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| Transocean Ltd. Reports First Quarter 2012 Results |
ZUG, SWITZERLAND, May 02, 2012 (MARKETWIRE via COMTEX) --Transocean Ltd. (NYSE: RIG) (SIX: RIGN)
-- First quarter 2012 revenues were $2.331 billion compared with $2.422
billion in the fourth quarter 2011,
-- First quarter 2012 net income attributable to controlling interest was
$42 million, which included $184 million of net unfavorable items.
This compares with the fourth quarter 2011 net loss attributable to
controlling interest of $6.119 billion, which included $6.176 billion
of net unfavorable items,
-- Revenue efficiency(1) was 90.4 percent in the first quarter, compared
with 91.9 percent in the fourth quarter 2011,
-- Fleet utilization(2) was 61 percent in the first quarter, unchanged
from the fourth quarter 2011,
-- First quarter 2012 operating and maintenance expenses were $1.410
billion. Excluding $1.0 billion for estimated loss contingencies
associated with the Macondo Well incident, fourth quarter 2011
operating and maintenance expenses were $1.565 billion,
-- Cash flows from operating activities were $540 million in the first
quarter, which compares with $563 million in the fourth quarter 2011,
-- First quarter 2012 Annual Effective Tax Rate(3) was 25.5 percent
compared with 59.6 percent in the fourth quarter 2011, and
-- New contracts totaling $834 million were secured in the Fleet Status
Report periods February 14, 2012 through April 18, 2012. Since April
18, 2012, additional contracts totaling $430 million were secured.
Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported net income attributable to controlling interest of $42 million, or $0.12 per diluted share, for the three months ended March 31, 2012. First quarter 2012 results include net unfavorable items of $184 million, or $0.52 per diluted share. The results compare with net income attributable to controlling interest of $310 million, or $0.96 per diluted share, for the three months ended March 31, 2011. First quarter 2011 results included net favorable items of $139 million, or $0.43 per diluted share, primarily associated with the gain on sale of the Trident 20, partially offset by charges mainly related to unfavorable discrete tax items. Net unfavorable items, after tax, impacting the first quarter of 2012 include the following:
-- $118 million, or $0.34 per diluted share, increase in the charge
associated with the completion of the measurement of the estimated
goodwill impairment recorded in the fourth quarter 2011 for the
contract drilling services reporting unit,
-- $62 million, or $0.17 per diluted share, impairment of the intangible
assets of ADTI, the drilling management services reporting unit,
-- $29 million, or $0.08 per diluted share, of favorable discrete tax
items,
-- $17 million, or $0.05 per diluted share, impairment charge associated
with the sale of GSF Rig 136,
-- $15 million, or $0.04 per diluted share, loss associated with the sale
of Challenger Minerals (North Sea) Limited and the impairment of the
properties of Challenger Minerals Inc., and
-- $1 million associated with the company's acquisition of Aker
Drilling.
Operations Quarterly Review Revenues for the three months ended March 31, 2012 were $2.331 billion, compared with revenues of $2.422 billion during the three months ended December 31, 2011. Contract drilling revenues decreased $35 million due mainly to lower revenue efficiency primarily on Deepwater and Midwater Floaters. Total fleet revenue efficiency was 90.4 percent for the first quarter, compared with 91.9 percent in the fourth quarter 2011. Other revenues decreased $54 million to $117 million for the first quarter 2012, compared with $171 million in the prior quarter, primarily due to decreased levels of low-margin drilling management services activity. Operating and maintenance expenses totaled $1.410 billion for the first quarter 2012. This compares with $1.565 billion in the fourth quarter 2011, which excludes $1.0 billion for estimated loss contingencies associated with the Macondo Well incident. The sequential decline in operating and maintenance expenses relates to the timing of certain projects and various other items. These include approximately $70 million in net lower costs incurred on rigs undergoing shipyard, maintenance, repair and equipment certification projects during the period; approximately $40 million associated with reduced activity in the company's low-margin drilling management services reporting unit; and approximately $35 million related to the fourth quarter 2011 termination of the Deepwater Expedition contract. Depreciation and amortization expense was $351 million in the first quarter 2012 compared with $374 million in the prior quarter. The $23 million decrease was due mainly to assets that are now fully depreciated and the impact of Standard Jackups classified as held for sale or sold. General and administrative expenses were $69 million for the first quarter 2012 compared with $88 million in the previous quarter, including $1 million and $17 million, respectively, associated with the Aker Drilling acquisition. Annual Effective