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Transocean Ltd. Reports Fourth Quarter and Full-Year 2009 Results

February 24, 2010
ZUG, Switzerland, Feb 24, 2010 (GlobeNewswire via COMTEX) -- Transocean Ltd. (NYSE:RIG) today reported net income attributable to controlling interest for the three months ended December 31, 2009 of $723 million, or $2.24 per diluted share, on revenues of $2.733 billion. The results compare to net income attributable to controlling interest of $754 million, or $2.35 per diluted share, on revenues of $3.270 billion, for the three months ended December 31, 2008.

Fourth quarter 2009 results were favorably impacted by certain net additions, after tax, totaling $10 million, or $0.03 per diluted share, as follows:

  --  $34 million for the gain on sale of an interest in a joint venture,
  --  $24 million of income related to the settlement of litigation matters,
  --  Partially offset by $48 million of net charges primarily related to
      discrete tax items, the retirement of debt and adjustments associated
      with the GlobalSantaFe merger.


For the year ended December 31, 2009, net income attributable to controlling interest totaled $3.181 billion, or $9.84 per diluted share, on revenues of $11.556 billion. Net income for the year ended December 31, 2009 included after-tax charges of $498 million, or $1.55 per diluted share, resulting primarily from the fourth quarter items listed above, in addition to charges earlier this year of $334 million on impairments of intangible assets and two rigs held for sale, $132 million on litigation matters and $42 million of net charges primarily related to discrete tax items, the retirement of debt and adjustments associated with the GlobalSantaFe merger.

For 2008, net income attributable to controlling interest was $4.031 billion, or $12.53 per diluted share, on revenues of $12.674 billion. Net income for the year ended December 31, 2008 included after-tax charges of $401 million, or $1.24 per diluted share, primarily related to impairments of goodwill and other intangible assets, write-downs of two rigs held for sale and additional depreciation, depletion and amortization expense resulting from an adjustment to the useful lives of certain rigs acquired in the GlobalSantaFe merger.

Operations Quarterly Review

Revenues for the three months ended December 31, 2009 decreased to $2.733 billion, compared to revenues of $2.823 billion during the three months ended September 30, 2009. The decrease was primarily due to a $219 million reduction in revenue resulting from the stacking of rigs and reduced revenue efficiency, partially offset by a $136 million increase in revenue due to the commencement of operations of three of our newbuild drillships and improvement in average dayrates for floaters.

Operating and maintenance expenses totaled $1.296 billion for the fourth quarter 2009, down seven percent compared to $1.396 billion for the prior quarter. The $100 million quarter-to-quarter reduction in operating and maintenance costs occurred as a result of $137 million in litigation settlement expenses in the third quarter 2009 and a $24 million favorable impact from litigation settlements in the fourth quarter 2009. These items were partially offset by shipyard extensions, increases in maintenance projects and commencement of operations of our newbuilds. In addition, the fourth quarter was favorably impacted by $43 million of reduced costs from stacked rigs and negatively impacted by unplanned costs of $28 million due to an operational incident affecting a jackup.

Depreciation, depletion and amortization expense was $382 million in the fourth quarter 2009, up four percent versus $367 million for the third quarter 2009. The increase was due to the impact on depreciation in the fourth quarter of 2009 from the commencement of operations of the newbuild units, compared to the prior quarter.

General and administrative expenses were $46 million for the fourth quarter 2009 compared to $54 million in the prior quarter. The $8 million decrease was due, in part, to reduced year-end accruals related to one-time personnel expenses.

Liquidity and Interest Expense

Interest expense, net of amounts capitalized for the fourth quarter 2009, increased to $119 million compared to $115 million in the third quarter 2009. The increase was due to the impact of two months of interest expense in the third quarter 2009 compared to the full quarter of interest expense in the fourth quarter 2009 for the Petrobras 10000 capital lease. As of December 31, 2009, total debt was $11.7 billion, compared to $11.9 billion as of September 30, 2009.

