Transocean Ltd. Reports First Quarter 2011 Results
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Transocean Ltd. /
Transocean Ltd. Reports First Quarter 2011 Results
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The issuer is solely responsible for the content of this announcement.
ZUG, SWITZERLAND--(Marketwire - May 4, 2011) - Transocean Ltd. (NYSE: RIG) (SIX:
RIGN) today reported net income attributable to controlling interest of $310
million, or $0.96 per diluted share, for the three months ended March 31, 2011.
The results compare to net income attributable to controlling interest of $677
million, or $2.09 per diluted share for the three months ended March 31, 2010.
First quarter 2011 results included the following items, after tax, that
resulted in a net positive impact of approximately $139 million, or $0.43 per
diluted share:
-- $176 million of income from discontinued operations, nearly all of which is
from the gain on the sale of the Trident 20,
-- $9 million from the gain on the sale of the Transocean Mercury,
-- $8 million of net charges related to litigation matters not associated with
the Macondo well incident, and
-- $38 million of net charges primarily related to discrete tax items.
First quarter 2011 results also included expenses associated with the Macondo
well incident of $23 million, $19 million after tax, or $0.06 per diluted share.
These expenses were primarily related to increased insurance premiums and legal
costs.
Operations Quarterly Review
Revenues for the three months ended March 31, 2011 were $2.144 billion, compared
to revenues of $2.127 billion during the three months ended December 31, 2010.
First quarter contract drilling revenues were impacted by lower utilization and
revenue efficiency. Our Deepwater and Midwater Floater fleets experienced lower
utilization due to the stacking of rigs, as well as increased shipyard time
related to contract preparation, special periodic surveys and major maintenance
projects. Compliance with new well control equipment certification requirements,
higher standards for equipment condition and capacity constraints on our vendors
contributed to reduced revenue efficiency among our Ultra-Deepwater and
Deepwater Floaters. Partially offsetting lower contract drilling revenue was
additional revenue from two newbuild rigs commencing operations. Other revenues
increased primarily from additional drilling management services activity.
Operating and maintenance expenses totaled $1.359 billion for the first quarter
2011, up slightly from $1.339 billion for the prior quarter. The change was due
to increased drilling management services activity, which was partially offset
by reduced rig-related maintenance costs.
Depreciation and amortization expense was $354 million in the first quarter
2011 compared to $381 million in the prior quarter. The $27 million decrease was
primarily due to the reduced carrying amounts of our Standard Jackups resulting
from the approximately $1 billion asset impairment recognized on that asset
group during the fourth quarter 2010.
Liquidity and Interest Expense
Interest expense, net of amounts capitalized for the first quarter 2011, was
$145 million, compared to $152 million in the fourth quarter 2010.
Cash flow from operating activities decreased to $390 million for the first
quarter 2011 compared to $796 million for the fourth quarter 2010. The decline
in cash flow from operations resulted primarily from an increase in working
capital.
Effective Tax Rate
Transocean's Annual Effective Tax Rate(1) for the first quarter 2011, which
excludes various discrete items, was 19.3 percent. The Effective Tax Rate(2) for
the first quarter was 33.1 percent, primarily reflecting the impact of discrete
items resulting from changes in estimates.
Conference Call Information
Transocean will conduct a teleconference call at 10:00 a.m. EDT, 4:00 p.m. CEST,
on May 5, 2011. To participate, dial +1 719-325-2234 and refer to confirmation
code 8570996 approximately five to 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 to be discussed during the conference call, titled "1Q11
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 5, 2011, and can be accessed by dialing
+1 719-457-0820 or +1 888-203-1112 and referring to the confirmation code
8570996. 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 the world's largest offshore drilling contractor and the leading
provider of drilling management services worldwide. With a fleet of 137 mobile
offshore drilling units as well as one ultra-deepwater drillship and three high-
specification jackups under construction, Transocean's fleet is considered one
of the most modern and versatile in the world due to its emphasis on technically
demanding segments of the offshore drilling business. Transocean owns or
operates a contract drilling fleet of 47 High-Specification Floaters (Ultra-
Deepwater, Deepwater and Harsh-Environment semisubmersibles and drillships), 25
Midwater Floaters, nine High-Specification Jackups, 53 Standard Jackups and
other assets utilized in the support of offshore drilling activities worldwide.
(1) Annual Effective Tax Rate is defined as income tax expense excluding various
discrete items (such as changes in estimates and tax on items excluded from
income before income tax expense) divided by income before income tax expense
excluding gains on sales and similar items pursuant to the accounting standards
for income taxes and estimating the annual effective tax rate. See the
accompanying schedule entitled "Supplemental Effective Tax Rate Analysis."
(2) Effective Tax Rate is defined as income tax expense divided by income before
income taxes. See the accompanying schedule entitled "Supplemental Effective Tax
Rate Analysis."
For more information about Transocean, please visit our website at
www.deepwater.com.
