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): February 23, 2011
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) |
Registrants 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 press release dated February 23, 2011, concerning financial results for the fourth quarter and fiscal year ended December 31, 2010, furnished as Exhibit 99.1 to this report, is incorporated by reference herein.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit No. |
Description | |
99.1 |
Transocean Ltd. Release Reporting Fourth Quarter and Full-Year 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: February 23, 2011 | By | /s/ Eric J. Christ | ||||
Eric J. Christ | ||||||
Authorized Person |
Index to Exhibits
Exhibit Number |
Description | |
99.1 |
Transocean Ltd. Release Reporting Fourth Quarter and Full-Year 2010 Financial Results |
Exhibit 99.1
Transocean Ltd. Investor Relations and Communications Dept. | ||
Analyst Contact: | Gregory S. Panagos | |||
+1 713-232-7551 | ||||
Media Contact: | Guy A. Cantwell | FOR RELEASE: February 23, 2011 | ||
+1 713-232-7647 |
TRANSOCEAN LTD. REPORTS FOURTH QUARTER
AND FULL-YEAR 2010 RESULTS
ZUG, SWITZERLANDTransocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported a net loss attributable to controlling interest for the three months ended December 31, 2010 of $799 million or $2.51 per diluted share. The results compare to net income attributable to controlling interest of $723 million, or $2.24 per diluted share for the three months ended December 31, 2009.
Fourth Quarter 2010
Fourth quarter 2010 results were adversely impacted by $1.017 billion of after tax items, or $3.19 per diluted share, which include:
| An after-tax, non-cash charge of $1.010 billion, or $3.16 per diluted share. The charge resulted from an impairment of our Standard Jackup asset group. Calculated based on U.S. Generally Accepted Accounting Principles, the charge is due to a current and projected decline in dayrates and utilization that has adversely impacted this asset group. |
| a $13 million loss on retirement of debt associated with repurchases of a portion of our convertible senior notes, and |
| $6 million of income as a result of the TODCO tax sharing agreement and other matters. |
Fourth quarter 2010 results also included expenses associated with the Macondo well incident of $28 million, or $25 million, after tax, or $0.08 per diluted share. These expenses include legal and internal investigation costs, professional fees and increased insurance premiums.
Full Year 2010
For the year ended December 31, 2010, net income attributable to controlling interest totaled $961 million, or $2.99 per diluted share. Net income for the year ended December 31, 2010 included after-tax charges of $854 million, or $2.65 per diluted share, resulting primarily from the $1.010 billion impairment of our Standard Jackups. Other charges for the full year totaled $111 million and included litigation matters, an impairment of oil and gas properties, a loss on the sale of two rigs and losses on the
early retirement of debt and other matters. Partially offsetting these charges was a $267 million after-tax gain resulting from insurance recoveries associated with the loss of the Deepwater Horizon.
Full-year 2010 results also included additional expenses associated with the Macondo well incident of $137 million, or $116 million after tax, or $0.36 per diluted share. These expenses include legal costs, internal investigation costs, professional fees and increased insurance premiums.
For 2009, net income attributable to controlling interest was $3.181 billion, or $9.84 per diluted share. Net income for the year ended December 31, 2009 included after-tax charges of $498 million, or $1.55 per diluted share, resulting primarily from impairments of intangible assets and two rigs held for sale, litigation matters, losses on the early retirement of debt and adjustments associated with the GlobalSantaFe merger. These charges were partially offset by gains on the sale of our interest in a joint venture and settlements of certain tax matters.
Operations Quarterly Review
Revenues for the three months ended December 31, 2010 were $2.160 billion, compared to revenues of $2.309 billion during the three months ended September 30, 2010. The $149 million decrease was primarily due to:
| $90 million of decreased utilization, primarily from rigs that were stacked or idled, |
| a $52 million charge related to a customer dispute in the U.S. Gulf of Mexico, |
| $41 million from increased shipyard activity, |
| $18 million of reduced revenue on completion of the GSF Arctic IV charter, |
| offset by $44 million due to increased drilling management services revenue, and |
| $8 million of other net favorable variances. |
Operating and maintenance expenses totaled $1.352 billion for the fourth quarter 2010, up approximately 11 percent compared to $1.213 billion for the prior quarter. The $139 million quarter-to-quarter increase in operating and maintenance costs was primarily due to:
| $73 million of increased shipyard and contract preparation costs, |
| $35 million of increased costs associated with drilling management services activity, |
| $34 million resulting from increased maintenance expense, |
| offset by $3 million of net favorable variances. |
General and administrative expenses were $67 million for the fourth quarter 2010 compared to $59 million in the previous quarter. The $8 million increase was due, in part, to increases in non-rig related insurance costs and other miscellaneous items.
