Transocean Ltd. : Transocean Ltd. Reports Fourth Quarter and Full Year 2012 Results
Transocean Ltd. : Transocean Ltd. Reports Fourth Quarter and Full Year 2012
Results
Transocean Ltd. / Transocean Ltd. Reports Fourth Quarter and Full Year 2012
Results . Processed and transmitted by Thomson Reuters ONE. The issuer is
solely responsible for the content of this announcement.
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
Discontinued Operations per 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
December September 31,
31, 2012 30, 2012 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
4Q 3Q 2Q 1Q 4Q FY FY FY
2012 2012 2012 2012 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
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the
information contained therein.
Source: Transocean Ltd. via Thomson Reuters ONE
HUG#1682591
--- End of Message ---
Transocean Ltd.
Chemin de Blandonnet 10 Vernier Switzerland
ISIN: CH0048265513;
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