Tax Rate Transocean's Annual Effective Tax Rate (3) for the first quarter 2012, which excludes various discrete items, was 25.5 percent. This compares with 59.6 percent for the prior quarter. Other Items For the first quarter, interest expense, net of amounts capitalized, was $180 million, compared with $178 million in the fourth quarter 2011. Capitalized interest for the first quarter 2012 was $13 million compared with $10 million in the prior quarter. Interest income decreased to $15 million in the first quarter, compared with $17 million in the fourth quarter 2011. Cash flows from operating activities decreased $23 million to $540 million for the first quarter 2012 compared with $563 million for the fourth quarter 2011. Capital expenditures decreased to $260 million for the first quarter compared with $350 million in the fourth quarter of 2011. The lower capital expenditures were primarily due to the timing of shipyard milestone payments associated with the company's newbuild program. Forward-Looking Statements Statements included in this news release, including those regarding estimates of Transocean's goodwill or long-lived asset impairments and the estimated loss contingencies associated with the Macondo Well incident, are forward-looking statements that involve certain assumptions. These statements are based on currently available competitive, financial, and economic data along with our current operating plans and involve risks and uncertainties including, but not limited to, market conditions, Transocean's results of operations and other factors detailed in "Risk Factors" and elsewhere in Transocean's filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize (or the other consequences of such a development worsen), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. Transocean disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise. Conference Call Information Transocean will conduct a teleconference call at 10:00 a.m. EDT, 4:00 p.m. CEST, on Thursday, May 3, 2012. To participate, dial +1 800-768-6563 or +1 785-830-7991 and refer to confirmation code 9219164 approximately 10 minutes prior to the scheduled start time of the call. In addition, the conference call will be simultaneously broadcast over the Internet in a listen-only mode and can be accessed by logging onto Transocean's website at www.deepwater.com and selecting "Investor Relations." A file containing three charts that may be discussed during the conference call, titled "1Q12 Charts," has been posted to Transocean's website and can also be found by selecting "Investor Relations/Quarterly Toolkit." The conference call may also be accessed via the Internet at www.CompanyBoardroom.com by typing in Transocean's New York Stock Exchange trading symbol, "RIG." A telephonic replay of the conference call should be available after 1:00 p.m. EDT, 7:00 p.m. CEST, on May 3, 2012, and can be accessed by dialing +1 719-457-0820 or +1 888-203-1112 and referring to the confirmation code 9219164. Also, a replay will be available through the Internet and can be accessed by visiting either of the above-referenced internet addresses. Both replay options will be available for approximately 30 days. About Transocean Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. We own or have partial ownership interests in and operate a fleet of 129 mobile offshore drilling units consisting of 50 High-Specification Floaters (Ultra-Deepwater, Deepwater and Harsh-Environment semisubmersibles and drillships), 25 Midwater Floaters, nine High-Specification Jackups, 44 Standard Jackups and one swamp barge. In addition, we have two Ultra-Deepwater drillships and four High-Specification Jackups under construction. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on deepwater and harsh environment drilling services. We believe we operate one of the most versatile offshore drilling fleets in the world. (1) Revenue efficiency is defined as actual revenue divided by the highest amount of total revenue which could have been earned during the relevant period(s). See the accompanying schedule entitled "Revenue Efficiency." (2) Utilization is defined as the total actual number of revenue earning days in the period as a percentage of the total number of calendar days in the period for all drilling rigs in the company's fleet. See the accompanying schedule entitled "Utilization." (3) Annual Effective Tax Rate is defined as income tax expense from continuing operations excluding various discrete items (such as changes in estimates and tax on items excluded from income before income tax expense) divided by income from continuing operations before income tax expense excluding gains on sales and similar items pursuant to the accounting standards for income taxes. See the accompanying schedule entitled "Supplemental Effective Tax Rate Analysis." (4) Effective Tax Rate is defined as income tax expense from continuing operations divided by income from continuing operations before income taxes. See the accompanying schedule entitled "Supplemental Effective Tax Rate Analysis." For more information about Transocean, please visit the website at www.deepwater.com.
TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three months ended
March 31,
--------------------------
2012 2011
------------ ------------
Operating revenues
Contract drilling revenues $ 2,203 $ 1,950
Contract drilling intangible revenues 11 10
Other revenues 117 184
------------ ------------
2,331 2,144
------------ ------------
Costs and expenses
Operating and maintenance 1,410 1,359
Depreciation and amortization 351 354
General and administrative 69 67
------------ ------------
1,830 1,780
------------ ------------
Loss on impairment (227) --
Gain (loss) on disposal of assets, net (4) 8
------------ ------------
Operating income 270 372
------------ ------------
Other income (expense), net
Interest income 15 15
Interest expense, net of amounts capitalized (180) (145)
Other, net (7) 3
------------ ------------
(172) (127)
------------ ------------
Income from continuing operations before income
tax expense 98 245
Income tax expense 24 81
------------ ------------
Income from continuing operations 74 164
Income (loss) from discontinued operations, net
of tax (15) 176
------------ ------------
Net income 59 340
Net income attributable to noncontrolling
interest 17 30
------------ ------------
Net income attributable to controlling interest $ 42 $ 310
============ ============
Earnings per share-basic
Earnings from continuing operations $ 0.16 $ 0.42
Earnings (loss) from discontinued operations (0.04) 0.54
------------ ------------
Earnings per share $ 0.12 $ 0.96
============ ============
Earnings per share-diluted
Earnings from continuing operations $ 0.16 $ 0.42
Earnings (loss) from discontinued operations (0.04) 0.54
------------ ------------
Earnings per share $ 0.12 $ 0.96
============ ============
Weighted-average shares outstanding
Basic 350 319
Diluted 350 320
TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
March 31, December 31,
2012 2011
------------ ------------
Assets
Cash and cash equivalents $ 3,982 $ 4,017
Accounts receivable, net of allowance for
doubtful accounts of $28 at March 31, 2012 and
December 31, 2011 2,238 2,176
Materials and supplies, net of allowance for
obsolescence of $76 and $73 at March 31, 2012
and December 31, 2011, respectively 663 627
Deferred income taxes, net 142 142
Assets held for sale 53 26
Other current assets 595 621
------------ ------------
Total current assets 7,673 7,609
------------ ------------
Property and equipment 28,960 29,037
Property and equipment of consolidated variable
interest entities 2,255 2,252
Less accumulated depreciation 8,892 8,760
------------ ------------
Property and equipment, net 22,323 22,529
------------ ------------
Goodwill 3,087 3,205
Other assets 1,632 1,745
------------ ------------
Total assets $ 34,715 $ 35,088
============ ============
Liabilities and equity
Accounts payable $ 841 $ 880
Accrued income taxes 70 89
Debt due within one year 2,695 1,942
Debt of consolidated variable interest entities
due within one year 97 97
Other current liabilities 2,061 2,350
------------ ------------
Total current liabilities 5,764 5,358
------------ ------------
Long-term debt 9,940 10,756
Long-term debt of consolidated variable interest
entities 724 741
Deferred income taxes, net 512 523
Other long-term liabilities 1,914 1,903
------------ ------------
Total long-term liabilities 13,090 13,923
------------ ------------
Commitments and contingencies
Redeemable noncontrolling interest 138 116
Shares, CHF 15.00 par value, 402,282,355
authorized, 167,617,649 conditionally
authorized, 365,135,298 issued at March 31,
2012 and December 31, 2011; 350,500,518 and
349,805,793 outstanding at March 31, 2012 and
December 31, 2011, respectively 4,991 4,982
Additional paid-in capital 7,216 7,211
Treasury shares, at cost, 2,863,267 held at
March 31, 2012 and December 31, 2011 (240) (240)
Retained earnings 4,286 4,244
Accumulated other comprehensive loss (515) (496)
------------ ------------
Total controlling interest shareholders'
equity 15,738 15,701
------------ ------------
Noncontrolling interest (15) (10)
------------ ------------
Total equity 15,723 15,691