Liquidity and Interest Expense
Interest expense, net of amounts capitalized for the fourth quarter 2010, was $152 million, compared to $142 million in the third quarter 2010, reflecting the full quarter impact of the issuance of $2 billion of new senior notes during the third quarter. Interest expense, for the full year 2010 net of amounts capitalized, was $567 million, compared to $484 million for the full year 2009. The increase in interest expense was mainly due to lower capitalized interest expense in 2010.
Cash flow from operating activities increased to $796 million for the fourth quarter 2010 compared to $709 million for the third quarter 2010. For the full year 2010, cash flow from operating activities totaled $3.946 billion compared to $5.598 billion for the full year 2009.
Effective Tax Rate
Transoceans Annual Effective Tax Rate(1), which excludes various discrete items, for the fourth quarter 2010 and the full year ended December 31, 2010 was a benefit of 18.7 percent and an expense of 13.8 percent, respectively. The Effective Tax Rate(2) for the fourth quarter 2010 and the full year ended December 31, 2010 was 4.1 percent and 23.9 percent, respectively. Transoceans Effective Tax Rate reflects the impact of changes in estimates as well as the impact of impairments. The decline in the Annual Effective Tax Rate for the full year 2010 was due to a tax benefit realized in the fourth quarter resulting primarily from the relocation of certain rigs.
Conference Call Information
Transocean will conduct a teleconference call at 10:00 a.m. EST, 4:00 p.m. Swiss time, on February 24, 2011. To participate, dial +1 719-325-2327 and refer to confirmation code 1432993 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 Transoceans website at www.deepwater.com and selecting Investor Relations. A file containing four charts to be discussed during the conference call, titled 4Q10 Charts, has been posted to Transoceans 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 Transoceans New York Stock Exchange trading symbol, RIG.A telephonic replay of the conference call should be available after 1:00 p.m. EST, 7:00 p.m. Swiss time, on February 24, 2011, and can be accessed by dialing +1 719-457-0820 and referring to the passcode 1432993. 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.
About Transocean
Transocean is the worlds largest offshore drilling contractor and the leading provider of drilling management services worldwide. With a fleet of 138 mobile offshore drilling units as well as one ultra-deepwater drillship and three high-specification jackups under construction, Transoceans fleet is considered one of the most modern and versatile in the world due to its emphasis on technically demanding segments of the offshore drilling business. Transocean owns or operates a contract drilling fleet of 47 High-Specification Floaters (Ultra-Deepwater, Deepwater and Harsh-Environment semisubmersibles and drillships), 25 Midwater Floaters, nine High-Specification Jackups, 54 Standard Jackups and other assets utilized in the support of offshore drilling activities worldwide.
(1) Annual Effective Tax Rate is defined as income tax expense excluding various discrete items (such as changes in estimates and tax on items excluded from income before income tax expense) divided by income before income tax expense excluding gains on sales and similar items pursuant to the accounting standards for income taxes and estimating the annual effective tax rate. See the accompanying schedule entitled Supplemental Effective Tax Rate Analysis.
(2) Effective Tax Rate is defined as income tax expense divided by income before income taxes. See the accompanying schedule entitled Supplemental Effective Tax Rate Analysis.
For more information about Transocean, please visit our website at www.deepwater.com.
