Attached files

file filename
8-K - CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES - Transocean Ltd.a12-11179_18k.htm

Exhibit 99.1

 

 

Transocean Ltd.

Investor Relations and Communications Dept.

 

 

Analyst Contacts:

Thad Vayda

News Release

 

+1 713-232-7551

 

 

 

 

 

Diane Vento

 

 

+1 713-232-8015

 

 

 

 

Media Contact:

Guy A. Cantwell

FOR RELEASE: May 2, 2012

 

+1 713-232-7647

 

 

TRANSOCEAN LTD. REPORTS FIRST QUARTER 2012 RESULTS

 

·                  First quarter 2012 revenues were $2.331 billion compared with $2.422 billion in the fourth quarter 2011,

 

·                  First quarter 2012 net income attributable to controlling interest was $42 million, which included $184 million of net unfavorable items.   This compares with the fourth quarter 2011 net loss attributable to controlling interest of $6.119 billion, which included $6.176 billion of net unfavorable items,

 

·                  Revenue efficiency(1) was 90.4 percent in the first quarter, compared with 91.9 percent in the fourth quarter 2011,

 

·                  Fleet utilization(2) was 61 percent in the first quarter, unchanged from the fourth quarter 2011,

 

·                  First quarter 2012 operating and maintenance expenses were $1.410 billion.  Excluding $1.0 billion for estimated loss contingencies associated with the Macondo Well incident, fourth quarter 2011 operating and maintenance expenses were $1.565 billion,

 

·                  Cash flows from operating activities were $540 million in the first quarter, which compares with $563 million in the fourth quarter 2011,

 

·                  First quarter 2012 Annual Effective Tax Rate(3) was 25.5 percent compared with 59.6 percent in the fourth quarter 2011, and

 

·                  New contracts totaling $834 million were secured in the Fleet Status Report periods February 14, 2012 through April 18, 2012.  Since April 18, 2012, additional contracts totaling $430 million were secured.

 

ZUG, SWITZERLAND — Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported net income attributable to controlling interest of $42 million, or $0.12 per diluted share, for the three months ended March 31, 2012. First quarter 2012 results include net unfavorable items of $184 million, or $0.52 per diluted share.  The results compare with net income attributable to controlling interest of $310 million, or $0.96 per diluted share, for the three months ended March 31, 2011.  First quarter 2011 results included net favorable items of $139 million, or $0.43 per diluted share, primarily associated with the gain on sale of the Trident 20, partially offset by charges mainly related to unfavorable discrete tax items.

 



 

Net unfavorable items, after tax, impacting the first quarter of 2012 include the following:

 

·                  $118 million, or $0.34 per diluted share, increase in the charge associated with the completion of the measurement of the estimated goodwill impairment recorded in the fourth quarter 2011 for the contract drilling services reporting unit,

 

·                  $62 million, or $0.17 per diluted share, impairment of the intangible assets of ADTI, the drilling management services reporting unit,

 

·                  $29 million, or $0.08 per diluted share, of favorable discrete tax items,

 

·                  $17 million, or $0.05 per diluted share, impairment charge associated with the sale of GSF Rig 136,

 

·                  $15 million, or $0.04 per diluted share, loss associated with the sale of Challenger Minerals (North Sea) Limited and the impairment of the properties of Challenger Minerals Inc., and

 

·                  $1 million associated with the company’s acquisition of Aker Drilling.

 

Operations Quarterly Review

 

Revenues for the three months ended March 31, 2012 were $2.331 billion, compared with revenues of $2.422 billion during the three months ended December 31, 2011.  Contract drilling revenues decreased $35 million due mainly to lower revenue efficiency primarily on Deepwater and Midwater Floaters.  Total fleet revenue efficiency was 90.4 percent for the first quarter, compared with 91.9 percent in the fourth quarter 2011.  Other revenues decreased $54 million to $117 million for the first quarter 2012, compared with $171 million in the prior quarter, primarily due to decreased levels of low-margin drilling management services activity.

 

Operating and maintenance expenses totaled $1.410 billion for the first quarter 2012.  This compares with $1.565 billion in the fourth quarter 2011, which excludes $1.0 billion for estimated loss contingencies associated with the Macondo Well incident.  The sequential decline in operating and maintenance expenses relates to the timing of certain projects and various other items.  These include approximately $70 million in net lower costs incurred on rigs undergoing shipyard, maintenance, repair and equipment certification projects during the period; approximately $40 million associated with reduced activity in the company’s low-margin drilling management services reporting unit; and approximately $35 million related to the fourth quarter 2011 termination of the Deepwater Expedition contract.

