UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (date of earliest event reported): September 25, 2013
NOBLE CORPORATION
(Exact name of Registrant as specified in its charter)
Switzerland | 000-53604 | 98-0619597 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission file number) |
(I.R.S. employer identification number) |
Dorfstrasse 19A Baar, Switzerland |
6340 | |
(Address of principal executive offices) | (Zip code) |
Registrants telephone number, including area code: 41 (41) 761-65-55
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01 | Other Events |
On September 24, 2013, the Company announced that its Board of Directors has approved a plan to reorganize its business by means of a separation and spin-off of a newly formed subsidiary whose assets and liabilities would consist of most of its standard specification drilling units, and related assets, liabilities and business (the Plan). The Plan, if consummated, will result in the creation of two separate offshore drilling companies. The Company is filing herewith pro forma financial information for the Company that gives effect to the proposed Plan. Unaudited Pro Forma Combined Balance Sheet of the Company, as of June 30, 2013, and the related notes thereto, and the Unaudited Pro Forma Combined Statements of Operations of the Company for the twelve months ended December 31, 2012 and the six months ended June 30, 2013, and the related notes thereto, showing the pro forma effect of the removal of the standard specification units to be separated in the Plan, are attached hereto as Exhibit 99.1 and incorporated by reference herein.
Forward-Looking Statements
This Current Report and the exhibit hereto may contain forward-looking statements about the business, financial performance and prospects of the Company. Statements about the Companys or managements plans, intentions, expectations, beliefs, estimates, predictions, or similar expressions for the future, including those regarding fleet content, the Plan and the timing thereof, are forward-looking statements that involve risks, uncertainties and assumptions. No assurance can be given that the outcomes of these forward-looking statements will be realized, and actual results could differ materially from those expressed as a result of various factors. A discussion of some of these factors, including risks and uncertainties, is set forth from time to time in the Companys filings with the Securities and Exchange Commission (the SEC).
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
EXHIBIT NUMBER |
DESCRIPTION | |||
99.1 | | Unaudited Pro Forma Combined Balance Sheet of the Company as of June 30, 2013, and the related notes thereto, and Unaudited Pro Forma Combined Statements of Operations of the Company for the twelve months ended December 31, 2012 and the six months ended June 30, 2013, and the related notes thereto. |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Noble Corporation, a Swiss corporation | ||||
Date: September 25, 2013 | ||||
By: | /s/ James A. MacLennan | |||
James A. MacLennan | ||||
Senior Vice President and Chief Financial Officer | ||||
3
INDEX TO EXHIBITS
EXHIBIT NUMBER |
DESCRIPTION | |||
99.1 | | Unaudited Pro Forma Combined Balance Sheet of the Company as of June 30, 2013, and the related notes thereto, and Unaudited Pro Forma Combined Statements of Operations of the Company for the twelve months ended December 31, 2012 and the six months ended June 30, 2013, and the related notes thereto. |
4
Exhibit 99.1
Unaudited combined pro forma financial statements for Noble-Swiss
As of, and for, the six months ended June 30, 2013 and for the year ended December 31, 2012
On September 24, 2013, Noble Corporation, a Swiss company (Noble-Swiss), announced that its Board of Directors has approved a plan to reorganize its business by means of a separation and spin-off of a newly formed subsidiary (Newco) whose assets and liabilities would consist of most of Noble-Swiss standard specification drilling units, and related assets, liabilities and business.
The unaudited pro forma financial information of Noble-Swiss assumes that the standard specification units to be owned and operated by Newco would include five drillships, three semisubmersibles, 34 jackups, two submersibles, and one floating production storage and offloading unit, as well as the Hibernia platform operations offshore Canada (collectively the subject fleet). The separation of the subject fleet from Noble-Swiss, including its transfer to Newco, is referred to herein as the Separation.
