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Transocean Ltd. Reports Fourth Quarter and Full Year 2012 Results


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2013-03-02 00:44:21 -

Transocean Ltd. /
Transocean Ltd. Reports Fourth Quarter and Full Year 2012 Results
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ZUG, SWITZERLAND--(Marketwire - March 1, 2013) -  Transocean Ltd. (NYSE: RIG)
(SIX: RIGN)

  * Fourth quarter 2012 revenues were $2.326 billion, compared with $2.431
    billion in the third quarter 2012;
  * Operating and maintenance expenses for the fourth quarter were $1.438
    billion, compared with $1.321 billion in the third quarter 2012;
  * Fourth quarter 2012 net income attributable to controlling interest was $456
    million, which included $126 million of net favorable items. This compares
    with the third quarter 
2012 net loss attributable to controlling interest of $381 million, which included $887 million of net unfavorable items; * Fourth quarter Annual Effective Tax Rate((1)) from continuing operations was 7.8 percent, compared with 15.2 percent in the third quarter 2012; * Fourth quarter net income attributable to controlling interest was $1.26 per diluted share. After adjusting for net favorable items, adjusted earnings from continuing operations were $330 million, or $0.91 per diluted share; * Cash flows from operating activities were $923 million in the fourth quarter, compared with $786 million in the third quarter 2012; * Revenue efficiency((2)) from continuing operations was 94.7 percent in the fourth quarter, compared with 94.9 percent, in the third quarter 2012. Ultra-Deepwater revenue efficiency was 95.5 percent, compared with 95.9 percent in the prior quarter. Total rig utilization((3)) from continuing operations was 79 percent in the fourth quarter, compared with 80 percent in the third quarter 2012; * New contracts associated with continuing operations totaling $2.0 billion were secured in the Fleet Status Report periods October 17, 2012 through February 14, 2013. Backlog from continuing operations was $28.8 billion at February 14, 2013; and * During the fourth quarter of 2012, the company reclassified its drilling management services operations in the U.S. Gulf of Mexico to discontinued operations, reducing other revenues and operating and maintenance expenses in the period by $51 million and $50 million, respectively. Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported net income attributable to controlling interest of $456 million, or $1.26 per diluted share, for the three months ended December 31, 2012. Fourth quarter 2012 results included net favorable items of $126 million, or $0.35 per diluted share. The results compare with a net loss attributable to controlling interest of $6.2 billion, or $18.76 per diluted share, for the three months ended December 31, 2011. Fourth quarter 2011 results included net unfavorable items of $6.3 billion, or $19.02 per diluted share. The net unfavorable items in 2011 were primarily due to a loss on goodwill impairment of $5.2 billion, or $15.83 per diluted share, related to the contract drilling services reporting unit; and $1.0 billion, or $3.04 per diluted share, for estimated loss contingencies associated with the Macondo well incident. Fourth quarter 2012 net favorable items, after tax, included the following: * $101 million, or $0.28 per diluted share, associated with favorable discrete tax items, and * $25 million, or $0.07 per diluted share, of income from discontinued operations primarily associated with the sale of the shallow water rigs. After consideration of these net favorable items, adjusted earnings from continuing operations were $330 million, or $0.91 per diluted share. A reconciliation of the non-GAAP adjusted net income and diluted earnings per share is included in the accompanying schedules. Revenues from continuing operations for the three months ended December 31, 2012 were $2.326 billion, compared with revenues of $2.431 billion during the preceding three month period. Contract drilling revenues decreased $35 million primarily due to the expected increase in out of service time, partly offset by higher average dayrates. Revenue efficiency from continuing operations was 94.7 percent for the fourth quarter, compared with 94.9 percent in the third quarter 2012. Other revenues decreased $70 million to $51 million for the fourth quarter 2012, compared with $121 million in the prior quarter, primarily due to lower drilling management services activity. As expected, operating and maintenance expenses from continuing operations increased $117 million