Transocean Ltd. Reports First Quarter 2011 Results

4 mei 2011 Transocean Ltd. / Transocean Ltd. Reports First Quarter 2011 Results . Processed and transmitted by Thomson Reuters ONE. The issuer is solely responsible for the content of this announcement. ZUG, SWITZERLAND--(Marketwire - May 4, 2011) - Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported net income attributable to controlling interest of $310 million, or $0.96 per diluted share, for the three months ended March 31, 2011. The results compare to net income attributable to controlling interest of $677 million, or $2.09 per diluted share for the three months ended March 31, 2010. First quarter 2011 results included the following items, after tax, that resulted in a net positive impact of approximately $139 million, or $0.43 per diluted share: --  $176 million of income from discontinued operations, nearly all of which is from the gain on the sale of the Trident 20, --  $9 million from the gain on the sale of the Transocean Mercury, --  $8 million of net charges related to litigation matters not associated with the Macondo well incident, and --  $38 million of net charges primarily related to discrete tax items. First quarter 2011 results also included expenses associated with the Macondo well incident of $23 million, $19 million after tax, or $0.06 per diluted share. These expenses were primarily related to increased insurance premiums and legal costs. Operations Quarterly Review Revenues for the three months ended March 31, 2011 were $2.144 billion, compared to revenues of $2.127 billion during the three months ended December 31, 2010. First quarter contract drilling revenues were impacted by lower utilization and revenue efficiency. Our Deepwater and Midwater Floater fleets experienced lower utilization due to the stacking of rigs, as well as increased shipyard time related to contract preparation, special periodic surveys and major maintenance projects. Compliance with new well control equipment certification requirements, higher standards for equipment condition and capacity constraints on our vendors contributed to reduced revenue efficiency among our Ultra-Deepwater and Deepwater Floaters. Partially offsetting lower contract drilling revenue was additional revenue from two newbuild rigs commencing operations. Other revenues increased primarily from additional drilling management services activity. Operating and maintenance expenses totaled $1.359 billion for the first quarter 2011, up slightly from $1.339 billion for the prior quarter. The change was due to increased drilling management services activity, which was partially offset by reduced rig-related maintenance costs. Depreciation and amortization expense was $354 million in the first quarter 2011 compared to $381 million in the prior quarter. The $27 million decrease was primarily due to the reduced carrying amounts of our Standard Jackups resulting from the approximately $1 billion asset impairment recognized on that asset group during the fourth quarter 2010. Liquidity and Interest Expense Interest expense, net of amounts capitalized for the first quarter 2011, was $145 million, compared to $152 million in the fourth quarter 2010. Cash flow from operating activities decreased to $390 million for the first quarter 2011 compared to $796 million for the fourth quarter 2010. The decline in cash flow from operations resulted primarily from an increase in working capital. Effective Tax Rate Transocean's Annual Effective Tax Rate(1) for the first quarter 2011, which excludes various discrete items, was 19.3 percent. The Effective Tax Rate(2) for the first quarter was 33.1 percent, primarily reflecting the impact of discrete items resulting from changes in estimates. Conference Call Information Transocean will conduct a teleconference call at 10:00 a.m. EDT, 4:00 p.m. CEST, on May 5, 2011. To participate, dial +1 719-325-2234 and refer to confirmation code 8570996 approximately five to 10 minutes prior to the scheduled start time of the call. In addition, the conference call will be simultaneously broadcast over the Internet in a listen-only mode and can be accessed by logging onto Transocean's website at www.deepwater.com and selecting "Investor Relations." A file containing four charts to be discussed during the conference call, titled "1Q11 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 5, 2011, and can be accessed by dialing +1 719-457-0820 or +1 888-203-1112 and referring to the confirmation code 8570996. 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 the world's largest offshore drilling contractor and the leading provider of drilling management services worldwide. With a fleet of 137 mobile offshore drilling units as well as one ultra-deepwater drillship and three high- specification jackups under construction, Transocean's fleet is considered one of the most modern and versatile in the world due to its emphasis on technically demanding segments of the offshore drilling business. Transocean owns or operates a contract drilling fleet of 47 High-Specification Floaters (Ultra- Deepwater, Deepwater and Harsh-Environment semisubmersibles and drillships), 25 Midwater Floaters, nine High-Specification Jackups, 53 Standard Jackups and other assets utilized in the support of offshore drilling activities worldwide. (1) Annual Effective Tax Rate is defined as income tax expense excluding various discrete items (such as changes in estimates and tax on items excluded from income before income tax expense) divided by income before income tax expense excluding gains on sales and similar items pursuant to the accounting standards for income taxes and estimating the annual effective tax rate. See the accompanying schedule entitled "Supplemental Effective Tax Rate Analysis." (2) Effective Tax Rate is defined as income tax expense divided by income before income taxes. See the accompanying schedule entitled "Supplemental Effective Tax Rate Analysis." For more information about Transocean, please visit our website at www.deepwater.com.                     