The plan approved by the Board of Directors contemplates the execution of the Separation through the distribution of the shares of Newco to Noble-Swiss shareholders in a spin-off (the Distribution and, together with the Separation, the Spin-Off). Subject to business, market, regulatory and other considerations, the Distribution may be preceded by an initial public offering of up to 20 percent of the shares of Newco. In connection with the Separation, Noble-Swiss expects to repay certain outstanding indebtedness with payments received from Newco. Newco is expected to fund such payments to Noble-Swiss with proceeds from borrowings and, if Noble-Swiss proceeds with the initial public offering of Newco shares, its initial public offering. Following the Spin-Off, Noble-Swiss will continue to own and operate its high-specification assets with particular operating focus in deepwater and ultra-deepwater markets for drillships and semisubmersibles and harsh environment and high-specification markets for jackups. Completion of the Spin-Off is subject to receipt of a tax ruling from the U.S. Internal Revenue Service, approval of the shareholders of Noble-Swiss, and business, market, regulatory and other considerations beyond the control of Noble-Swiss.
The historical financial information of the subject fleet has been derived from the historical financial statements of Noble-Swiss, and the pro forma financial information of Noble-Swiss presents solely the impact of the removal of the subject fleet. No pro forma adjustments have been made for any assumptions regarding Newco as a standalone company or any transactions to be effected in connection with the Separation, including any financings or debt repayments.
The following unaudited pro forma combined financial information sets forth: (i) the historical financial information of Noble- Swiss and the subject fleet as of June 30, 2013 and for the six months then ended, as derived from the unaudited financial statements of Noble-Swiss and the unaudited combined financial statements of the subject fleet, (ii) the historical financial information of Noble-Swiss and the subject fleet for the year ended December 31, 2012, as derived from the audited financial statements of Noble-Swiss and the unaudited combined financial statements of the subject fleet and (iii) the pro forma financial information of Noble-Swiss retained assuming the proposed Spin-Off was completed as of June 30, 2013 for purposes of the unaudited pro forma combined balance sheet and as of January 1, 2012 for purposes of the unaudited pro forma combined statements of operations.
In July 2013, Noble-Swiss sold the Noble Lewis Dugger. As the sale of the rig is not deemed material to the overall pro forma Noble-Swiss retained financials, no pro forma adjustments have been made to reflect the sale of this rig.
The unaudited pro forma combined financial information should be read in conjunction with, and is qualified in its entirety by, the notes thereto and the historical annual and interim consolidated financial statements of Noble-Swiss, including the notes thereto, which were filed with the Securities and Exchange Commission in Noble-Swiss Annual Report on Form 10-K for the year ended December 31, 2012 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2013. The adjustments made herein are preliminary and are based on certain estimates and assumptions and currently available information. Such adjustments could change as additional information becomes available, as estimates and assumptions are refined or as additional events occur.
The unaudited pro forma combined financial statements are presented for comparative purposes only and may not necessarily be indicative of what the actual financial position or results of operations of Noble-Swiss or Newco would have been as of, and for, the periods presented, nor does it purport to represent the future financial position or results of operations of Noble-Swiss or Newco.
