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Transocean Ltd. Reports Second Quarter 2011 Results

August 3, 2011

ZUG, SWITZERLAND, Aug 03, 2011 (MARKETWIRE via COMTEX) --

Transocean Ltd. (NYSE: RIG) (SIX: RIGN)

--  Revenues increased nine percent to $2.334 billion compared to $2.144    billion in the first quarter 2011--  Second quarter 2011 net income attributable to controlling interest    was $155 million, which included $36 million of certain net    unfavorable items, compared to $310 million in the first quarter 2011,    which included $139 million of certain net favorable items noted in    our first quarter earnings release--  Revenue efficiency(1) improved to 92.1 percent, up from 90.0 percent    in the first quarter 2011--  Fleet utilization(2) was 55 percent, unchanged from the first quarter    2011--  Operating and maintenance expenses were $1.492 billion, up from $1.359    billion in the first quarter 2011--  The Annual Effective Tax Rate(4) for 2011 has increased to 22.6    percent from 19.3 percent in the first quarter 2011--  New contracts totaling $1.5 billion were secured in the Fleet Status    Report period April 14, 2011 through July 13, 2011--  Non-core assets George H. Galloway and GSF Labrador were classified as    assets held for sale, in addition to the previously announced GSF    Britannia--  The first quarterly installment of the dividend was paid on June 15,    2011

Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported net incomeattributable to controlling interest of $155 million, or $0.48 perdiluted share, for the three months ended June 30, 2011. The resultscompare to net income attributable to controlling interest of $715million, or $2.22 per diluted share, for the three months ended June30, 2010.

Second quarter 2011 results included the following items, after tax,that resulted in a net unfavorable impact of approximately $36million, or $0.11 per diluted share:

--  $25 million loss on impairment relating to the three Standard Jackups,    George H. Galloway, GSF Labrador and GSF Britannia, classified as    assets held for sale at June 30, 2011, and--  $11 million of net charges related to discrete tax items and the    effect of discontinued operations.

Second quarter 2011 results also included expenses associated with theMacondo well incident of approximately $26 million, $19 million aftertax, or $0.06 per diluted share. These expenses were primarilyrelated to legal costs and professional service fees.

Operations Quarterly Review

Revenues for the three months ended June 30, 2011 were $2.334billion, compared to revenues of $2.144 billion during the threemonths ended March 31, 2011. Second quarter contract drillingrevenues, which increased to $2.086 billion from $1.95 billion in thefirst quarter, were positively impacted by improved activity in theGulf of Mexico, the commencement of operations of the newbuildUltra-Deepwater Floater Deepwater Champion, the reactivation ofpreviously idled rigs, and higher revenue efficiency for ourUltra-Deepwater and Deepwater Floaters, partially offset by thestacking of additional Deepwater and Midwater Floaters. Overallutilization was flat during the period compared to the first quarter.

Other revenues increased $54 million to $238 million, primarily dueto additional drilling management services activity.

The company reported improved revenue efficiency for ourUltra-Deepwater and Deepwater Floaters compared to the first quarter,as our program to improve efficiency yielded results. Similar to thefirst quarter, compliance with new well control equipmentcertification requirements, higher standards for equipment conditionand capacity constraints on our vendors continued to adversely impactrevenue efficiency and out-of-service time compared to the prioryear.

Operating and maintenance expenses totaled $1.492 billion for thesecond quarter 2011, up from $1.359 billion for the prior quarter.The increase was primarily due to higher maintenance expenses alongwith increased levels of contract drilling and drilling managementservices activity.

Net Interest Expense, Capital Expenditures and Cash Flow

Net Interest Expense was $142 million in the period compared to $130million in the first quarter. The increase is due primarily tointerest income associated with a tax refund recognized in the firstquarter.

Capital expenditures increased to $293 million for the second quartercompared to $240 million in the first quarter 2011. The higherexpenditures were primarily due to our newbuild construction program.

