                                                                                    --
     Additions to property and equipment                                                                                                                                                         (536.7 )                                                                                            (322.2 )
     Other                                                                                           2.8                     9.8  
------------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- -------------------- ------------------------------------
        Net cash used in investing activities of continuing operations                            (403.0 )                                   (575.0 )
------------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- -------------------- ------------------------------------
                                                                                                                                                                                                                                                                                             
FINANCING ACTIVITIES
     Reduction of long-term borrowings                                                                                                                                                           (537.0 )                                                                                            (863.9 )
     Cash dividends paid                                                                                                                                                                          (13.8 )                                                                                             (11.6 )
     Debt financing costs                                                                                                                                                                         (12.0 )                                                                                             (23.4 )
     Proceeds from issuance of senior notes                                                                                                                                              --                                                                                               849.5
     Proceeds from equity issuance                                                                                                                                                       --                                                                                               585.5
     Other                                                                                          (7.7 )                                     (7.1 )
------------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- -------------------- ------------------------------------
        Net cash provided by (used in) financing activities                                       (570.5 )                                    529.0  
------------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- -------------------- ------------------------------------
                                                                                                                                                                                                                                                                                             
Net cash provided by (used in) discontinued operations                                               (.8 )                                      8.4  
------------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- -------------------- ------------------------------------
Effect of exchange rate changes on cash and cash equivalents                                                                                                                                         .6                                                                                                (1.4 )
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                                                                                                 (714.3 )                                                                                           1,038.4
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                   1,159.7                   121.3  
------------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- -------------------- ------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                                       $   445.4               $ 1,159.7  
============================================================================== ==================== ==================== ==================== ==================== ==================== ======= ======= ==================== ==================== ==================== ==================== ======= ======= ====================
 
 
                                                                                                                                                                                 ENSCO PLC AND SUBSIDIARIES
                                                                                                                                                                                    OPERATING STATISTICS
                                                                                                                                                                                         (Unaudited)
 
                                                                                 Fourth Quarter                                                                            Third
                                                                                                                                                                                                                                                                                                                                                                        Quarter
                                                                                                                              ----------------------------------------------------------------------------------------------------------                                                                                                                 ---------------------------------
                                                                                                                                              2017                                    2016                                                                                                                                         2017
                                                                                                                              ------------------------------------                                          ------------------------------------                                                                                                         ------------------------------------
                                                                                                                                                                                                                                                                                                                                                          
Rig Utilization(1)
                                                                                                                                                                                                                                                                                                                                                          
   Floaters                                                                                                                               44 %                                                                          44 %                                                                                                                                         46 %
   Jackups                                                                                                                                54 %                                                                          54 %                                                                                                                                         60 %
                                                             
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------
         Total                             50 %                                    51 %                                          55 %
==================== ==================== ==================== ==================== ==================== ==================== =================================== ==================== ==================== =================================== ==================== ==================== ==================== ==================== ==================== ===================================
                                                                                                                                                                                                                                                                                                                                                          
Average Day Rates(2)
                                                                                                                                                                                                                                                                                                                                                          
   Floaters                                                                                                                        $ 306,937                                                                     $ 358,405                                                                                                                                    $ 334,218
   Jackups                                                                                                                            76,037                                                                       101,252                                                                                                                                       88,272
                                                             
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------------------------------------------- -------------------- -------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------
         Total                      $ 156,532            $ 176,709                  $ 165,623  
==================== ==================== ==================== ==================== ==================== ==================== ====== ======= ==================== ==================== ==================== ====== ======= ==================== ==================== ==================== ==================== ==================== ==================== ====== ======= ====================
 
(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 and recognized
                                              day rate revenue, including days associated with early contract
                                              terminations, compensated downtime and mobilizations. When revenue
                                              is earned but is deferred and amortized over a future period, for
                                              example when a rig earns revenue while mobilizing to commence a new
                                              contract or while being upgraded in a shipyard, the related days are
                                              excluded from days under contract.
                                               
                                              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.
                                               

Non-GAAP Financial Measures (Unaudited)

To supplement Ensco’s condensed consolidated financial statements presented on a GAAP basis, this press release provides investors with adjusted loss per share from continuing operations, adjusted EBITDA and net debt, which are non-GAAP measures.

