Transocean Ltd. Reports Second Quarter 2012 Results
(Thomson Reuters ONE) -
Transocean Ltd. /
Transocean Ltd. Reports Second Quarter 2012 Results
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The issuer is solely responsible for the content of this announcement.
ZUG, SWITZERLAND--(Marketwire - August 1, 2012) - Transocean Ltd. (NYSE: RIG)
(SIX: RIGN)
* Second quarter 2012 revenues were $2.575 billion compared with $2.337
billion in the first quarter 2012;
* Excluding an additional $750 million for estimated loss contingencies
associated with the Macondo well incident, second quarter 2012 operating and
maintenance expenses were $1.607 billion compared with $1.463 billion in the
first quarter 2012;
* Second quarter 2012 net loss attributable to controlling interest was $304
million, which included $560 million of net unfavorable items. This compares
with the first quarter 2012 net income attributable to controlling interest
of $10 million, which included $181 million of net unfavorable items;
* Revenue efficiency((1)) was 92.5 percent in the second quarter, compared
with 90.6 percent in the first quarter 2012;
* Fleet utilization((2)) was 66 percent in the second quarter, compared with
61 percent in the first quarter 2012;
* Cash flows from operating activities were $459 million in the second
quarter, which compares with $540 million in the first quarter 2012;
* Second quarter 2012 Annual Effective Tax Rate((3)) was 31.1 percent compared
with 27.6 percent in the first quarter 2012;
* New contracts totaling $4.7 billion were secured in the Fleet Status Report
periods April 18, 2012 through July 18, 2012. Backlog at July 18(th) was
$22.9 billion, a net increase of $2.3 billion. Since July 18, 2012,
additional contracts totaling $144 million were secured; and
* Prior period consolidated financial statements have been adjusted to correct
for an error primarily related to the recognition of assets for insurance
recoveries for legal and other costs associated with the Macondo well
incident. These corrections, described in Appendix A to this release, are
immaterial to the prior period consolidated financial statements.
Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported a net loss attributable
to controlling interest of $304 million, or $0.86 per diluted share, for the
three months ended June 30, 2012. Second quarter 2012 results included net
unfavorable items of $560 million, or $1.58 per diluted share. The results
compare with net income attributable to controlling interest of $124 million, or
$0.39 per diluted share, for the three months ended June 30, 2011. Second
quarter 2011 results included net unfavorable items of $36 million, or $0.11 per
diluted share, primarily associated with impairment losses on three standard
jackups and charges related to unfavorable discrete tax items.
Net unfavorable items, after tax, impacting the second quarter of 2012 included
the following:
* $750 million, or $2.12 per diluted share, for estimated loss contingencies
associated with the Macondo well incident that the company believes is
probable and for which a reasonable estimate can be made at this time. This
estimate will be adjusted to reflect new information and future developments
as they become known;
* $145 million, or $0.41 per diluted share, associated with discrete tax
benefits;
* $64 million, or $0.18 per diluted share, net gain on the sale of Transocean
Nordic, Transocean Shelf Explorer, Roger W. Mowell, and GSF Adriatic II;
* $14 million, or $0.04 per diluted share, loss associated with Quantum's
exchange of its 50 percent interest in Transocean Pacific Drilling Inc. for
Transocean Ltd.'s shares;
* $12 million, or $0.03 per diluted share, in impairments of long-lived assets
classified as held for sale; and
* $7 million, or $0.02 per diluted share, primarily associated with a gain on
disposal of the discontinued operations of Challenger Minerals Inc.
Operations Quarterly Review
Revenues for the three months ended June 30, 2012 were $2.575 billion, compared
with revenues of $2.337 billion during the three months ended March
31, 2012. Contract drilling revenues increased $170 million mainly due to fewer
shipyard days and higher revenue efficiency((1)) primarily on High Specification
Floaters. Total fleet revenue efficiency((1)) was 92.5 percent for the second
quarter, compared with 90.6 percent in the first quarter 2012. Other revenues
increased $68 million to $185 million for the second quarter 2012, compared with
$117 million in the prior quarter, primarily due to increased activity levels in
the company's drilling management services reporting unit outside the U.S. GOM.