Cash flows from operating activities decreased to $340 million forthe second quarter 2011 compared to $390 million for the firstquarter 2011. The decrease in cash flows from operations resultedprimarily from an increase in working capital.

Effective Tax Rate

Transocean's second quarter Effective Tax Rate(3) was 33.5 percentcompared to 33.1 percent in the first quarter. The company's AnnualEffective Tax Rate(4) for 2011, which excludes various discreteitems, was 22.6 percent in the second quarter compared to 19.3percent in the first quarter. The increases are primarily due to ashift in activity between tax jurisdictions. Please see theaccompanying schedule entitled \"Supplemental Effective Tax RateAnalysis.\"

Conference Call Information

Transocean will conduct a teleconference call at 10:00 a.m. EDT, 4:00p.m. CEST, on August 4, 2011. To participate, dial +1 719-457-2698and refer to confirmation code 4734310 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 \"2Q11 Charts,\" has been posted toTransocean's website and can also be found by selecting \"InvestorRelations/Quarterly Toolkit.\" The conference call may also beaccessed via 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. EDT, 7:00 p.m. CEST, on August 4, 2011, and can be accessedby dialing +1 719-457-0820 and referring to the confirmation code4734310. Also, a replay will be available through the Internet andcan be accessed by visiting either of the above-referenced internetaddresses. Both replay options will be available for approximately 30days.

About Transocean

Transocean is the world's largest offshore drilling contractor andthe leading provider of drilling management services worldwide. Witha fleet of 134 mobile offshore drilling units as well as fourHigh-Specification Jackups 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 48 High-Specification Floaters (Ultra-Deepwater, Deepwaterand Harsh-Environment semisubmersibles and drillships), 25 MidwaterFloaters, nine High-Specification Jackups, 51 Standard Jackups andone swamp barge utilized in the support of offshore drillingactivities.

(1) Revenue efficiency is defined as actual revenue divided by thehighest amount of total revenue which could have been earned duringthe relevant period(s). See the accompanying schedule entitled\"Revenue Efficiency.\"

(2) Utilization is defined as the total actual number of revenueearning days in the period as a percentage of the total number ofcalendar days in the period for all drilling rigs in our fleet. Seethe accompanying schedule entitled \"Utilization.\"

(3) Effective Tax Rate is defined as income tax expense fromcontinuing operations divided by income from continuing operationsbefore income taxes. See the accompanying schedule entitled\"Supplemental Effective Tax Rate Analysis.\"

(4) Annual Effective Tax Rate is defined as income tax expense fromcontinuing operations excluding various discrete items (such aschanges in estimates and tax on items excluded from income beforeincome tax expense) divided by income from continuing operationsbefore income tax expense excluding gains on sales and similar itemspursuant to the accounting standards for income taxes. See theaccompanying schedule entitled \"Supplemental Effective Tax RateAnalysis.\"