to $1.438 billion for the fourth quarter of 2012, compared with $1.321 billion for the prior quarter. Contract drilling expenses increased $173 million primarily due to higher maintenance and shipyard costs associated with rigs undergoing surveys and other projects. Costs associated primarily with the company's drilling management services reporting unit decreased $56 million due to reduced activity. General and administrative expenses were $65 million for the fourth quarter 2012, compared with $69 million in the previous quarter. Transocean's fourth quarter Effective Tax Rate((4) )from continuing operations was (20.7) percent, compared with 16.5 percent in the third quarter 2012. The decrease in the Effective Tax Rate was due to changes in estimates primarily related to settlements of prior years' tax liabilities. Transocean's Annual Effective Tax Rate from continuing operations for the fourth quarter 2012 was 7.8 percent. This compares with 15.2 percent for the prior quarter. The decrease was primarily due to changes in the blend of income that is taxed based on gross revenues versus pre-tax income, the foreign exchange effect of the strengthened Norwegian krone versus the U.S. dollar, and rig movements between jurisdictions. Fourth quarter 2012 income tax expense included a favorable adjustment of $37 million, or $0.10 per diluted share, required to decrease the 2012 Annual Effective Tax Rate to 17.8 percent from 20.5 percent for the nine months ended September 30, 2012. Interest expense, net of amounts capitalized, was $180 million, unchanged from the prior quarter. Capitalized interest for the fourth quarter was $18 million, compared with $12 million in the third quarter 2012. Interest income decreased to $13 million in the fourth quarter, compared with $15 million in the third quarter 2012. Cash flows from operating activities were $923 million for the fourth quarter, compared with $786 million for the third quarter 2012. Capital expenditures from continuing operations were $657 million for the fourth quarter, compared with $201 million in the third quarter of 2012. Full Year 2012 For the year ended December 31, 2012, net loss attributable to controlling interest totaled $219 million, or $0.62 per diluted share. Full year results included $1.638 billion, or $4.58 per diluted share, of net unfavorable items as follows: * $961 million, or $2.70 per diluted share, loss on impairment of assets included in discontinued operations; * $756 million, or $2.11 per diluted share, primarily for estimated loss contingencies associated with the Macondo well incident; * $135 million, or $0.38 per diluted share, additional charges associated with the estimated 2011 goodwill impairment of the contract drilling services reporting unit and the 2012 impairment of the intangible assets of ADTI; * $66 million, or $0.19 per diluted share, net loss from discontinued operations, offset by; * $232 million or $0.67 per diluted share, related to favorable discrete taxes and other items; and * $48 million, or $0.13 per diluted share, gain on the sale of two deepwater floaters. After consideration of these net unfavorable items, adjusted earnings from continuing operations for the full year 2012 were $1.419 billion, or $3.96 per diluted share. A reconciliation of the non-GAAP adjusted net income and diluted earnings per share is included in the accompanying schedules. During the fourth quarter of 2012, the company reclassified its drilling management services operations in the U.S. Gulf of Mexico to discontinued operations, reducing other revenues and operating and maintenance expenses by $103 million and $112 million, respectively, for the year ended December 31, 2012. Interest expense, net of amounts capitalized, was $723 million for the full year 2012, compared with $621 million for the full year 2011. Capitalized interest for the full year 2012 was $54 million, compared with $39 million in 2011. Interest income was $56 million for the full year 2012, compared with $44 million in 2011. For the full year 2012, cash flow from operating activities totaled $2.708 billion, compared with $1.825 billion for 2011. For the year ended December 31, 2011, net loss attributable to controlling interest totaled $5.754 billion, or $17.88 per diluted share, resulting primarily from the loss on the goodwill impairment associated with the contract drilling services reporting unit of $5.2 billion, or $16.15 per diluted share; and the estimated loss contingencies associated with the Macondo well incident of $1.0 billion, or $3.10 per diluted share. Full Year 2013 Guidance Summary The following table is a