Seadrill Limited · NYSE:SDRL
Seadrill — Q2 2014 Earnings Presentation
25 slides from Seadrill's earnings presentation, Aug 27, 2014
Slide 1: Conference Call – 2Q 2014 Results
Conference Call – 2Q 2014 Results August 27, 2014
Slide 2: Forward Looking Statements
Forward Looking Statements The statements described in this presentation 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 which could be made
Slide 3: Seadrill Second Quarter Call Agenda
Seadrill Second Quarter Call Agenda • Highlights 2Q 2014 • Subsequent events during 3Q 2014 • Seadrill Strategy & Market Outlook • Financial Performance Highlights • Appendix: Seadrill Limited Financials 3
Slide 4: Record Breaking Earnings
Record Breaking Earnings Quarterly EBITDA (proforma consolidated) 865 900 • Seadrill Group generates consolidated 800 768 788 713 EBITDA of US$865 million for the second 700 665 663 634 612 604 quarter 2014 600 573 579 575 595 574 US$ Millions 500 • Economic utilization for the Group’s floaters 400
Slide 5: Highlights Second Quarter 2014
Highlights Second Quarter 2014 • Seadrill secures contracts for the jack-up units West Tucana, West Telesto, West Ariel, and West Prospero and extends contract for the West Mischief. The total revenue potential for the new contracts is approximately US$433 million. • Seadrill sells 230 million share
Slide 6: Subsequent Events Third Quarter 2014
Subsequent Events Third Quarter 2014 • Seadrill and SapuraKencana's Joint Venture commenced operations of its first pipe-laying support vessel for Petrobras for a period of five years with an extension option for an additional five years. Total revenue potential for the firm contract period is estim
Slide 7: Seadrill Strategy & Market Outlook
Financial performance highlights Seadrill Strategy & Market Outlook Appendix: Seadrill Limited Financials 7
Slide 8: Evolution of Seadrill
Evolution of Seadrill 80 67 69 60 70 60 61 56 50 60 40 41 Share price (US$) 50 43 Number of units 37 40 32 30 30 20 20 10 10 5 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Number of units SDRL share price Seadrill Group SDLP NADL Sevan AOD SeaMex SDRL 51.1% 70.4% 50.1% 66.2% 50.0% 100% 100%
Slide 9: Floaters – US$17.4 Billion Contract Backlog
Floaters – US$17.4 Billion Contract Backlog 2014 2015 2016 2017 Unit Customer 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q West Tellus Chevron $635 West Carina - Newbuild West Draco - Newbuild West Dorado - Newbuild West Aquila - Newbuild West Libra - Newbuild Drillships West Saturn ExxonMobil Newbu
Slide 10: Strongest Fleet Profile in the Industry
Strongest Fleet Profile in the Industry Floater Age Free and Clear Floater Availability Until End of 2016 80 100% 80 100% 70 70 81% 80% 80% 79% 74% 60 60 64% 63% 62% 50 63% 50 60% 60% 40 42 40 38% 40% 40% 30 30 28% 20 20 22 20% 20% 7 11 1 10 10 20 11 12 3% 6 6 0 0% 0 0% Diamond Transocean Noble Ensc
Slide 11: Jack-ups - US$5.5 Billion Contract Backlog
Jack-ups - US$5.5 Billion Contract Backlog 2014 2015 2016 Unit Customer 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q HE Jack-ups Contracted West Epsilon Statoil US$289,000 West Elara Statoil US$365,000 03.2017 Uncontracted West Linus ConocoPhillips US$377,000 05.2019 West Titania - Transit West Cressida PTTEP /
Slide 12: Jack-Up Market Fundamentals
Jack-Up Market Fundamentals Jack-up Fleet Age Jack-up Delivery Schedule 250 70 60 200 50 150 40 Years 100 30 20 50 10 0 > 30 years 20 and 30 10 and 20 5 and 10 < 5 years 0 years years years 2014 2015 2016 2017 • Current Jack-up market is tight, however… • 139 Jack-ups to be delivered until the end o
Slide 13: Financial Performance Highlights
Financial performance highlights Financial Performance Highlights 13
Slide 14: Financial Performance Highlights
