Highlights
- Operating revenue of $267.9 million.
- Operating income of $81.6 million.
- Net income of $16.6 million.
- Adjusted EBITDA of $164.6 million.
- Cash and cash equivalents of $919.1 million.
- Economic utilization of 96%.
- Order backlog of $1.9 billion and average contract duration of 1.5 years as of August 24, 2017.
Financial Results Overview
Total operating revenues for the second quarter were $267.9 million (1Q17: $327.5 million). The decrease was primarily due to the West Aquarius earning a lower day rate on its new contract and lower termination fees relating to the West Capella, partially offset by a full quarter of operations for the West Vencedor.
Total operating expenses for the second quarter were $186.3 million (1Q17: $175.4 million). The increase was due to a full quarter of operations for the West Vencedor, re-commencement costs for the West Capricorn prior to the unit returning to operations and higher general and administrative expenses related to costs incurred as part of the recently announced amendments to three credit facilities.
Operating income was $81.6 million (1Q17: $173.4 million). The decrease was primarily due to lower revenues, higher expenses and a fair value gain on the revaluation of contingent consideration on the West Polaris in the first quarter not being repeated in the second quarter.
Net financial items resulted in an expense of $57.3 million (1Q17: expense of $46.1 million). The main movement related to a higher loss on the mark to market valuation of derivatives of $16.7 million (1Q17: loss of $6.2 million).
Income before tax was $24.3 million (1Q17: $127.3 million). Income tax expense for the second quarter was $7.7 million (1Q17: $20.4 million).
Net income attributable to Seadrill Partners LLC Members was $11.7 million for the second quarter (1Q17: $56.8 million) and distributable cash flow was $32.7 million (1Q17: $68.9 million).
In April, Seadrill Partners deferred distributions to common unitholders until an agreement was reached with its lending banks to insulate itself from potential events of default by Seadrill Limited should Seadrill Limited require the use of in court processes, such as schemes of arrangement or chapter 11 proceedings, to implement its restructuring.
The recently announced amendments to three credit facilities have successfully insulated the company as well as addressing near term refinancing requirements and distributions will be resumed at the same level as prior to the deferral. A quarterly cash distribution with respect to the first and second quarters of 2017 of $0.10 per unit for each quarter will therefore be paid on or around September 5, 2017.