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

                   TRANSOCEAN LTD. AND SUBSIDIARIES            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                 (In millions, except per share data)                              (Unaudited)                                  Three months ended     Six months ended                                       June 30,              June 30,                                 --------------------  --------------------                                    2011       2010       2011       2010                                 ---------  ---------  ---------  ---------                                               (As                   (As                                            adjusted)             adjusted)Operating revenues  Contract drilling revenues     $   2,086  $   2,272  $   4,036  $   4,697  Contract drilling intangible   revenues                             10         29         20         62  Other revenues                       238        178        422        299                                ----------  ---------  ---------  ---------                                     2,334      2,479      4,478      5,058                                ----------  ---------  ---------  ---------Costs and expenses  Operating and maintenance          1,492      1,347      2,851      2,533  Depreciation and amortization        359        393        713        767  General and administrative            66         58        133        121                                ----------  ---------  ---------  ---------                                     1,917      1,798      3,697      3,421                                ----------  ---------  ---------  ---------Loss on impairment                     (25)        --        (25)        --Gain (loss) on disposal of assets, net                            (1)       268          7        254                                ----------  ---------  ---------  ---------Operating income                       391        949        763      1,891                                ----------  ---------  ---------  ---------Other income (expense), net  Interest income                        5          5         20         10  Interest expense, net of   amounts capitalized                (147)      (141)      (292)      (273)  Other, net                            (5)        (3)        (2)        12                                ----------  ---------  ---------  ---------                                      (147)      (139)      (274)      (251)                                ----------  ---------  ---------  ---------Income from continuing operations before income tax expense                               244        810        489      1,640Income tax expense                      82         98        163        245                                ----------  ---------  ---------  ---------Income from continuing operations                            162        712        326      1,395Income from discontinued operations, net of tax                  2          8        178         10                                ----------  ---------  ---------  ---------Net income                             164        720        504      1,405Net income attributable to noncontrolling interest                 9          5         39         13                                ----------  ---------  ---------  ---------Net income attributable to controlling interest            $     155  $     715  $     465  $   1,392                                ----------  ---------  ---------  ---------Earnings per share-basic  Earnings from continuing   operations                    $    0.47  $    2.20  $    0.89  $    4.29  Earnings from discontinued   operations                         0.01       0.03       0.55       0.03                                ----------  ---------  ---------  ---------  Earnings per share             $    0.48  $    2.23  $    1.44  $    4.32                                ----------  ---------  ---------  ---------Earnings per share-diluted  Earnings from continuing   operations                    $    0.47  $    2.20  $    0.89  $    4.28  Earnings from discontinued   operations                         0.01       0.02       0.55       0.03                                ----------  ---------  ---------  ---------  Earnings per share             $    0.48  $    2.22  $    1.44  $    4.31                                ----------  ---------  ---------  ---------Weighted-average shares outstanding  Basic                                320        319        319        320  Diluted                              320        320        320        321

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Certain reclassifications have been made to prior period amounts toconform with the current period's presentation, includingreclassifications associated with our discontinued operations. Thefinancial statements contained within this release should be read inconjunction with the consolidated financial statements and notesthereto included in our most recent reports on Form 10-K and Form10-Q.

                      TRANSOCEAN LTD. AND SUBSIDIARIES                    CONDENSED CONSOLIDATED BALANCE SHEETS                      (In millions, except share data)                                 (Unaudited)                                                  June 30,     December 31,                                                    2011           2010                                               -------------- --------------                                                               (As adjusted)AssetsCash and cash equivalents                      $       3,389  $       3,394Accounts receivable, net of allowance for doubtful accountsof $30 and $38 at June 30, 2011 and December 31, 2010, respectively                                2,114          1,843Materials and supplies, net of allowance for obsolescenceof $73 and $70 at June 30, 2011 and December 31, 2010, respectively                                  546            514Deferred income taxes, net                               112            115Assets held for sale                                     139             --Other current assets                                     438            329                                               -------------  -------------    Total current assets                               6,738          6,195                                               -------------  -------------Property and equipment                                26,897         26,721Property and equipment of consolidated variable interest entities                            2,243          2,214Less accumulated depreciation                          8,144          7,616                                               -------------  -------------  Property and equipment, net                         20,996         21,319                                               -------------  -------------  Goodwill                                             8,132          8,132  Other assets                                         1,070          1,165                                               -------------  -------------        Total assets                           $      36,936  $      36,811                                               -------------  -------------Liabilities and equityAccounts payable                               $         742  $         832Accrued income taxes                                      26            109Debt due within one year                               1,820          1,917Debt of consolidated variable interest entities due within one year                             96             95Other current liabilities                              1,800            883                                               -------------  -------------    Total current liabilities                          4,484          3,836                                               -------------  -------------Long-term debt                                         8,375          8,354Long-term debt of consolidated variable interest entities                                       790            855Deferred income taxes, net                               594            575Other long-term liabilities                            1,754          1,791                                               -------------  -------------    Total long-term liabilities                       11,513         11,575                                               -------------  -------------Commitments and contingenciesRedeemable noncontrolling interest                        66             25Shares, CHF 15.00 par value, 335,235,298 authorized, 167,617,649 conditionally authorized, 335,235,298 issued at June 30, 2011 and December 31, 2010; 319,639,362 and 319,080,678 outstanding at June 30, 2011 and December 31, 2010, respectively                       4,490          4,482Additional paid-in capital                             6,529          7,504Treasury shares, at cost, 2,863,267 held at June 30, 2011 and December 31, 2010                    (240)          (240)Retained earnings                                     10,434          9,969Accumulated other comprehensive loss                    (328)          (332)                                               -------------  -------------  Total controlling interest shareholders'   equity                                             20,885         21,383                                               -------------  -------------  Noncontrolling interest                                (12)            (8)                                               -------------  -------------    Total equity                                      20,873         21,375                                               -------------  -------------      Total liabilities and equity             $      36,936  $      36,811                                               -------------  -------------