Cash flow from operating activities decreased to $1.175 billion for the fourth quarter 2009 compared to $1.406 billion for the third quarter 2009. For the full year 2009, cash flow from operating activities totaled $5.598 billion compared to $4.959 billion for the full year 2008.

Effective Tax Rate

Transocean's Annual Effective Tax Rate(1), which excludes various discrete items, for the fourth quarter 2009 and the full year ended December 31, 2009 was 17.4 percent and 16.0 percent, respectively. The Effective Tax Rate(2) for the fourth quarter 2009 and the full year ended December 31, 2009 was 20.1 percent and 19.2 percent, respectively. Transocean's Effective Tax Rate reflects the impact of changes in estimates as well as the impact of impairments.

Conference Call Information

Transocean will conduct a teleconference call at 10:00 a.m. EST, 4:00 p.m. Swiss time, on February 24, 2010. To participate, dial +1 913-312-1377 and refer to confirmation code 5179649 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 five charts to be discussed during the conference call, titled "4Q09 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. EST, 7:00 p.m. Swiss time, on February 24, and can be accessed by dialing +1 719-457-0820 and referring to the passcode 5179649. Also, a replay will be available through the Internet and can be accessed by visiting either of the above-referenced Worldwide Web addresses.

Transocean is the world's largest offshore drilling contractor and the leading provider of drilling management services worldwide. With a fleet of 138 mobile offshore drilling units plus five announced ultra-deepwater newbuild units, 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 44 High-Specification Floaters (Ultra-Deepwater, Deepwater and Harsh-Environment semisubmersibles and drillships), 26 Midwater Floaters, 10 High-Specification Jackups, 55 Standard Jackups and other assets utilized in the support of offshore drilling activities worldwide.

The Transocean Ltd. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2252

(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."

                          TRANSOCEAN LTD. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                        (In millions, except per share data)
                                     (Unaudited)


                                       Three months ended      Twelve months ended
                                         December 31,             December 31,
                                      -------------------     --------------------

                                        2009       2008          2009       2008
                                      --------  ---------     ---------  ---------
                                                   (As                      (As
                                                adjusted)                adjusted)
  Operating revenues
   Contract drilling revenues          $ 2,546    $ 2,830      $ 10,607   $ 10,756
   Contract drilling intangible
    revenues                                44        133           281        690

   Other revenues                          143        307           668      1,228
                                      --------  ---------     ---------  ---------

                                         2,733      3,270        11,556     12,674
                                      --------  ---------     ---------  ---------
  Costs and expenses
   Operating and maintenance             1,296      1,408         5,140      5,355
   Depreciation, depletion and
    amortization                           382        396         1,464      1,436

   General and administrative               46         59           209        199
                                      --------  ---------     ---------  ---------

                                         1,724      1,863         6,813      6,990
                                      --------  ---------     ---------  ---------
  Loss on impairment                        --      (320)         (334)      (320)

  Loss on disposal of assets, net          (6)        (3)           (9)        (7)
                                      --------  ---------     ---------  ---------

  Operating income                       1,003      1,084         4,400      5,357
                                      --------  ---------     ---------  ---------

  Other income (expense), net
   Interest income                           3          2             5         32
   Interest expense, net of
    amounts capitalized                  (119)      (167)         (484)      (640)
   Loss on retirement of debt             (12)        (3)          (29)        (3)

   Other, net                               23         49            32         26
                                      --------  ---------     ---------  ---------

                                         (105)      (119)         (476)      (585)
                                      --------  ---------     ---------  ---------

  Income before income tax
   expense                                 898        965         3,924      4,772

  Income tax expense                       181        210           754        743
                                      --------  ---------     ---------  ---------

  Net income                               717        755         3,170      4,029
  Net income (loss) attributable
   to noncontrolling interest              (6)          1          (11)        (2)
                                      --------  ---------     ---------  ---------

  Net income attributable to
   controlling interest                  $ 723      $ 754       $ 3,181    $ 4,031
                                      --------  ---------     ---------  ---------

  Earnings per share
   Basic                                $ 2.24     $ 2.36        $ 9.87    $ 12.63
   Diluted                              $ 2.24     $ 2.35        $ 9.84    $ 12.53

