DISCONTINUED OPERATIONS
We sold the following rigs during the three-year period ended December 31, 2013 (in millions):
|
| | | | | | | | | | | | | | | | |
Rig | | Date of Rig Sale | | Segment(1) | | Net Proceeds | | Net Book Value(2) | | Pre-tax (Loss)/Gain(3) |
Pride Pennsylvania | | March 2013 | | Jackups | | $ | 15.5 |
| | $ | 15.7 |
| | $ | (.2 | ) |
ENSCO 5003 | | December 2012 | | Floaters | | 68.2 |
| | 89.4 |
| | (21.2 | ) |
Pride Hawaii | | October 2012 | | Jackups | | 18.8 |
| | 16.8 |
| | 2.0 |
|
ENSCO I | | September 2012 | | Other | | 4.5 |
| | 12.3 |
| | (7.8 | ) |
ENSCO 61 | | June 2012 | | Jackups | | 31.7 |
| | 19.6 |
| | 12.1 |
|
ENSCO 59 | | May 2012 | | Jackups | | 22.8 |
| | 21.9 |
| | .9 |
|
ENSCO 95 | | June 2011 | | Jackups | | 41.5 |
| | 28.8 |
| | 12.7 |
|
| | | | | | $ | 203.0 |
| | $ | 204.5 |
| | $ | (1.5 | ) |
(1) The rigs' operating results were reclassified to discontinued operations in our consolidated statements of income for each of the years in the three-year period ended December 31, 2013 and were previously included within the operating segment noted in the above table.
(2) Includes the rig's net book value as well as inventory and other assets on the date of the sale.
(3) The pre-tax (loss)/gain was included in loss from discontinued operations, net in our consolidated statement of income in the year of sale. Income tax expense of $900,000 and $10.9 million was recognized in connection with the sale of assets during the years ended December 31, 2013 and December 31, 2011, respectively. There was no net income tax expense recognized in connection with the sale of assets during the year ended December 31, 2012.
During 2012, we classified jackup rig Pride Pennsylvania as held for sale and the rig was written down to fair value less estimated cost to sell. We recognized a $2.5 million loss for assets classified as held for sale during the year ended December 31, 2012.
The following table summarizes loss from discontinued operations for each of the years in the three-year period ended December 31, 2013 (in millions):
|
| | | | | | | | | | | | |
| | 2013 | | 2012 | | 2011 |
Revenues | | $ | — |
| | $ | 6.7 |
| | $ | 45.0 |
|
Operating expenses | | 6.5 |
| | 44.3 |
| | 44.4 |
|
Operating (loss) income | | (6.5 | ) | | (37.6 | ) | | .6 |
|
Other income | | .3 |
| | 1.3 |
| | .2 |
|
Income tax benefit (expense) | | 2.3 |
| | 7.3 |
| | (4.8 | ) |
(Loss) gain on disposal of discontinued operations, net | | (1.1 | ) | | (16.5 | ) | | 1.8 |
|
Loss from discontinued operations | | $ | (5.0 | ) | | $ | (45.5 | ) | | $ | (2.2 | ) |
Debt and interest expense are not allocated to our discontinued operations.
During 2008, ENSCO 74 was lost as a result of Hurricane Ike in the U.S. Gulf of Mexico. The owner of a pipeline filed claims alleging that ENSCO 74 caused the pipeline to rupture during Hurricane Ike. We have incurred $3.6 million in professional fees in connection with this matter, which we have applied against our $10.0 million per occurrence deductible under our liability insurance policy.
We recently reached an agreement in principle to settle with the pipeline owner for $9.6 million. Accordingly, we recorded a $6.4 million charge for our remaining obligation under our liability insurance policy in loss from discontinued operations in our consolidated statement of income for the year ended December 31, 2013. The remaining $3.2 million will be settled by our underwriters. See "Note 12 - Commitments and Contingencies" for additional information on the ENSCO 74 loss.