Excluding $750 million for estimated loss contingencies associated with the
Macondo well incident, operating and maintenance expenses totaled $1.607 billion
for the second quarter 2012. This compares with $1.463 billion in the first
quarter 2012. The increase in operating and maintenance expenses was partly due
to approximately $82 million in higher costs incurred on rigs undergoing
shipyard, maintenance, survey and repair projects. In addition, drilling
management services activity levels outside the U.S. GOM increased operating and
maintenance costs by $62 million.
General and administrative expenses were $79 million for the second quarter
2012 compared with $69 million in the previous quarter. The increase was
primarily due to transaction costs associated with the Quantum exchange.
Correction of Prior Period Consolidated Financial Statements
Please note that previously reported consolidated financial statements have been
adjusted to reflect prior period corrections primarily related to the
recognition of assets for insurance recoveries for legal and other costs
associated with the Macondo well incident. These corrections are immaterial to
the prior year consolidated financial statements.
For the three months ended March 31, 2012, the corrections reduced income from
continuing operations by $55 million and net income attributable to controlling
interest by $32 million. For the three months ended June 30, 2011, the
corrections reduced income from continuing operations by $31 million, and net
income attributable to controlling interest by $31 million. Additional details
of these corrections, as well as required reconciliations, are provided in
Appendix A.
Income Taxes
Transocean's second quarter Effective Tax Rate((4) )was 8.6 percent compared
with 47.2 percent in the first quarter 2012. The decrease in the Effective Tax
Rate((4)) was due to favorable changes in estimates mainly for settlement of
prior year's tax liabilities. Transocean's Annual Effective Tax Rate((3) )for
the second quarter 2012, which excludes various favorable discrete items
totaling $145 million, was 31.1 percent. This compares with 27.6 percent for the
prior quarter. The increase was primarily due to changes in the blend of income
that is taxed based on gross revenues versus pre-tax income and rig movements
between taxing jurisdictions, among other things. Second quarter 2012 income tax
expense included an adjustment of $5 million, or $0.01 per diluted share,
required to reflect an increase in the Annual Effective Tax Rate((3)) to 29.6
percent for the six months ended June 30, 2012, from 27.6 percent for the first
quarter of 2012.
Other Items
For the second quarter, interest expense, net of amounts capitalized, was $183
million, compared with $180 million in the first quarter 2012. Capitalized
interest for the second quarter 2012 was $12 million compared with $13 million
in the prior quarter. Interest income decreased to $13 million in the second
quarter, compared with $15 million in the first quarter 2012.
Cash flows from operating activities were $459 million for the second quarter
compared with $540 million for the first quarter 2012. Capital expenditures
decreased to $236 million for the second quarter compared with $260 million in
the first quarter of 2012. The lower capital expenditures were primarily due to
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, the effect
and results of litigation, assessments and contingencies, 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, August 2, 2012. To participate, dial +1 719-325-4929 and refer to
confirmation code 4582389 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 four charts that may be discussed during the conference call, titled
"2Q12 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 August 2, 2012, and can be accessed by dialing
+1 719-457-0820 or +1 888-203-1112 and referring to the confirmation code
4582389. 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 128 mobile offshore drilling units consisting of 49 High-
Specification Floaters (Ultra-Deepwater, Deepwater and Harsh-Environment
semisubmersibles and drillships), 25 Midwater Floaters, 10 High-Specification
Jackups, 43 Standard Jackups and one swamp barge. In addition, we have two