TRANSOCEAN LTD. AND SUBSIDIARIIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three months ended
March 31,
------------------------
2011 2010
----------- -----------
(As adjusted)
Operating revenues
Contract drilling revenues $ 1,950 $ 2,425
Contract drilling intangible revenues 10 33
Other revenues 184 121
----------- -----------
2,144 2,579
----------- -----------
Costs and expenses
Operating and maintenance 1,359 1,186
Depreciation and amortization 354 374
General and administrative 67 63
----------- -----------
1,780 1,623
----------- -----------
Gain (loss) on disposal of assets, net 8 (14)
----------- -----------
Operating income 372 942
----------- -----------
Other income (expense), net
Interest income 15 5
Interest expense, net of amounts capitalized (145) (132)
Other, net 3 15
----------- -----------
(127) (112)
----------- -----------
Income from continuing operations before income
tax expense 245 830
Income tax expense 81 147
----------- -----------
Income from continuing operations 164 683
Income from discontinued operations, net of tax 176 2
----------- -----------
Net income 340 685
Net income attributable to noncontrolling
interest 30 8
----------- -----------
Net income attributable to controlling interest $ 310 $ 677
=========== ===========
Earnings per share-basic
Earnings from continuing operations $ 0.42 $ 2.09
Earnings from discontinued operations 0.54 0.01
----------- -----------
Earnings per share 0.96 2.10
=========== ===========
Earnings per share-diluted
Earnings from continuing operations $ 0.42 $ 2.08
Earnings from discontinued operations 0.54 0.01
----------- -----------
Earnings per share 0.96 2.09
=========== ===========
Weighted-average shares outstanding
Basic 319 321
Diluted 320 322
TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
March 31, December 31,
2011 2010
----------- -----------
(As adjusted)
Assets
Cash and cash equivalents $ 3,812 $ 3,394
Accounts receivable, net of allowance for
doubtful accounts of $33 and $38 at March 31,
2011 and December 31, 2010, respectively 2,161 1,978
Materials and supplies, net of allowance for
obsolescence of $70 at March 31, 2011 and
December 31, 2010 541 514
Deferred income taxes, net 116 115
Assets held for sale 77 --
Other current assets 197 194
----------- -----------
Total current assets 6,904 6,195
----------- -----------
Property and equipment 26,819 26,721
Property and equipment of consolidated variable
interest entities 2,241 2,214
Less accumulated depreciation 7,887 7,616
----------- -----------
Property and equipment, net 21,173 21,319
----------- -----------
Goodwill 8,132 8,132
Other assets 1,001 1,165
----------- -----------
Total assets $ 37,210 $ 36,811
=========== ===========
Liabilities and equity
Accounts payable $ 808 $ 832
Accrued income taxes 67 109
Debt due within one year 1,965 1,917
Debt of consolidated variable interest entities
due within one year 95 95
Other current liabilities 906 883
----------- -----------
Total current liabilities 3,841 3,836
----------- -----------
Long-term debt 8,361 8,354
Long-term debt of consolidated variable interest
entities 820 855
Deferred income taxes, net 586 575
Other long-term liabilities 1,840 1,791
----------- -----------
Total long-term liabilities 11,607 11,575
----------- -----------
Commitments and contingencies
Redeemable noncontrolling interest 57 25
Shares, CHF 15.00 par value, 335,235,298
authorized, 167,617,649 conditionally
authorized, 335,235,298 issued at March 31, 2011
and December 31, 2010; 319,538,901 and
319,080,678 outstanding at March 31, 2011 and
December 31, 2010, respectively 4,488 4,482
Additional paid-in capital 7,518 7,504
Treasury shares, at cost, 2,863,267 held at
March 31, 2011 and December 31, 2010 (240) (240)
Retained earnings 10,279 9,969
Accumulated other comprehensive loss (335) (332)
----------- -----------
Total controlling interest shareholders'
equity 21,710 21,383
----------- -----------
Noncontrolling interest (5) (8)
----------- -----------
Total equity 21,705 21,375
----------- -----------
Total liabilities and equity $ 37,210 $ 36,811
=========== ===========
TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three months ended
March 31,
------------------------
2011 2010
----------- -----------
(As adjusted)
Cash flows from operating activities
Net income $ 340 $ 685
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of drilling contract
intangibles (10) (33)
Depreciation and amortization 354 374
Share-based compensation expense 27 35
Gain on disposal of discontinued operations (173) --
(Gain) loss on disposal of assets, net (8) 14
Amortization of debt issue costs, discounts
and premiums, net 26 49
Deferred income taxes 11 (22)
Other, net (3) 31
Deferred revenue, net 46 151
Deferred expenses, net (36) (14)
Changes in operating assets and liabilities (184) (98)
----------- -----------
Net cash provided by operating activities 390 1,172
----------- -----------
Cash flows from investing activities
Capital expenditures (240) (369)
Proceeds from disposal of assets, net 13 41
Proceeds from disposal of discontinued
operations 259 --
Other, net (6) 5
----------- -----------
Net cash provided by (used in) investing
activities 26 (323)
----------- -----------
Cash flows from financing activities
Change in short-term borrowings, net 51 (131)
Proceeds from debt 5 54
Repayments of debt (47) (253)
Purchases of shares held in treasury -- (60)
Other, net (7) (3)
----------- -----------
Net cash provided by (used in) financing
activities 2 (393)
----------- -----------
Net increase in cash and cash equivalents 418 456
----------- -----------
Cash and cash equivalents at beginning of period 3,394 1,130
----------- -----------
Cash and cash equivalents at end of period $ 3,812 $ 1,586
=========== ===========
TRANSOCEAN LTD.
