UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 4, 2010 (August 4, 2010)
TRANSOCEAN LTD.
(Exact name of registrant as specified in its charter)
| Switzerland | 000-53533 | 98-0599916 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
| 10 Chemin de Blandonnet 1214 Vernier, Geneva Switzerland |
CH-1214 | |||
| (Address of principal executive offices) | (zip code) | |||
Registrant’s telephone number, including area code: +41 (22) 930-9000
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. | Results of Operations and Financial Condition. |
Our news release dated August 4, 2010, concerning second quarter 2010 financial results, furnished as Exhibit 99.1 to this report, is incorporated by reference herein.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
The exhibit to this report furnished pursuant to item 2.02 is as follows:
| Exhibit No. |
Description | |
| 99.1 | Transocean Ltd. Release Reporting Second Quarter 2010 Financial Results | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TRANSOCEAN LTD. | ||||||
| Date: August 4, 2010 | By | /s/ Heather G. Callender | ||||
| Heather G. Callender | ||||||
| Associate General Counsel | ||||||
Index to Exhibits
| Exhibit Number |
Description | |
| 99.1 | Transocean Ltd. Release Reporting Second Quarter 2010 Financial Results | |
Exhibit 99.1
|
l ll ll l ll ll ll ll ll ll ll l Transocean Ltd. Investor Relations and Communications Dept. |
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll l
| Analyst Contact: |
Gregory S. Panagos | News Release | ||
| +1 713-232-7551 | ||||
| Media Contact: |
Guy A. Cantwell | FOR RELEASE: August 4, 2010 | ||
| +1 713-232-7647 |
TRANSOCEAN LTD. REPORTS
SECOND QUARTER 2010 RESULTS
ZUG, SWITZERLAND—Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported net income attributable to controlling interest for the three months ended June 30, 2010 of $715 million, or $2.22 per diluted share, on revenues of $2.505 billion. The results compare to net income attributable to controlling interest of $806 million, or $2.49 per diluted share, on revenues of $2.882 billion, for the three months ended June 30, 2009.
Second quarter 2010 results included increased expenses associated with the Macondo well incident of $82 million, or $69 million after tax at our Annual Effective Tax Rate. These expenses include insurance deductibles, legal costs, increased insurance premiums, internal investigation costs and professional fees.
In addition, second quarter 2010 results were favorably impacted by $249 million, after tax, as follows:
| • | A $267 million gain resulting from insurance recoveries associated with the loss of Deepwater Horizon, |
| • | Partially offset by $18 million of expenses primarily relating to litigation matters not associated with the Macondo well incident. |
Second quarter 2009 results were adversely impacted by certain net charges, after tax, totaling $96 million, or $0.30 per diluted share, including $67 million primarily related to write-downs of assets held for sale and a $29 million net loss primarily related to discrete tax items, the retirement of debt and the sale of an interest in a joint venture.
Operations Quarterly Review
Revenues for the three months ended June 30, 2010 decreased to $2.505 billion compared to $2.602 billion during the three months ended March 31, 2010. The $97 million decrease was primarily due to contract drilling revenue reductions, including $80 million resulting from the stacking of rigs, $69 million from rigs operating on contracts at lower dayrates, $61 million from increased rig time in shipyards and mobilizations and $37 million associated with the loss of Deepwater Horizon. The decrease was partially offset by an $80 million increase in drilling management services revenues, a $54 million increase in
contract drilling revenue from newly-constructed ultra-deepwater rigs commencing or continuing operations in the second quarter and $16 million of other minor variances.
Operating and maintenance expenses totaled $1.358 billion for the second quarter 2010, up approximately 14 percent compared to $1.196 billion for the prior quarter. The $162 million quarter-to-quarter increase in operating and maintenance costs occurred as a result of $82 million of increased costs from insurance deductibles and legal costs associated with the Macondo well incident, a $65 million increase in drilling management services costs and $17 million of additional operating costs related to increased activity associated with newly-constructed ultra-deepwater rigs.
General and administrative expenses were $58 million for the second quarter 2010, compared to $63 million in the first quarter 2010. The $5 million decrease was primarily due to higher share-based compensation expenses in the first quarter.
Liquidity and Interest Expense
Interest expense, net of amounts capitalized in the second quarter 2010, totaled $141 million, compared to $132 million in the prior quarter. The increase was primarily due to reduced capitalized interest related to the commencement of operations of newly-constructed ultra-deepwater drillships in the first and second quarters. As of June 30, 2010, total debt was $11.426 billion, compared to $11.439 billion as of March 31, 2010, a decrease of $13 million.