Ultra-Deepwater Drillships and three 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, and believes that it operates 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 Six months ended
June 30, June 30,
---------------------------- ---------------------
2012 2011 2012 2011
--------- ---------------- --------- ---------
Operating revenues
Contract drilling
revenues $ 2,390 $ 2,096 $ 4,610 $ 4,056
Other revenues 185 238 302 422
--------- ---------------- --------- ---------
2,575 2,334 4,912 4,478
--------- ---------------- --------- ---------
Costs and expenses
Operating and
maintenance 2,357 1,528 3,820 2,905
Depreciation and
amortization 345 359 700 713
General and
administrative 79 66 148 133
--------- ---------------- --------- ---------
2,781 1,953 4,668 3,751
--------- ---------------- --------- ---------
Loss on impairment (12 ) (25 ) (239 ) (25 )
Gain (loss) on disposal
of assets, net 55 (1 ) 51 7
--------- ---------------- --------- ---------
Operating income (loss) (163 ) 355 56 709
--------- ---------------- --------- ---------
Other income (expense),
net
Interest income 13 5 28 20
Interest expense, net
of amounts
capitalized (183 ) (147 ) (363 ) (292 )
Other, net (6 ) (5 ) (24 ) (2 )
--------- ---------------- --------- ---------
(176 ) (147 ) (359 ) (274 )
--------- ---------------- --------- ---------
Income (loss) from
continuing operations
before income tax
expense (339 ) 208 (303 ) 435
Income tax (benefit)
expense (29 ) 77 (12 ) 143
--------- ---------------- --------- ---------
Income (loss) from
continuing operations (310 ) 131 (291 ) 292
Income (loss) from
discontinued
operations, net of tax 7 2 6 174
--------- ---------------- --------- ---------
Net income (loss) (303 ) 133 (285 ) 466
Net income (loss)
attributable to
noncontrolling interest 1 9 9 23
--------- ---------------- --------- ---------
Net income (loss)
attributable to
controlling interest $ (304 ) $ 124 $ (294 ) $ 443
--------- ---------------- --------- ---------
Earnings (loss) per
share-basic
Earnings (loss) from
continuing operations $ (0.88 ) $ 0.38 $ (0.85 ) $ 0.84
Earnings (loss) from
discontinued
operations 0.02 0.01 0.02 0.54
--------- ---------------- --------- ---------
Earnings (loss) per
share $ (0.86 ) $ 0.39 $ (0.83 ) $ 1.38
--------- ---------------- --------- ---------
Earnings (loss) per
share-diluted
Earnings (loss) from
continuing operations $ (0.88 ) $ 0.38 $ (0.85 ) $ 0.84
Earnings (loss) from
discontinued
operations 0.02 0.01 0.02 0.54
--------- ---------------- --------- ---------
Earnings (loss) per
share $ (0.86 ) $ 0.39 $ (0.83 ) $ 1.38
--------- ---------------- --------- ---------
Weighted-average shares
outstanding
Basic 353 320 352 319
Diluted 353 320 352 320
TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
June 30, December 31,
2012 2011
------------- ---------------
Assets
Cash and cash equivalents $ 3,964 $ 4,017
Accounts receivable, net of allowance for
doubtful accounts of $28 at June 30, 2012 and
December 31, 2011 2,124 2,176
Materials and supplies, net of allowance for
obsolescence of $81 and $73 at June 30, 2012
and December 31, 2011, respectively 676 627
Deferred income taxes, net 142 142
Assets held for sale 9 26
Other current assets 452 537
----------- --------------
Total current assets 7,367 7,525
----------- --------------
Property and equipment 30,559 29,037
Property and equipment of consolidated variable
interest entities 813 2,252
Less accumulated depreciation 9,165 8,756
----------- --------------
Property and equipment, net 22,207 22,533
----------- --------------
Goodwill 3,099 3,217
Other assets 1,769 1,757
----------- --------------
Total assets $ 34,442 $ 35,032
----------- --------------
Liabilities and equity
Accounts payable $ 917 $ 880
Accrued income taxes 121 89
Debt due within one year 2,772 1,942
Debt of consolidated variable interest entities
due within one year 28 245
Other current liabilities 2,888 2,372
----------- --------------
Total current liabilities 6,726 5,528
----------- --------------
Long-term debt 9,862 10,756
Long-term debt of consolidated variable
interest entities 177 593
Deferred income taxes, net 487 519
Other long-term liabilities 1,581 1,893
----------- --------------
Total long-term liabilities 12,107 13,761
----------- --------------
Commitments and contingencies
Redeemable noncontrolling interest -- 116
Shares, CHF 15.00 par value, 402,282,355
