Highlights
- Operating revenue of $206.2 million.
- Operating income of $50.5 million.
- Net loss of $18.9 million.
- Adjusted EBITDA of $129.9 million.
- Cash and cash equivalents of $881.7 million.
- Economic utilization of 92%. Excluding downtime for planned maintenance, utilization was 98%.
- Order backlog of $1.1 billion as of November 20, 2018.
- 10 cent per common unit distribution for the third quarter of 2018.
Financial Results Overview
Total operating revenues for the third quarter were $206.2 million (2Q18: $418.1 million). The decrease was primarily due to the $250 million West Leo litigation judgment recognized in the second quarter, of which $204 million was recognized as revenue. Excluding the impact of the litigation judgment, revenue decreased by approximately $8 million primarily due to a planned SPS for the West Vela and the West Capella completing its contract, partially offset by higher uptime on the West Auriga following the completion of a planned SPS in the second quarter.
Total operating expenses for the third quarter were $155.7 million (2Q18: $178.9 million). The decrease was primarily related to lower costs for the West Capella while between contracts, lower stacking costs for the West Leo and lower general and administrative expense.
Operating income was $50.5 million (2Q18: $239.2 million). The decrease was primarily related to revenue recognized from the West Leo litigation judgment in the second quarter. Excluding the impact of the litigation judgment, operating income increased by approximately $15 million as lower operating costs offset the decline in revenue.
Adjusted EBITDA for the third quarter was $129.9 million compared to guidance of $100 million due to the West Aquarius working for the full quarter, the West Vela planned SPS being completed sooner than expected and strong operating performance for other rigs in operation.
Net financial items resulted in an expense of $55.3 million (2Q18: expense of $31.3 million). The increase in the expense was primarily due to interest income related to the West Leo litigation judgment being recognized in the second quarter and a lower gain on the mark to market valuation of derivatives of $6.5 million (2Q18: gain of $10.8 million).
Loss before tax was $4.8 million (2Q18: income of $207.9 million). Income tax expense was $14.1 million (2Q18: credit of $9.3 million) reflecting taxes payable in the third quarter and provisions taken for the expected tax expense for the year.
Net loss was $18.9 million (2Q18: net income of $217.2 million). Seadrill Partners LLC Members had a net loss for the quarter of $9.3 million (2Q18: net income of $127.7 million).
Distributable cash flow for the third quarter was $5.7 million and our 10 cent per common unit distribution was maintained.