Noble Corporation (Noble-Swiss)
Unaudited pro forma combined balance sheet
As of June 30, 2013
(in thousands)
Removal of | Pro forma | |||||||||||
Historical | subject | Noble-Swiss | ||||||||||
Noble-Swiss | fleet | Retained | ||||||||||
(Note 2) | ||||||||||||
Assets |
||||||||||||
Current assets |
||||||||||||
Cash and cash equivalents |
$ | 166,207 | $ | 45,952 | $ | 120,255 | ||||||
Accounts receivable |
834,576 | 366,648 | 467,928 | |||||||||
Taxes receivable (Note 2) |
148,281 | 7,576 | 140,705 | |||||||||
Prepaid expenses |
71,824 | 22,082 | 49,742 | |||||||||
Other current assets |
123,338 | 40,719 | 82,619 | |||||||||
|
|
|
|
|
|
|||||||
Total current assets |
1,344,226 | 482,977 | 861,249 | |||||||||
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|
|
|
|
|
|||||||
Property and equipment, at cost |
18,198,504 | 5,343,177 | 12,855,327 | |||||||||
Accumulated depreciation |
(4,354,168 | ) | (2,313,705 | ) | (2,040,463 | ) | ||||||
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|
|
|
|
|||||||
Property and equipment, net |
13,844,336 | 3,029,472 | 10,814,864 | |||||||||
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|
|
|
|
|
|||||||
Other assets |
277,524 | 78,774 | 198,750 | |||||||||
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|
|
|
|
|||||||
Total assets |
$ | 15,466,086 | $ | 3,591,223 | $ | 11,874,863 | ||||||
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|
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Liabilities and Equity |
||||||||||||
Current liabilities |
||||||||||||
Accounts payable |
$ | 344,468 | $ | 123,100 | 221,368 | |||||||
Accrued payroll and related costs |
126,267 | 48,572 | 77,695 | |||||||||
Interest payable |
67,255 | 413 | 66,842 | |||||||||
Taxes payable (Note 2) |
123,234 | | 123,234 | |||||||||
Dividends payable |
256,420 | | 256,420 | |||||||||
Other current liabilities |
168,946 | 29,522 | 139,424 | |||||||||
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|
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|
|
|||||||
Total Current liabilities |
1,086,590 | 201,607 | 884,983 | |||||||||
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|
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Long-term debt (Note 2) |
5,276,304 | | 5,276,304 | |||||||||
Deferred income taxes (Note 2) |
218,513 | 88,459 | 130,054 | |||||||||
Other liabilities |
324,379 | 98,049 | 226,330 | |||||||||
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|
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Total liabilities |
6,905,786 | 388,115 | 6,517,671 | |||||||||
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|
|||||||
Shareholders equity |
7,807,466 | 3,203,108 | 4,604,358 | |||||||||
Noncontrolling interest |
752,834 | | 752,834 | |||||||||
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|
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Total Equity |
8,560,300 | 3,203,108 | 5,357,192 | |||||||||
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|
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Total liabilities and equity |
$ | 15,466,086 | $ | 3,591,223 | $ | 11,874,863 | ||||||
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|
See accompanying notes to the unaudited pro forma combined financial statements
Noble Corporation (Noble-Swiss)
Unaudited pro forma combined statement of operations
For the six months ended June 30, 2013
(in thousands)
Removal of | Pro forma | |||||||||||
Historical | subject | Noble-Swiss | ||||||||||
Noble-Swiss | fleet | Retained | ||||||||||
(Note 2) | ||||||||||||
Operating revenues |
||||||||||||
Contract drilling services |
$ | 1,904,192 | $ | 776,734 | $ | 1,127,458 | ||||||
Reimbursables |
49,434 | 21,336 | 28,098 | |||||||||
Labor contract drilling services |
34,657 | 17,684 | 16,973 | |||||||||
Other |
77 | 66 | 11 | |||||||||
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|
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1,988,360 | 815,820 | 1,172,540 | ||||||||||
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Operating expenses |
||||||||||||
Contract drilling services |
976,070 | 409,498 | 566,572 | |||||||||
Reimbursables |
37,623 | 15,748 | 21,875 | |||||||||
Labor contract drilling services |
21,651 | 11,727 | 9,924 | |||||||||
Depreciation & amortization |
418,745 | 179,191 | 239,554 | |||||||||
General & administrative (Note 2) |
52,420 | 27,807 | 24,613 | |||||||||
Gain on contract settlements/extinguishments, net |
(1,800 | ) | (1,800 | ) | | |||||||
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1,504,709 | 650,852 | 853,857 | ||||||||||
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Operating Income |
483,651 | 164,968 | 318,683 | |||||||||
Other income (expense) |
||||||||||||
Interest expense |