authorized, 167,617,649 conditionally
authorized, and 373,830,649 and 365,135,298
issued at June 30, 2012 and December 31, 2011,
respectively; 359,284,907 and 349,805,793
outstanding at June 30, 2012 and December
31, 2011, respectively 5,127 4,982
Additional paid-in capital 7,472 7,211
Treasury shares, at cost, 2,863,267 held at
June 30, 2012 and December 31, 2011 (240 ) (240 )
Retained earnings 3,780 4,180
Accumulated other comprehensive loss (516 ) (496 )
----------- --------------
Total controlling interest shareholders'
equity 15,623 15,637
----------- --------------
Noncontrolling interest (14 ) (10 )
----------- --------------
Total equity 15,609 15,627
----------- --------------
Total liabilities and equity $ 34,442 $ 35,032
----------- --------------
TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(In millions)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
----------------------- ------------------------
2012 2011 2012 2011
----------- --------- ---------- ---------
Cash flows from
operating activities
Net income (loss) $ (303 ) $ 133 $ (285 ) $ 466
Adjustments to
reconcile to net cash
provided by operating
activities
Amortization of
drilling contract
intangibles (12 ) (10 ) (23 ) (20 )
Depreciation and
amortization 345 359 700 713
Share-based
compensation
expense 25 27 48 54
Loss on impairment 12 25 239 25
(Gain) loss on
disposal of assets,
net (55 ) 1 (51 ) (7 )
(Gain) loss on
disposal of
discontinued
operations, net (10 ) -- (10 ) (169 )
Amortization of
debt issue costs,
discounts and
premiums, net 17 36 35 62
Deferred income
taxes (26 ) 12 (43 ) 36
Other, net 20 14 41 11
Changes in deferred
revenue, net 7 (3 ) (5 ) 43
Changes in deferred
expenses, net 28 (48 ) (21 ) (84 )
Changes in
operating assets
and liabilities 411 (206 ) 374 (400 )
----------- --------- ---------- ---------
Net cash provided by
operating activities 459 340 999 730
----------- --------- ---------- ---------
Cash flows from
investing activities
Capital expenditures (236 ) (293 ) (496 ) (533 )
Proceeds from
disposal of assets,
net 144 5 185 18
Proceeds from
disposal of
discontinued
operations, net 17 -- 17 259
Other, net 13 (27 ) 25 (33 )
----------- --------- ---------- ---------
Net cash used in
investing activities (62 ) (315 ) (269 ) (289 )
----------- --------- ---------- ---------
Cash flows from
financing activities
Changes in short-term
borrowings, net (260 ) 5 (260 ) 56
Proceeds from debt -- -- -- 5
Repayments of debt (173 ) (202 ) (320 ) (249 )
Proceeds from
restricted cash
investments 84 -- 192 --
Deposits to
restricted cash
investments (74 ) -- (116 ) --
Distribution of
qualifying additional
paid-in capital -- (254 ) (278 ) (254 )
Other, net 8 3 (1 ) (4 )
----------- --------- ---------- ---------
Net cash used in
financing activities (415 ) (448 ) (783 ) (446 )
----------- --------- ---------- ---------
Net decrease in cash
and cash equivalents (18 ) (423 ) (53 ) (5 )
Cash and cash
equivalents at
beginning of period 3,982 3,772 4,017 3,354
----------- --------- ---------- ---------
Cash and cash
equivalents at end of
period $ 3,964 $ 3,349 $ 3,964 $ 3,349
----------- --------- ---------- ---------
TRANSOCEAN LTD. AND SUBSIDIARIES
FLEET OPERATING STATISTICS
Operating Revenues (in millions) ((1))
-----------------------------------------------------------
Six months ended
Three months ended June 30,
----------------------------------- -----------------------
June 30, March 31, June 30,
2012 2012 2011 2012 2011
----------- ----------- ----------- ----------- -----------
Contract Drilling
Revenues
High-
Specification
Floaters:
Ultra
Deepwater
Floaters $ 1,141 $ 1,092 $ 1,005 $ 2,233 $ 1,849
Deepwater
Floaters 328 242 238 570 528
Harsh
Environment
Floaters 264 255 181 519 331
----------- ----------- ----------- ----------- -----------
Total High-
Specification
Floaters 1,733 1,589 1,424 3,322 2,708
Midwater
Floaters 337 347 376 684 776
Jackups:
High-
Specification
Jackups 102 78 48 180 79
Standard
Jackups 200 189 230 389 459
----------- ----------- ----------- ----------- -----------
Total Jackups 302 267 278 569 538
Other Rigs 7 6 8 13 14
----------- ----------- ----------- ----------- -----------
Total Contract
Drilling Revenues 2,379 2,209 2,086 4,588 4,036
----------- ----------- ----------- ----------- -----------
Contract
Intangible Revenue 11 11 10 22 20
Other Revenues