___________________

Certain reclassifications have been made to prior period amounts toconform with the current period's presentation, includingreclassifications associated with our discontinued operations. Thefinancial statements contained within this release should be read inconjunction with the consolidated financial statements and notesthereto included in our most recent reports on Form 10-K and Form10-Q.

                      TRANSOCEAN LTD. AND SUBSIDIARIES               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                (In millions)                                 (Unaudited)                                     Three months ended   Six months ended                                          June 30,            June 30,                                     ------------------  ------------------                                       2011      2010      2011      2010                                     --------  --------  --------  --------Cash flows from operating activitiesNet income                           $    164  $    720  $    504  $  1,405Adjustments to reconcile to net cash provided by operating activities  Amortization of drilling contract   intangibles                            (10)      (29)      (20)      (62)  Depreciation and amortization           359       393       713       767  Share-based compensation expense         27        18        54        53  Loss on impairment                       25        --        25        --  Gain on disposal of discontinued   operations, net                         --        --      (173)       --  (Gain) loss on disposal of assets,   net                                      1      (268)       (7)     (254)  Amortization of debt issue costs,   discounts and premiums, net             36        51        62       100  Deferred income taxes                     5       (12)       16       (34)  Other, net                               14         1        11        32  Deferred revenue, net                    (3)        7        43       158  Deferred expenses, net                  (48)      (23)      (84)      (37)  Changes in operating assets and   liabilities                           (230)      411      (414)      313                                     --------  --------  --------  --------Net cash provided by operating activities                               340     1,269       730     2,441                                     --------  --------  --------  --------Cash flows from investing activities  Capital expenditures                   (293)     (300)     (533)     (669)  Proceeds from disposal of assets,   net                                      5        10        18        51  Proceeds from disposal of   discontinued operations, net            --        --       259        --  Proceeds from insurance recoveries   for loss of drilling unit               --       560        --       560  Other, net                              (27)       10       (33)       15                                     --------  --------  --------  --------Net cash provided by (used in) investing activities                    (315)      280      (289)      (43)                                     --------  --------  --------  --------Cash flows from financing activities  Change in short-term borrowings,   net                                      5       (46)       56      (177)  Proceeds from debt                       --        --         5        54  Repayments of debt                     (202)      (22)     (249)     (275)  Distribution of qualifying   additional paid-in capital            (254)       --      (254)       --  Purchases of shares held in   treasury                                --      (180)       --      (240)  Other, net                                3         1        (4)       (2)                                     --------  --------  --------  --------Net cash used in financing activities                              (448)     (247)     (446)     (640)                                     --------  --------  --------  --------Net increase (decrease) in cash and cash equivalents                        (423)    1,302        (5)    1,758Cash and cash equivalents at beginning of period                    3,812     1,586     3,394     1,130                                     --------  --------  --------  --------Cash and cash equivalents at end of period                              $  3,389  $  2,888  $  3,389  $  2,888                                     --------  --------  --------  --------

___________________

Certain reclassifications have been made to prior period amounts toconform with the current period's presentation. The financialstatements contained within this release should be read inconjunction with the consolidated financial statements and notesthereto included in our most recent reports on Form 10-K and Form10-Q.