FLEET OPERATING STATISTICS
Operating Revenues ($ Millions) (1)
-------------------------------------
Three months ended
-------------------------------------
March 31, December 31, March 31,
2011 2010 2010
----------- ----------- -----------
Contract Drilling Revenues
High-Specification Floaters:
Ultra Deepwater Floaters $ 844 $ 740 $ 901
Deepwater Floaters 290 339 390
Harsh Environment Floaters 150 155 176
Total High-Specification Floaters 1,284 1,234 1,467
Midwater Floaters 400 477 522
High-Specification Jackups 31 33 77
Standard Jackups 229 259 352
Other Rigs 6 6 7
Subtotal 1,950 2,009 2,425
Contract Intangible Revenue 10 13 33
Other Revenues
Client Reimbursable Revenues 37 34 40
Integrated Services and Other 15 15 30
Drilling Management Services 132 56 51
Subtotal 184 105 121
Total Company $ 2,144 $ 2,127 $ 2,579
Average Daily Revenue (1)
-------------------------------------
Three months ended
-------------------------------------
March 31, December 31, March 31,
2011 2010 2010
----------- ----------- -----------
High-Specification Floaters:
Ultra Deepwater Floaters $ 467,700 $ 435,900 $ 486,000
Deepwater Floaters $ 395,900 $ 395,600 $ 383,800
Harsh Environment Floaters $ 402,400 $ 366,800 $ 400,100
Total High-Specification Floaters $ 441,300 $ 414,500 $ 443,200
Midwater Floaters $ 313,000 $ 298,500 $ 331,600
High-Specification Jackups $ 106,200 $ 129,400 $ 162,600
Standard Jackups $ 109,200 $ 110,600 $ 133,100
Other Rigs $ 73,400 $ 73,000 $ 72,700
Total Drilling Fleet $ 292,600 $ 276,900 $ 299,600
Utilization (1)
-------------------------------------
Three months ended
-------------------------------------
March 31, December 31, March 31,
2011 2010 2010
----------- ----------- -----------
High-Specification Floaters:
Ultra Deepwater Floaters 77% 76% 88%
Deepwater Floaters 51% 58% 71%
Harsh Environment Floaters 83% 92% 98%
Total High-Specification Floaters 69% 71% 83%
Midwater Floaters 60% 68% 67%
High-Specification Jackups 40% 31% 59%
Standard Jackups 43% 46% 53%
Other Rigs 49% 48% 50%
Total Drilling Fleet 55% 58% 66%
Transocean Ltd. and Subsidiaries
Supplemental Effective Tax Rate Analysis
(In US$ millions)
-------------------------------------
Three months ended
-------------------------------------
Mar 31, Dec 31, Mar 31,
2011 2010 2010
----------- ----------- -----------
(As adjusted)(As adjusted)
Income from continuing operations
before income taxes 245 (836) 830
Add back (subtract):
Litigation matters 8 1 -
(Gain) loss on disposal of other
assets, net (9) - 14
Loss on impairment of other
assets, net - 1,010 -
(Gain) loss on retirement of
debt - 13 (2)
Other, net 5 (8) 5
----------- ----------- -----------
Adjusted income from continuing
operations before income taxes 249 180 847
Income tax expense from continuing
operations 81 (32) 147
Add back (subtract):
Changes in estimates (1) (35) (8) (17)
Other, net 2 - (1)
----------- ----------- -----------
Adjusted income tax expense from
continuing operations (2) 48 (40) 129
----------- ----------- -----------
Effective Tax Rate (3) 33.1% 3.8% 17.7%
Annual Effective Tax Rate (4) 19.3% -22.1% 15.2%
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, 2010 includes ($65) 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.
Analyst Contact:
Gregory S. Panagos
+1 713-232-7551
Media Contact:
Guy A. Cantwell
+1 713-232-7647
--- End of Message ---
Transocean Ltd.
Chemin de Blandonnet 10 Vernier Switzerland
ISIN: CH0048265513;
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Transocean Ltd. via Thomson Reuters ONE
[HUG#1512655]
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Datum: 04.05.2011 - 22:16 Uhr
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News-ID 54254
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