Client
Reimbursable
Revenues 41 48 40 89 77
Integrated
Services and
Other 6 - 15 6 30
Drilling
Management
Services 138 69 183 207 315
----------- ----------- ----------- ----------- -----------
Total Other
Revenues 185 117 238 302 422
----------- ----------- ----------- ----------- -----------
Total Company $ 2,575 $ 2,337 $ 2,334 $ 4,912 $ 4,478
----------- ----------- ----------- ----------- -----------
Average Daily Revenue ((1))
-----------------------------------------------------------
Six months ended
Three months ended June 30,
----------------------------------- -----------------------
June 30, March June 30,
2012 31, 2012 2011 2012 2011
----------- ----------- ----------- ----------- -----------
High-
Specification
Floaters:
Ultra
Deepwater
Floaters $ 537,000 $ 534,900 $ 516,600 $ 536,000 $ 493,100
Deepwater
Floaters 379,200 357,800 396,400 369,800 396,200
Harsh
Environment
Floaters 433,200 478,600 430,100 454,400 417,100
Total High-
Specification
Floaters 481,600 488,800 479,900 485,000 460,800
Midwater
Floaters 295,800 275,600 333,000 285,200 322,400
High-
Specification
Jackups 138,400 116,900 110,300 128,200 108,700
Standard
Jackups 89,900 91,200 111,700 90,500 110,400
Other Rigs 77,800 73,300 76,400 75,600 74,900
----------- ----------- ----------- ----------- -----------
Total Drilling
Fleet $ 305,400 $ 301,100 $ 312,100 $ 303,300 $ 302,400
----------- ----------- ----------- ----------- -----------
(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))
---------------------------------------------------
Six months
ended
Three months ended June 30,
----------------------------- ---------------
June March June
30, 31, 30,
2012 2012 2011 2012 2011
--------- --------- --------- --------- -----
High-Specification
Floaters:
Ultra Deepwater
Floaters 87% 83% 80% 85% 79%
Deepwater Floaters 59% 47% 41% 53% 46%
Harsh Environment
Floaters 96% 84% 93% 90% 88%
Total High-Specification
Floaters 79% 71% 69% 75% 69%
Midwater Floaters 52% 56% 54% 54% 57%
High-Specification
Jackups 84% 81% 56% 83% 48%
Standard Jackups 55% 47% 43% 51% 43%
Other Rigs 100% 98% 50% 99% 50%
--------- --------- --------- --------- -----
Total Drilling Fleet 66% 61% 55% 64% 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
----------------------------------------------------------------
FY FY
2Q 2012 1Q 2012 4Q 2011 3Q 2011 2Q 2011 2011 2010
--------- --------- --------- --------- --------- ------- ------
Ultra
Deepwater 92.2% 89.4% 89.5% 86.4% 89.3% 87.7% 88.6%
Deepwater 92.1% 83.2% 88.1% 87.7% 93.9% 89.4% 90.3%
Harsh
Environment
Floaters 98.1% 97.8% 98.0% 94.4% 98.4% 97.4% 96.0%
Midwater
Floaters 87.4% 90.8% 94.2% 90.8% 91.9% 92.6% 92.5%
High
Specification
Jackups 95.1% 93.4% 94.3% 97.3% 95.6% 95.6% 95.3%
Standard
Jackups 97.3% 97.8% 96.4% 98.2% 98.4% 97.7% 97.3%
Others 99.4% 97.3% 98.6% 99.5% 97.6% 98.7% 98.4%
--------- --------- --------- --------- --------- ------- ------
Total Fleet 92.5% 90.6% 91.9% 89.5% 92.1% 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 Six months ended
------------------------------- -------------------
June March June June June
30, 31, 31, 30, 30,
2012 2012 2011 2012 2011
-------- --------- -------- -------- --------
Income (loss) from
continuing
operations before
income taxes $ (339 ) $ 36 $ 208 $ (303 ) $ 435
Add back
(subtract):
Litigation
matters 750 -- -- 750 --
Gain on disposal
of other assets,
net (64 ) -- -- (64 ) (9 )
Loss on
impairment of
goodwill and
other assets 12 227 25 239 25
Loss on redeemed
noncontrolling
interest 14 11 -- 25 --
Other, net -- 1 -- 1 5
-------- --------- ---------- -------- --------
Adjusted income
from continuing
operations before
income taxes 373 275 233 648 456
Income tax
(benefit) expense
from continuing
operations (29 ) 17 77 (12 ) 143
Add back
(subtract):
Loss on
impairment -- 30 -- 30 --
Changes in
estimates (1) 145 29 (13 ) 174 (33 )
Other, net -- -- -- -- 2
-------- --------- -------- -------- --------
Adjusted income tax
expense from
continuing
operations (2) $ 116 $ 76 $ 64 $ 192 $ 112
-------- --------- -------- -------- --------
Effective Tax Rate
(3) 8.6 % 47.2 % 37.0 % 4.0 % 32.9 %
Annual Effective
Tax Rate (4) 31.1 % 27.6 % 27.5 % 29.6 % 24.6 %
(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 and six months ended June 30, 2012 includes $5 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.