                      TRANSOCEAN LTD. AND SUBSIDIARIES                         FLEET OPERATING STATISTICS                                    Operating Revenues (in millions) (1)                              ------------------------------------------------                                                             Six months ended                                   Three months ended            June 30,                              ---------------------------- -------------------                              June 30,  March 31, June 30,                                2011      2011      2010     2011      2010                              -------- ---------- -------- -------- ----------Contract Drilling Revenues  High-Specification   Floaters:    Ultra Deepwater Floaters  $  1,005 $      844 $    809 $  1,849 $    1,710    Deepwater Floaters             238        290      382      528        772    Harsh Environment     Floaters                      181        150      166      331        342                              -------- ---------- -------- -------- ----------  Total High-Specification   Floaters                      1,424      1,284    1,357    2,708      2,824  Midwater Floaters                376        400      521      776      1,044  Jackups:    High-Specification     Jackups                        48         31       75       79        152    Standard Jackups               230        229      312      459        664                              -------- ---------- -------- -------- ----------  Total Jackups                    278        260      387      538        816  Other Rigs                         8          6        7       14         13                              -------- ---------- -------- -------- ----------Total Contract Drilling Revenues                        2,086      1,950    2,272    4,036      4,697                              -------- ---------- -------- -------- ----------Contract Intangible Revenue         10         10       29       20         62Other Revenues  Client Reimbursable   Revenues                         40         37       38       77         78  Integrated Services and   Other                            15         15       11       30         42  Drilling Management   Services                        183        132      129      315        179                              -------- ---------- -------- -------- ----------Total Other Revenues               238        184      178      422        299                              -------- ---------- -------- -------- ----------Total Company                 $  2,334 $   $2,144 $  2,479 $ $4,478 $   $5,058                              -------- ---------- -------- -------- ----------
                                          Average Daily Revenue (1)                              ------------------------------------------------                                                             Six months ended                                   Three months ended            June 30,                              ---------------------------- -------------------                              June 30,  March 31, June 30,                                2011      2011      2010     2011      2010                              -------- ---------- -------- -------- ----------  High-Specification   Floaters:    Ultra Deepwater Floaters  $516,600 $  467,700 $482,100 $493,100 $  484,100    Deepwater Floaters         396,400    395,900  395,800  396,200    389,600    Harsh Environment     Floaters                  430,100    402,400  428,500  417,100    413,400  Total High-Specification   Floaters                    479,900    441,300  447,800  460,800    445,400  Midwater Floaters            333,000    313,000  319,000  322,400    325,200  High-Specification Jackups   110,300    106,200  138,500  108,700    149,700  Standard Jackups             111,700    109,200  117,100  110,400    125,000  Other Rigs                    76,400     73,400   72,000   74,900     72,400                              -------- ---------- -------- -------- ----------Total Drilling Fleet          $312,100 $  292,600 $285,200 $302,400 $  292,500                              -------- ---------- -------- -------- ----------(1) Average daily revenue is defined as contract drilling revenue earned perrevenue earning day in the period. A revenue earning day is defined as a dayfor which a rig earns dayrate after commencement of operations.                      TRANSOCEAN LTD. AND SUBSIDIARIES                   FLEET OPERATING STATISTICS (continued)                                            Utilization (2)                           -------------------------------------------------                                                           Six months ended                                 Three months ended            June 30,                           ----------------------------- -------------------                            June 30, March 31,  June 30,                              2011      2011      2010      2011      2010                           --------- --------- --------- --------- ---------  High-Specification   Floaters:    Ultra Deepwater     Floaters                 80%       77%       76%       79%       82%    Deepwater Floaters        41%       51%       66%       46%       68%    Harsh Environment     Floaters                 93%       83%       85%       88%       91%  Total High-Specification   Floaters                   69%       69%       74%       69%       78%  Midwater Floaters           54%       60%       69%       57%       68%  High-Specification   Jackups                    56%       40%       66%       48%       62%  Standard Jackups            43%       43%       53%       43%       53%  Other Rigs                  50%       49%       50%       50%       50%                           --------- --------- --------- --------- ---------Total Drilling Fleet          55%       55%       64%       55%       65%                           --------- --------- --------- --------- ---------(2) Utilization is defined as the total actual number of revenue earningdays in the period as a percentage of the total number of calendar days inthe period for all drilling rigs in our fleet.
