(Source: Business Wire)
Transocean Ltd. (NYSE: RIG) today reported net income attributable to controlling interest for the three months ended June 30, 2009 of $806 million, or $2.49 per diluted share, compared to net income attributable to controlling interest of $1.065 billion, or $3.31 per diluted share for the three months ended June 30, 2008. Revenues for the second quarter of 2009 were $2.882 billion compared to $3.102 billion for the second quarter of 2008.
Second quarter 2009 results were adversely impacted by certain net charges, after tax, totaling $96 million, or $0.30 per diluted share, as follows:
$67 million of write-downs to fair market value for the GSF Arctic II and GSF Arctic IV semisubmersible rigs held for sale, as well as an impairment of an intangible asset related to drilling management services, and
A $29 million net loss primarily related to discrete tax items, the retirement of debt, the sale of an interest in a joint venture and expenses associated with the merger of Transocean and GlobalSantaFe.
Operations Quarterly Review
Revenues for the three months ended June 30, 2009 decreased 7.6 percent to $2.882 billion compared to revenues of $3.118 billion during the three months ended March 31, 2009. Of the $236 million quarter-to-quarter decrease, $209 million primarily reflected a decline in rig utilization across all rig categories, primarily related to the stacking of jackup and midwater units, a planned increase in shipyard activity and downtime resulting from unplanned operational events. Non-cash contract drilling intangible revenues also declined $29 million, compared to the first quarter 2009.
Operating and maintenance expenses for the three months ended June 30, 2009 were $1.277 billion compared to $1.171 billion for the prior three-month period, an increase of $106 million or 9.1 percent. The quarter-to-quarter increase in operating and maintenance costs consisted of $87 million related to an increase in shipyard and maintenance costs and increased costs related to newbuild rigs about to commence operations, partially offset by reduced operating costs due to stacked rigs.
General and administrative expenses decreased 5.4 percent to $53 million for the second quarter of 2009 compared to $56 million for the first quarter 2009. The decrease primarily reflects a $4 million decline in expenses related to the merger with GlobalSantaFe.
Interest Expense and Liquidity
Interest expense, net of amounts capitalized, for the second quarter of 2009 totaled $114 million compared to $136 million for the first quarter of 2009. The decrease in interest expense primarily related to lower average outstanding debt balances during the quarter compared to the first quarter 2009.
As of June 30, 2009, total debt was $12.053 billion, compared to total debt of $12.964 billion as of March 31, 2009, a decrease of $911 million.
Cash flow from operating activities totaled $1.576 billion for the second quarter of 2009 compared to $1.441 billion for the first quarter of 2009.
Effective Tax Rate
Transocean's reported Effective Tax Rate(1) of 18.5 percent for the second quarter of 2009 reflects various discrete tax items of $16 million which primarily resulted from changes in estimates, as well as the impact of the write-down of rigs to fair market value, as described above. Excluding these items, the Annual Effective Tax Rate(2) for the second quarter of 2009 was 15.7 percent versus 15.2 percent in the first quarter of 2009.
Conference Call Information
Transocean will conduct a teleconference call at 10:00 a.m. Eastern time, 4:00 p.m. Swiss time, today. To participate, dial +1 (913) 981-4904 and refer to confirmation code 9249616 approximately five to 10 minutes prior to the scheduled start time of the call. In addition, the conference call will be simultaneously broadcast in a listen-only mode over the Internet and can be accessed by logging onto the company's Web address at www.deepwater.com and selecting "Investor Relations." It may also be accessed at www.CompanyBoardroom.com by typing in Transocean's New York Stock Exchange trading symbol, "RIG." A file containing five charts to be discussed during the conference call, titled "2Q09 Charts," has been posted to Transocean's Web site and can be found by selecting "Investor Relations."
A telephonic replay of the conference call should be available after 1:00 p.m. Eastern time, 7:00 p.m. Swiss time, on August 5, 2009 and can be accessed by dialing +1 (719) 457-0820 and referring to the passcode 9249616. Also, a replay will be available through the Internet and can be accessed by visiting either of the above-referenced Worldwide Web addresses. Both replay options will be available for approximately 30 days.