TRANSOCEAN LTD. AND SUBSIDIARIES
APPENDIX A
Correction of Errors in Previously Reported Consolidated Financial Statements
We perform assessments of our contingencies and corresponding assets for
insurance recoveries on an ongoing basis to evaluate the appropriateness of our
balances and disclosures for such contingencies and insurance recoveries. We
establish liabilities for estimated loss contingencies when we believe a loss is
probable and the amount of the probable loss can be reasonably estimated. We
recognize corresponding assets for those loss contingencies that we believe are
probable of being recovered through insurance. In performing these assessments
in the three months ended June 30, 2012, we identified an error in our
previously issued financial statements for the year ended December 31, 2011 and
the three months ended March 31, 2012 related to the recognition of assets for
insurance recoveries related to legal and other costs totaling $67 million and
$37 million, respectively, which we have concluded should not have been recorded
because they were not probable of recovery.
We assessed the materiality of this error in accordance with SEC Staff
Accounting Bulletin ("SAB") No. 99, Materiality and SAB No. 108, Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current
Year Financial Statements ("SAB 108"), using both the rollover method and the
iron curtain method, as defined in SAB 108, and concluded the error, inclusive
of other adjustments discussed below, was immaterial to prior years but could be
material to the current year. Under SAB 108, if the prior year error that, if
corrected in the current year, would be material to the current year, the prior
year financial statements should be corrected, even though such correction
previously was immaterial to the prior year financial statements. Correcting
prior year financial statements for immaterial errors does not require our
previously filed reports to be amended, but rather these corrections will be
made the next time we file the prior period consolidated financial statements.
In addition to the adjustments in 2011 and 2012 related to the assets for
insurance recoveries, we recorded other adjustments related to the years ended
December 31, 2011 and 2010 and the three months ended March 31, 2012 to correct
for immaterial errors for repair and maintenance costs, income taxes,
discontinued operations, and the allocation of net income attributable to
noncontrolling interest. These other adjustments were not previously recorded in
the appropriate periods, as we concluded that they were immaterial to our
previously issued consolidated financial statements.
For the three months ended March 31, 2012, the correction of these errors
reduced income from continuing operations by $55 million and net income
attributable to controlling interest by $32 million. For the three and six month
periods ended June 30, 2011, correction of these errors reduced income from
continuing operations by $31 million and $34 million, respectively, and net
income attributable to controlling interest by $31 million and $22 million,
respectively. For the year ended December 31, 2011, correction of these errors
increased loss from continuing operations by $31 million and net loss
attributable to controlling interest by $29 million. For the year ended December
31, 2010, correction of these errors reduced income from continuing operations
by $19 million and net income attributable to controlling interest by $35
million. The summary of adjustments for increases and (decreases) to net income
(loss) from continuing operations and net income (loss) attributable to
controlling interest for the applicable periods were as follows (in millions):
Six
Three months months Years
ended ended ended
------------------- --------- -------------------------
March June June December December
31, 30, 30, 31, 31,
2012 2011 2011 2011 2010
-------- -------- --------- ----------- -----------
Legal and other
costs $ (37 ) $ (19 ) $ (30 ) $ (67 ) $ --
Repair and
maintenance
costs -- (32 ) (48 ) 11 (11 )
Income tax
(expense)
benefit 7 5 20 16 (4 )
Other immaterial
adjustments, net (25 ) 15 24 9 (4 )
-------- -------- --------- ----------- -----------
Net adjustment
to income from
continuing
operations (55 ) (31 ) (34 ) (31 ) (19 )
Net adjustment
to income from
discontinued
operations, net
of tax 14 -- (4 ) (14 ) --
Net adjustment
to net income
attributable to
noncontrolling
interest 9 -- 16 16 (16 )
-------- -------- --------- ----------- -----------
Net adjustment
to net income
attributable to
controlling
interest $ (32 ) $ (31 ) $ (22 ) $ (29 ) $ (35 )
-------- -------- --------- ----------- -----------
The effects of the corrections of the errors on our consolidated statements of
operations and balance sheets are presented in the tables below. The corrections
of the errors had no effect on our consolidated statements of comprehensive
income (loss) other than the effect of the changes to net income (loss) for each
period. The corrections of the errors had no effect on the previously reported
amounts of operating, investing, and financing cash flows in our consolidated
statements of cash flows.