(51,966 | ) | (2,235 | ) | (49,731 | ) | ||||||
Interest income and other, net |
530 | 1,420 | (890 | ) | ||||||||
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Income before income taxes |
432,215 | 164,153 | 268,062 | |||||||||
Income tax (provision) (Note 2) |
(71,176 | ) | (33,973 | ) | (37,203 | ) | ||||||
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Net income |
361,039 | 130,180 | 230,859 | |||||||||
Income attributable to non-controlling interests |
(34,359 | ) | | (34,359 | ) | |||||||
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Net income attributable to controlling interests |
$ | 326,680 | $ | 130,180 | $ | 196,500 | ||||||
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|
|
|
See accompanying notes to the unaudited pro forma combined financial statements
Noble Corporation (Noble-Swiss)
Unaudited pro forma combined statement of operations
For the year ended December 31, 2012
(in thousands)
Removal of | Pro forma | |||||||||||
Historical | subject | Noble-Swiss | ||||||||||
Noble-Swiss | fleet | Retained | ||||||||||
(Note 2) | ||||||||||||
Operating revenues |
||||||||||||
Contract drilling services |
$ | 3,349,362 | $ | 1,259,741 | $ | 2,089,621 | ||||||
Reimbursables |
115,495 | 49,727 | 65,768 | |||||||||
Labor contract drilling services |
81,890 | 36,591 | 45,299 | |||||||||
Other |
265 | 254 | 11 | |||||||||
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3,547,012 | 1,346,313 | 2,200,699 | ||||||||||
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Operating expenses |
||||||||||||
Contract drilling services |
1,776,481 | 794,149 | 982,332 | |||||||||
Reimbursables |
94,096 | 38,672 | 55,424 | |||||||||
Labor contract drilling services |
46,895 | 21,930 | 24,965 | |||||||||
Depreciation & amortization |
758,621 | 321,809 | 436,812 | |||||||||
General & administrative (Note 2) |
99,990 | 54,298 | 45,692 | |||||||||
Gain on contract settlements/extinguishments, net |
(12,871 | ) | | (12,871 | ) | |||||||
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|
|||||||
2,763,212 | 1,230,858 | 1,532,354 | ||||||||||
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Operating Income |
783,800 | 115,455 | 668,345 | |||||||||
Other income (expense) |
||||||||||||
Interest expense |
(85,763 | ) | (3,746 | ) | (82,017 | ) | ||||||
Interest income and other, net |
5,188 | 1,721 | 3,467 | |||||||||
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Income before income taxes |
703,225 | 113,430 | 589,795 | |||||||||
Income tax (provision) (Note 2) |
(147,088 | ) | (43,192 | ) | (103,896 | ) | ||||||
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Net income |
556,137 | 70,238 | 485,899 | |||||||||
Income attributable to non-controlling interests |
(33,793 | ) | | (33,793 | ) | |||||||
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Net income attributable to controlling interests |
$ | 522,344 | $ | 70,238 | $ | 452,106 | ||||||
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See accompanying notes to the unaudited pro forma combined financial statements
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
1. Basis of Presentation
On September 24, 2013, Noble Corporation, a Swiss company (Noble-Swiss), announced that its Board of Directors has approved a plan to reorganize its business by means of a separation and spin-off of a newly formed subsidiary (Newco) whose assets and liabilities would consist of most of Noble-Swiss standard specification drilling units, and related assets, liabilities and business.
The unaudited pro forma financial information of Noble-Swiss assumes that the standard specification units to be owned and operated by Newco would include five drillships, three semisubmersibles, 34 jackups, two submersibles, and one floating production storage and offloading unit, as well as the Hibernia platform operations offshore Canada (collectively the subject fleet). The separation of the subject fleet from Noble-Swiss, including its transfer to Newco is referred to herein as the Separation. The plan approved by the Board of Directors contemplates the execution of the Separation through the distribution of the shares of Newco to Noble-Swiss shareholders in a spin-off (the Distribution and, together with the Separation, the Spin-Off).
The historical financial information of the subject fleet has been derived from the historical financial statements of Noble-Swiss, and the pro forma financial information of Noble-Swiss presents solely the impact of the removal of the subject fleet. No pro forma adjustments have been made for any assumptions regarding Newco as a standalone company or any transactions to be effected in connection with the Spin-Off, including any financings or debt repayments.
