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Transocean Ltd. Reports Fourth Quarter and Full-Year 2010 Results

February 23, 2011

ZUG, SWITZERLAND, Feb 23, 2011 (MARKETWIRE via COMTEX) --

Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported a net lossattributable to controlling interest for the three months endedDecember 31, 2010 of $799 million or $2.51 per diluted share. Theresults compare to net income attributable to controlling interest of$723 million, or $2.24 per diluted share for the three months endedDecember 31, 2009.

Fourth Quarter 2010

Fourth quarter 2010 results were adversely impacted by $1.017 billionof after tax items, or $3.19 per diluted share, which include:

-- An after-tax, non-cash charge of $1.010 billion, or $3.16 per diluted   share. The charge resulted from an impairment of our Standard Jackup   asset group. Calculated based on U.S. Generally Accepted Accounting   Principles, the charge is due to a current and projected decline in   dayrates and utilization that has adversely impacted this asset group.-- a $13 million loss on retirement of debt associated with repurchases   of a portion of our convertible senior notes, and-- $6 million of income as a result of the TODCO tax sharing agreement   and other matters.

Fourth quarter 2010 results also included expenses associated with theMacondo well incident of $28 million, or $25 million, after tax, or$0.08 per diluted share. These expenses include legal and internalinvestigation costs, professional fees and increased insurancepremiums.

Full Year 2010

For the year ended December 31, 2010, net income attributable tocontrolling interest totaled $961 million, or $2.99 per dilutedshare. Net income for the year ended December 31, 2010 includedafter-tax charges of $854 million, or $2.65 per diluted share,resulting primarily from the $1.010 billion impairment of ourStandard Jackups. Other charges for the full year totaled $111million and included litigation matters, an impairment of oil and gasproperties, a loss on the sale of two rigs and losses on the earlyretirement of debt and other matters. Partially offsetting thesecharges was a $267 million after-tax gain resulting from insurancerecoveries associated with the loss of the Deepwater Horizon.

Full-year 2010 results also included additional expenses associatedwith the Macondo well incident of $137 million, or $116 million aftertax, or $0.36 per diluted share. These expenses include legal costs,internal investigation costs, professional fees and increasedinsurance premiums.

For 2009, net income attributable to controlling interest was $3.181billion, or $9.84 per diluted share. Net income for the year endedDecember 31, 2009 included after-tax charges of $498 million, or $1.55per diluted share, resulting primarily from impairments of intangibleassets and two rigs held for sale, litigation matters, losses on theearly retirement of debt and adjustments associated with theGlobalSantaFe merger. These charges were partially offset by gains onthe sale of our interest in a joint venture and settlements ofcertain tax matters.

Operations Quarterly Review

Revenues for the three months ended December 31, 2010 were $2.160billion, compared to revenues of $2.309 billion during the threemonths ended September 30, 2010. The $149 million decrease wasprimarily due to:

-- $90 million of decreased utilization, primarily from rigs that were   stacked or idled,-- a $52 million charge related to a customer dispute in the U.S. Gulf   of Mexico,-- $41 million from increased shipyard activity,-- $18 million of reduced revenue on completion of the GSF Arctic IV   charter,-- offset by $44 million due to increased drilling management services   revenue, and-- $8 million of other net favorable variances.

Operating and maintenance expenses totaled $1.352 billion for thefourth quarter 2010, up approximately 11 percent compared to $1.213billion for the prior quarter. The $139 million quarter-to-quarterincrease in operating and maintenance costs was primarily due to:

-- $73 million of increased shipyard and contract preparation costs,-- $35 million of increased costs associated with drilling management   services activity,-- $34 million resulting from increased maintenance expense,-- offset by $3 million of net favorable variances.

General and administrative expenses were $67 million for the fourthquarter 2010 compared to $59 million in the previous quarter. The $8million increase was due, in part, to increases in non-rig relatedinsurance costs and other miscellaneous items.

