SDLP - Seadrill Partners LLC Announces Third Quarter 2015 Results

Highlights

  • Operating income of $209.4 million and net income attributable to Seadrill Partners LLC Members of $21.5 million.
  • Generated distributable cash flow of $85.4 million with a coverage ratio of 1.54x for the third quarter 2015.
    • Declared a $0.5675 per unit distribution for the third quarter, in line with the second quarter distribution.
    • Economic utilization for the third quarter of 98%.
    • Orderbacklog of $4.7 billion and average contract duration of 2.8 years

Financial Results Overview

Seadrill Partners LLC[1] reports: Total revenues were $456.5 million for the third quarter of 2015 (the "third quarter"), compared to $417.2 million in the second quarter of 2015 (the "second quarter"). The increase in revenues is primarily related to the inclusion of the West Polaris for a full quarter, partially offset by a full quarter of lower dayrates for the West Sirius and idle time for the West Vencedor.

Operating income for the quarter was $209.4 million compared to $205.5 million in the preceding quarter. The increase due to higher revenues was partially offset by higher expenses for the West Sirius which was being prepared for cold stacking.

Financial and other items resulted in a loss of $125.4 million for the third quarter compared to a gain of $19.9 million in the second quarter primarily due to mark to market losses on derivatives and increased interest expense due to the acquisition of the West Polaris.  Net income before tax was therefore reduced to $84.0 million for the third quarter compared to $225.4 million in the second quarter. 

Income taxes for the third quarter were $48.6 million compared to $32.9 million in the second quarter.  The increase is primarily due the recognition of a deferred tax liability related to a change in Nigerian tax law.  As a result, net income attributable to Seadrill Partners LLC Members was $21.5 million for the third quarter compared to $101.3 million for the previous quarter.

Distributable cash flow[2] was $85.4 million for Seadrill Partners' third quarter as compared to $84.7 million for the second quartergiving a coverage ratio of 1.54x for the third quarter.

Distribution for the period was $0.5675 per unit, equivalent to an annual distribution of $2.27.


1All references to "Seadrill Partners" and "the Company" refer to Seadrill Partners LLC and its subsidiaries, including the operating companies that indirectly own interests in the drilling units Seadrill Partners LLC owns: (i) a 58% limited partner interest in Seadrill Operating LP, as well as the non-economic general partner interest in Seadrill Operating LP through its 100% ownership of its general partner, Seadrill Operating GP LLC, (ii) a 51% limited liability company interest in Seadrill Capricorn Holdings LLC and (iii) a 100% limited liability company interest in Seadrill Partners Operating LLC. Seadrill Operating LP owns: (i) a 100% interest in the entities that own the West Aquarius, West Leo and the West Vencedor and (ii) an approximate 56% interest in the entity that owns and operates the West Capella. Seadrill Capricorn Holdings LLC owns 100% of the entities that own and operate the West Capricorn,West Sirius, West Auriga and the West Vela. Seadrill Partners Operating LLC owns 100% of the entities that own and operate the T-15 and T-16 tender barges.

2 Please see Appendix A for a reconciliation of Distributable Cash Flow to net income, the most directly comparable US Generally Accepted Accounting Principles ("US GAAP") financial measure.

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