Vantage Drilling Company, an offshore drilling contractor, reports net income for the three months ended June 30, 2014 of $15.1 million or $0.05 per diluted share, excluding charges for the early retirement of debt and a revision to the tax provision, as compared to earnings of $4.2 million or $0.01 per diluted share for the three months ended June 30, 2013.
Including approximately $1.4 million charge for the early retirement of debt and a $3.5 million revision to the tax provision for the three months ended June 30, 2014, the Company reported earnings of $10.2 million or $0.03 per diluted share.
The $1.4 million charge for the early retirement of debt consists of the writing off a portion of deferred financing costs and original debt issuance discount associated with the discretionary prepayment of $42 million on the company’s 2017 Term Loan. The total debt paydown for the quarter, including scheduled maturities and open market purchases of the company’s Senior Notes, totaled $56.9 million.
During the second quarter, Vantage’s customer for the Titanium Explorer drillship revised their upcoming drilling location for the rig, which coupled with revised financial estimates, had a significant impact on the company’s estimated annual effective tax rate, Vantage says.
Vantage explains that the company is required to calculate the effective tax rate on an annual basis and apply it to the financial statements on a year-to-date basis. The change in estimates resulted in the recognition of an additional $3.5 million tax provision for the second quarter.
Paul Bragg, Chairman and Chief Executive Officer, commented, “We are pleased to achieve another quarter of strong operating results. The highlight of the quarter was our debt paydown of nearly $57 million. We remain on track to reach our 2014 debt reduction goal, given our contracted backlog and continued high operating efficiency across the fleet.”
Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of three ultra-deepwater drillships, the Platinum Explorer, the Titanium Explorer and the Tungsten Explorer, as well as an additional ultra-deepwater drillship, the Cobalt Explorer, now under construction, and four Baker Marine Pacific Class 375 ultra-premium jack-up drilling rigs.