Liquidity and Interest Expense

Interest expense, net of amounts capitalized for the fourth quarter2010, was $152 million, compared to $142 million in the third quarter2010, reflecting the full quarter impact of the issuance of $2 billionof new senior notes during the third quarter. Interest expense, forthe full year 2010 net of amounts capitalized, was $567 million,compared to $484 million for the full year 2009. The increase ininterest expense was mainly due to lower capitalized interest expensein 2010.

Cash flow from operating activities increased to $796 million for thefourth quarter 2010 compared to $709 million for the third quarter2010. For the full year 2010, cash flow from operating activitiestotaled $3.946 billion compared to $5.598 billion for the full year2009.

Effective Tax Rate

Transocean's Annual Effective Tax Rate(1), which excludes variousdiscrete items, for the fourth quarter 2010 and the full year endedDecember 31, 2010 was a benefit of 18.7 percent and an expense of13.8 percent, respectively. The Effective Tax Rate(2) for the fourthquarter 2010 and the full year ended December 31, 2010 was 4.1percent and 23.9 percent, respectively. Transocean's Effective TaxRate reflects the impact of changes in estimates as well as theimpact of impairments. The decline in the Annual Effective Tax Ratefor the full year 2010 was due to a tax benefit realized in thefourth quarter resulting primarily from the relocation of certainrigs.

Conference Call Information

Transocean will conduct a teleconference call at 10:00 a.m. EST, 4:00p.m. Swiss time, on February 24, 2011. To participate, dial +1719-325-2327 and refer to confirmation code 1432993 approximatelyfive to 10 minutes 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 \"4Q10 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.\"Atelephonic replay of the conference call should be available after1:00 p.m. EST, 7:00 p.m. Swiss time, on February 24, 2011, and can beaccessed by dialing +1 719-457-0820 and referring to the passcode1432993. Also, a replay will be available through the Internet andcan be accessed by visiting either of the above-referenced WorldwideWeb addresses. Both replay options will be available for approximately30 days.

About Transocean

Transocean is the world's largest offshore drilling contractor andthe leading provider of drilling management services worldwide. With afleet of 138 mobile offshore drilling units as well as oneultra-deepwater drillship and three high-specification jackups underconstruction, Transocean's fleet is considered one of the most modernand versatile in the world due to its emphasis on technicallydemanding segments of the offshore drilling business. Transocean ownsor operates a contract drilling fleet of 47 High-SpecificationFloaters (Ultra-Deepwater, Deepwater and Harsh-Environmentsemisubmersibles and drillships), 25 Midwater Floaters,nineHigh-Specification Jackups, 54 Standard Jackups and other assetsutilized in the support of offshore drilling activities worldwide.

(1) 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.\"

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

For more information about Transocean, please visit our website atwww.deepwater.com.