summary of the company's full year 2013 guidance for key income statement and balance sheet items. This information is based on current expectations and certain management assumptions, and is subject to change. Item Range +-----------------------------------+------------------------------------------+ |Other Revenues * | $400 million - $420 million | +-----------------------------------+------------------------------------------+ |Fleet Average Revenue Efficiency | Approximately 93 percent | +-----------------------------------+------------------------------------------+ |Operating and Maintenance Expenses | $5.7 billion - $5.9 billion | +-----------------------------------+------------------------------------------+ |Depreciation and Amortization | $1.1 billion - $1.2 billion | +-----------------------------------+------------------------------------------+ |General and Administrative Expenses| $280 million - $300 million | +-----------------------------------+------------------------------------------+ |Net Interest Expense ** | $540 million - $550 million | +-----------------------------------+------------------------------------------+ |Annual Effective Tax Rate | Between 18% and 22% | +-----------------------------------+------------------------------------------+ |Capital Expenditures | Approximately $3.0 billion | +-----------------------------------+------------------------------------------+ | |Net loss of $15 million to $20 million per| |Discontinued Operations | quarter | +-----------------------------------+------------------------------------------+ * Other Revenues includes Drilling Management Services, recharge revenues, and other miscellaneous revenues. ** Net Interest Expense is net of capitalized interest of approximately $90 million and Interest Income of approximately $50 million. Forward-Looking Statements Statements included in this news release including, but not limited to, those regarding estimates of Transocean's full year 2013 guidance, goodwill or long- lived asset impairments, 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, the effect and results of litigation, assessments and contingencies, 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. EST, 4:00 p.m. CET, on Monday, March 4, 2013. To participate, dial +1 913-312-0407 and refer to confirmation code 8254413 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 that may be discussed during the conference call, titled "4Q12 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 3:00 p.m. EST, 9:00 p.m. CET, on March 4, 2013, and can be accessed by dialing +1 719-457-0820 or +1 888-203-1112 and referring to the confirmation code 8254413. 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. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on deepwater and harsh environment drilling services, and believes that it operates one of the most versatile offshore drilling fleets in the world. Transocean owns or has partial ownership interests in, and operates a fleet of, 82 mobile offshore drilling units consisting of 48 High-Specification Floaters (Ultra-Deepwater, Deepwater and Harsh-Environment drilling rigs), 25 Midwater Floaters and nine High-Specification Jackups. In addition, we have six Ultra- Deepwater Drillships and three High-Specification Jackups under construction. For more information about Transocean, please visit the website www.deepwater.com. Notes (1) 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." (2) Revenue efficiency is defined as actual contract drilling revenues for the measurement period divided by the maximum revenue calculated for the measurement period, expressed as a percentage. Maximum revenue is defined as the greatest amount of contract drilling revenues the drilling unit could earn for the measurement period, excluding amounts related to incentive provisions. See the accompanying schedule entitled "Revenue Efficiency." (3) Rig utilization is defined as the total number of operating days divided by the total number of available rig calendar days in the measurement period, expressed as a percentage. See the accompanying schedule entitled "Utilization." (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." TRANSOCEAN LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) (Unaudited)   Three months ended   Year ended   December 31,   December 31, ---------------------------- -----------------------     2012     2011     2012     2011 --------- ---------------- ---------- ---------- Operating revenues   Contract drilling revenues $ 2,275   $ 2,011   $ 8,773   $ 7,407   Other revenues     51       122       423       620 --------- ---------------- ---------- ----------       