Cash flow from operating activities totaled $1.269 billion for the second quarter 2010, up from $1.172 billion for the first quarter 2010.
As of June 30, 2010, the company had cash and cash equivalents of $2.888 billion, compared to $1.586 billion at March 31, 2010. The increase is principally due to operating cash flow and the receipt of $560 million in insurance proceeds for the loss of Deepwater Horizon.
Effective Tax Rate
Transocean’s reported Effective Tax Rate(1) for the second quarter 2010 was 12.0 percent and included certain discrete items consisting primarily of the gain resulting from the insurance recoveries on the loss of Deepwater Horizon and changes in prior years tax estimates. Excluding these discrete items the Annual Effective Tax Rate ( 2) for the second quarter was 16.3 percent.
Update on Distribution Through Par Value Reduction
In May 2010, at our Annual General Meeting, our shareholders approved a cash distribution in the form of a par value reduction in the aggregate amount of CHF 3.44 per issued share, equal to approximately $3.19 using an exchange rate of USD 1.00 to CHF 1.08 as of the close of trading on June 30, 2010. We expect the cash distribution to be calculated and paid in four quarterly installments. Under Swiss law, upon satisfaction of all legal requirements, we must submit an application to the commercial register in the Canton of Zug to register the applicable par value reduction. We have submitted to the commercial register of the Canton of Zug our application for registration of the initial installment. The cantonal commercial register is currently reviewing our application, and although we believe that all registration requirements have been met, the Swiss authorities have
indicated to us that the review process will take longer than customary in light of lawsuits filed in the U.S. and served on the company in Switzerland. They have indicated that they will seek guidance from the Swiss Federal Office of the Commercial Register on whether the requirements for the registration of the first installment have been met. Given the expected extended review of our application by the competent Swiss authorities, the payment of the first installment will be delayed. If the Swiss authorities disagree with our view that all registration requirements have been met, our ability to pay the distribution installments could be further delayed or restricted indefinitely. A delay of the first installment will likely also result in a delay of the remaining three installments, which were expected to be paid in October 2010, January 2011 and April 2011, subject to the satisfaction of the applicable Swiss legal requirements.
Update on Discussions with the U.S. Department of Justice
On June 28, 2010, we received a letter from the U.S. Department of Justice (DOJ) asking us to meet with them to discuss our financial responsibilities in connection with the Macondo well incident and requesting that we provide them certain financial and organizational information. The letter also requested that we provide the DOJ advance notice of certain corporate actions involving the transfer of cash or other assets outside the ordinary course of business. After preliminary discussions with the DOJ, we have voluntarily agreed to provide them with 30 days notice prior to repurchasing any additional shares under our share repurchase program and prior to making substantial cash payments out of our U.S. entities, other than in the ordinary course of business. We expect to engage in further discussions with the DOJ in the future.
Update on Macondo Well Incident
We have filed a Quarterly Report on Form 10-Q with the United States Securities and Exchange Commission, including the relevant drilling contract between subsidiaries of Transocean and BP as an exhibit. The Form 10-Q includes updated information on the Macondo well incident. To view the Form 10-Q filing, please use the following link: http://www.deepwater.com/fw/main/SEC-Filings-57.html.
Forward Looking Statements
Statements regarding the distribution to shareholders, including the timing and amount of the distribution and review by the Swiss authorities, share repurchases and discussions with the DOJ, as well as any other statements that are not historical facts, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to compliance with legal requirements, operating hazards and delays, actions by governmental and regulatory authorities, customers and other third parties, the future price of oil and gas, the actual revenues earned and other factors detailed in the company’s most recent Form 10-K, Form 10-Q and other filings with the Securities and Exchange Commission (“SEC”), which are available free of charge on the SEC’s website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. Additional information regarding the distribution may be found in the company’s most recent Form 10-Q, proxy statement and other filings made with the SEC.
Conference Call Information
Transocean will conduct a teleconference call at 10:00 a.m. EDT, 4:00 p.m. CEST, on August 5, 2010. To participate, dial +1 719-325-4929 and refer to confirmation code 1148497 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 “2Q10 Charts,” has been posted to Transocean’s website and can 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 August 5, and can be accessed by dialing +1 719-457-0820 or +1 888-203-1112 and referring to the passcode 1148497. Also, a replay will be available through the Internet and can be accessed by visiting either of the above-referenced Worldwide Web addresses.