 

Depreciation and amortization expense was $351 million in the first quarter 2012 compared with $374 million in the prior quarter.  The $23 million decrease was due mainly to assets that are now fully depreciated and the impact of Standard Jackups classified as held for sale or sold.

 

General and administrative expenses were $69 million for the first quarter 2012 compared with $88 million in the previous quarter, including $1 million and $17 million, respectively, associated with the Aker Drilling acquisition.

 

Annual Effective Tax Rate

 

Transocean’s Annual Effective Tax Rate (3) for the first quarter 2012, which excludes various discrete items, was 25.5 percent.  This compares with 59.6 percent for the prior quarter.

 



 

Other Items

 

For the first quarter, interest expense, net of amounts capitalized, was $180 million, compared with $178 million in the fourth quarter 2011.  Capitalized interest for the first quarter 2012 was $13 million compared with $10 million in the prior quarter.   Interest income decreased to $15 million in the first quarter, compared with $17 million in the fourth quarter 2011.

 

Cash flows from operating activities decreased $23 million to $540 million for the first quarter 2012 compared with $563 million for the fourth quarter 2011.  Capital expenditures decreased to $260 million for the first quarter compared with $350 million in the fourth quarter of 2011. The lower capital expenditures were primarily due to the timing of shipyard milestone payments associated with the company’s newbuild program.

 

Forward-Looking Statements

 

Statements included in this news release, including those regarding estimates of Transocean’s goodwill or long-lived asset impairments and the estimated loss contingencies associated with the Macondo Well incident, are forward-looking statements that involve certain assumptions. These statements are based on currently available competitive, financial, and economic data along with our current operating plans and involve risks and uncertainties including, but not limited to, market conditions, Transocean’s results of operations and other factors detailed in “Risk Factors” and elsewhere in Transocean’s filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize (or the other consequences of such a development worsen), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. Transocean disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

 

Conference Call Information

 

Transocean will conduct a teleconference call at 10:00 a.m. EDT, 4:00 p.m. CEST, on Thursday, May 3, 2012. To participate, dial +1 800-768-6563 or +1 785-830-7991 and refer to confirmation code 9219164 approximately 10 minutes prior to the scheduled start time of the call.

 

In addition, the conference call will be simultaneously broadcast over the Internet in a listen-only mode and can be accessed by logging onto Transocean’s website at www.deepwater.com and selecting “Investor Relations.” A file containing three charts that may be discussed during the conference call, titled “1Q12 Charts,” has been posted to Transocean’s website and can also be found by selecting “Investor Relations/Quarterly Toolkit.” The conference call may also be accessed via the Internet at www.CompanyBoardroom.com by typing in Transocean’s New York Stock Exchange trading symbol, “RIG.”

 

A telephonic replay of the conference call should be available after 1:00 p.m. EDT, 7:00 p.m. CEST, on May 3, 2012, and can be accessed by dialing +1 719-457-0820 or +1 888-203-1112 and referring to the confirmation code 9219164. Also, a replay will be available through the Internet and can be accessed by visiting either of the above-referenced internet addresses. Both replay options will be available for approximately 30 days.

 



 

About Transocean

 

Transocean is a leading international provider of offshore contract drilling services for oil and gas wells.  We own or have partial ownership interests in and operate a fleet of 129 mobile offshore drilling units consisting of 50 High-Specification Floaters (Ultra-Deepwater, Deepwater and Harsh-Environment semisubmersibles and drillships), 25 Midwater Floaters, nine High-Specification Jackups, 44 Standard Jackups and one swamp barge.  In addition, we have two Ultra-Deepwater drillships and four High-Specification Jackups under construction.  The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on deepwater and harsh environment drilling services.  We believe we operate one of the most versatile offshore drilling fleets in the world.

 


(1) 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). See the accompanying schedule entitled “Revenue Efficiency.”

 

(2) 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 the company’s fleet. See the accompanying schedule entitled “Utilization.”

 

(3) 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. See the accompanying schedule entitled “Supplemental Effective Tax Rate Analysis.”

 

(4) Effective Tax Rate is defined as income tax expense from continuing operations divided by income from continuing operations before income taxes. See the accompanying schedule entitled “Supplemental Effective Tax Rate Analysis.”