  Weighted average shares
   outstanding
   Basic                                   321        319           320        318
   Diluted                                 322        320           321        321

               TRANSOCEAN LTD. AND SUBSIDIARIES
                 CONSOLIDATED BALANCE SHEETS
               (In millions, except share data)

                                          December 31,
                                     -----------------------

                                        2009          2008
                                     ---------     ---------
                                                      (As
  Assets                                           adjusted)
  Cash and cash equivalents            $ 1,130         $ 963
  Short-term investments                    38           333
  Accounts receivable, net
   Trade                                 2,330         2,798
   Other                                    55            66
  Materials and supplies, net              462           432
  Deferred income taxes, net               104            63
  Assets held for sale                     186           464

  Other current assets                     171           230
                                     ---------     ---------

     Total current assets                4,476         5,349
                                     ---------     ---------

  Property and equipment                29,351        25,836

  Less accumulated depreciation          6,333         4,975
                                     ---------     ---------

   Property and equipment, net          23,018        20,861
                                     ---------     ---------
  Goodwill                               8,134         8,128

  Other assets                             808           844
                                     ---------     ---------

     Total assets                     $ 36,436      $ 35,182
                                     ---------     ---------

  Liabilities and equity
  Accounts payable                       $ 780         $ 914
  Accrued income taxes                     240           317
  Debt due within one year               1,868           664

  Other current liabilities                730           806
                                     ---------     ---------

     Total current liabilities           3,618         2,701
                                     ---------     ---------

  Long-term debt                         9,849        12,893
  Deferred income taxes, net               726           666

  Other long-term liabilities            1,684         1,755
                                     ---------     ---------

     Total long-term liabilities        12,259        15,314
                                     ---------     ---------

  Commitments and contingencies

  Shares, CHF 15.00 par value,
   502,852,947 authorized,
   167,617,649 conditionally
   authorized, 335,235,298
   issued at December 31, 2009
   and 2008; 321,223,882 and
   319,262,113 outstanding at
   December 31, 2009 and 2008,
   respectively                          4,472         4,444


  Additional paid-in capital             7,407         7,313
  Retained earnings                      9,008         5,827
  Accumulated other
   comprehensive loss                    (335)         (420)
                                     ---------     ---------
     Total controlling interest
      shareholders' equity              20,552        17,164
                                     ---------     ---------

  Noncontrolling interest                    7             3
                                     ---------     ---------

     Total equity                       20,559        17,167
                                     ---------     ---------
     Total liabilities and
      equity                          $ 36,436      $ 35,182
                                     ---------     ---------

                               TRANSOCEAN LTD. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        (In millions)
                                         (Unaudited)

                                                 Three months ended         Years ended
                                                   December 31,             December 31
                                                -------------------     -------------------

                                                  2009       2008         2009       2008
                                                --------  ---------     --------  ---------
                                                             (As                     (As
                                                          adjusted)               adjusted)
  Cash flows from operating activities
  Net income                                       $ 717      $ 755      $ 3,170    $ 4,029
  Adjustments to reconcile net income to
   net cash provided by operating
   activities
   Amortization of drilling contract
    intangibles                                     (44)      (133)        (281)      (690)
   Depreciation, depletion and amortization          382        396        1,464      1,436
   Share-based compensation expense                   15         15           81         64
   Excess tax benefit from
    share‑based compensation plans               8          1          (2)       (10)
   Loss on impairment                                 --        320          334        320
   Loss on disposal of assets, net                     6          3            9          7
   Loss on retirement of debt                         12         --           29          3
   Amortization of debt issue costs,
    discounts and premiums, net                       49         47          209        176
   Deferred income taxes                            (37)          4           13          8
   Other, net                                       (23)         26            7         41
   Deferred revenue, net                              97       (11)          169         11
   Deferred expenses, net                             --         17         (38)      (115)
   Changes in operating assets and
    liabilities                                      (7)      (244)          434      (321)
                                                --------  ---------     --------  ---------