TRANSOCEAN LTD. AND SUBSIDIARIIES               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                    (In millions, except per share data)                                 (Unaudited)                                        Three months ended                                        March 31,                                        ------------------------                                        2011         2010                                        -----------  -----------                                        (As adjusted) Operating revenues   Contract drilling revenues                      $     1,950  $     2,425   Contract drilling intangible revenues                    10           33   Other revenues                                        184          121                                                   -----------  -----------                                        2,144        2,579                                        -----------  ----------- Costs and expenses   Operating and maintenance                             1,359        1,186   Depreciation and amortization                           354          374   General and administrative                               67           63                                        -----------  -----------                                        1,780        1,623                                        -----------  ----------- Gain (loss) on disposal of assets, net                      8          (14)                                                   -----------  ----------- Operating income                                        372          942                                        -----------  ----------- Other income (expense), net   Interest income                                          15            5   Interest expense, net of amounts capitalized           (145)        (132)   Other, net                                        3           15                                        -----------  -----------                                        (127)        (112)                                        -----------  ----------- Income from continuing operations before income  tax expense                                              245          830 Income tax expense                                        81          147                                        -----------  ----------- Income from continuing operations                         164          683 Income from discontinued operations, net of tax           176            2                                        -----------  ----------- Net income                                        340          685 Net income attributable to noncontrolling  interest                                        30            8                                        -----------  ----------- Net income attributable to controlling interest   $       310  $       677                                        ===========  =========== Earnings per share-basic   Earnings from continuing operations             $      0.42  $      2.09   Earnings from discontinued operations                  0.54         0.01                                             -----------  -----------   Earnings per share                                     0.96         2.10                                        ===========  =========== Earnings per share-diluted   Earnings from continuing operations             $      0.42  $      2.08   Earnings from discontinued operations                  0.54         0.01                                        -----------  -----------   Earnings per share                                     0.96         2.09                                        ===========  =========== Weighted-average shares outstanding   Basic                                        319          321   Diluted                                                 320          322                      TRANSOCEAN LTD. AND SUBSIDIARIES                   CONDENSED CONSOLIDATED BALANCE SHEETS                      (In millions, except share data)                                 (Unaudited)                                        March 31,   December 31,                                        2011         2010                                        -----------  -----------                                                               (As adjusted) Assets Cash and cash equivalents                         $     3,812  $     3,394 Accounts receivable, net of allowance for  doubtful accounts of $33 and $38 at March 31,  2011 and December 31, 2010, respectively               2,161        1,978 Materials and supplies, net of allowance for  obsolescence of $70 at March 31, 2011 and  December 31, 2010                                        541          514 Deferred income taxes, net                                116          115 Assets held for sale                                       77           -- Other current assets                                      197          194                                        -----------  -----------     Total current assets                                6,904        6,195                                        -----------  ----------- Property and equipment                                 26,819       26,721 Property and equipment of consolidated variable  interest entities                                      2,241        2,214 Less accumulated depreciation                           7,887        7,616                                        -----------  -----------   Property and equipment, net                          21,173       21,319                                        -----------  ----------- Goodwill                                        8,132        8,132 Other assets                                            1,001        1,165                                        -----------  -----------     Total assets                                  $    37,210  $    36,811                                        ===========  =========== Liabilities and equity Accounts payable                                  $       808  $       832 Accrued income taxes                                       67          109 Debt due within one year                                1,965        1,917 Debt of consolidated variable interest entities  due within one year                                       95           95 Other current liabilities                                 