TRANSOCEAN LTD. AND SUBSIDIARIES
APPENDIX A
Correction of Errors in Previously Reported Consolidated Financial Statements
(continued)
Three months ended March 31, 2012
-----------------------------------------
Previously As
reported Adjustments adjusted
------------ ------------- ----------
Operating revenues
Contract drilling revenues $ 2,214 $ 6 $ 2,220
Other revenues 117 -- 117
------------ ------------- ----------
2,331 6 2,337
------------ ------------- ----------
Costs and expenses
Operating and maintenance 1,410 53 1,463
Depreciation and amortization 351 4 355
General and administrative 69 -- 69
------------ ------------- ----------
1,830 57 1,887
------------ ------------- ----------
Loss on impairment (227 ) -- (227 )
Gain (loss) on disposal of assets,
net (4 ) -- (4 )
------------ ------------- ----------
Operating income (loss) 270 (51 ) 219
------------ ------------- ----------
Other income (expense), net
Interest income 15 -- 15
Interest expense, net of amounts
capitalized (180 ) -- (180 )
Other, net (7 ) (11 ) (18 )
------------ ------------- ----------
(172 ) (11 ) (183 )
------------ ------------- ----------
Income (loss) from continuing
operations before income tax
expense 98 (62 ) 36
Income tax (benefit) expense 24 (7 ) 17
------------ ------------- ----------
Income (loss) from continuing
operations 74 (55 ) 19
Income (loss) from discontinued
operations, net of tax (15 ) 14 (1 )
------------ ------------- ----------
Net income (loss) 59 (41 ) 18
Net income (loss) attributable to
noncontrolling interest 17 (9 ) 8
------------ ------------- ----------
Net income (loss) attributable to
controlling interest $ 42 $ (32 ) $ 10
------------ ------------- ----------
Earnings (loss) per share-basic
Earnings (loss) from continuing
operations $ 0.16 $ (0.13 ) $ 0.03
Earnings (loss) from
discontinued operations (0.04 ) 0.04 --
------------ ------------- ----------
Earnings (loss) per share $ 0.12 $ (0.09 ) $ 0.03
------------ ------------- ----------
Earnings (loss) per share-diluted
Earnings (loss) from continuing
operations $ 0.16 $ (0.13 ) $ 0.03
Earnings (loss) from
discontinued operations (0.04 ) 0.04 --
------------ ------------- ----------
Earnings (loss) per share $ 0.12 $ (0.09 ) $ 0.03
------------ ------------- ----------
TRANSOCEAN LTD. AND SUBSIDIARIES
APPENDIX A
Correction of Errors in Previously Reported Consolidated Financial Statements
(continued)
Three months ended June 30, 2011 Six months ended June 30, 2011
----------------------------------------- -----------------------------------------
Previously As Previously As
reported Adjustments adjusted reported Adjustments adjusted
------------ ------------- ---------- ------------ ------------- ----------
Operating
revenues
Contract
drilling
revenues $ 2,096 $ -- $ 2,096 $ 4,056 $ -- $ 4,056
Other revenues 238 -- 238 422 -- 422
------------ ------------- ---------- ------------ ------------- ----------
2,334 -- 2,334 4,478 -- 4,478
------------ ------------- ---------- ------------ ------------- ----------
Costs and
expenses
Operating and
maintenance 1,492 36 1,528 2,851 54 2,905
Depreciation
and
amortization 359 -- 359 713 -- 713
General and
administrative 66 -- 66 133 -- 133
------------ ------------- ---------- ------------ ------------- ----------
1,917 36 1,953 3,697 54 3,751