  Net cash provided by operating activities        1,175      1,196        5,598      4,959
                                                --------  ---------     --------  ---------

  Cash flows from investing activities
   Capital expenditures                            (857)      (505)      (3,052)    (2,208)
   Proceeds from disposal of assets, net               8        (4)           18        348
   Proceeds from short-term investments              142         45          564         59
   Purchases of short-term investments               (1)         --        (269)      (408)
   Joint ventures and other investments,
    net                                               40         16           45         13
                                                --------  ---------     --------  ---------

  Net cash used in investing activities            (668)      (448)      (2,694)    (2,196)
                                                --------  ---------     --------  ---------

  Cash flows from financing activities
   Change in short-term borrowings, net            (136)      (684)        (382)      (837)
   Proceeds from debt                                169        307          514      2,661
   Repayments of debt                              (288)      (220)      (2,871)    (4,893)
   Payments to shareholders for
    Reclassification                                  --        (1)           --        (1)
   Payments for warrant exercises, net                --        (3)         (13)        (7)
   Proceeds from share-based compensation
    plans, net                                         1          2           17         51
   Excess tax benefit from
    share‑based compensation plans             (8)        (1)            2         10

   Other, net                                        (1)       (14)          (4)       (25)
                                                --------  ---------     --------  ---------

  Net cash used in financing activities            (263)      (614)      (2,737)    (3,041)
                                                --------  ---------     --------  ---------

  Net increase (decrease) in cash and cash
   equivalents                                       244        134          167      (278)
  Cash and cash equivalents at beginning of
   period                                            886        829          963      1,241
                                                --------  ---------     --------  ---------
  Cash and cash equivalents at end of
   period                                        $ 1,130      $ 963      $ 1,130      $ 963
                                                --------  ---------     --------  ---------

                                     TRANSOCEAN LTD.
                               FLEET OPERATING STATISTICS


                                          Operating Revenues ($ Millions) (1)
                                 ------------------------------------------------------

                                                                        Twelve months
                                                                            ended
                                        Three months ended              December 31,
                                 -------------------------------     ------------------

                                              Sept 30,
                                   Dec 31,               Dec 31,
                                    2009        2009      2008         2009      2008
                                 -----------  --------  --------     --------  --------
  Contract Drilling Revenues
   High-Specification Floaters:
     Ultra Deepwater Floaters          $ 890     $ 732     $ 673      $ 2,997   $ 2,456
     Deepwater Floaters                  449       463       331        1,731     1,355
     Harsh Environment Floaters          155       141       164          613       646
   Total High-Specification
    Floaters                           1,494     1,336     1,168        5,341     4,457
   Midwater Floaters                     537       618       797        2,507     2,812
   High-Specification Jackups             86       104       146          469       594
   Standard Jackups                      422       537       709        2,257     2,842
   Other Rigs                              7         6        10           33        51
  Subtotal                             2,546     2,602     2,830       10,607    10,756
  Contract Intangible Revenue             44        58       133          281       690
  Other Revenues
   Client Reimbursable Revenues           46        49        51          194       203
   Integrated Services and
    Other                                 48        53        49          206       186
   Drilling Management Services           41        54       194          239       758
   Oil and Gas Properties                  8         7        13           29        81
  Subtotal                               143       163       307          668     1,228
  Total Company                       $2,733    $2,823    $3,270      $11,556   $12,674


                                                  Average Dayrates (1)
                                 ------------------------------------------------------

                                                                        Twelve months
                                                                            ended
                                        Three months ended              December 31,
                                 -------------------------------     ------------------