                     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,                                    ------------------  ------------------                                      2010      2009      2010      2009                                    --------  --------  --------  --------Operating revenuesContract drilling revenues          $  2,032  $  2,546  $  8,967  $ 10,607Contract drilling intangible revenues                                 13        44        98       281Other revenues                           115       143       511       668                                    --------  --------  --------  --------                                       2,160     2,733     9,576    11,556                                    --------  --------  --------  --------Costs and expensesOperating and maintenance              1,352     1,296     5,119     5,140Depreciation, depletion and amortization                            394       382     1,589     1,464General and administrative                67        46       247       209                                    --------  --------  --------  --------                                       1,813     1,724     6,955     6,813                                    --------  --------  --------  --------Loss on impairment                    (1,010)       --    (1,012)     (334)Gain (loss) on disposal of assets, net                                       1        (6)      257        (9)                                    --------  --------  --------  --------Operating income                        (662)    1,003     1,866     4,400                                    --------  --------  --------  --------Other income (expense), netInterest income                            6         3        23         5Interest expense, net of amounts capitalized                            (152)     (119)     (567)     (484)Loss on retirement of debt               (13)      (12)      (33)      (29)Other, net                                (8)       23        10        32                                    --------  --------  --------  --------                                        (167)     (105)     (567)     (476)                                    --------  --------  --------  --------Income (loss) before income tax expense                                (829)      898     1,299     3,924Income tax expense (benefit)             (34)      181       311       754                                    --------  --------  --------  --------Net income (loss)                       (795)      717       988     3,170Net income (loss) attributable to noncontrolling interest                   4        (6)       27       (11)                                    --------  --------  --------  --------Net income (loss) attributable to controlling interest               $   (799) $    723  $    961  $  3,181                                    ========  ========  ========  ========Earnings per shareBasic                               $  (2.51) $   2.24  $   2.99  $   9.87Diluted                             $  (2.51) $   2.24  $   2.99  $   9.84Weighted average shares outstandingBasic                                    319       321       320       320Diluted                                  319       322       320       321                     TRANSOCEAN LTD. AND SUBSIDIARIES                        CONSOLIDATED BALANCE SHEETS                     (In millions, except share data)                                                           December 31,                                                        ------------------                                                          2010      2009                                                        --------  --------AssetsCash and cash equivalents                               $  3,394  $  1,130Accounts receivable, netTrade                                                      1,811     2,330Other                                                        189        55Materials and supplies, net                                  517       462Deferred income taxes, net                                   115       104Assets held for sale                                          --       186Other current assets                                         169       209                                                        --------  --------Total current assets                                       6,195     4,476                                                        --------  --------Property and equipment                                    27,007    27,383Property and equipment of consolidated variable interest entities                                         2,214     1,968Less accumulated depreciation                              7,763     6,333                                                        --------  --------Property and equipment, net                               21,458    23,018                                                        --------  --------Goodwill                                                   8,132     8,134Other assets                                               1,026       808                                                        --------  --------Total assets                                            $ 36,811  $ 36,436                                                        ========  ========Liabilities and equityAccounts payable                                        $    847  $    780Accrued income taxes                                         116       240Debt due within one year                                   1,917     1,568Debt of consolidated variable interest entities due within one year                                              95       300Other current liabilities                                    861       730                                                        --------  --------Total current liabilities                                  3,836     3,618                                                        --------  --------Long-term debt                                             8,354     8,966Long-term debt of consolidated variable interest entities                                                    855       883Deferred income taxes, net                                   594       726Other long-term liabilities                                1,772     1,684                                                        --------  --------Total long-term liabilities                               11,575    12,259                                                        --------  --------Commitments