------------ ------------
Total liabilities and equity $ 34,715 $ 35,088
============ ============
TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three months ended
March 31,
--------------------------
2012 2011
------------ ------------
Cash flows from operating activities
Net income $ 59 $ 340
Adjustments to reconcile to net cash provided
by operating activities:
Amortization of drilling contract
intangibles (11) (10)
Depreciation and amortization 351 354
Share-based compensation expense 23 27
Loss on impairment 227 --
(Gain) loss on disposal of assets, net 4 (8)
(Gain) loss on disposal of discontinued
operations, net 14 (173)
Amortization of debt issue costs, discounts
and premiums, net 18 26
Deferred income taxes (30) 11
Other, net 21 (3)
Changes in deferred revenue, net (12) 46
Changes in deferred expenses, net (49) (36)
Changes in operating assets and liabilities (75) (184)
------------ ------------
Net cash provided by operating activities 540 390
------------ ------------
Cash flows from investing activities
Capital expenditures (260) (240)
Proceeds from disposal of assets, net 41 13
Proceeds from disposal of discontinued
operations, net -- 259
Other, net 12 (6)
------------ ------------
Net cash provided by (used in) investing
activities (207) 26
------------ ------------
Cash flows from financing activities
Changes in short-term borrowings, net -- 51
Proceeds from debt -- 5
Repayments of debt (147) (47)
Proceeds from restricted cash investments 108 --
Deposits to restricted cash investments (42) --
Distribution of qualifying additional paid-in
capital (278) --
Other, net (9) (7)
------------ ------------
Net cash provided by (used in) financing
activities (368) 2
------------ ------------
Net increase (decrease) in cash and cash
equivalents (35) 418
------------ ------------
Cash and cash equivalents at beginning of period 4,017 3,394
------------ ------------
Cash and cash equivalents at end of period $ 3,982 $ 3,812
============ ============
TRANSOCEAN LTD. AND SUBSIDIARIES
FLEET OPERATING STATISTICS
Operating Revenues (in millions) (1)
------------------------------------
Three months ended
------------------------------------
March 31, December 31, March 31,
2012 2011 2011
---------- ------------ ----------
Contract Drilling Revenues
High-Specification Floaters:
Ultra Deepwater Floaters $ 1,092 $ 1,066 $ 844
Deepwater Floaters 236 259 290
Harsh Environment Floaters 255 285 150
---------- ------------ ----------
Total High-Specification Floaters 1,583 1,610 1,284
Midwater Floaters 347 333 400
Jackups:
High-Specification Jackups 78 68 31
Standard Jackups 189 220 229
---------- ------------ ----------
Total Jackups 267 288 260
Other Rigs 6 7 6
---------- ------------ ----------
Total Contract Drilling Revenues 2,203 2,238 1,950
---------- ------------ ----------
Contract Intangible Revenue 11 13 10
Other Revenues
Client Reimbursable Revenues 48 41 37
Integrated Services and Other - 13 15
Drilling Management Services 69 117 132
---------- ------------ ----------
Total Other Revenues 117 171 184
---------- ------------ ----------
Total Company $ 2,331 $ 2,422 $ 2,144
========== ============ ==========
Average Daily Revenue (1)
------------------------------------
Three months ended
------------------------------------
March 31, December 31, March 31,
2012 2011 2011
---------- ------------ ----------
High-Specification Floaters:
Ultra Deepwater Floaters $ 534,900 $ 542,900 $ 467,700
Deepwater Floaters 348,900 351,600 395,900
Harsh Environment Floaters 478,600 468,300 402,400
Total High-Specification Floaters 486,900 486,600 441,300
Midwater Floaters 275,600 274,300 313,000
High-Specification Jackups 116,900 111,900 106,200
Standard Jackups 91,200 93,400 109,200
Other Rigs 73,300 73,800 73,400
---------- ------------ ----------
Total Drilling Fleet $ 300,300 $ 295,400 $ 292,600
========== ============ ==========
(1) Average daily revenue is defined as contract drilling revenue earned
per revenue earning day in the period. A revenue earning day is defined
as a day for which a rig earns dayrate after commencement of
operations.