Transocean is the world's largest offshore drilling contractor and the leading provider of drilling management services worldwide. With a fleet of 133 mobile offshore drilling units plus 10 announced ultra-deepwater newbuild units, 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 39 High-Specification Floaters (Ultra-Deepwater, Deepwater and Harsh-Environment semisubmersibles and drillships), 26 Midwater Floaters, 10 High-Specification Jackups, 55 Standard Jackups and other assets utilized in the support of offshore drilling activities worldwide.
(1) 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."
(2) 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 taxes) divided by income before income taxes excluding gains on sales and similar items pursuant to Financial Accounting Standards Board Interpretation No. 18. See the accompanying schedule entitled "Supplemental Effective Tax Rate Analysis."
Exception caught in main.
TRANSOCEAN LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except share data) (Unaudited) June 30, December 31, 2009 2008 (As adjusted) ASSETS Cash and cash equivalents $ 907 $ 963 Short-term investments 174 333 Accounts receivable, net of allowance for doubtful accounts of $52 and $114 at June 30, 2009 and December 31, 2008, respectively 2,674 2,864 Materials and supplies, net of allowance for obsolescence of $57 and $49 at June 30, 2009 and December 31, 2008, respectively 451 432 Deferred income taxes, net 46 63 Assets held for sale 186 464 Other current assets 192 230 Total current assets 4,630 5,349 Property and equipment 27,275 25,836 Less accumulated depreciation 5,624 4,975 Property and equipment, net 21,651 20,861 Goodwill 8,134 8,128 Other assets 842 844 Total assets $ 35,257 $ 35,182 LIABILITIES AND EQUITY Accounts payable $ 829 $ 914 Accrued income taxes 235 317 Debt due within one year 1,163 664 Other current liabilities 732 806 Total current liabilities 2,959 2,701 Long-term debt 10,890 12,893 Deferred income taxes, net 699 666 Other long-term liabilities 1,714 1,755 Total long-term liabilities 13,303 15,314 Commitments and contingencies Shares, CHF 15.00 par value, 502,852,947 authorized, 167,617,649 contingently authorized, 335,235,298 issued and 320,953,074 outstanding at June 30, 2009 and 502,852,947 authorized, 167,617,649 contingently authorized, 335,235,298 issued and 319,262,113 outstanding at December 31, 2008 4,468 4,444 Additional paid-in capital 7,388 7,313 Retained earnings 7,575 5,827 Accumulated other comprehensive loss (449 ) (420 ) Total controlling interest shareholders' equity 18,982 17,164 Noncontrolling interest 13 3 Total equity 18,995 17,167 Total liabilities and equity $ 35,257 $ 35,182 -------------------------------------------------------------------------------
Exception caught in main.
TRANSOCEAN LTD. FLEET OPERATING STATISTICS Operating Revenues ($ Millions) ((1)) Three months ended Six months ended June 30, June 30, 2009 March 31, 2009 June 30, 2008 2009 2008 Contract Drilling Revenues High-Specification Floaters: Ultra Deepwater Floaters $ 673 $ 702 $ 558 $1,375 $1,166 Deepwater Floaters 406 413 377 819 702 Harsh Environment Floaters 159 158 168 317 318 Total High-Specification Floaters 1,238 1,273 1,103 2,511 2,186 Midwater Floaters 644 708 650 1,352 1,325 High-Specification Jackups 128 151 148 278 304 Standard Jackups 608 689 674 1,298 1,385 Other Rigs 7 13 21 20 27 Subtotal 2,625 2,834 2,596 5,459 5,227 Contract Intangible Revenue 75 104 190 179 414 Other Revenues Client Reimbursable Revenues 48 50 50 98 98 Integrated Services and Other 52 53 35 105 78 Drilling Management Services 74 70 214 145 353 Oil and Gas Properties 8 7 17 14 42 Subtotal 182 180 316 362 571 Total Company $2,882 $3,118 $3,102 $6,000 $6,212 Average Dayrates ((1)) Three months ended Six months ended June 30, June 30, 2009 March 31, 2009 June 30, 2008 2009 2008 High-Specification Floaters: Ultra Deepwater Floaters $450,500 $451,000 $390,400 $450,800 $385,300 Deepwater Floaters $339,600 $336,900 $317,400 $338,200 $301,100 Harsh Environment Floaters $374,500 $351,100 $379,400 $362,500 $361,900 Total High-Specification Floaters $397,600 $393,800 $360,500 $395,700 $350,500 Midwater Floaters $302,700 $314,700 $299,300 $308,900 $295,700 High-Specification Jackups $161,400 $169,500 $178,000 $165,700 $175,800 Standard Jackups $149,200 $156,400 $149,400 $152,900 $147,700 Other Rigs $ 48,300 $ 46,700 $ 77,400 $ 47,300 $ 49,100 Total Drilling Fleet $255,900 $256,500 $239,300 $256,200 $233,700 Utilization ((1)) Three months ended Six months ended June 30, June 30, 2009 March 31, 2009 June 30, 2008 2009 2008 High-Specification Floaters: Ultra Deepwater Floaters 91% 96% 87% 94% 92% Deepwater Floaters 82% 85% 81% 84% 80% Harsh Environment Floaters 93% 100% 98% 96% 97% Total High-Specification Floaters 88% 92% 86% 90% 88% Midwater Floaters 84% 89% 82% 86% 85% High-Specification Jackups 87% 99% 91% 93% 95% Standard Jackups 82% 89% 89% 85% 91% Other Rigs 59% 99% 100% 80% 100% Total Drilling Fleet 84% 91% 87% 87% 89% ((1) )Average daily revenue is defined as contract drilling revenue earned per revenue earning day in the period. A revenue earning day is defined as a day for which a rig earns dayrate after commencement of operations. Utilization is defined as the total actual number of revenue earning days in the period as a percentage of the total number of calendar days in the period for all drilling rigs in our fleet. -------------------------------------------------------------------------------
Transocean Ltd. and Subsidiaries Non-GAAP Financial Measures and Reconciliations Operating Income Before General and Administrative Expense to Field Operating Income (In millions) Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, 2009 2009 2008 2009 2008 Operating revenue $ 2,882 $ 3,118 $ 3,102 $ 6,000 $ 6,212 Operating and maintenance expense 1,277 1,171 1,364 2,448 2,521 Depreciation, depletion and amortization 360 355 337 715 704 Impairment Loss 67 221 - 288 - (Gain) loss from disposal of assets, net 4 (4 ) 6 - 3 Operating income before general and administrative expense 1,174 1,375 1,395 2,549 2,984 Add back (subtract): Depreciation, depletion and amortization 360 355 337 715 704 Impairment Loss 67 221 - 288 - (Gain) loss from disposal of assets, net 4 (4 ) 6 - 3 Field operating income $ 1,605 $ 1,947 $ 1,738 $ 3,552 $ 3,691 -------------------------------------------------------------------------------
Transocean Ltd. and Subsidiaries Supplemental Effective Tax Rate Analysis (In millions) Three months ended Six months ended June 30, Mar. 31, June 30, June 30, June 30, 2009 2009 2008 2009 2008 (As Adjusted) (As Adjusted) Income before income taxes and minority interest $ 992 $ 1,190 $ 1,204 $ 2,182 $ 2,572 Add back (subtract): Impairment loss 67 221 - 288 - Loss on sale of CDC interest 4 - - 4 - Gain on sale of Sedco 135D rig & inventory (1 ) - - (1 ) - GSF Merger related costs 2 6 3 8 4 Loss on retirement of debt 8 2 1 10 3 Adjusted income before income taxes 1,072 1,419 1,208 2,491 2,579 Income tax expense 184 251 140 435 358 Add back (subtract): GSF Merger related costs - 1 - 1 - Changes in estimates (1) (16 ) (36 ) 2 (52 ) (25 ) Adjusted income tax expense (2) $ 168 $ 216 $ 142 $ 384 $ 333 Effective Tax Rate (3) 18.5 % 21.1 % 11.6 % 19.9 % 13.9 % Annual Effective Tax Rate (4) 15.7 % 15.2 % 11.8 % 15.4 % 12.9 % (1 ) Our estimates change as we file tax returns, settle disputes with tax authorities or become aware of other events and include changes in deferred taxes valuation allowances on deferred taxes and other tax liabilities. (2 ) The three months ended June 30, 2009 include $3 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 on sales and similar items pursuant to Financial Accounting Standards Board Interpretation No. 18. -------------------------------------------------------------------------------
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