We believe that adjusted loss per share from continuing operations provides meaningful supplemental information regarding the company’s performance by excluding certain charges that may not be indicative of Ensco’s ongoing operating results. This allows investors and others to better compare financial results across accounting periods and to those of peer companies, and to better understand the long-term performance of our business.

Ensco defines "Adjusted EBITDA" as net income (loss) before income (loss) from discontinued operations, other income (expense), income tax expense (benefit), interest expense, depreciation, amortization, loss on impairment, (gain) loss on asset disposals and transaction costs. Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities or (c) as a measure of liquidity. Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies.

Net debt is defined as long-term debt less cash and short-term investments. We review net debt as part of our overall liquidity, financial flexibility, capital structure and leverage, and believe that this measure is useful to investors as part of their assessment of our business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

Adjusted Earnings (Loss) Per Share

The table below reconciles earnings (loss) per share, as calculated in accordance with GAAP, to adjusted earnings (loss) per share for the quarters ended December 31, 2017 and 2016. Adjusted loss per share for the quarter ended December 31, 2017 excludes loss on impairment, bargain purchase gain, transactions costs related to the Atwood acquisition and discrete tax items. Adjusted earnings per share for the quarter ended December 31, 2016 excludes gain on exchange of debt for equity and other discrete tax items.

 
DILUTED EARNINGS PER                                                                                                                                                                                                                                                                   Three Months Ended December 31, 2017
SHARE RECONCILIATION(1):
                                                                                                                              ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Loss per share from continuing operations                                                                                            As                             Loss on                                                       Bargain                                    Atwood                                    Discrete                                  Adjusted
                                                                                                                                  Reported                                                                                 Impairment                                                                                           Purchase                                                                                           Transaction                                                                                             Tax
                                                                                                                                                                                                                                                                                                                                  Gain                                                                                                Costs                                                                                               Items
                                                                                                                              --------------                                                                  ----------------------------------                                                                  ----------------------------------                                                                  ----------------------------------                                                                  ----------------------------------                                                                  --------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
Net income (loss) from continuing                                                                                                $ (208.5 )                                                                         $   182.9                                                                                           $  (140.2 )                                                                                         $    49.4                                                                                           $    19.2                                                                                          $  (97.2 )
operations attributable to Ensco(2)
Net income allocated to non-vested                        (.1 )           --          --          --          --                   (.1 )
share awards(3)
----------------------------------------- -------------------- -------------------- -------------------- -------------------- ----------  ---- -------------------- -------------------- -------------------- --------------  -------------------- -------------------- -------------------- -------------------- --------------  -------------------- -------------------- -------------------- -------------------- --------------  -------------------- -------------------- -------------------- -------------------- --------------  -------------------- -------------------- -------------------- -------------------- ------------  --------------------
Net income (loss) from continuing                    $ (208.6 )                $   182.9               $  (140.2 )                                $    49.4               $    19.2              $  (97.3 )
operations attributable to Ensco
shares
========================================= ==================== ==================== ==================== ==================== ==== ====== ==== ==================== ==================== ==================== ======= ======= ==================== ==================== ==================== ==================== ======= ======= ==================== ==================== ==================== ==================== ======= ======= ==================== ==================== ==================== ==================== ======= ======= ==================== ==================== ==================== ==================== ====== ====== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
                                                     $  (0.49 )                $    0.43               $   (0.33 )                                $    0.11               $    0.05              $  (0.23 )
         Earnings (loss) per share
         from continuing operations
----------------------------------------- -------------------- -------------------- -------------------- -------------------- ---- ------ ---- -------------------- -------------------- -------------------- ------- ------- -------------------- -------------------- -------------------- -------------------- ------- ------- -------------------- -------------------- -------------------- -------------------- ------- ------- -------------------- -------------------- -------------------- -------------------- ------- ------- -------------------- -------------------- -------------------- -------------------- ------ ------ --------------------
 