2,326       2,133       9,196       8,027 --------- ---------------- ---------- ---------- Costs and expenses   Operating and maintenance   1,438     2,355     6,106     6,179   Depreciation and amortization   278     290     1,123     1,109   General and administrative   65     88     282     288 --------- ---------------- ---------- ----------       1,781       2,733       7,511       7,576 --------- ---------------- ---------- ---------- Loss on impairment     --       (5,201 )     (140 )     (5,201 ) Gain (loss) on disposal of assets, net   (4 )   (10 )   36     (12 ) --------- ---------------- ---------- ---------- Operating income     541       (5,811 )     1,581       (4,762 ) --------- ---------------- ---------- ---------- Other income (expense), net   Interest income     13       17       56       44 Interest expense, net   of amounts capitalized   (180 )   (178 )   (723 )   (621 )   Gain on retirement of debt   --     --     2     --   Other, net     (16 )     (3 )     (50 )     (99 ) --------- ---------------- ---------- ----------       (183 )     (164 )     (715 )     (676 ) --------- ---------------- ---------- ---------- Income (loss) from continuing operations before income tax expense   358     (5,975 )   866     (5,438 ) Income tax expense (benefit)   (74 )   119     50     324 --------- ---------------- ---------- ---------- Income (loss) from continuing operations   432     (6,094 )   816     (5,762 ) Income (loss) from discontinued operations, net of tax   25     (28 )   (1,027 )   85 --------- ---------------- ---------- ---------- Net income (loss)     457       (6,122 )     (211 )     (5,677 ) Net income attributable to noncontrolling interest   1     43     8     77 --------- ---------------- ---------- ---------- Net income (loss) attributable to controlling interest $ 456   $ (6,165 ) $ (219 ) $ (5,754 ) --------- ---------------- ---------- ---------- Earnings (loss) per share-basic   Earnings (loss) from continuing operations $ 1.19   $ (18.67 ) $ 2.27   $ (18.14 ) Earnings (loss) from   discontinued operations   0.07     (0.09 )   (2.89 )   0.26 --------- ---------------- ---------- ----------   Earnings (loss) per share $ 1.26   $ (18.76 ) $ (0.62 ) $ (17.88 ) --------- ---------------- ---------- ---------- Earnings (loss) per share-diluted   Earnings (loss) from continuing operations $ 1.19   $ (18.67 ) $ 2.27   $ (18.14 ) Earnings (loss) from   discontinued operations   0.07     (0.09 )   (2.89 )   0.26 --------- ---------------- ---------- ----------   Earnings (loss) per share $ 1.26   $ (18.76 ) $ (0.62 ) $ (17.88 ) --------- ---------------- ---------- ---------- Weighted-average shares outstanding   Basic     359       329       356       322   Diluted     360       329       356       322 TRANSOCEAN LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except share data) (Unaudited)     December 31, -------------------------------     2012     2011 ------------ ---------------- Assets Cash and cash equivalents   $ 5,134     $ 4,017 Accounts receivable, net   Trade     1,940       2,049   Other     260       127 Materials and supplies, net     610       529 Assets held for sale     179       26 Deferred income taxes, net     142       142 Other current assets     382       646 ------------ ----------------       Total current assets     8,647       7,536 ------------ ---------------- Property and equipment     26,967       24,833 Property and equipment of consolidated variable interest entities   1,092     2,252 Less accumulated depreciation     7,179       6,297 ------------ ----------------     Property and equipment, net     20,880       20,788 ------------ ---------------- Goodwill     2,987       3,217 Other assets     1,741       3,491 ------------ ----------------       Total assets   $ 34,255     $ 35,032 ------------ ---------------- Liabilities and equity Accounts payable   $ 1,047     $ 880 Accrued income taxes     116       86 Debt due within one year     1,339       1,942 Debt of consolidated variable interest entities due within one year   28     245 Other current liabilities     2,933       2,375 ------------ ----------------       Total current liabilities     5,463       5,528 ------------ ---------------- Long-term debt     10,929       10,756 Long-term debt of consolidated variable interest entities   163     593 Deferred income taxes, net     366       487 Other long-term liabilities     1,604       1,925 ------------ ----------------       Total long-term liabilities     13,062       13,761 ------------ ---------------- Commitments and contingencies Redeemable noncontrolling interest     --       116 Shares, CHF 15.00 par value, 402,282,355 authorized, 167,617,649 conditionally authorized at December 31, 2012 and 2011; 373,830,649 and 365,135,298 issued at December 31, 2012 and 2011, respectively; and 359,505,251 and 349,805,793 outstanding at December 31, 2012 and 2011, respectively   5,130     4,982 Additional paid-in capital     7,521       7,211 Treasury shares, at cost, 2,863,267 held at December 31, 2012 and 2011   (240 )   (240 ) Retained earnings     3,855       4,180 Accumulated other comprehensive loss     (521 )     (496 ) ------------ ----------------     Total controlling interest shareholders' equity   15,745     15,637 ------------ ----------------     Noncontrolling interest     (15 )     (10 ) ------------ ----------------       Total equity     15,730       15,627 ------------ ----------------       Total liabilities and equity   $ 34,255     $ 35,032 ------------ ---------------- TRANSOCEAN LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited)   Three months ended   Twelve months ended   December 31,   December 31, ----------------------------- -----------------------     2012     2011     2012     2011 ---------------- ---------- ---------- ---------- Cash flows from operating activities   Net income (loss)   $ 457     $ (6,122 )   $ (211 )   $ (5,677 ) Adjustments to   reconcile to net cash provided by operating activities Amortization of     drilling contract intangibles   (10 )   (13 )   (42 )   (45 )     Depreciation and amortization   278     290     1,123     1,109 Depreciation and amortization of     assets in discontinued operations   --     82     183     342 Share-based     compensation expense   25     21     97     95     Loss on impairment     --       5,201       140       5,201 Loss on impairment     of assets in discontinued operations   3     6     986     38 (Gain) loss on     disposal of assets, net   4     11     (36 )   12 Gain on disposal     of assets in discontinued operations, net   (12 )   (8 )   (82 )   (183 ) Amortization of     debt issue costs, discounts and premiums, net   16     30     68     125     Deferred income taxes   (29 )   (92 )   (133 )   (62 )     Other, net     25       59       72       144 Changes in     deferred revenue, net   15     (23 )   (54 )   (16 ) Changes in     deferred expenses, net   55     5     85     (61 ) Changes in     operating assets and liabilities   96     1,156     512     803 ---------------- ---------- ---------- ---------- Net cash provided by operating activities   923     603     2,708     1,825 ---------------- ---------- ---------- ---------- Cash flows from investing activities   Capital expenditures     (657 )     (341 )     (1,303 )     (974 ) Capital expenditures   for discontinued operations   (31 )   (9 )   (106 )   (46 ) Investment in   business combination, net of cash acquired   --     (1,047 )   --     (1,246 ) Proceeds from   disposal of assets, net   2     2     191     14 Proceeds from   disposal of assets in discontinued operations, net   593     94     789     447 Payment for   settlement of forward exchange contract   --     --     --     (78 )   Other, net     8       14       40       (13 ) ---------------- ---------- ---------- ---------- Net cash used in investing activities   (85 )   (1,287 )   (389 )   (1,896 ) ---------------- ---------- ---------- ---------- Cash flows from financing activities   Changes in short- term borrowings, net   --     (146 )   (260 )   (88 )   Proceeds from debt     --       2,934       1,493       2,939   Repayments of debt     (1,698 )     (2,137 )     (2,282 )     (2,409 ) Proceeds from   restricted cash investments   13     479     311     479 Deposits to   restricted cash investments   (9 )   (523 )   (167 )   (523 )   Proceeds from share issuance, net   --     1,211     --     1,211 Distribution of   qualifying additional paid-in capital   --     (255 )   (278 )   (763 )   Other, net     (11 )     (108 )     (19 )     (112 ) ---------------- ---------- ---------- ---------- Net cash provided by (used in) financing activities   (1,705 )   1,455     (1,202 )   734 ---------------- ---------- ---------- ---------- Net increase (decrease) in cash and cash equivalents   (867 )   771     1,117     663 Cash and cash equivalents at beginning of period   6,001     3,246     4,017     3,354 ---------------- ---------- ---------- ---------- Cash and cash equivalents at end of period $ 5,134   $ 4,017   $ 5,134   $ 4,017 ---------------- ---------- ---------- ---------- TRANSOCEAN LTD. AND SUBSIDIARIES FLEET OPERATING STATISTICS     Operating Revenues (in millions) -------------------------------------------------------------       