 

For more information about Transocean, please visit the website at www.deepwater.com.

 



 

TRANSOCEAN LTD. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

(In millions, except per share data)

(Unaudited)

 

 

 

Three months ended
March 31,

 

 

 

2012

 

2011

 

Operating revenues

 

 

 

 

 

Contract drilling revenues

 

$

2,203

 

$

1,950

 

Contract drilling intangible revenues

 

11

 

10

 

Other revenues

 

117

 

184

 

 

 

2,331

 

2,144

 

Costs and expenses

 

 

 

 

 

Operating and maintenance

 

1,410

 

1,359

 

Depreciation and amortization

 

351

 

354

 

General and administrative

 

69

 

67

 

 

 

1,830

 

1,780

 

Loss on impairment

 

(227

)

 

Gain (loss) on disposal of assets, net

 

(4

)

8

 

Operating income

 

270

 

372

 

 

 

 

 

 

 

Other income (expense), net

 

 

 

 

 

Interest income

 

15

 

15

 

Interest expense, net of amounts capitalized

 

(180

)

(145

)

Other, net

 

(7

)

3

 

 

 

(172

)

(127

)

Income from continuing operations before income tax expense

 

98

 

245

 

Income tax expense

 

24

 

81

 

Income from continuing operations

 

74

 

164

 

Income (loss) from discontinued operations, net of tax

 

(15

)

176

 

 

 

 

 

 

 

Net income

 

59

 

340

 

Net income attributable to noncontrolling interest

 

17

 

30

 

Net income attributable to controlling interest

 

$

42

 

$

310

 

 

 

 

 

 

 

Earnings per share-basic

 

 

 

 

 

Earnings from continuing operations

 

$

0.16

 

$

0.42

 

Earnings (loss) from discontinued operations

 

(0.04

)

0.54

 

Earnings per share

 

$

0.12

 

$

0.96

 

 

 

 

 

 

 

Earnings per share-diluted

 

 

 

 

 

Earnings from continuing operations

 

$

0.16

 

$

0.42

 

Earnings (loss) from discontinued operations

 

(0.04

)

0.54

 

Earnings per share

 

$

0.12

 

$

0.96

 

 

 

 

 

 

 

Weighted-average shares outstanding

 

 

 

 

 

Basic

 

350

 

319

 

Diluted

 

350

 

320

 

 



 

TRANSOCEAN LTD. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(In millions, except share data)

(Unaudited)

 

 

 

March 31,
2012

 

December 31,
2011

 

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

3,982

 

$

4,017

 

Accounts receivable, net of allowance for doubtful accounts of $28 at March 31, 2012 and December 31, 2011

 

2,238

 

2,176

 

Materials and supplies, net of allowance for obsolescence of $76 and $73 at March 31, 2012 and December 31, 2011, respectively

 

663

 

627

 

Deferred income taxes, net

 

142

 

142

 

Assets held for sale

 

53

 

26

 

Other current assets

 

595

 

621

 

Total current assets

 

7,673

 

7,609

 

 

 

 

 

 

 

Property and equipment

 

28,960

 

29,037

 

Property and equipment of consolidated variable interest entities

 

2,255

 

2,252

 

Less accumulated depreciation

 

8,892

 

8,760

 

Property and equipment, net

 

22,323

 

22,529

 

Goodwill

 

3,087

 

3,205

 

Other assets

 

1,632

 

1,745

 

Total assets

 

$

34,715

 

$

35,088

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

Accounts payable

 

$

841

 

$

880

 

Accrued income taxes

 

70

 

89

 

Debt due within one year

 

2,695

 

1,942

 

Debt of consolidated variable interest entities due within one year

 

97

 

97

 

Other current liabilities

 

2,061

 

2,350

 

Total current liabilities

 

5,764

 

5,358

 

 

 

 

 

 

 

Long-term debt

 

9,940

 

10,756

 

Long-term debt of consolidated variable interest entities

 

724

 

741

 

Deferred income taxes, net

 

512

 

523

 

Other long-term liabilities

 

1,914

 

1,903

 

Total long-term liabilities

 

13,090

 

13,923

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

Redeemable noncontrolling interest

 

138

 

116

 

 

 

 

 

 

 

Shares, CHF 15.00 par value, 402,282,355 authorized, 167,617,649 conditionally authorized, 365,135,298 issued at March 31, 2012 and December 31, 2011;  350,500,518 and 349,805,793 outstanding at March 31, 2012 and December 31, 2011, respectively

