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Transocean Ltd. Reports First Quarter 2010 Results

May 5, 2010

ZUG, SWITZERLAND, May 05, 2010 (MARKETWIRE via COMTEX) --Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported net incomeattributable to controlling interest of $677 million, or $2.09 perdiluted share, on revenues of $2.602 billion for the three monthsended March 31, 2010. The results compare to net income attributableto controlling interest of $942 million, or $2.93 per diluted share,on revenues of $3.118 billion for the three months ended March 31,2009.

First quarter 2010 results were adversely impacted by certain netcharges, after tax, totaling $42 million, or $0.13 per diluted share,as follows:

--  $15 million loss on the sale of GSF Arctic II and GSF Arctic IV,--  $16 million primarily regarding impairment charges related to    accelerated depletion of certain oil and gas properties, and,--  $11 million of net charges primarily related to discrete tax items

First quarter 2009 results were adversely impacted by certain netcharges, after tax, totaling $264 million, or $0.82 per diluted share,consisting of $221 million of impairments on rigs held for sale and$43 million of discrete tax items, merger-related costs and losses onthe retirement of debt.

Operations Quarterly Review

Revenues for the three months ended March 31, 2010 decreased to$2.602 billion compared to $2.733 billion during the three monthsended December 31, 2009. The $131 million decrease was primarily dueto a $78 million reduction in contract drilling revenue resultingfrom the stacking of rigs in the previous quarter, a $78 millionreduction in revenue from increased rig time in shipyard andmobilizations partially offset by a $49 million increase in revenuefrom newly constructed ultra-deepwater rigs commencing or continuingoperations in the quarter.

Operating and maintenance expenses totaled $1.196 billion for thefirst quarter 2010, down approximately eight percent compared to$1.296 billion for the prior quarter. The $100 millionquarter-to-quarter reduction in operating and maintenance costsoccurred as a result of a $123 million reduction primarily inmaintenance costs and a $21 million reduction in costs related tostacked rigs. These items were partially offset by a favorableimpact in the prior quarter from litigation settlements and $17million of costs in the first quarter related to the after-salechartering of the GSF Arctic IV and $15 million of additionaloperating costs related to newly constructed ultra-deepwater rigs.

Depreciation, depletion and amortization expense was $401 million inthe first quarter 2010, up five percent compared to $382 million forthe fourth quarter 2009. The $19 million increase was primarily dueto impairments related to our oil and gas properties and thecommencement of operations of newly constructed ultra-deepwater rigs.

General and administrative expenses were $63 million for the firstquarter 2010, compared to $46 million in the prior quarter. The $17million increase was primarily related to an accelerated vesting ofshare-based compensation awards.

Liquidity and Interest Expense

Interest expense, net of amounts capitalized for the first quarter2010 totaled $132 million, compared to $119 million in the priorquarter. The increase was primarily due to reduced capitalizedinterest related to the commencement of operations of newlyconstructed ultra-deepwater drillships in the fourth and firstquarters. As of March 31, 2010, total debt was $11.439 billion,compared to $11.717 billion as of December 31, 2009, a decrease of$278 million reflecting $213 million repayment of joint venture debt,lower outstanding commercial paper program borrowings and the earlyretirement of the GSF Explorer capital lease.

Cash flow from operating activities totaled $1.172 billion for thefirst quarter 2010, in line with $1.175 billion generated in thefourth quarter 2009.

Effective Tax Rate

Transocean's reported Effective Tax Rate(1), which includes variousdiscrete items primarily resulting from the impact of oil and gasimpairments and changes in prior years tax estimates, for the firstquarter 2010 was 15.8 percent. Excluding these discrete items theAnnual Effective Tax Rate(2) for the first quarter was 15.0 percent.

Update on Deepwater Horizon Incident

Concurrently with this press release, we have filed a QuarterlyReport on Form 10-Q with the United States Securities and ExchangeCommission. The form 10-Q includes updated information on theDeepwater Horizon incident. To view the Form 10-Q filing, please usethe following link:http://www.deepwater.com/fw/main/SEC-Filings-57.html

Conference Call Information

Transocean will conduct a teleconference call at 10:00 a.m. ET, 4:00p.m. Swiss time, on May 6, 2010. To participate, dial +1 913-312-0650and refer to confirmation code 4091491 approximately five to 10minutes prior to the scheduled start time of the call.