Years ended Three months ended December 31, ------------------------------------- -----------------------     December   September   December 31, 2012  30, 2012  31, 2011 2012 2011 ----------- ------------ ------------ ------------ ---------- Contract Drilling Revenues High-   Specification Floaters: Ultra     Deepwater Floaters $ 1,198 $ 1,213 $ 1,066 $ 4,643 $ 3,945     Deepwater Floaters   275   306   256   1,152   969 Harsh     Environment Floaters   220   247   285   985   806 ----------- ------------ ------------ ------------ ---------- Total High-   Specification Floaters   1,693   1,766   1,607   6,780   5,720   Midwater Floaters   464   424   333   1,573   1,462 High-   Specification Jackups   108   110   58   378   176 ----------- ------------ ------------ ------------ ---------- Total Contract Drilling Revenues - continuing operations   2,265   2,300   1,998   8,731   7,358 ----------- ------------ ------------ ------------ ---------- Contract Intangible Revenue   10   10   13   42   45 Other Revenues Client   Reimbursable Revenues   40   46   36   162   142 Integrated   Services and Other   3   -   13   10   53 Drilling   Management Services   8   75   73   251   429 ----------- ------------ ------------ ------------ ---------- Total Other Revenues   51   121   122   423   624 ----------- ------------ ------------ ------------ ---------- Total Revenue from continuing operations $ 2,326 $ 2,431 $ 2,133 $ 9,196 $ 8,027 ----------- ------------ ------------ ------------ ----------     Average Daily Revenue ((1)) -------------------------------------------------------------       Years ended Three months ended December 31, ------------------------------------- -----------------------     December   September   December  31, 2012 30, 2012 31, 2011 2012 2011 ----------- ------------ ------------ ------------ ---------- Continuing operations: High-   Specification Floaters: Ultra     Deepwater Floaters $ 514,300 $ 515,000 $ 490,200 $ 500,300 $ 461,000     Deepwater Floaters   337,100   356,300   315,200   338,200   340,000 Harsh     Environment Floaters   476,400   421,000   463,000   444,500   428,400 ----------- ------------ ------------ ------------ ---------- Total High-   Specification Floaters   469,300   464,600   446,100   455,000   430,400   Midwater Floaters   280,300   264,500   264,800   262,200   286,400 High-   Specification Jackups   162,400   154,600   107,300   141,300   108,500 ----------- ------------ ------------ ------------ ---------- Total Drilling Fleet: $ 382,000 $ 376,200 $ 369,900 $ 370,300 $ 367,600 ----------- ------------ ------------ ------------ ---------- (1) Average daily revenue is defined as contract drilling revenues earned per   operating day. An operating day is defined as a calendar day during which a rig is contracted to earn a dayrate during the firm contract period after commencement of operations. TRANSOCEAN LTD. AND SUBSIDIARIES FLEET OPERATING STATISTICS (continued)     Utilization ((2)) --------------------------------------------------------     Years ended   Three months ended   December 31, -------------------------------------- ---------------   December   September   December   31, 2012   30, 2012    31, 2011   2012   2011 ---------- ----------- ----------- ------ ------ Continuing operations: High-   Specification Floaters: Ultra     Deepwater Floaters 94 % 95 % 88 % 94 % 88 %     Deepwater Floaters 64 % 63 % 55 % 61 % 49 % Harsh     Environment Floaters 72 % 91 % 96 % 87 % 94 % ---------- ----------- ----------- ------ ------ Total High-   Specification Floaters 82 % 85 % 78 % 83 % 76 %   Midwater Floaters 72 % 70 % 57 % 66 % 59 % High-   Specification Jackups 81 % 86 % 74 % 84 % 57 % ---------- ----------- ----------- ------ ------ Total Drilling Fleet 79 % 80 % 72 % 78 % 69 % ---------- ----------- ----------- ------ ------ (2)   Rig utilization is defined as the total number of operating days divided by the total number of available rig calendar days in the measurement period, expressed as a percentage.     