 

4,991

 

4,982

 

Additional paid-in capital

 

7,216

 

7,211

 

Treasury shares, at cost, 2,863,267 held at March 31, 2012 and December 31, 2011

 

(240

)

(240

)

Retained earnings

 

4,286

 

4,244

 

Accumulated other comprehensive loss

 

(515

)

(496

)

Total controlling interest shareholders’ equity

 

15,738

 

15,701

 

Noncontrolling interest

 

(15

)

(10

)

Total equity

 

15,723

 

15,691

 

Total liabilities and equity

 

$

34,715

 

$

35,088

 

 



 

TRANSOCEAN LTD. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(In millions)

(Unaudited)

 

 

 

Three months ended
March 31,

 

 

 

2012

 

2011

 

Cash flows from operating activities

 

 

 

 

 

Net income

 

$

59

 

$

340

 

Adjustments to reconcile to net cash provided by operating activities:

 

 

 

 

 

Amortization of drilling contract intangibles

 

(11

)

(10

)

Depreciation and amortization

 

351

 

354

 

Share-based compensation expense

 

23

 

27

 

Loss on impairment

 

227

 

 

(Gain) loss on disposal of assets, net

 

4

 

(8

)

(Gain) loss on disposal of discontinued operations, net

 

14

 

(173

)

Amortization of debt issue costs, discounts and premiums, net

 

18

 

26

 

Deferred income taxes

 

(30

)

11

 

Other, net

 

21

 

(3

)

Changes in deferred revenue, net

 

(12

)

46

 

Changes in deferred expenses, net

 

(49

)

(36

)

Changes in operating assets and liabilities

 

(75

)

(184

)

Net cash provided by operating activities

 

540

 

390

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Capital expenditures

 

(260

)

(240

)

Proceeds from disposal of assets, net

 

41

 

13

 

Proceeds from disposal of discontinued operations, net

 

 

259

 

Other, net

 

12

 

(6

)

Net cash provided by (used in) investing activities

 

(207

)

26

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Changes in short-term borrowings, net

 

 

51

 

Proceeds from debt

 

 

5

 

Repayments of debt

 

(147

)

(47

)

Proceeds from restricted cash investments

 

108

 

 

Deposits to restricted cash investments

 

(42

)

 

Distribution of qualifying additional paid-in capital

 

(278

)

 

Other, net

 

(9

)

(7

)

Net cash provided by (used in) financing activities

 

(368

)

2

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

(35

)

418

 

Cash and cash equivalents at beginning of period

 

4,017

 

3,394

 

Cash and cash equivalents at end of period

 

$

3,982

 

$

3,812

 

 



 

TRANSOCEAN LTD. AND SUBSIDIARIES

FLEET OPERATING STATISTICS

 

 

 

Operating Revenues (in millions) (1)

 

 

 

Three months ended

 

 

 

March 31,
2012

 

December 31,
2011

 

March 31,
2011

 

Contract Drilling Revenues

 

 

 

 

 

 

 

High-Specification Floaters:

 

 

 

 

 

 

 

Ultra Deepwater Floaters

 

$

1,092

 

$

1,066

 

$

844

 

Deepwater Floaters

 

236

 

259

 

290

 

Harsh Environment Floaters

 

255

 

285

 

150

 

Total High-Specification Floaters

 

1,583

 

1,610

 

1,284

 

Midwater Floaters

 

347

 

333

 

400

 

Jackups:

 

 

 

 

 

 

 

High-Specification Jackups

 

78

 

68

 

31

 

Standard Jackups

 

189

 

220

 

229

 

Total Jackups

 

267

 

288

 

260

 

Other Rigs

 

6

 

7

 

6

 

Total Contract Drilling Revenues

 

2,203

 

2,238

 

1,950

 

Contract Intangible Revenue

 

11

 

13

 

10

 

Other Revenues

 

 

 

 

 

 

 

Client Reimbursable Revenues

 

48

 

41

 

37

 

Integrated Services and Other

 

 

13

 

15

 

Drilling Management Services

 

69

 

117

 

132

 

Total Other Revenues

 

117

 

171

 

184

 

Total Company

 

$

2,331

 

$

2,422

 

$

2,144

 

 

 

 

Average Daily Revenue (1)

 

 

 

Three months ended

 

 

 

March 31,
2012

 

December 31,
2011

 

March 31,
2011

 