TRANSOCEAN LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three months ended December 31, |
Twelve months ended December 31, |
|||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating revenues |
||||||||||||||||
Contract drilling revenues |
$ | 2,032 | $ | 2,546 | $ | 8,967 | $ | 10,607 | ||||||||
Contract drilling intangible revenues |
13 | 44 | 98 | 281 | ||||||||||||
Other revenues |
115 | 143 | 511 | 668 | ||||||||||||
2,160 | 2,733 | 9,576 | 11,556 | |||||||||||||
Costs and expenses |
||||||||||||||||
Operating and maintenance |
1,352 | 1,296 | 5,119 | 5,140 | ||||||||||||
Depreciation, depletion and amortization |
394 | 382 | 1,589 | 1,464 | ||||||||||||
General and administrative |
67 | 46 | 247 | 209 | ||||||||||||
1,813 | 1,724 | 6,955 | 6,813 | |||||||||||||
Loss on impairment |
(1,010 | ) | | (1,012 | ) | (334 | ) | |||||||||
Gain (loss) on disposal of assets, net |
1 | (6 | ) | 257 | (9 | ) | ||||||||||
Operating income |
(662 | ) | 1,003 | 1,866 | 4,400 | |||||||||||
Other income (expense), net |
||||||||||||||||
Interest income |
6 | 3 | 23 | 5 | ||||||||||||
Interest expense, net of amounts capitalized |
(152 | ) | (119 | ) | (567 | ) | (484 | ) | ||||||||
Loss on retirement of debt |
(13 | ) | (12 | ) | (33 | ) | (29 | ) | ||||||||
Other, net |
(8 | ) | 23 | 10 | 32 | |||||||||||
(167 | ) | (105 | ) | (567 | ) | (476 | ) | |||||||||
Income (loss) before income tax expense |
(829 | ) | 898 | 1,299 | 3,924 | |||||||||||
Income tax expense (benefit) |
(34 | ) | 181 | 311 | 754 | |||||||||||
Net income (loss) |
(795 | ) | 717 | 988 | 3,170 | |||||||||||
Net income (loss) attributable to noncontrolling interest |
4 | (6 | ) | 27 | (11 | ) | ||||||||||
Net income (loss) attributable to controlling interest |
$ | (799 | ) | $ | 723 | $ | 961 | $ | 3,181 | |||||||
Earnings per share |
||||||||||||||||
Basic |
$ | (2.51 | ) | $ | 2.24 | $ | 2.99 | $ | 9.87 | |||||||
Diluted |
$ | (2.51 | ) | $ | 2.24 | $ | 2.99 | $ | 9.84 | |||||||
Weighted average shares outstanding |
||||||||||||||||
Basic |
319 | 321 | 320 | 320 | ||||||||||||
Diluted |
319 | 322 | 320 | 321 |
TRANSOCEAN LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
December 31, | ||||||||
2010 | 2009 | |||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 3,394 | $ | 1,130 | ||||
Accounts receivable, net |
||||||||
Trade |
1,811 | 2,330 | ||||||
Other |
189 | 55 | ||||||
Materials and supplies, net |
517 | 462 | ||||||
Deferred income taxes, net |
115 | 104 | ||||||
Assets held for sale |
| 186 | ||||||
Other current assets |
169 | 209 | ||||||
Total current assets |
6,195 | 4,476 | ||||||
Property and equipment |
27,007 | 27,383 | ||||||
Property and equipment of consolidated variable interest entities |
2,214 | 1,968 | ||||||
Less accumulated depreciation |
7,763 | 6,333 | ||||||
Property and equipment, net |
21,458 | 23,018 | ||||||
Goodwill |
8,132 | 8,134 | ||||||
Other assets |
1,026 | 808 | ||||||
Total assets |
$ | 36,811 | $ | 36,436 | ||||
Liabilities and equity |
||||||||
Accounts payable |
$ | 847 | $ | 780 | ||||
Accrued income taxes |
116 | 240 | ||||||
Debt due within one year |
1,917 | 1,568 | ||||||
Debt of consolidated variable interest entities due within one year |
95 | 300 | ||||||
Other current liabilities |
861 | 730 | ||||||
Total current liabilities |
3,836 | 3,618 | ||||||
Long-term debt |
8,354 | 8,966 | ||||||
Long-term debt of consolidated variable interest entities |
855 | 883 | ||||||
Deferred income taxes, net |
594 | 726 | ||||||
Other long-term liabilities |
1,772 | 1,684 | ||||||
Total long-term liabilities |
11,575 | 12,259 | ||||||
Commitments and contingencies |
||||||||
Redeemable noncontrolling interest |
25 | | ||||||