Revenue Efficiency((3))     Trailing Five Quarters and Historical Data ------------------------------------------------------------------------------------             FY   FY   FY   4Q 2012   3Q 2012   2Q 2012   1Q 2012   4Q 2011   2012   2011   2010 --------- --------- --------- --------- --------- ------ ------ ------ Ultra Deepwater 95.5 % 95.9 % 92.4 % 89.0 % 89.6 % 93.2 % 87.9 % 89.0 % Deepwater   90.9 %   96.1 %   94.5 %   83.1 %   89.7 %   91.4 %   90.7 %   91.5 % Harsh Environment Floaters 97.3 % 95.4 % 97.9 % 97.8 % 98.0 % 97.1 % 97.4 % 96.0 % Midwater Floaters 93.9 % 90.4 % 88.2 % 90.6 % 95.4 % 90.9 % 93.4 % 92.8 % High Specification Jackups 95.2 % 97.2 % 94.3 % 92.1 % 93.4 % 95.0 % 94.8 % 94.7 % --------- --------- --------- --------- --------- ------ ------ ------ Total Fleet   94.7 %   94.9 %   92.7 %   89.6 %   91.8 %   93.0 %   90.5 %   91.2 % --------- --------- --------- --------- --------- ------ ------ ------ (3) Revenue efficiency is defined as actual contract drilling revenues for the measurement period divided by the maximum revenue calculation for the   measurement period, expressed as a percentage. Maximum revenue is defined as the greatest amount of contract drilling revenues the drilling unit could earn for the measurement period, excluding amounts related to incentive provisions. TRANSOCEAN LTD. AND SUBSIDIARIES SUPPLEMENTAL EFFECTIVE TAX RATE ANALYSIS (In US$ millions, except percentages)     Three months ended     Years ended ------------------------------------- ----------------------- December December December December    31,   September    31,    31,    31,   2012    30, 2012   2011   2012   2011 ---------- ----------- ---------- ---------- ---------- Income (loss) from continuing operations before income taxes $ 358   $ 638   $ (5,975 ) $ 866   $ (5,438 )   Add back (subtract):   Litigation matters   --     8     1,000     758     1,000   Acquisition costs   --     --     17     1     22 Gain on   disposal of other assets, net   --     (51 )   --     (51 )   -- Loss on   impairment of goodwill and other assets   --     --     5,201     140     5,201 Loss on   redeemed noncontrolling interest   --     --     --     25     -- Loss on   forward exchange contract   --     --     --     --     78 Loss on   marketable security   --     --     13     --     13 Gain on   retirement of debt   --     (2 )   --     (2 )   --   Other, net     --       --       --       --       6 ---------- ----------- ---------- ---------- ---------- Adjusted income from continuing operations before income taxes   358     593     256     1,737     882 Income tax (benefit) expense from continuing operations   (74 )   105     119     50     324     Add back (subtract):     Litigation matters   --     2     --     2     -- Gain on     disposal of other assets, net   --     (3 )   --     (3 )   -- Loss on impairment     of goodwill and other assets   --     --     --     5     -- Changes in     estimates (1)   102     (14 )   7     256     (14 )     Other, net     --       --       --       --       2 ---------- ----------- ---------- ---------- ---------- Adjusted income tax expense from continuing operations (2) $ 28   $ 90   $ 126   $ 310   $ 312 ---------- ----------- ---------- ---------- ---------- Effective Tax Rate (3)   -20.7 %   16.5 %   -2.0 %   5.8 %   -6.0 % Annual Effective Tax Rate (4)   7.8 %   15.2 %   49.2 %   17.8 %   35.4 % (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 and year ended December 31, 2012 includes $(37) million of additional tax expense (benefit) reflecting the catch-up effect of an increase (decrease) in the annual effective tax rate from the previous quarter estimate. (3) Effective Tax Rate is income tax expense divided by income before income taxes. (4) Annual Effective Tax Rate is income tax expense excluding various discrete items (such as changes in estimates and tax on items excluded from income before income taxes) divided by income before income taxes excluding gains and losses on sales and similar items pursuant to the accounting standards for income taxes and estimating the annual effective tax rate. Transocean Ltd. and Subsidiaries Non-GAAP Financial Measures and Reconciliations Adjusted Net Income and Diluted Earnings Per Share (in US$ millions, except per share data)   YTD     QTD     YTD     QTD     YTD     QTD     QTD 12/31/   12/31/   09/30/   09/30/   06/30/   06/30/   03/31/   12   12   12   12   12   12   12 ---------- ---------- --------- --------- --------- --------- --------- Adjusted Net Income Net income (loss) attributable to controlling interest, as reported $ (219 ) $ 456   $ (675 ) $ (381 ) $ (294 ) $ (304 ) $ 10   Add back (subtract):     Litigation matters   756     -     756     6     750     750     - Loss on     impairment of goodwill and other assets   135     -     135     -     135     -     135 Gain on     disposal of assets, net   (48 )   -     (48 )   (48 )   -     -     - Gain on     retirement of debt   (2 )   -     (2 )   (2 )   -     -     - Loss on     redeemed noncontrolling interest   25     -     25     -     25     14     11 Loss on     impairment of discontinued operations   961     2     959     881     78     12     66 (Gain) loss on     sale of