906          883                                        -----------  -----------     Total current liabilities                           3,841        3,836                                        -----------  ----------- Long-term debt                                        8,361        8,354 Long-term debt of consolidated variable interest  entities                                        820          855 Deferred income taxes, net                                586          575 Other long-term liabilities                             1,840        1,791                                        -----------  -----------     Total long-term liabilities                        11,607       11,575                                        -----------  ----------- Commitments and contingencies Redeemable noncontrolling interest                         57           25 Shares, CHF 15.00 par value, 335,235,298  authorized, 167,617,649 conditionally  authorized, 335,235,298 issued at March 31, 2011  and December 31, 2010; 319,538,901 and  319,080,678 outstanding at March 31, 2011 and  December 31, 2010, respectively                        4,488        4,482 Additional paid-in capital                              7,518        7,504 Treasury shares, at cost, 2,863,267 held at  March 31, 2011 and December 31, 2010                    (240)        (240) Retained earnings                                      10,279        9,969 Accumulated other comprehensive loss                     (335)        (332)                                        -----------  -----------    Total controlling interest shareholders'     equity                                        21,710       21,383                                        -----------  -----------    Noncontrolling interest                                 (5)          (8)                                        -----------  -----------     Total equity                                       21,705       21,375                                                   -----------  -----------     Total liabilities and equity                  $    37,210  $    36,811                                        ===========  ===========                      TRANSOCEAN LTD. AND SUBSIDIARIES               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                               (In millions)                                (Unaudited)                                        Three months ended                                                           March 31,                                        ------------------------                                        2011         2010                                        -----------  -----------                                        (As adjusted) Cash flows from operating activities   Net income                                      $       340  $       685   Adjustments to reconcile net income to net    cash provided by operating activities:     Amortization of drilling contract      intangibles                                        (10)         (33)     Depreciation and amortization                         354          374     Share-based compensation expense                       27           35     Gain on disposal of discontinued operations          (173)          --     (Gain) loss on disposal of assets, net                 (8)          14     Amortization of debt issue costs, discounts      and premiums, net                                     26           49     Deferred income taxes                                  11          (22)     Other, net                                        (3)          31     Deferred revenue, net                                  46          151     Deferred expenses, net                                (36)         (14)     Changes in operating assets and liabilities          (184)         (98)                                                   -----------  ----------- Net cash provided by operating activities                 390        1,172                                        -----------  ----------- Cash flows from investing activities   Capital expenditures                                   (240)        (369)   Proceeds from disposal of assets, net                    13           41   Proceeds from disposal of discontinued    operations                                        259           --   Other, net                                        (6)           5                                        -----------  ----------- Net cash provided by (used in) investing  activities                                        26         (323)                                        -----------  ----------- Cash flows from financing activities   Change in short-term borrowings, net                     51         (131)   Proceeds from debt                                        5           54   Repayments of debt                                      (47)        (253)   Purchases of shares held in treasury                     --          (60)   Other, net                                               (7)          (3)                                        -----------  ----------- Net cash provided by (used in) financing  activities                                        2         (393)                                                   -----------  ----------- Net increase in cash and cash equivalents                 418          456                                        -----------  ----------- Cash and cash equivalents at beginning of period        3,394        1,130                                        -----------  ----------- Cash and cash equivalents at end of period        $     3,812  $     1,586                                        ===========  ===========                               TRANSOCEAN LTD.                         