'Significant Achievements' Mark Record Year for Pride International
Pride International, Inc. reported its financial results for the three months and year ended December 31, 2007, a year marked with a number of significant achievements in support of the company's announced strategic transition to offshore drilling with an expanding presence in the deepwater drilling market sector. Net income for the three months ended December 31, 2007 was $135.0 million, or $0.77 per diluted share, compared to net income of $68.9 million, or $0.40 per diluted share, for the fourth quarter of 2006.
Results for the fourth quarter of 2007 included income from discontinued operations of $17.3 million, or $0.10 per diluted share, primarily representing three tender-assist rigs that the company agreed to sell in August 2007 for $213 million in cash. The sale of the three units was completed during the first quarter of 2008. In the fourth quarter of 2006, income from discontinued operations was $36.9 million, or $0.21 per diluted share.
Income from continuing operations totaled $117.7 million, or $0.67 per diluted share, on revenues of $502.3 million in the fourth quarter of 2007, compared to $32.0 million, or $0.19 per diluted share, on revenues of $438.3 million for the corresponding three months in 2006. Results for the three months ended December 31, 2007 included a net gain of $21.4 million, or $0.05 per diluted share, resulting from the sale of non-strategic assets, primarily the barge rig Bintang Kalimantan. Results for the corresponding three months of 2006 included expenses of $14.4 million, or $0.08 per diluted share, relating to the termination of certain agency relationships associated with five of the company's semisubmersible rigs in Brazil.
For the 12 months ended December 31, 2007, net income was a record $784.3 million, or $4.43 per diluted share. The results reflected a gain of $268.6 million, or $1.50 per diluted share, resulting from the sale of the company's Latin America Land and E&P Services segments in August 2007. Over the same 12 months, income from continuing operations totaled $431.8 million, or $2.46 per diluted share, on record revenues of $2,043.8 million. For the 12 months ended December 31, 2006, net income totaled $296.5 million, or $1.72 per diluted share, while income from continuing operations was $188.7 million, or $1.11 per diluted share, on revenues of $1,610.8 million.
Cash flow from operating activities totaled $685.0 million for the 12 months ended December 31, 2007, while capital expenditures were $656.4 million, including $315.9 million invested in two advanced capability, ultra-deepwater drillships currently under construction. The company expects capital expenditures for the 12 months ended December 31, 2008 to be $995 million, with an estimated $610 million relating to the ultra-deepwater drillship construction projects, including a third project announced in January 2008.
Total debt at December 31, 2007 was $1,191.5 million, while net debt (total debt less cash and cash equivalents of $890.4 million) was $301.1 million.
Louis A. Raspino, President and Chief Executive Officer of Pride International, Inc., stated, "We achieved record financial performance in 2007, with continued excellent operational execution and safety results. Equally important, and specific to our transition to a pure focus offshore drilling company, we achieved a number of strategic initiatives during 2007 and early 2008, including the disposal of approximately $1.3 billion of non-strategic assets and the addition of three ultra-deepwater drillships currently under construction, which are expected to be available in 2010 and 2011. With the three projects, the company has now committed approximately $2.8 billion since 2005 to the expansion of its deepwater presence. In addition, we have secured attractive, multi-year contracts on two of our new drillships.
"We believe our investments in the deepwater market sector are timely, as we continue to witness exceptional activity levels with growing evidence that suggests the strong industry demand for deepwater capacity could remain well beyond 2010. Since the beginning of 2008, we have secured or extended contracts for four rigs representing revenues in excess of $3.3 billion, inclusive of performance bonus opportunities, and totaling 22 rig years. With the recent contract extensions for the semisubmersible rigs Pride Rio de Janeiro and Pride Portland, we now have earnings visibility to 2017 and our total backlog of contracts is approaching a record $8 billion, before performance bonus opportunities, representing an estimated 140 percent of our current market capitalization. This revenue backlog and the resulting expected cash flow represents a solid financial base to support further growth initiatives and offers the company valuable flexibility as we evaluate and execute strategies that increase shareholder value.''