and contingenciesRedeemable noncontrolling interest                            25        --Shares, CHF 15.00 par value, 335,235,298 authorized, 167,617,649 conditionally authorized, 335,235,298 issued and 319,080,678 outstanding at December 31, 2010; and 502,852,947 authorized; 167,617,649 conditionally authorized, 335,235,298 issued and 321,223,882 outstanding at December 31, 2009          4,482     4,472Additional paid-in capital                                 7,504     7,407Treasury shares, at cost, 2,863,267 and none held at December 31, 2010 and 2009, respectively                   (240)       --Retained earnings                                          9,969     9,008Accumulated other comprehensive loss                        (332)     (335)                                                        --------  --------Total controlling interest shareholders' equity           21,383    20,552                                                        --------  --------Noncontrolling interest                                       (8)        7                                                        --------  --------Total equity                                              21,375    20,559                                                        --------  --------Total liabilities and equity                            $ 36,811  $ 36,436                                                        ========  ========                    TRANSOCEAN LTD. AND SUBSIDIARIES                  CONSOLIDATED STATEMENTS OF CASH FLOWS                              (In millions)                                    Three months ended  Twelve months ended                                       December 31,        December 31,                                    ------------------  ------------------                                      2010      2009      2010      2009                                    --------  --------  --------  --------Cash flows from operating activitiesNet income (loss)                   $   (795) $    717  $    988  $  3,170Adjustments to reconcile net income to net cash provided by operating activities:Amortization of drilling contract intangibles                             (13)      (44)      (98)     (281)Depreciation, depletion and amortization                            394       382     1,589     1,464Share-based compensation expense          23        15       102        81Excess tax benefit from share-based compensation plans                        -         8        (1)       (2)(Gain) loss on disposal of assets, net                                      (1)        6      (257)        9Loss on impairment                     1,010         -     1,012       334Loss on retirement of debt                13        12        33        29Amortization of debt issue costs, discounts and premiums, net              41        49       189       209Deferred income taxes                    (71)      (37)     (145)       13Other, net                                (2)      (23)       (1)        7Deferred revenue, net                      -        97       205       169Deferred expenses, net                   (24)        -       (79)      (38)Changes in operating assets and liabilities                             221        (7)      409       434                                    --------  --------  --------  --------Net cash provided by operating activities                              796     1,175     3,946     5,598                                    --------  --------  --------  --------Cash flows from investing activitiesCapital expenditures                    (428)     (857)   (1,411)   (3,052)Proceeds from disposal of assets, net                                       9         8        60        18Proceeds from insurance recoveries for loss of drilling unit                 -         -       560         -Proceeds from payments on notes receivable                                6         -        37         -Proceeds from short-term investments      32       142        37       564Purchases of short-term investments        -        (1)        -      (269)Joint ventures and other investments, net                          1        40        (4)       45                                    --------  --------  --------  --------Net cash used in investing activities                             (380)     (668)     (721)   (2,694)                                    --------  --------  --------  --------Cash flows from financing activitiesChange in short-term borrowings, net     (62)     (136)     (193)     (382)Proceeds from debt                         -       169     2,054       514Repayments of debt                    (1,599)     (288)   (2,565)   (2,871)Purchases of shares held in treasury       -         -      (240)        -Financing costs                            -         -       (15)       (2)Proceeds from (taxes paid for) share-based compensation plans, net       2         1        (1)       17Excess tax benefit from share-based compensation plans                        -        (8)        1         2Other, net                                 1        (1)       (2)      (15)                                    --------  --------  --------  --------Net cash used in financing activities                           (1,658)     (263)     (961)   (2,737)                                    --------  --------  --------  --------Net increase (decrease) in cash and cash equivalents                 (1,242)      244     2,264       167Cash and cash equivalents at beginning of period                   4,636       886     1,130       963                                    --------  --------  --------  --------Cash and cash equivalents at end of period                          $  3,394  $  1,130  $  3,394  $  1,130                                    ========  ========  ========  ========                             TRANSOCEAN LTD.                       