Financial Performance Highlights Q2 2014 Q1 2014 Q2 2014 Proforma Proforma Stand alone Consolidated Consolidated Total Operating Revenue US$1,222 m US$1,554 m US$1,436 m Total Operating Expenses US$ 746 m US$906 m US$863 m Net Operating Income US$476 m US$648 m US$574 m EBITDA * US$641 m US$865 m US
Slide 15: Balance Sheet Summary
Balance Sheet Summary June March 30, 2014 31, 2014 Total Current Assets 3,185 4,031 Non-current assets Newbuildings 2,593 3,917 Drilling units 14,008 13,163 Other 6,818 6,380 Total non-current assets 23,419 23,460 TOTAL ASSETS 26,604 27,491 Current Liabilities Current portion of long-term debt 2,147
Slide 16: EBITDA Contribution
EBITDA Contribution 900 865 2 5 788 800 768 70 224 713 700 164 665 663 634 618 612 595 604 600 573 579 575 574 560 493 500 US$ Millions 434 400 624 641 300 200 100 0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 Floaters Jack-ups Tenders 2Q14 Gain from sale of
Slide 17: Illustrative Funding Profile
Illustrative Funding Profile 2,500 Recent Completed transactions: 2,000 • US$1,500 million (Korea II) facility • US$1,350 million facility 1,500 • SEK 1,500 million Bond Issue 2014 is fully US$ Millions financed • US$1,800 million SDLP TLB facility 1,000 • US$1,100 million SDLP add-on TLB facility •
Slide 18: Core Assets and Financial Investments
Core Assets • 32 6th generation ultra-deepwater units • 2 Midwater harsh environment semi- submersible rigs • 29 High-specification jack-ups • 3 Harsh environment jack-ups • 3 Tender rigs Financial Investments 8.18% of SapuraKencana – Market Value ~US$670mm 50.11% of Sevan Drilling – Market Value ~U
Slide 19: Appendix: Seadrill Limited Financials
Appendix: Seadrill Limited Financials 19
Slide 20: Operating Income - Floaters
Operating Income - Floaters Unaudited accounts in USD millions 2Q14 1Q14 4Q13 3Q13 Total operating revenues 852 813 1,030 939 Gain on Sale - 440 - - Vessel and rig operating expenses 263 271 370 357 Reimbursable expenses 58 23 17 29 Depreciation and amortisation 121 127 150 146 General and administr
Slide 21: Operating Income – Jack-up Rigs
Operating Income – Jack-up Rigs Unaudited accounts in USD millions 2Q14 1Q14 4Q13 3Q13 Total operating revenues 335 315 339 292 Vessel and rig operating expenses 142 130 148 122 Reimbursable expenses 11 9 11 6 Depreciation and amortisation 44 48 46 42 General and administrative expenses 26 25 24 23
Slide 22: Operating Income – Total Seadrill Limited
Operating Income – Total Seadrill Limited Unaudited accounts in USD millions 2Q14 1Q14 4Q13 3Q13 Total operating revenues 1,222 1,221 1,469 1,280 Gain on sale of assets - 440 - - Vessel and rig operating expenses 437 492 565 491 Reimbursable expenses 69 32 50 48 Depreciation and amortisation 165 174
Slide 23: Net Income – Total Seadrill Limited
Net Income – Total Seadrill Limited Unaudited accounts in USD millions 2Q14 1Q14 4Q13 3Q13 Net operating income 476 890 568 471 Financial items and other income Interest income 32 11 8 - Interest expense (124) (118) (134) (107) Share in results from associated companies 54 20 (189) (10) (Loss)/Gain
Slide 24: Balance Sheet - Assets
Balance Sheet - Assets June March December Unaudited accounts in USD millions 30, 2014 31, 2014 31, 2013 Current assets Cash and cash equivalents 543 912 744 Restricted cash 237 206 168 Marketable securities 933 1,072 416 Accounts receivables, net 824 780 1,042 Other current assets 648 1,061 463 Tot
Slide 25: Balance Sheet – Liabilities & Shareholder’s Equity
Balance Sheet – Liabilities & Shareholder’s Equity June March December 30, 2014 31, 2014 31, 2013 Current liabilities Current portion of long-term debt 2,147 1,662 1,566 Trade accounts payable 61 111 90 Other current liabilities 1,895 2,621 2,169 Total current liabilities 4,103 4,394 3,825 Non-curre