FLEET OPERATING STATISTICS                                       Operating Revenues ($ Millions) (1)                                      -------------------------------------                                        Three months ended                                      -------------------------------------                                       March 31,   December 31,  March 31,                                         2011         2010         2010                                      -----------  -----------  ----------- Contract Drilling Revenues   High-Specification Floaters:     Ultra Deepwater Floaters         $       844  $       740  $       901     Deepwater Floaters                       290          339          390     Harsh Environment Floaters               150          155          176   Total High-Specification Floaters        1,284        1,234        1,467   Midwater Floaters                          400          477          522   High-Specification Jackups                  31           33           77   Standard Jackups                           229          259          352   Other Rigs                                   6            6            7 Subtotal                                   1,950        2,009        2,425 Contract Intangible Revenue                   10           13           33 Other Revenues   Client Reimbursable Revenues                37           34           40   Integrated Services and Other               15           15           30   Drilling Management Services               132           56           51 Subtotal                                     184          105          121 Total Company                        $     2,144  $     2,127  $     2,579                                        Average Daily Revenue  (1)                                      -------------------------------------                                              Three months ended                                      -------------------------------------                                       March 31,   December 31,  March 31,                                         2011         2010         2010                                      -----------  -----------  -----------   High-Specification Floaters:     Ultra Deepwater Floaters         $   467,700  $   435,900  $   486,000     Deepwater Floaters               $   395,900  $   395,600  $   383,800     Harsh Environment Floaters       $   402,400  $   366,800  $   400,100   Total High-Specification Floaters  $   441,300  $   414,500  $   443,200   Midwater Floaters                  $   313,000  $   298,500  $   331,600   High-Specification Jackups         $   106,200  $   129,400  $   162,600   Standard Jackups                   $   109,200  $   110,600  $   133,100   Other Rigs                         $    73,400  $    73,000  $    72,700 Total Drilling Fleet                 $   292,600  $   276,900  $   299,600                                        Utilization (1)                                      -------------------------------------                                        Three months ended                                      -------------------------------------                                       March 31,   December 31,  March 31,                                         2011         2010         2010                                      -----------  -----------  -----------   High-Specification Floaters:     Ultra Deepwater Floaters                  77%          76%          88%     Deepwater Floaters                        51%          58%          71%     Harsh Environment Floaters                83%          92%          98%   Total High-Specification Floaters           69%          71%          83%   Midwater Floaters                           60%          68%          67%   High-Specification Jackups                  40%          31%          59%   Standard Jackups                            43%          46%          53%   Other Rigs                                  49%          48%          50% Total Drilling Fleet                          55%          58%          66%                      Transocean Ltd. and Subsidiaries                  Supplemental Effective Tax Rate Analysis                             (In US$ millions)                                      -------------------------------------                                                Three months ended                                      -------------------------------------                                        Mar 31,      Dec 31,      Mar 31,                                        2011         2010         2010                                      -----------  -----------  -----------                                        (As adjusted)(As adjusted) Income from continuing operations  before income taxes                         245         (836)         830   Add back (subtract):     Litigation matters                         8            1            -     (Gain) loss on disposal of other      assets, net                              (9)           -           14     Loss on impairment of other      assets, net                               -        1,010            -     (Gain) loss on retirement of      debt                                      -           13           (2)     Other, net                                 5           (8)           5                                      -----------  -----------  ----------- Adjusted income from continuing  operations before income taxes              249          180          847 Income tax expense from continuing  operations                                   81          (32)         147   Add back (subtract):     Changes in estimates (1)                 (35)          (8)         (17)     Other, net                                 2            -           (1)                                      -----------  -----------  ----------- Adjusted income tax expense from  continuing operations (2)                    48          (40)         129                                      -----------  -----------  ----------- Effective Tax Rate (3)                      33.1%         3.8%        17.7% Annual Effective Tax Rate (4)               19.3%       -22.1%        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, 2010 includes ($65) 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. Analyst Contact: Gregory S. Panagos +1 713-232-7551 Media Contact: Guy A. Cantwell +1 713-232-7647 --- End of Message --- Transocean Ltd. Chemin de Blandonnet 10 Vernier Switzerland ISIN: CH0048265513; This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Transocean Ltd. via Thomson Reuters ONE [HUG#1512655]