High-Specification Floaters:

 

 

 

 

 

 

 

Ultra Deepwater Floaters

 

$

534,900

 

$

542,900

 

$

467,700

 

Deepwater Floaters

 

348,900

 

351,600

 

395,900

 

Harsh Environment Floaters

 

478,600

 

468,300

 

402,400

 

Total High-Specification Floaters

 

486,900

 

486,600

 

441,300

 

Midwater Floaters

 

275,600

 

274,300

 

313,000

 

High-Specification Jackups

 

116,900

 

111,900

 

106,200

 

Standard Jackups

 

91,200

 

93,400

 

109,200

 

Other Rigs

 

73,300

 

73,800

 

73,400

 

Total Drilling Fleet

 

$

300,300

 

$

295,400

 

$

292,600

 

 


(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.

 



 

TRANSOCEAN LTD. AND SUBSIDIARIES

FLEET OPERATING STATISTICS (continued)

 

 

 

Utilization (2)

 

 

 

Three months ended

 

 

 

March 31,
2012

 

December 31,
2011

 

March 31,
2011

 

High-Specification Floaters:

 

 

 

 

 

 

 

Ultra Deepwater Floaters

 

83

%

79

%

77

%

Deepwater Floaters

 

47

%

50

%

51

%

Harsh Environment Floaters

 

84

%

95

%

83

%

Total High-Specification Floaters

 

71

%

72

%

69

%

Midwater Floaters

 

56

%

55

%

60

%

High-Specification Jackups

 

81

%

74

%

40

%

Standard Jackups

 

47

%

51

%

43

%

Other Rigs

 

98

%

99

%

49

%

Total Drilling Fleet

 

61

%

61

%

55

%

 


(2)          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.

 

 

 

Revenue Efficiency(3)

 

 

 

Trailing Five Quarters and Historical Data

 

 

 

1Q 2012

 

4Q 2011

 

3Q 2011

 

2Q 2011

 

1Q 2011

 

FY 2011

 

FY 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ultra Deepwater

 

89.4

%

89.5

%

86.4

%

89.3

%

85.3

%

87.7

%

88.6

%

Deepwater

 

81.1

%

88.1

%

87.7

%

93.9

%

88.2

%

89.4

%

90.3

%

Harsh Environment Floaters

 

97.8

%

98.0

%

94.4

%

98.4

%

99.2

%

97.4

%

96.0

%

Midwater Floaters

 

90.8

%

94.2

%

90.8

%

91.9

%

93.6

%

92.6

%

92.5

%

High Specification Jackups

 

93.4

%

94.3

%

97.3

%

95.6

%

95.1

%

95.6

%

95.3

%

Standard Jackups

 

97.8

%

96.4

%

98.2

%

98.4

%

97.7

%

97.7

%

97.3

%

Others

 

97.3

%

98.6

%

99.5

%

97.6

%

99.0

%

98.7

%

98.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Fleet

 

90.4

%

91.9

%

89.5

%

92.1

%

90.0

%

90.9

%

91.7

%

 


(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 US$ millions, except percentages)

 

 

 

Three months ended

 

 

 

March 31,
2012

 

December 31,
2011

 

March 31,
2011

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes

 

$

98

 

$

(5,970

)

$

245

 

Add back (subtract):

 

 

 

 

 

 

 

Litigation matters

 

 

1,000

 

8

 

Acquisition costs

 

1

 

17

 

 

Gain on disposal of other assets, net

 

 

(11

)

(9

)

Loss on impairment of goodwill and other assets

 

227

 

5,201

 

 

Loss on marketable security

 

 

13

 

 

Other, net

 

 

 

5

 

Adjusted income from continuing operations before income taxes

 

326

 

250

 

249

 

 

 

 

 

 

 

 

 

Income tax expense from continuing operations

 

24

 

132

 

81

 

Add back (subtract):

 

 

 

 

 

 

 

Loss on impairment

 

30

 

 

 

Changes in estimates (1)

 

29

 

18

 

(35

)

Other, net

 

 

 

2

 

Adjusted income tax expense from continuing operations (2)

 

$

83

 

$

150

 

$

48

 

 

 

 

 

 

 

 

 

Effective Tax Rate (3)

 

24.7

%

-2.2

%

33.1

%

 

 

 

 

 

 

 

 

Annual Effective Tax Rate (4)

 

25.5

%

59.6

%

19.3

%

 


(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 December 31, 2011 include $46 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.