Shares, CHF 15.00 par value, 335,235,298 authorized, 167,617,649 conditionally authorized, 335,235,298 issued and 319,080,678 outstanding at December 31, 2010; and 502,852,947 authorized; 167,617,649 conditionally authorized, 335,235,298 issued and 321,223,882 outstanding at December 31, 2009 |
4,482 | 4,472 | ||||||
Additional paid-in capital |
7,504 | 7,407 | ||||||
Treasury shares, at cost, 2,863,267 and none held at December 31, 2010 and 2009, respectively |
(240 | ) | | |||||
Retained earnings |
9,969 | 9,008 | ||||||
Accumulated other comprehensive loss |
(332 | ) | (335 | ) | ||||
Total controlling interest shareholders equity |
21,383 | 20,552 | ||||||
Noncontrolling interest |
(8 | ) | 7 | |||||
Total equity |
21,375 | 20,559 | ||||||
Total liabilities and equity |
$ | 36,811 | $ | 36,436 | ||||
TRANSOCEAN LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Three months ended December 31, |
Twelve months ended December 31, |
|||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Cash flows from operating activities |
||||||||||||||||
Net income (loss) |
$ | (795 | ) | $ | 717 | $ | 988 | $ | 3,170 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||
Amortization of drilling contract intangibles |
(13 | ) | (44 | ) | (98 | ) | (281 | ) | ||||||||
Depreciation, depletion and amortization |
394 | 382 | 1,589 | 1,464 | ||||||||||||
Share-based compensation expense |
23 | 15 | 102 | 81 | ||||||||||||
Excess tax benefit from share-based compensation plans |
| 8 | (1 | ) | (2 | ) | ||||||||||
(Gain) loss on disposal of assets, net |
(1 | ) | 6 | (257 | ) | 9 | ||||||||||
Loss on impairment |
1,010 | | 1,012 | 334 | ||||||||||||
Loss on retirement of debt |
13 | 12 | 33 | 29 | ||||||||||||
Amortization of debt issue costs, discounts and premiums, net |
41 | 49 | 189 | 209 | ||||||||||||
Deferred income taxes |
(71 | ) | (37 | ) | (145 | ) | 13 | |||||||||
Other, net |
(2 | ) | (23 | ) | (1 | ) | 7 | |||||||||
Deferred revenue, net |
| 97 | 205 | 169 | ||||||||||||
Deferred expenses, net |
(24 | ) | | (79 | ) | (38 | ) | |||||||||
Changes in operating assets and liabilities |
221 | (7 | ) | 409 | 434 | |||||||||||
Net cash provided by operating activities |
796 | 1,175 | 3,946 | 5,598 | ||||||||||||
Cash flows from investing activities |
||||||||||||||||
Capital expenditures |
(428 | ) | (857 | ) | (1,411 | ) | (3,052 | ) | ||||||||
Proceeds from disposal of assets, net |
9 | 8 | 60 | 18 | ||||||||||||
Proceeds from insurance recoveries for loss of drilling unit |
| | 560 | | ||||||||||||
Proceeds from payments on notes receivable |
6 | | 37 | | ||||||||||||
Proceeds from short-term investments |
32 | 142 | 37 | 564 | ||||||||||||
Purchases of short-term investments |
| (1 | ) | | (269 | ) | ||||||||||
Joint ventures and other investments, net |
1 | 40 | (4 | ) | 45 | |||||||||||
Net cash used in investing activities |
(380 | ) | (668 | ) | (721 | ) | (2,694 | ) | ||||||||
Cash flows from financing activities |
||||||||||||||||
Change in short-term borrowings, net |
(62 | ) | (136 | ) | (193 | ) | (382 | ) | ||||||||
Proceeds from debt |
| 169 | 2,054 | 514 | ||||||||||||
Repayments of debt |
(1,599 | ) | (288 | ) | (2,565 | ) | (2,871 | ) | ||||||||
Purchases of shares held in treasury |
| | (240 | ) | | |||||||||||
Financing costs |
| | (15 | ) | (2 | ) | ||||||||||
Proceeds from (taxes paid for) share-based compensation plans, net |
2 | 1 | (1 | ) | 17 | |||||||||||
Excess tax benefit from share-based compensation plans |
| (8 | ) | 1 | 2 | |||||||||||
Other, net |
1 | (1 | ) | (2 | ) | (15 | ) | |||||||||
Net cash used in financing activities |
(1,658 | ) | (263 | ) | (961 | ) | (2,737 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents |
(1,242 | ) | 244 | 2,264 | 167 | |||||||||||
Cash and cash equivalents at beginning of period |
4,636 | 886 | 1,130 | 963 | ||||||||||||
Cash and cash equivalents at end of period |
$ | 3,394 | $ | 1,130 | $ | 3,394 | $ | 1,130 | ||||||||
TRANSOCEAN LTD.