In addition, the conference call will be simultaneously broadcastover the Internet in a listen-only mode and can be accessed bylogging onto Transocean's website at www.deepwater.com and selecting\"Investor Relations.\" A file containing four charts to be discussedduring the conference call, titled \"1Q10 Charts,\" has been posted toTransocean's website and can also be found by selecting \"InvestorRelations/Quarterly Toolkit.\" The conference call may also be accessedvia the Internet at www.CompanyBoardroom.com by typing inTransocean's New York Stock Exchange trading symbol, \"RIG.\"

A telephonic replay of the conference call should be available after1:00 p.m. ET, 7:00 p.m. Swiss time, on May 6, and can be accessed bydialing +1 719-457-0820 and referring to the passcode 4091491. Also,a replay will be available through the Internet and can be accessedby visiting either of the above-referenced Worldwide Web addresses.

Transocean is the world's largest offshore drilling contractor andthe leading provider of drilling management services worldwide. With afleet of 139 mobile offshore drilling units plus threeultra-deepwater units under construction, Transocean's fleet isconsidered one of the most modern and versatile in the world due toits emphasis on technically demanding segments of the offshoredrilling business. Transocean owns or operates a contract drillingfleet of 45 High-Specification Floaters (Ultra-Deepwater, Deepwaterand Harsh-Environment semisubmersibles and drillships), 26 MidwaterFloaters, 10 High-Specification Jackups, 55 Standard Jackups andother assets utilized in the support of offshore drilling activitiesworldwide.

(1) Effective Tax Rate is defined as income tax expense divided byincome before income taxes. See the accompanying schedule entitled\"Supplemental Effective Tax Rate Analysis.\"

(2) Annual Effective Tax Rate is defined as income tax expenseexcluding various discrete items (such as changes in estimates and taxon items excluded from income before income tax expense) divided byincome before income tax expense excluding gains on sales and similaritems pursuant to the accounting standards for income taxes andestimating the annual effective tax rate. See the accompanyingschedule entitled \"Supplemental Effective Tax Rate Analysis.\"