 
DILUTED EARNINGS PER SHARE                                                                                                                                                                                                                                                                                                                                                                                                                                    Three Months Ended December 31, 2016
RECONCILIATION(1):
                                                                                                                                                                                                                                                                               ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Earnings per share from continuing operations                                                                                                                                                                                                                                                                                      As                                                                                              Exchange of                                                                                          Discrete                                                                                           Adjusted
                                                                                                                                                                                                                                                                                             Reported                                                                                            Debt for                                                                                               Tax
                                                                                                                                                                                                                                                                                                                                                                                                  Equity                                                                                               Items
                                                                                                                                                                                                                                                                                                                  ----------------------------------                                                                  ----------------------------------                                                                  ----------------------------------                                                                  --------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Net income (loss) from continuing operations attributable to                                                                                                                                                                                                                                                            $    29.1                                                                                           $    (9.0 )                                                                                               7.0                                                                                          $   27.1
Ensco(2)
Net income allocated to non-vested share awards(3)                                                                                                                                                                                                                                      (.8 )                           --          --                   (.8 )
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------               -------------------- -------------------- --------------  -------------------- -------------------- -------------------- -------------------- --------------  -------------------- -------------------- -------------------- -------------------- --------------  -------------------- -------------------- -------------------- -------------------- ------------  --------------------
Net income (loss) from continuing operations attributable to                                                                                                                                                                                                                      $    28.3               $    (9.0 )                                $     7.0              $   26.3  
Ensco shares
====================================================================================================================================================================================================================================               ==================== ==================== ======= ======= ==================== ==================== ==================== ==================== ======= ======= ==================== ==================== ==================== ==================== ======= ======= ==================== ==================== ==================== ==================== ====== ====== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
  Earnings (loss) per share from continuing operations                                                                                                                                                                                                                            $    0.10               $   (0.03 )                                $    0.02              $   0.09  
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- ------- ------- -------------------- -------------------- -------------------- -------------------- ------- ------- -------------------- -------------------- -------------------- -------------------- ------- ------- -------------------- -------------------- -------------------- -------------------- ------ ------ --------------------
 
  (1)     No adjustments have been made to earnings per share from
                                                discontinued operations for the three-month periods ended December
                                                31, 2017 and 2016.
                                                 
(2)                                             No amount of net loss was attributable to noncontrolling interest
                                                for the three-month period ended December 31, 2017. Net income from
                                                continuing operations attributable to Ensco excludes income
                                                attributable to noncontrolling interest of $1.5 million for the
                                                three-month period ended December 31, 2016.
                                                 
(3)                                             Represents income allocated to participating securities under the
                                                two-class method.
 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

A reconciliation of net income (loss) as reported to Adjusted EBITDA for quarters ended December 31, 2017 and 2016 and years ended December 31, 2017 and 2016 is included in the tables below (in millions):

 
                                                                                                           Three Months                                                                                                       Twelve Months
                                                                                                                                                                                    Ended December 31,                                                                                                                                       Ended December 31,
                                                                                                                                                                                           2017                                                                                                                                                     2017
                                                                                                                                      -------------------------------------------------------------------------------------------------------                                                  -------------------------------------------------------------------------------------------------------
                                                                                                                                                    2017                                  2016                                                                         2017                                  2016
                                                                                                                                      --------------------------------                                          -------------------------------------                                          --------------------------------                                          -------------------------------------
                                                                                                                                                                                                                                                                                                                                                                          
Net income (loss)                                                                                                                       $ (207.1 )                                                                    $    40.5                                                                  $ (304.2 )                                                                    $   897.1
Less:
  Income from discontinued operations, net of tax                1.4                   9.9              1.0                   8.1  
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------- -------------------- -------------------- ------------------------------------
    Income (loss) from continuing operations                                                                                            $ (208.5 )                                                                    $    30.6                                                                  $ (305.2 )                                                                    $   889.0
Add:
  Income tax expense                                                                                                                        42.4                                                                            3.9                                                                     109.2                                                                          108.5
  Interest expense                                                                                                                          57.2                                                                           56.3                                                                     224.2                                                                          228.8
  Other income                                                (144.5 )                                  (10.1 )                            (160.2 )                                 (297.0 )
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------- -------------------- -------------------- ------------------------------------
    Operating income                                                                                                                    $ (253.4 )                                                                    $    80.7                                                                  $ (132.0 )                                                                    $   929.3
Add:
  Depreciation expense                                                                                                                     119.5                                                                          110.2                                                                     444.8                                                                          445.3
  Amortization, net (1)                                                                                                                     (5.4 )                                                                        (25.6 )                                                                   (61.6 )                                                                       (139.7 )
  Loss on impairment                                                                                                                       182.9                                                                 --                                                                     182.9                                                                 --
  Gain on asset disposals                                                                                                                   (0.4 )                                                                         (1.2 )                                                                    (0.9 )                                                                         (1.1 )
  Transaction costs                                             49.4        --             59.1        --  
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------- -------------------- -------------------- ------------------------------------ -------------------- -------------------- ------------------------------- -------------------- -------------------- ------------------------------------
    Adjusted EBITDA                                                                                                                     $   92.6                                                                      $   164.1                                                                  $  492.3                                                                      $ 1,233.8
 