FLEET OPERATING STATISTICS
Operating Revenues ($ Millions) (1) | ||||||||||||||||||||
Three months ended | Twelve months ended December 31, |
|||||||||||||||||||
December 31, 2010 |
September 30, 2010 |
December 31, 2009 |
2010 | 2009 | ||||||||||||||||
Contract Drilling Revenues |
||||||||||||||||||||
High-Specification Floaters: |
||||||||||||||||||||
Ultra Deepwater Floaters |
$ | 740 | $ | 720 | $ | 890 | $ | 3,171 | $ | 2,997 | ||||||||||
Deepwater Floaters |
339 | 350 | 449 | 1,461 | 1,731 | |||||||||||||||
Harsh Environment Floaters |
155 | 178 | 155 | 674 | 613 | |||||||||||||||
Total High-Specification Floaters |
1,234 | 1,248 | 1,494 | 5,306 | 5,341 | |||||||||||||||
Midwater Floaters |
477 | 572 | 537 | 2,093 | 2,507 | |||||||||||||||
High-Specification Jackups |
56 | 78 | 86 | 320 | 469 | |||||||||||||||
Standard Jackups |
259 | 298 | 422 | 1,222 | 2,257 | |||||||||||||||
Other Rigs |
6 | 8 | 7 | 26 | 33 | |||||||||||||||
Subtotal |
2,032 | 2,204 | 2,546 | 8,967 | 10,607 | |||||||||||||||
Contract Intangible Revenue |
13 | 23 | 44 | 98 | 281 | |||||||||||||||
Other Revenues |
||||||||||||||||||||
Client Reimbursable Revenues |
34 | 40 | 46 | 152 | 194 | |||||||||||||||
Integrated Services and Other |
15 | 10 | 48 | 68 | 206 | |||||||||||||||
Drilling Management Services |
57 | 25 | 41 | 261 | 239 | |||||||||||||||
Oil and Gas Properties |
9 | 7 | 8 | 30 | 29 | |||||||||||||||
Subtotal |
115 | 82 | 143 | 511 | 668 | |||||||||||||||
Total Company |
$ | 2,160 | $ | 2,309 | $ | 2,733 | $ | 9,576 | $ | 11,556 | ||||||||||
Average Daily Revenue (1) | ||||||||||||||||||||
Three months ended | Twelve months ended December 31, |
|||||||||||||||||||
December 31, 2010 |
September 30, 2010 |
December 31, 2009 |
2010 | 2009 | ||||||||||||||||
High-Specification Floaters: |
||||||||||||||||||||
Ultra Deepwater Floaters |
$ | 435,900 | $ | 422,800 | $ | 486,200 | $ | 457,300 | $ | 462,700 | ||||||||||
Deepwater Floaters |
$ | 395,600 | $ | 365,600 | $ | 346,600 | $ | 384,900 | $ | 344,900 | ||||||||||
Harsh Environment Floaters |
$ | 366,800 | $ | 414,100 | $ | 405,800 | $ | 401,900 | $ | 378,000 | ||||||||||
Total High-Specification Floaters |
$ | 414,500 | $ | 403,900 | $ | 425,900 | $ | 427,600 | $ | 407,200 | ||||||||||
Midwater Floaters |
$ | 298,500 | $ | 328,400 | $ | 325,100 | $ | 319,600 | $ | 322,800 | ||||||||||
High-Specification Jackups |
$ | 162,600 | $ | 138,100 | $ | 175,100 | $ | 152,000 | $ | 166,300 | ||||||||||
Standard Jackups |
$ | 110,600 | $ | 113,200 | $ | 147,300 | $ | 118,700 | $ | 152,600 | ||||||||||
Other Rigs |
$ | 73,000 | $ | 72,900 | $ | 72,300 | $ | 72,700 | $ | 54,700 | ||||||||||
Total Drilling Fleet |
$ | 276,600 | $ | 271,200 | $ | 295,700 | $ | 282,700 | $ | 271,400 | ||||||||||