TRANSOCEAN LTD. AND SUBSIDIARIES
FLEET OPERATING STATISTICS (continued)
Utilization (2)
----------------------------------
Three months ended
----------------------------------
March 31, December 31, March 31,
2012 2011 2011
--------- ------------ ---------
High-Specification Floaters:
Ultra Deepwater Floaters 83% 79% 77%
Deepwater Floaters 47% 50% 51%
Harsh Environment Floaters 84% 95% 83%
Total High-Specification Floaters 71% 72% 69%
Midwater Floaters 56% 55% 60%
High-Specification Jackups 81% 74% 40%
Standard Jackups 47% 51% 43%
Other Rigs 98% 99% 49%
--------- ------------ ---------
Total Drilling Fleet 61% 61% 55%
========= ============ =========
(2) Utilization is defined as the total actual number of revenue earning
days in the period as a percentage of the total number of calendar days
in the period for all drilling rigs in our fleet.
Revenue Efficiency(3)
Trailing Five Quarters and Historical Data
-------------------------------------------------------
1Q 2012 4Q 2011 3Q 2011 2Q 2011 1Q 2011 FY 2011 FY 2010
------- ------- ------- ------- ------- ------- -------
Ultra Deepwater 89.4% 89.5% 86.4% 89.3% 85.3% 87.7% 88.6%
Deepwater 81.1% 88.1% 87.7% 93.9% 88.2% 89.4% 90.3%
Harsh Environment
Floaters 97.8% 98.0% 94.4% 98.4% 99.2% 97.4% 96.0%
Midwater Floaters 90.8% 94.2% 90.8% 91.9% 93.6% 92.6% 92.5%
High Specification
Jackups 93.4% 94.3% 97.3% 95.6% 95.1% 95.6% 95.3%
Standard Jackups 97.8% 96.4% 98.2% 98.4% 97.7% 97.7% 97.3%
Others 97.3% 98.6% 99.5% 97.6% 99.0% 98.7% 98.4%
------- ------- ------- ------- ------- ------- -------
Total Fleet 90.4% 91.9% 89.5% 92.1% 90.0% 90.9% 91.7%
======= ======= ======= ======= ======= ======= =======
(3) Revenue efficiency is defined as actual revenue divided by the highest
amount of total revenue which could have been earned during the
relevant period(s).
TRANSOCEAN LTD. AND SUBSIDIARIES
SUPPLEMENTAL EFFECTIVE TAX RATE ANALYSIS
(In US$ millions, except percentages)
Three months ended
------------------------------------
March 31, December 31, March 31,
2012 2011 2011
---------- ------------ ----------
Income (loss) from continuing
operations before income taxes $ 98 $ (5,970) $ 245
Add back (subtract):
Litigation matters -- 1,000 8
Acquisition costs 1 17 --
Gain on disposal of other assets,
net -- (11) (9)
Loss on impairment of goodwill and
other assets 227 5,201 --
Loss on marketable security -- 13 --
Other, net -- -- 5
---------- ------------ ----------
Adjusted income from continuing
operations before income taxes 326 250 249
---------- ------------ ----------
Income tax expense from continuing
operations 24 132 81
Add back (subtract):
Loss on impairment 30 -- --
Changes in estimates (1) 29 18 (35)
Other, net -- -- 2
---------- ------------ ----------
Adjusted income tax expense from
continuing operations (2) $ 83 $ 150 $ 48
---------- ------------ ----------
Effective Tax Rate (3) 24.7% -2.2% 33.1%
Annual Effective Tax Rate (4) 25.5% 59.6% 19.3%
(1) Our estimates change as we file tax returns, settle disputes with tax
authorities or become aware of other events and include changes in (a)
deferred taxes, (b) valuation allowances on deferred taxes and (c)
other tax liabilities.
(2) The three months ended December 31, 2011 include $46 million of
additional tax expense (benefit) reflecting the catch-up effect of an
increase (decrease) in the annual effective tax rate from the previous
quarter estimate.
(3) Effective Tax Rate is income tax expense divided by income before
income taxes.
(4) Annual Effective Tax Rate is income tax expense excluding various
discrete items (such as changes in estimates and tax on items excluded
from income before income taxes) divided by income before income taxes
excluding gains and losses on sales and similar items pursuant to the
accounting standards for income taxes and estimating the annual
effective tax rate.
SOURCE: Transocean Ltd. |