------------ ------------- ---------- ------------ ------------- ----------
Loss on
impairment (25 ) -- (25 ) (25 ) -- (25 )
Gain (loss) on
disposal of
assets, net (1 ) -- (1 ) 7 -- 7
------------ ------------- ---------- ------------ ------------- ----------
Operating income
(loss) 391 (36 ) 355 763 (54 ) 709
------------ ------------- ---------- ------------ ------------- ----------
Other income
(expense), net
Interest
income 5 -- 5 20 -- 20
Interest
expense, net
of amounts
capitalized (147 ) -- (147 ) (292 ) -- (292 )
Other, net (5 ) -- (5 ) (2 ) -- (2 )
------------ ------------- ---------- ------------ ------------- ----------
(147 ) -- (147 ) (274 ) -- (274 )
------------ ------------- ---------- ------------ ------------- ----------
Income (loss)
from continuing
operations
before income
tax expense 244 (36 ) 208 489 (54 ) 435
Income tax
(benefit)
expense 82 (5 ) 77 163 (20 ) 143
------------ ------------- ---------- ------------ ------------- ----------
Income (loss)
from continuing
operations 162 (31 ) 131 326 (34 ) 292
Income (loss)
from
discontinued
operations, net
of tax 2 -- 2 178 (4 ) 174
------------ ------------- ---------- ------------ ------------- ----------
Net income
(loss) 164 (31 ) 133 504 (38 ) 466
Net income
(loss)
attributable to
noncontrolling
interest 9 -- 9 39 (16 ) 23
------------ ------------- ---------- ------------ ------------- ----------
Net income
(loss)
attributable to
controlling
interest $ 155 $ (31 ) $ 124 $ 465 $ (22 ) $ 443
------------ ------------- ---------- ------------ ------------- ----------
Earnings (loss)
per share-basic
Earnings
(loss) from
continuing
operations $ 0.47 $ (0.09 ) $ 0.38 $ 0.89 $ (0.05 ) $ 0.84
Earnings
(loss) from
discontinued
operations 0.01 -- 0.01 0.55 (0.01 ) 0.54
------------ ------------- ---------- ------------ ------------- ----------
Earnings
(loss) per
share $ 0.48 $ (0.09 ) $ 0.39 $ 1.44 $ (0.06 ) $ 1.38
------------ ------------- ---------- ------------ ------------- ----------
Earnings (loss)
per share-
diluted
Earnings
(loss) from
continuing
operations $ 0.47 $ (0.09 ) $ 0.38 $ 0.89 $ (0.05 ) $ 0.84
Earnings
(loss) from
discontinued
operations 0.01 -- 0.01 0.55 (0.01 ) 0.54
------------ ------------- ---------- ------------ ------------- ----------
Earnings
(loss) per
share $ 0.48 $ (0.09 ) $ 0.39 $ 1.44 $ (0.06 ) $ 1.38
------------ ------------- ---------- ------------ ------------- ----------
TRANSOCEAN LTD. AND SUBSIDIARIES
APPENDIX A
Correction of Errors in Previously Reported Consolidated Financial Statements (continued)
Year ended December 31, 2011 Year ended December 31, 2010
----------------------------------------- ------------------------------------------
Previously As Previously As
reported Adjustments adjusted reported Adjustments adjusted
------------ ------------- ---------- ------------ ------------- -----------
Operating
revenues
Contract
drilling
revenues $ 8,380 $ (6 ) $ 8,374 $ 8,986 $ -- $ 8,986
Other revenues 762 -- 762 480 -- 480
------------ ------------- ---------- ------------ ------------- ------------
9,142
Unternehmensinformation / Kurzprofil:
Datum: 02.08.2012 - 01:13 Uhr
Sprache: Deutsch
News-ID 170987
Anzahl Zeichen: 65572
contact information:
Town:
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Kategorie:
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