                                              Sept 30,
                                   Dec 31,               Dec 31,
                                    2009        2009      2008         2009      2008
                                 -----------  --------  --------     --------  --------
   High-Specification Floaters:
     Ultra Deepwater Floaters       $486,200  $458,500  $423,600     $462,700  $399,200
     Deepwater Floaters             $346,600  $355,600  $299,000     $344,900  $305,400
     Harsh Environment Floaters     $405,800  $386,000  $358,900     $378,000  $361,500
   Total High-Specification
    Floaters                        $425,900  $409,300  $370,500     $407,200  $360,100
   Midwater Floaters                $325,100  $355,800  $329,200     $322,800  $303,800
   High-Specification Jackups       $175,100  $161,000  $169,100     $166,300  $174,800
   Standard Jackups                 $147,300  $156,200  $156,100     $152,600  $152,500
   Other Rigs                        $72,300   $73,300   $37,800      $54,700   $46,200
  Total Drilling Fleet              $295,700  $283,800  $251,500     $271,400  $240,300


                                                    Utilization (1)
                                 ------------------------------------------------------

                                                                        Twelve months
                                                                            ended
                                        Three months ended              December 31,
                                 -------------------------------     ------------------

                                   Dec 31,    Sept 30,   Dec 31,
                                    2009        2009      2008         2009      2008
                                 -----------  --------  --------     --------  --------
   High-Specification Floaters:
     Ultra Deepwater Floaters            91%       90%       96%          92%       93%
     Deepwater Floaters                  88%       89%       75%          86%       76%
   Harsh Environment Floaters            83%       80%      100%          89%       98%
   Total High-Specification
    Floaters                             89%       88%       88%          89%       87%
   Midwater Floaters                     69%       72%       92%          79%       87%
   High-Specification Jackups            53%       70%       94%          77%       93%
   Standard Jackups                      57%       68%       90%          74%       91%
   Other Rigs                            50%       42%       99%          66%      100%
  Total Drilling Fleet                   69%       75%       90%          80%       90%

  (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. 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.

                            Transocean Ltd. and Subsidiaries
                        Supplemental Effective Tax Rate Analysis
                                     (In millions)



                                                                       Twelve months
                                          Three months ended               ended
                                       -------------------------     -----------------

                                        Dec     Sept                  Dec
                                        31,     30,     Dec 31,       31,     Dec 31,
                                        2009    2009      2008        2009      2008
                                       ------  ------  ---------     ------  ---------
                                                          (As                   (As
                                                       adjusted)             adjusted)
  Income before income taxes             $898    $844       $965     $3,924     $4,772
   Add back (subtract):
     Litigation matters                  (24)     132         --        108         --
     Loss on retirement of debt            12       7         --         29          3
     GSF merger related costs               5       4          2         17          6
     Income from TODCO tax sharing
      agreement                           (1)    (11)        (4)       (12)       (18)
     Loss on impairment                    --      46        326        334        326
     Gain on sale of Sedco 135-D           --     (1)         --        (2)         --
     Gain on sale of interests in
      joint ventures                     (34)      --         --       (30)         --
     Change to estimated useful
      lives of certain GSF rigs            --      --         46         --         46
   Bad debt provision related to a
    customer bankruptcy                    --      --         23         --         23
   Loss on The Reserve Funds               --      --         --         --         16


                                       ------  ------  ---------     ------  ---------
  Adjusted income before income
   taxes                                  856   1,021      1,358      4,368      5,174

  Income tax expense                      181     138        210        754        743
   Add back (subtract):
     Loss on impairment                    18      --         17         18         17
     GSF Merger related costs              --       1         --          2          1
     Bad debt provision related to
      a customer bankruptcy                --      --          6         --          6
     Loss on The Reserve Funds             --      --         --         --          2

     Changes in estimates (1)            (50)      28       (14)       (74)       (24)
                                       ------  ------  ---------     ------  ---------

  Adjusted income tax expense (2)        $149    $167       $219       $700       $745
                                       ======  ======  =========     ======  =========

  Effective Tax Rate (3)                20.1%   16.4%      21.8%      19.2%      15.6%

  Annual Effective Tax Rate (4)         17.4%   16.4%      16.1%      16.0%      14.4%

  (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, 2009 include $11 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.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Transocean Ltd.

CONTACT:  Transocean Ltd.
Analyst Contact:
Gregory S. Panagos
+1 713-232-7551
Media Contact:
Guy A. Cantwell
+1 713-232-7647