                                  Revenue Efficiency(3)                        Trailing Five Quarters and Historical Data             ---------------------------------------------------------------               2Q     1Q              2011   2011   4Q 2010   3Q 2010   2Q 2010   FY 2010   FY 2009             ------ ------ --------- --------- --------- --------- ---------                              (As       (As       (As       (As       (As                           adjusted) adjusted) adjusted) adjusted) adjusted)Ultra Deepwater    89.3%  85.3%   86.1%     86.5%     89.1%     88.6%     94.3%Deepwater     93.9%  88.2%   88.6%     90.1%     92.8%     90.3%     89.6%Harsh Environment Floaters     98.4%  99.2%   96.1%     96.4%     96.9%     96.0%     97.7%Midwater Floaters     91.9%  93.6%   85.0%     96.2%     93.9%     92.5%     93.7%High Specificatio n Jackups    95.6%  95.1%   97.7%     93.3%     98.9%     95.3%     96.2%Standard Jackups      98.4%  97.7%   98.9%     96.4%     97.3%     97.3%     96.2%Others        97.6%  99.0%   96.1%     99.6%     98.5%     98.4%     93.9%             ------ ------ --------- --------- --------- --------- ---------Total Fleet   92.1%  90.0%   88.7%     91.8%     92.8%     91.7%     94.0%             ------ ------ --------- --------- --------- --------- ---------(3) Revenue efficiency is defined as actual revenue divided by the highest amount of total revenue which could have been earned during the relevant period(s).                      TRANSOCEAN LTD. AND SUBSIDIARIES                  SUPPLEMENTAL EFFECTIVE TAX RATE ANALYSIS                      (In millions, except percentages)                      -------------------------------  --------------------                             Three months ended          Six months ended                      -------------------------------  --------------------                      June 30,  March 31,   June 30,   June 30,   June 30,                        2011       2011       2010       2011       2010                      --------  ---------  ----------  --------  ----------                                               (As                   (As                                            adjusted)             adjusted)Income from continuing operations before income taxes         $    244  $     245  $      810  $    489  $    1,640  Add back   (subtract):    Litigation     matters                --          8          12         8          12    Gain on loss of     Deepwater     Horizon                --         --        (267)       --        (267)    (Gain) loss on     disposal of     other assets,     net                    --         (9)         --        (9)         14    Loss on     impairment of     assets                 25         --          --        25          --    Gain on     retirement of     debt                   --         --          --        --          (2)    Other, net              --          5          --         5           5                      --------  ---------  ----------  --------  ----------Adjusted income from continuing operations before income taxes              269        249         555       518       1,402                      --------  ---------  ----------  --------  ----------Income tax expense from continuing operations                 82         81          98       163         245    Add back     (subtract):    Changes in     estimates (1)         (13)       (35)          1       (48)        (16)    Other, net              --          2          --         2          (1)                      --------  ---------  ----------  --------  ----------Adjusted income tax expense from continuing operations (2)       $     69  $      48  $       99  $    117  $      228                      --------  ---------  ----------  --------  ----------Effective Tax Rate (3)                      33.5%      33.1%       12.1%     33.3%       15.0%Annual Effective Tax Rate (4)                 25.6%      19.3%       18.0%     22.6%       16.3%
(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 June 30, 2011 includes $8 million of additional     tax expense reflecting the catch-up effect of an increase 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 defined as income tax expense from     continuing operations excluding various discrete items (such as changes     in estimates and tax on items excluded from income before income tax     expense) divided by income from continuing operations before income tax     expense excluding gains on sales and similar items pursuant to the     accounting standards for income taxes.

SOURCE: Transocean Ltd.