Transocean is the world’s largest offshore drilling contractor and the leading provider of drilling management services worldwide. With a fleet of 139 mobile offshore drilling units plus three ultra-deepwater newbuild drillships 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 45 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 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.”
###
TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
| Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Operating revenues |
||||||||||||||||
| Contract drilling revenues |
$ | 2,290 | $ | 2,625 | $ | 4,731 | $ | 5,459 | ||||||||
| Contract drilling intangible revenues |
29 | 75 | 62 | 179 | ||||||||||||
| Other revenues |
186 | 182 | 314 | 362 | ||||||||||||
| 2,505 | 2,882 | 5,107 | 6,000 | |||||||||||||
| Costs and expenses |
||||||||||||||||
| Operating and maintenance |
1,358 | 1,277 | 2,554 | 2,448 | ||||||||||||
| Depreciation, depletion and amortization |
400 | 360 | 801 | 715 | ||||||||||||
| General and administrative |
58 | 53 | 121 | 109 | ||||||||||||
| 1,816 | 1,690 | 3,476 | 3,272 | |||||||||||||
| Loss on impairment |
— | (67 | ) | (2 | ) | (288 | ) | |||||||||
| Gain (loss) on disposal of assets, net |
268 | (4 | ) | 254 | — | |||||||||||
| Operating income |
957 | 1,121 | 1,883 | 2,440 | ||||||||||||
| Other income (expense), net |
||||||||||||||||
| Interest income |
5 | 1 | 10 | 2 | ||||||||||||
| Interest expense, net of amounts capitalized |
(141 | ) | (114 | ) | (273 | ) | (250 | ) | ||||||||
| Gain (loss) on retirement of debt |
— | (8 | ) | 2 | (10 | ) | ||||||||||
| Other, net |
(3 | ) | (8 | ) | 10 | — | ||||||||||
| (139 | ) | (129 | ) | (251 | ) | (258 | ) | |||||||||
| Income before income tax expense |
818 | 992 | 1,632 | 2,182 | ||||||||||||
| Income tax expense |
98 | 184 | 227 | 435 | ||||||||||||
| Net income |
720 | 808 | 1,405 | 1,747 | ||||||||||||
| Net income (loss) attributable to noncontrolling interest |
5 | 2 | 13 | (1 | ) | |||||||||||
| Net income attributable to controlling interest |
$ | 715 | $ | 806 | $ | 1,392 | $ | 1,748 | ||||||||
| Earnings per share |
||||||||||||||||
| Basic |
$ | 2.23 | $ | 2.50 | $ | 4.32 | $ | 5.43 | ||||||||
| Diluted |
$ | 2.22 | $ | 2.49 | $ | 4.31 | $ | 5.42 | ||||||||
| Weighted average shares outstanding |
||||||||||||||||
| Basic |
319 | 320 | 320 | 320 | ||||||||||||
| Diluted |
320 | 321 | 321 | 321 | ||||||||||||
TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
| June 30, 2010 |
December 31, 2009 |
|||||||
| (Unaudited) | ||||||||
| Assets |
||||||||
| Cash and cash equivalents |
$ | 2,888 | $ | 1,130 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $41 and $65 at June 30, 2010 and December 31, 2009, respectively |
2,254 | 2,385 | ||||||
| Materials and supplies, net of allowance for obsolescence of $66 at June 30, 2010 and December 31, 2009 |
467 | 462 | ||||||
| Deferred income taxes, net |
121 | 104 | ||||||
| Assets held for sale |
— | 186 | ||||||
| Other current assets |
184 | 209 | ||||||
| Total current assets |
5,914 | 4,476 | ||||||
| Property and equipment |
27,377 | 27,383 | ||||||
| Property and equipment of consolidated variable interest entities |
2,179 | 1,968 | ||||||
| Less accumulated depreciation |
7,034 | 6,333 | ||||||
| Property and equipment, net |
22,522 | 23,018 | ||||||
| Goodwill |
8,132 | 8,134 | ||||||
| Other assets |
984 | 808 | ||||||
| Total assets |
$ | 37,552 | $ | 36,436 | ||||
| Liabilities and equity |
||||||||
| Accounts payable |
$ | 968 | $ | 780 | ||||
| Accrued income taxes |
154 | 240 | ||||||
| Debt due within one year |
1,580 | 1,568 | ||||||
| Debt of consolidated variable interest entities due within one year |
82 | 300 | ||||||
| Other current liabilities |
1,884 | 730 | ||||||
| Total current liabilities |
4,668 | 3,618 | ||||||
| Long-term debt |
8,862 | 8,966 | ||||||
| Long-term debt of consolidated variable interest entities |
902 | 883 | ||||||
| Deferred income taxes, net |
710 | 726 | ||||||
| Other long-term liabilities |
1,683 | 1,684 | ||||||
| Total long-term liabilities |