(1)       Amortization, net, includes amortization during the indicated period
                                                for deferred mobilization revenues and costs, deferred capital
                                                upgrade revenues, intangible amortization and other amortization.
 

Pro Forma Financial Data (Unaudited)

The table below represents total debt, cash and cash equivalents, short-term investments, net debt, total capital and net debt-to-capital ratio after giving effect to the January 2018 debt issuance and tenders/redemption described above (in millions, except percentages):

 
LIQUIDITY AND CAPITAL RESOURCES PRO FORMA VS.                                                                   As of December 31, 2017
ACTUAL:
                                                                                                                                                       -----------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                    Pro Forma                                  2017
                                                                                                                                                       ----------------------------------                                                               -------------------------------------
                                                                                                                                                                                                                                                         
Total debt(1)                                                                                                                                            $  5,057.5                                                                                          $  4,750.7
Cash and cash equivalents(2)                                                                                                                                  721.6                                                                                               445.4
Short-term investments(2)                                      440.0                   440.0  
--------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------------------- -------------------- -------------------- -------------------- ------------------------------------
Net debt(3)                                                                                                                                              $  3,895.9                                                                                          $  3,865.3
Total capital(1)(4)                                                                                                                                      $ 12,613.2                                                                                          $ 12,597.4
Net debt-to-capital(1)                                                                                                                                         30.9 %                                                                                              30.7 %
 
(1)       Pro Forma balances present total debt, total capital and the net
                                                debt-to-total capital ratio on an adjusted basis after giving effect
                                                to the January 2018 offering of senior notes due 2026, and
                                                subsequent tender offers and redemption. In January 2018, total debt
                                                increased by $306.8 million as a result of the issuance of $1.0
                                                billion of 7.75% senior notes due 2026 issued, net of debt issuance
                                                costs of $16.5 million, partially offset by the debt repurchases and
                                                redemptions of our 8.5% senior notes due 2019, 6.875% senior notes
                                                due 2020 and 4.70% senior notes due 2021, which had an aggregate
                                                carrying value of $676.7 million, net of discounts, premiums and
                                                issuance costs. Total capital was adjusted by the aforementioned
                                                amount and the estimated net of tax loss on the repurchases and
                                                redemptions of $14.8 million.
                                                 
(2)                                             Pro Forma balances represent our cash and cash equivalents and
                                                short-term investments after giving effect to the January 2018 debt
                                                issuance and tender offers/redemption described above. Our cash and
                                                cash equivalents balance increased by $276.2 million due to the
                                                proceeds from the issuance of $1.0 billion of 7.75% senior notes due
                                                2026, net of $16.5 million of issuance costs, partially offset by
                                                $707.3 million cash paid for repurchases and redemptions, inclusive
                                                of accrued interest and commissions.
                                                 
(3)                                             Net debt consists of total debt, less cash and cash equivalents and
                                                short-term investments.
                                                 
(4)                                             Total capital consists of net debt and Ensco shareholders’ equity.
 

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20180226006606r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20180226006606/en/

SOURCE: Ensco plc

Ensco plc 
Investor & Media Contacts: 
Nick Georgas, 713-430-4607 
Director - Investor Relations and Communications 
or 
Tim Richardson, 713-430-4490 
Manager - Investor Relations


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