FLEET OPERATING STATISTICS                                Operating Revenues ($ Millions) (1)                          ------------------------------------------------                                                          Twelve months                               Three months ended       ended December 31,                          ----------------------------  ------------------                          December  September December                          31, 2010  30, 2010  31, 2009    2010      2009                          --------  --------  --------  --------  --------Contract Drilling Revenues  High-Specification   Floaters:    Ultra Deepwater     Floaters             $    740  $    720  $    890  $  3,171  $  2,997    Deepwater Floaters         339       350       449     1,461     1,731    Harsh Environment     Floaters                  155       178       155       674       613  Total High-   Specification Floaters    1,234     1,248     1,494     5,306     5,341  Midwater Floaters            477       572       537     2,093     2,507  High-Specification   Jackups                      56        78        86       320       469  Standard Jackups             259       298       422     1,222     2,257  Other Rigs                     6         8         7        26        33Subtotal                     2,032     2,204     2,546     8,967    10,607Contract Intangible Revenue                        13        23        44        98       281Other Revenues  Client Reimbursable   Revenues                     34        40        46       152       194  Integrated Services   and Other                    15        10        48        68       206  Drilling Management   Services                     57        25        41       261       239  Oil and Gas Properties         9         7         8        30        29Subtotal                       115        82       143       511       668Total Company             $  2,160  $  2,309  $  2,733  $  9,576  $ 11,556                                      Average Daily Revenue  (1)                          ------------------------------------------------                                                        Twelve months ended                               Three months ended           December 31,                          ----------------------------  ------------------                          December  September December                          31, 2010  30, 2010  31, 2009    2010      2009                          --------  --------  --------  --------  --------  High-Specification   Floaters:    Ultra Deepwater     Floaters             $435,900  $422,800  $486,200  $457,300  $462,700    Deepwater Floaters    $395,600  $365,600  $346,600  $384,900  $344,900    Harsh Environment     Floaters             $366,800  $414,100  $405,800  $401,900  $378,000  Total High-   Specification Floaters $414,500  $403,900  $425,900  $427,600  $407,200  Midwater Floaters       $298,500  $328,400  $325,100  $319,600  $322,800  High-Specification   Jackups                $162,600  $138,100  $175,100  $152,000  $166,300  Standard Jackups        $110,600  $113,200  $147,300  $118,700  $152,600  Other Rigs              $ 73,000  $ 72,900  $ 72,300  $ 72,700  $ 54,700Total Drilling Fleet      $276,600  $271,200  $295,700  $282,700  $271,400                                          Utilization (1)                          ------------------------------------------------                                                        Twelve months ended                               Three months ended           December 31,                          ----------------------------  ------------------                          December  September December                          31, 2010  30, 2010  31, 2009    2010      2009                          --------  --------  --------  --------  --------  High-Specification   Floaters:    Ultra Deepwater     Floaters                   76%       77%       91%       79%       92%    Deepwater Floaters          58%       65%       88%       65%       86%    Harsh Environment     Floaters                   92%       93%       83%       92%       89%  Total High-   Specification Floaters       71%       75%       89%       76%       89%  Midwater Floaters             68%       73%       69%       69%       79%  High-Specification   Jackups                      38%       61%       53%       58%       77%  Standard Jackups              46%       52%       57%       51%       74%  Other Rigs                    48%       50%       50%       49%       66%Total Drilling Fleet            58%       64%       69%       63%       80%(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)                               Three months ended       Twelve months ended                          ----------------------------  ------------------                           Dec 31,   Sept 30,  Dec 31,   Dec 31,   Dec 31,                            2010      2010      2009      2010      2009                          --------  --------  --------  --------  --------Income before income taxes                    $   (829) $    497  $    898  $  1,299  $  3,924  Add back (subtract):   Litigation matters            1        14       (24)       27       108   Gain on loss of    Deepwater Horizon            -         -         -      (267)        -   (Gain) Loss on    disposal of other    assets, net                  -         -         -        14        (2)   Loss on impairment of    other assets, net        1,010         -         -     1,012       334   Loss of impairment of    oil and gas    properties                   -         -         -        21         -   GSF merger related    costs and other, net        (8)        -         4        (2)        5   (Gain) loss on    retirement of debt          13        22        12        33        29   Gain on sale of    interests in joint    ventures                     -         -       (34)        -       (30)                          --------  --------  --------  --------  --------Adjusted income before income taxes                  187       533       856     2,137     4,368Income tax expense             (34)      118       181       311       754  Add back (subtract):   Loss of impairment of    oil and gas properties       -         -         -         7         -   Loss on impairment of    other assets, net            -         -        18         -        18   GSF merger related    costs                        -         -         -         1         2   Tax effect of the    Patient Proctection    and Affordable    Care Act                     -         -         -        (2)        -   Changes in    estimates (1)               (1)       (7)      (50)      (21)      (74)                          --------  --------  --------  --------  --------Adjusted income tax expense (2)              $    (35) $    111  $    149  $    296  $    700                          ========  ========  ========  ========  ========Effective Tax Rate (3)         4.1%     23.8%     20.1%     23.9%     19.2%Annual Effective Tax Rate (4)                    -18.7%     20.8%     17.4%     13.8%     16.0%(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 ($61) 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.