12,157 | 12,259 | ||||||
| Commitments and contingencies |
||||||||
| Shares, CHF 15.00 par value, 502,852,947 authorized, 167,617,649 conditionally authorized, 335,235,298 issued at June 30, 2010 and December 31, 2009; 318,916,207 and 321,223,882 outstanding at June 30, 2010 and December 31, 2009, respectively |
4,479 | 4,472 | ||||||
| Additional paid-in capital |
6,421 | 7,407 | ||||||
| Treasury shares, at cost, 2,863,267 and none held at June 30, 2010 and December 31, 2009, respectively |
(240 | ) | — | |||||
| Retained earnings |
10,400 | 9,008 | ||||||
| Accumulated other comprehensive loss |
(336 | ) | (335 | ) | ||||
| Total controlling interest shareholders’ equity |
20,724 | 20,552 | ||||||
| Noncontrolling interest |
3 | 7 | ||||||
| Total equity |
20,727 | 20,559 | ||||||
| Total liabilities and equity |
$ | 37,552 | $ | 36,436 | ||||
TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions, except share data)
| Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Cash flows from operating activities |
||||||||||||||||
| Net income |
$ | 720 | $ | 808 | $ | 1,405 | $ | 1,747 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities |
||||||||||||||||
| Amortization of drilling contract intangibles |
(29 | ) | (75 | ) | (62 | ) | (179 | ) | ||||||||
| Depreciation, depletion and amortization |
400 | 360 | 801 | 715 | ||||||||||||
| Share-based compensation expense |
18 | 24 | 53 | 43 | ||||||||||||
| Excess tax benefit from share-based compensation plans |
(1 | ) | — | (1 | ) | (1 | ) | |||||||||
| (Gain) loss on disposal of assets, net |
(268 | ) | 4 | (254 | ) | — | ||||||||||
| Loss on impairment |
— | 67 | 2 | 288 | ||||||||||||
| (Gain) loss on retirement of debt |
— | 8 | (2 | ) | 10 | |||||||||||
| Amortization of debt issue costs, discounts and premiums, net |
51 | 57 | 100 | 109 | ||||||||||||
| Deferred income taxes |
(12 | ) | 20 | (34 | ) | 26 | ||||||||||
| Other, net |
(6 | ) | 14 | (1 | ) | 23 | ||||||||||
| Deferred revenue, net |
7 | 49 | 158 | 43 | ||||||||||||
| Deferred expenses, net |
(23 | ) | (37 | ) | (37 | ) | (35 | ) | ||||||||
| Changes in operating assets and liabilities |
412 | 277 | 313 | 228 | ||||||||||||
| Net cash provided by operating activities |
1,269 | 1,576 | 2,441 | 3,017 | ||||||||||||
| Cash flows from investing activities |
||||||||||||||||
| Capital expenditures |
(300 | ) | (947 | ) | (679 | ) | (1,655 | ) | ||||||||
| Proceeds from disposal of assets, net |
10 | — | 51 | 8 | ||||||||||||
| Proceeds from insurance recoveries for loss of drilling unit |
560 | — | 560 | — | ||||||||||||
| Proceeds from payments on notes receivable |
11 | — | 21 | — | ||||||||||||
| Proceeds from short-term investments |
— | 172 | 5 | 393 | ||||||||||||
| Purchases of short-term investments |
— | (234 | ) | — | (234 | ) | ||||||||||
| Joint ventures and other investments, net |
(1 | ) | — | (1 | ) | — | ||||||||||
| Net cash provided by (used in) investing activities |
280 | (1,009 | ) | (43 | ) | (1,488 | ) | |||||||||
| Cash flows from financing activities |
||||||||||||||||
| Change in short-term borrowings, net |
(46 | ) | (476 | ) | (177 | ) | (500 | ) | ||||||||
| Proceeds from debt |
— | 231 | 54 | 319 | ||||||||||||
| Repayments of debt |
(22 | ) | (708 | ) | (275 | ) | (1,410 | ) | ||||||||
| Payments for warrant exercises, net |
— | (13 | ) | — | (13 | ) | ||||||||||
| Purchases of shares held in treasury |
(180 | ) | — | (240 | ) | — | ||||||||||
| Proceeds from (taxes paid for) share-based compensation plans, net |
3 | 5 | (1 | ) | 22 | |||||||||||
| Excess tax benefit from share-based compensation plans |
1 | — | 1 | 1 | ||||||||||||
| Other, net |
(3 | ) | (1 | ) | (2 | ) | (4 | ) | ||||||||
| Net cash used in financing activities |
(247 | ) | (962 | ) | (640 | ) | (1,585 | ) | ||||||||
| Net increase (decrease) in cash and cash equivalents |
1,302 | (395 | ) | 1,758 | (56 | ) | ||||||||||
| Cash and cash equivalents at beginning of period |
1,586 | 1,302 | 1,130 | 963 | ||||||||||||
| Cash and cash equivalents at end of period |
$ | 2,888 | $ | 907 | $ | 2,888 | $ | 907 | ||||||||
TRANSOCEAN LTD.