The unaudited pro forma combined financial statements were prepared in accordance with Securities and Exchange Commission Regulation S-X Article 11 and are based on the historical financial statements of Noble-Swiss. The unaudited pro forma combined financial statements are in conformity with accounting principles generally accepted in the United States.
The unaudited pro forma combined financial statements are presented for comparative purposes only and may not necessarily be indicative of what the actual financial position or results of operations of Noble-Swiss and Newco would have been as of, and for, the periods presented, nor does it purport to represent the future combined financial position or results of operations of Noble-Swiss or Newco.
2. Removal of subject fleet as pro forma adjustments
The pro forma adjustments included in the accompanying financial statements include assets, liabilities, revenues and costs that are specifically identifiable or have been allocated directly to the subject fleet. Shareholders equity for the subject fleet represents Noble-Swiss interest in the recorded net assets of the subject fleet and includes cumulative operating results.
Long-term debt
In connection with the Separation, Noble-Swiss expects to repay certain outstanding indebtedness with payments received from Newco. Newco is expected to fund such payments to Noble-Swiss with proceeds from borrowings and, if Noble-Swiss proceeds with the initial public offering of Newco shares, its initial public offering. As described above, no pro forma adjustments have been made regarding the use of proceeds or financing costs, including interest, which might be incurred as a result of any such financings.
General and administrative expenses
The subject fleet receives service and support functions from Noble-Swiss and certain of its subsidiaries. The costs associated with these support functions have been allocated relative to Noble-Swiss in its entirety, which is considered to be the most meaningful under the circumstances. These allocated costs are primarily related to corporate administrative expenses, employee related costs, including pensions and other benefits, and corporate and shared employees for the following functional groups:
| information technology, |
| legal services, |
| accounting, |
| finance services, |
| human resources, |
| marketing and product support, |
| treasury and |
| other corporate and infrastructural services. |
Income taxes
A reasonable allocation of income taxes to the subject fleet has been made in instances where the operations of the subject fleet were included in the filing of a consolidated or combined return of Noble-Swiss. These estimates may not necessarily reflect the ultimate tax rate of either the subject fleet, or Noble-Swiss retained, following the Spin-Off.
3. Sale of Noble Lewis Dugger
In July 2013, Noble-Swiss sold the Noble Lewis Dugger. As the sale of the rig is not deemed material to the overall pro forma Noble-Swiss retained financials, no pro-forma adjustments have been made to reflect the sale of this rig.
4. Noble-Swiss earnings per share
The following details the unaudited pro forma earnings per share for Noble-Swiss retained:
Six months | Year | |||||||
ended | ended | |||||||
June 30, 2013 | December 31, 2012 | |||||||
Allocation of net income |
||||||||
Basic |
||||||||
Net income attributable to Noble Corporation |
$ | 182,798 | $ | 443,258 | ||||
Earnings allocated to unvested share-based payment awards |
(2,138 | ) | (4,505 | ) | ||||
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Net income to common shareholdersbasic |
$ | 180,660 | $ | 438,753 | ||||
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Diluted |
||||||||
Net income attributable to Noble Corporation |
$ | 182,798 | $ | 443,258 | ||||
Earnings allocated to unvested share-based payment awards |
(2,137 | ) | (4,499 | ) | ||||
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Net income to common shareholdersdiluted |
$ | 180,661 | $ | 438,759 | ||||
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Weighted average shares outstandingbasic |
253,184 | 252,435 | ||||||
Incremental shares issuable from assumed exercise of stock options |
265 | 356 | ||||||
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|
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Weighted average shares outstandingdiluted |
253,449 | 252,791 | ||||||
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Weighted average unvested share-based payment awards |
2,998 | 2,592 | ||||||
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Earnings per share |
||||||||
Basic |
$ | 0.71 | $ | 1.74 | ||||
Diluted |
$ | 0.71 | $ | 1.74 |