discontinued operations   (69 )   (1 )   (68 )   2     (70 )   (72 )   2 (Gain) loss     from discontinued operations   135     (26 )   161     33     128     59     69 Discrete tax     items and other, net   (255 )   (101 )   (154 )   15     (169 )   (141 )   (28 ) ---------- ---------- --------- --------- --------- --------- ---------     Net income, as adjusted $ 1,419   $ 330   $ 1,089   $ 506   $ 583   $ 318   $ 265 ---------- ---------- --------- --------- --------- --------- --------- Diluted Earnings Per Share: Diluted earnings (loss) per share, as reported $ (0.62 ) $ 1.26   $ (1.90 ) $ (1.06 ) $ (0.84 ) $ (0.86 ) $ 0.03   Add back (subtract):     Litigation matters   2.11     -     2.12     0.02     2.12     2.11     - Loss on     impairment of goodwill and other assets   0.38     -     0.38     -     0.38     -     0.38 Gain on     disposal of assets, net   (0.13 )   -     (0.13 )   (0.13 )   -     -     - Gain on     retirement of debt   (0.01 )   -     (0.01 )   (0.01 )   -     -     - Loss on     redeemed noncontrolling interest   0.07     -     0.07     -     0.07     0.04     0.03 Loss on     impairment of discontinued operations   2.70     -     2.70     2.45     0.23     0.03     0.19 (Gain) loss on     sale of discontinued operations   (0.19 )   -     (0.19 )   0.01     (0.20 )   (0.20 )   0.01 (Gain) loss     from discontinued operations   0.38     (0.07 )   0.45     0.09     0.36     0.17     0.19 Discrete tax     items and other, net   (0.73 )   (0.28 )   (0.44 )   0.03     (0.48 )   (0.40 )   (0.08 ) ---------- ---------- --------- --------- --------- --------- --------- Diluted earnings per share, as adjusted $ 3.96   $ 0.91   $ 3.05   $ 1.40   $ 1.64   $ 0.89   $ 0.75 ---------- ---------- --------- --------- --------- --------- ---------   YTD     QTD     YTD     QTD     YTD     QTD     QTD   12/31/   12/31/   09/30/   09/30/   06/30/   06/30/   03/31/ 11   11   11   11   11   11   11 ---------- ---------- --------- --------- --------- --------- --------- Adjusted Net Income Net income (loss) attributable to controlling interest, as reported $ (5,754 ) $ (6,165 ) $ 411   $ (32 ) $ 443   $ 124   $ 319   Add back (subtract):     Litigation matters   1,000     1,000     -     -     -     -     -     Acquisition costs   22     17     5     5     -     -     - Loss on     impairment of goodwill and other assets   5,201     5,201     -     -     -     -     - Loss on     marketable security   13     13     -     -     -     -     - Loss on     forward exchange contract   78     -     78     78     -     -     - Loss on     impairment of discontinued operations   34     4     30     5     25     25     - (Gain) loss on     sale of discontinued operations   (214 )   (24 )   (190 )   (14 )   (176 )   2     (178 ) Loss from     discontinued operations   95     48     47     11     36     10     26 Discrete tax     items and other, net   19     (8 )   27     (6 )   33     13     20 ---------- ---------- --------- --------- --------- --------- ---------     Net income, as adjusted $ 494   $ 86   $ 408   $ 47   $ 361   $ 174   $ 187 ---------- ---------- --------- --------- --------- --------- --------- Diluted Earnings Per Share: Diluted earnings (loss) per share, as reported $ (17.88 ) $ (18.76 ) $ 1.28   $ (0.10 ) $ 1.38   $ 0.38   $ 0.99   Add back (subtract):     Litigation matters   3.10     3.04     -     -     -     -     -     Acquisition costs   0.07     0.05     0.02     0.02     -     -     - Loss on     impairment of goodwill and other assets   16.15     15.83     -     -     -     -     - Loss on     marketable security   0.04     0.04     -     -     -     -     - Loss on     forward exchange contract   0.24     -     0.26     0.25     -     -     - Loss on     impairment of discontinued operations   0.11     0.01     0.11     0.02     0.09     0.08     - (Gain) loss on     sale of discontinued operations   (0.66 )   (0.07 )   (0.62 )   (0.04 )   (0.56 )   0.01     (0.56 ) Loss from     discontinued operations   0.29     0.15     0.16     0.03     0.11     0.03     0.08 Discrete tax     items and other, net   0.06     (0.03 )   0.06     (0.03 )   0.10     0.04     0.07 ---------- ---------- --------- --------- --------- --------- --------- Diluted earnings per share, as adjusted $ 1.52   $ 0.26   $ 1.27   $ 0.15   $ 1.12   $ 0.54   $ 0.58 ---------- ---------- --------- --------- --------- --------- --------- Analyst Contacts: Thad Vayda +1 713-232-7551 Diane Vento +1 713-232-8015 Media Contact: Guy A. Cantwell +1 713-232-7647 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#1682591]


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