FLEET OPERATING STATISTICS
| Operating Revenues ($ Millions) (1) | |||||||||||||||
| Three months ended | Six months ended | ||||||||||||||
| June 30, 2010 |
March 31, 2010 |
June 30, 2009 |
June 30, 2010 |
June 30, 2009 | |||||||||||
| Contract Drilling Revenues |
|||||||||||||||
| High-Specification Floaters: |
|||||||||||||||
| Ultra Deepwater Floaters |
$ | 809 | $ | 901 | $ | 673 | $ | 1,710 | $ | 1,375 | |||||
| Deepwater Floaters |
382 | 390 | 406 | 772 | 819 | ||||||||||
| Harsh Environment Floaters |
166 | 176 | 159 | 342 | 317 | ||||||||||
| Total High-Specification Floaters |
1,357 | 1,467 | 1,238 | 2,824 | 2,511 | ||||||||||
| Midwater Floaters |
521 | 522 | 644 | 1,044 | 1,352 | ||||||||||
| High-Specification Jackups |
93 | 94 | 128 | 186 | 278 | ||||||||||
| Standard Jackups |
312 | 352 | 608 | 664 | 1,298 | ||||||||||
| Other Rigs |
7 | 6 | 7 | 13 | 20 | ||||||||||
| Subtotal |
2,290 | 2,441 | 2,625 | 4,731 | 5,459 | ||||||||||
| Contract Intangible Revenue |
29 | 33 | 75 | 62 | 179 | ||||||||||
| Other Revenues |
|||||||||||||||
| Client Reimbursable Revenues |
38 | 40 | 48 | 78 | 98 | ||||||||||
| Integrated Services and Other |
11 | 30 | 52 | 42 | 105 | ||||||||||
| Drilling Management Services |
129 | 51 | 74 | 179 | 145 | ||||||||||
| Oil and Gas Properties |
8 | 7 | 8 | 15 | 14 | ||||||||||
| Subtotal |
186 | 128 | 182 | 314 | 362 | ||||||||||
| Total Company |
$ | 2,505 | $ | 2,602 | $ | 2,882 | $ | 5,107 | $ | 6,000 | |||||
| Average Daily Revenue (1) | |||||||||||||||
| Three months ended | Six months ended | ||||||||||||||
|
|
June 30, 2010 |
|
March 31, 2010 |
|
June 30, 2009 |
|
June 30, 2010 |
|
June 30, 2009 | ||||||
| High-Specification Floaters: |
|||||||||||||||
| Ultra Deepwater Floaters |
$ | 482,100 | $ | 486,000 | $ | 450,500 | $ | 484,100 | $ | 450,800 | |||||
| Deepwater Floaters |
$ | 395,800 | $ | 383,800 | $ | 339,600 | $ | 389,600 | $ | 338,200 | |||||
| Harsh Environment Floaters |
$ | 428,500 | $ | 400,100 | $ | 374,500 | $ | 413,400 | $ | 362,500 | |||||
| Total High-Specification Floaters |
$ | 447,800 | $ | 443,200 | $ | 397,600 | $ | 445,400 | $ | 395,700 | |||||
| Midwater Floaters |
$ | 319,000 | $ | 331,600 | $ | 302,700 | $ | 325,200 | $ | 308,900 | |||||
| High-Specification Jackups |
$ | 146,100 | $ | 166,000 | $ | 161,400 | $ | 155,500 | $ | 165,700 | |||||
| Standard Jackups |
$ | 117,100 | $ | 133,100 | $ | 149,200 | $ | 125,000 | $ | 152,900 | |||||
| Other Rigs |
$ | 72,000 | $ | 72,700 | $ | 48,300 | $ | 72,400 | $ | 47,300 | |||||
| Total Drilling Fleet |
$ | 284,200 | $ | 298,300 | $ | 255,900 | $ | 291,300 | $ | 256,200 | |||||
| Utilization (1) | |||||||||||||||
| Three months ended | Six months ended | ||||||||||||||
|
|
June 30, 2010 |
|
March 31, 2010 |
