The improved fourth quarter 2005 results included an after-tax gain of $23.5 million, or 9 cents per diluted share, resulting from the sale of the Glomar Robert F. Bauer drillship. Results for the comparable period of 2004 included a tax charge of $42.5 million, or 18 cents per diluted share, related to the realignment of the company's subsidiary structure.
For the 12 months ended Dec. 31, 2005, GlobalSantaFe reported net income of $423.1 million, or $1.73 per diluted share, on revenues of $2.3 billion. These results compare with 2004 income from continuing operations of $31.4 million, or 13 cents per diluted share, which included net after-tax charges of $25.8 million, or 11 cents per diluted share, related to the subsidiary realignment and early retirement of debt, partially offset by gains from the sale of a portion of the company's interest in the Broom Field and insurance proceeds related to the loss of the jackup GSF Adriatic IV.
"We benefited from substantial improvement in dayrates and accelerating demand across virtually all rig classes and geographic regions throughout 2005, and these same robust fundamentals are firmly in place as we enter 2006," said GlobalSantaFe President and CEO Jon Marshall.
Fourth Quarter 2005 Analysis
Fourth quarter 2005 net income benefited from a 277 percent increase in operating income to $198.2 million from $52.6 million in the fourth quarter of 2004. This improved performance primarily resulted from higher contract drilling dayrates and utilization and also reflects the gain from the drillship sale and increased operating income for the company's drilling management services and oil and gas segments.
The company estimates that hurricanes Katrina and Rita had an unfavorable impact on its fourth quarter 2005 net income of approximately $17 million, or 7 cents per diluted share.
Average revenues per day from contract drilling increased 34 percent in the fourth quarter of 2005 to $89,200 from $66,400 in the fourth quarter of 2004. The average utilization rate of our available fleet increased to 98 percent, compared with 91 percent in the fourth quarter of 2004.
Full Year 2005 Analysis
The significant improvement in 2005 net income was primarily due to a 247 percent increase in operating income to $464.4 million from $133.8 million in 2004. This sharp rise in operating income was driven by higher contract drilling dayrates and utilization and also benefited from a 150 percent increase in operating income for the combined drilling management services and oil and gas segments, as well as the fourth quarter drillship sale. Operating income for 2004 included gains totaling $49.1 million from the sale of a partial interest in the Broom Field and insurance proceeds related to the GSF Adriatic IV loss.
The company estimates that hurricanes Katrina and Rita had a negative impact on its 2005 net income of approximately $29 million, or 12 cents per diluted share.
Average revenues per day from contract drilling increased to $78,900 in 2005, compared with $63,500 in the prior year. The average utilization rate in 2005 increased to 96 percent from 86 percent in 2004.
The combined drilling management services and oil and gas segments reported 2005 operating income of $65.2 million on revenues of $623.3 million, compared with operating income of $26.1 million on revenues of $546.8 million in 2004. This higher operating income reflects improved turnkey performance, higher oil production and improved oil and gas prices, partially offset by fewer turnkey projects in 2005. During 2005, the drilling management services segment reported a total of 99 turnkey projects, compared with 119 in 2004.
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