                     TRANSOCEAN LTD. AND SUBSIDIARIES              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                   (In millions, except per share data)                                (Unaudited)                                                      Three months ended                                                          March 31,                                                    ----------------------                                                       2010        2009                                                    ----------  ----------Operating revenues  Contract drilling revenues                        $    2,441  $    2,834  Contract drilling intangible revenues                     33         104  Other revenues                                           128         180                                                    ----------  ----------                                                         2,602       3,118                                                    ----------  ----------Costs and expenses  Operating and maintenance                              1,196       1,171  Depreciation, depletion and amortization                 401         355  General and administrative                                63          56                                                    ----------  ----------                                                         1,660       1,582                                                    ----------  ----------Loss on impairment                                          (2)       (221)Gain (loss) on disposal of assets, net                     (14)          4                                                    ----------  ----------Operating income                                           926       1,319                                                    ----------  ----------Other income (expense), net  Interest income                                            5           1  Interest expense, net of amounts capitalized            (132)       (136)  Other, net                                                15           6                                                    ----------  ----------                                                          (112)       (129)                                                    ----------  ----------Income before income tax expense                           814       1,190Income tax expense                                         129         251                                                    ----------  ----------Net income                                                 685         939Net income (loss) attributable to noncontrolling interest                                                    8          (3)                                                    ----------  ----------Net income attributable to controlling interest     $      677  $      942                                                    ==========  ==========Earnings per share  Basic                                             $     2.10  $     2.94  Diluted                                           $     2.09  $     2.93Weighted-average shares outstanding  Basic                                                    321         319  Diluted                                                  322         320                     TRANSOCEAN LTD. AND SUBSIDIARIES                  CONDENSED CONSOLIDATED BALANCE SHEETS                     (In millions, except share data)                                                    March 31,  December 31,                                                       2010       2009                                                    ----------  ----------                                                    (Unaudited)AssetsCash and cash equivalents                           $    1,586  $    1,130Accounts receivable, net of allowance for doubtful accounts of $41 and $65 at March 31, 2010 and December 31, 2009, respectively                2,285       2,385Materials and supplies, net of allowance for obsolescence of $64 and $66 at March 31, 2010 and December 31, 2009, respectively                       464         462Deferred income taxes, net                                 113         104Assets held for sale                                        --         186Other current assets                                       263         209                                                    ----------  ----------        Total current assets                             4,711       4,476                                                    ----------  ----------Property and equipment                                  27,604      27,383Property and equipment of consolidated variable interest entities                                       2,149       1,968Less accumulated depreciation                            6,728       6,333                                                    ----------  ----------    Property and equipment, net                         23,025      23,018                                                    ----------  ----------Goodwill                                                 8,132       8,134Other assets                                               970         808                                                    ----------  ----------        Total assets                                $   36,838  $   36,436                                                    ==========  ==========Liabilities and equityAccounts payable                                    $      746  $      780Accrued income taxes                                       240         240Debt due within one year                                 1,447       1,568Debt of consolidated variable interest entities due within one year                                            82         300Other current liabilities                                  787         730                                                    ----------  ----------        Total current liabilities                        3,302       3,618                                                    ----------  ----------Long-term debt                                           8,990       8,966Long-term debt of consolidated variable interest entities                                                  920         883Deferred income taxes, net                                 713         726Other long-term liabilities                              1,707       1,684                                                    ----------  ----------        Total long-term liabilities                     12,330      12,259                                                    ----------  ----------Commitments and contingenciesShares, CHF 15.00 par value, 502,852,947 authorized, 167,617,649 conditionally authorized, 335,235,298 issued at March 31, 2010 and December 31, 2009; 320,950,624 and 321,223,882 outstanding at March 31, 2010 and December 31, 2009, respectively                                            4,478       4,472Additional paid-in capital                               7,433       7,407Retained earnings                                        9,685       9,008Accumulated other comprehensive loss                      (338)       (335)Treasury shares, at cost, 717,000 and none held at March 31, 2010 and December 31, 2009, respectively        (60)         --                                                    ----------  ----------        Total controlling interest shareholders'         equity                                         21,198      20,552                                                    ----------  ----------Noncontrolling interest                                      8           7                                                    ----------  ----------        Total equity                                    21,206      20,559                                                    ----------  ----------        Total liabilities and equity                $   36,838  $   36,436                                                    ==========  ==========                     TRANSOCEAN LTD. AND SUBSIDIARIES              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                              (In millions)                                (Unaudited)                                                      Three months ended                                                          March 31,                                                    ----------------------                                                       2010        2009                                                    ----------  ----------Cash flows from operating activitiesNet income                                          $      685  $      939Adjustments to reconcile net income to net cash provided by operating activities    Amortization of drilling contract intangibles          (33)       (104)    Depreciation, depletion and amortization               401         355    Share-based compensation expense                        35          19    (Gain) loss on disposal of assets, net                  14          (4)    Loss on impairment                                       2         221    Amortization of debt issue costs, discounts