|
June 30, 2009 |
|
June 30, 2010 |
|
June 30, 2009 | ||||||
| High-Specification Floaters: |
|||||||||||||||
| Ultra Deepwater Floaters |
76% | 88% | 91% | 82% | 94% | ||||||||||
| Deepwater Floaters |
66% | 71% | 82% | 68% | 84% | ||||||||||
| Harsh Environment Floaters |
85% | 98% | 93% | 91% | 96% | ||||||||||
| Total High-Specification Floaters |
74% | 83% | 88% | 78% | 90% | ||||||||||
| Midwater Floaters |
69% | 67% | 84% | 68% | 86% | ||||||||||
| High-Specification Jackups |
70% | 63% | 87% | 66% | 93% | ||||||||||
| Standard Jackups |
53% | 53% | 82% | 53% | 85% | ||||||||||
| Other Rigs |
50% | 50% | 59% | 50% | 80% | ||||||||||
| Total Drilling Fleet |
64% | 66% | 84% | 65% | 87% | ||||||||||
| (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
Supplemental Effective Tax Rate Analysis
(In millions)
| Three months ended | Six months ended | |||||||||||||||||||
| June 30, 2010 |
March 31, 2010 |
June 30, 2009 |
June 30, 2010 |
June 30, 2009 |
||||||||||||||||
| Income before income taxes |
$ | 818 | $ | 814 | $ | 992 | $ | 1,632 | $ | 2,182 | ||||||||||
| Add back (subtract): |
||||||||||||||||||||
| Litigation matters |
12 | — | — | 12 | — | |||||||||||||||
| Gain on loss of Deepwater Horizon |
(267 | ) | — | — | (267 | ) | — | |||||||||||||
| Loss on disposal of other assets, net |
— | 14 | 3 | 14 | 3 | |||||||||||||||
| Loss on impairment of goodwill and intangible assets |
— | 2 | 9 | 2 | 9 | |||||||||||||||
| Loss on impairment of other assets |
— | 21 | — | 21 | — | |||||||||||||||
| Loss on impairment of assets held for sale |
— | — | 58 | — | 279 | |||||||||||||||
| (Gain) loss on retirement of debt |
— | (2 | ) | 8 | (2 | ) | 10 | |||||||||||||
| GSF merger related costs and other, net |
— | 6 | 2 | 6 | 8 | |||||||||||||||
| Adjusted income before income taxes |
563 | 855 | 1,072 | 1,418 | 2,491 | |||||||||||||||
| Income tax expense |
98 | 129 | 184 | 227 | 435 | |||||||||||||||
| Add back (subtract): |
||||||||||||||||||||
| Loss on impairment of oil and gas properties |
(7 | ) | 7 | — | — | — | ||||||||||||||
| GSF merger related costs |
— | 1 | — | 1 | 1 | |||||||||||||||
| Tax effect of the Patient Protection and Affordable Care Act |
— | (2 | ) | — | (2 | ) | — | |||||||||||||
| Changes in estimates (1) |
1 | (7 | ) | (16 | ) | (6 | ) | (52 | ) | |||||||||||
| Adjusted income tax expense (2) |
$ | 92 | $ | 128 | $ | 168 | $ | 220 | $ | 384 | ||||||||||
| Effective Tax Rate (3) |
12.0 | % | 15.8 | % | 18.5 | % | 13.9 | % | 19.9 | % | ||||||||||
| Annual Effective Tax Rate (4) |
16.3 | % | 15.0 | % | 15.7 | % | 15.5 | % | 15.4 | % | ||||||||||
| (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 ended June 30, 2010 includes $4 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. |