and     premiums, net                                          49          52    Deferred income taxes                                  (22)          6    Other, net                                               3          11    Deferred revenue, net                                  151          (6)    Deferred expenses, net                                 (14)          2    Changes in operating assets and liabilities            (99)        (50)                                                    ----------  ----------Net cash provided by operating activities                1,172       1,441                                                    ----------  ----------Cash flows from investing activities    Capital expenditures                                  (379)       (708)    Proceeds from disposal of assets, net                   41           8    Proceeds from distributions from short-term     investments                                             5         221    Joint ventures and other investments, net               10          --                                                    ----------  ----------Net cash used in investing activities                     (323)       (479)                                                    ----------  ----------Cash flows from financing activities    Change in short-term borrowings, net                  (131)        (24)    Proceeds from debt                                      54          88    Repayments of debt                                    (253)       (600)    Repurchases of convertible senior notes                 --        (102)    Purchases of treasury shares                           (60)         --    Proceeds from (taxes paid for) share-based     compensation plans, net                                (4)         17    Other, net                                               1          (2)                                                    ----------  ----------Net cash used in financing activities                     (393)       (623)                                                    ----------  ----------Net increase in cash and cash equivalents                  456         339Cash and cash equivalents at beginning of period         1,130         963                                                    ----------  ----------Cash and cash equivalents at end of period          $    1,586  $    1,302                                                    ==========  ==========                              TRANSOCEAN LTD.                        FLEET OPERATING STATISTICS                                        Operating Revenues ($ Millions)                                     -------------------------------------                                               Three months ended                                     -------------------------------------                                      March 31,  December 31,   March 31,                                        2010         2009         2009                                     -----------  -----------  -----------Contract Drilling Revenues  High-Specification Floaters:    Ultra Deepwater Floaters         $       901  $       890  $       702    Deepwater Floaters                       390          449          413    Harsh Environment Floaters               176          155          158  Total High-Specification Floaters        1,467        1,494        1,273  Midwater Floaters                          522          537          708  High-Specification Jackups                  94           86          151  Standard Jackups                           352          422          689  Other Rigs                                   6            7           13Subtotal                                   2,441        2,546        2,834Contract Intangible Revenue                   33           44          104Other Revenues  Client Reimbursable Revenues                40           46           50  Integrated Services and Other               30           48           53  Drilling Management Services                51           41           70  Oil and Gas Properties                       7            8            7Subtotal                                     128          143          180Total Company                        $     2,602  $     2,733  $     3,118                                           Average Daily Revenue (1)                                     -------------------------------------                                               Three months ended                                     -------------------------------------                                       March 31,  December 31,  March 31,                                         2010        2009         2009                                     -----------  -----------  -----------  High-Specification Floaters:    Ultra Deepwater Floaters         $   486,000  $   486,200  $   451,000    Deepwater Floaters               $   383,800  $   346,600  $   336,900    Harsh Environment Floaters       $   400,100  $   405,800  $   351,100  Total High-Specification Floaters  $   437,200  $   425,900  $   393,800  Midwater Floaters                  $   331,600  $   325,100  $   314,700  High-Specification Jackups         $   166,000  $   175,100  $   169,500  Standard Jackups                   $   133,100  $   147,300  $   156,400  Other Rigs                         $    72,700  $    72,300  $    46,700Total Drilling Fleet                 $   298,300  $   295,700  $   256,500                                                 Utilization (1)                                     -------------------------------------                                               Three months ended                                     -------------------------------------                                      March 31,  December 31,   March 31,                                        2010         2009         2009                                     -----------  -----------  -----------  High-Specification Floaters:    Ultra Deepwater Floaters                  88%          91%          96%    Deepwater Floaters                        71%          88%          85%    Harsh Environment Floaters                98%          83%         100%  Total High-Specification Floaters           84%          89%          92%  Midwater Floaters                           67%          69%          89%  High-Specification Jackups                  63%          53%          99%  Standard Jackups                            53%          57%          89%  Other Rigs                                  50%          50%          99%Total Drilling Fleet                          66%          69%          91%(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, except percentages)                                                Three months ended                                        ----------------------------------                                          Mar 31,     Dec 31,     Mar 31,                                           2010        2009        2009                                        ----------  ----------  ----------Income before income taxes              $      814  $      898  $    1,190  Add back (subtract):  Loss on impairment of oil and gas   properties                                   21           -           -  Loss on impairment of goodwill                 2           -           -  Loss on disposal of assets                    14           -           -  Loss on impairment on the Reserve funds        1           -           -  (Gain) loss on retirement of debt             (2)         12           2  GSF merger related costs and other, net        5           5           6  Litigation matters                             -         (24)          -  Income from TODCO tax sharing agreement        -          (1)          -  Gain on sale of interests in joint   ventures                                      -         (34)          -  Loss on impairment of assets held for   sale                                          -           -         221                                        ----------  ----------  ----------Adjusted income before income taxes            855         856       1,419Income tax expense                             129         181         251  Add back (subtract):  Loss on impairment of oil and gas   properties                                    7           -           -  GSF merger related costs                       1           -           1  Tax effect of the Patient Protection   and Affordable Care Act                      (2)          -           -  Loss on impairment                             -          18           -  Changes in estimates (1)                      (7)        (50)        (37)                                        ----------  ----------  ----------Adjusted income tax expense (2)         $      128  $      149  $      215                                        ==========  ==========  ==========Effective Tax Rate (3)                        15.8%       20.1%       21.1%Annual Effective Tax Rate (4)                 15.0%       17.4%       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, 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.

SOURCE: Transocean Ltd.