Utilization (1) | ||||||||||||||||||||
Three months ended | Twelve months ended December 31, |
|||||||||||||||||||
December 31, 2010 |
September 30, 2010 |
December 31, 2009 |
2010 | 2009 | ||||||||||||||||
High-Specification Floaters: |
||||||||||||||||||||
Ultra Deepwater Floaters |
76 | % | 77 | % | 91 | % | 79 | % | 92 | % | ||||||||||
Deepwater Floaters |
58 | % | 65 | % | 88 | % | 65 | % | 86 | % | ||||||||||
Harsh Environment Floaters |
92 | % | 93 | % | 83 | % | 92 | % | 89 | % | ||||||||||
Total High-Specification Floaters |
71 | % | 75 | % | 89 | % | 76 | % | 89 | % | ||||||||||
Midwater Floaters |
68 | % | 73 | % | 69 | % | 69 | % | 79 | % | ||||||||||
High-Specification Jackups |
38 | % | 61 | % | 53 | % | 58 | % | 77 | % | ||||||||||
Standard Jackups |
46 | % | 52 | % | 57 | % | 51 | % | 74 | % | ||||||||||
Other Rigs |
48 | % | 50 | % | 50 | % | 49 | % | 66 | % | ||||||||||
Total Drilling Fleet |
58 | % | 64 | % | 69 | % | 63 | % | 80 | % |
(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 | Twelve months ended | |||||||||||||||||||
Dec 31, 2010 |
Sept 30, 2010 |
Dec 31, 2009 |
Dec 31, 2010 |
Dec 31, 2009 |
||||||||||||||||
Income before income taxes |
$ | (829 | ) | $ | 497 | $ | 898 | $ | 1,299 | 3,924 | ||||||||||
Add back (subtract): |
||||||||||||||||||||
Litigation matters |
1 | 14 | (24 | ) | 27 | 108 | ||||||||||||||
Gain on loss of Deepwater Horizon |
| | | (267 | ) | |||||||||||||||
(Gain) Loss on disposal of other assets, net |
| | | 14 | (2 | ) | ||||||||||||||
Loss on impairment of other assets, net |
1,010 | | | 1,012 | 334 | |||||||||||||||
Loss of impairment of oil and gas properties |
| | | 21 | | |||||||||||||||
GSF merger related costs and other, net |
(8 | ) | | 4 | (2 | ) | 5 | |||||||||||||
(Gain) loss on retirement of debt |
13 | 22 | 12 | 33 | 29 | |||||||||||||||
Gain on sale of interests in joint ventures |
| | (34 | ) | | (30 | ) | |||||||||||||
Adjusted income before income taxes |
187 | 533 | 856 | 2,137 | 4,368 | |||||||||||||||
Income tax expense |
(34 | ) | 118 | 181 | 311 | 754 | ||||||||||||||
Add back (subtract): |
||||||||||||||||||||
Loss of impairment of oil and gas properties |
| | | 7 | | |||||||||||||||
Loss on impairment of other assets, net |
| | 18 | | 18 | |||||||||||||||
GSF merger related costs |
| | | 1 | 2 | |||||||||||||||
Tax effect of the Patient Proctection and Affordable Care Act |
| | | (2 | ) | | ||||||||||||||
Changes in estimates (1) |
(1 | ) | (7 | ) | (50 | ) | (21 | ) | (74 | ) | ||||||||||
Adjusted income tax expense (2) |
$ | (35 | ) | $ | 111 | $ | 149 | $ | 296 | $ | 700 | |||||||||
Effective Tax Rate (3) |
4.1 | % | 23.8 | % | 20.1 | % | 23.9 | % | 19.2 | % | ||||||||||
Annual Effective Tax Rate (4) |
-18.7 | % | 20.8 | % | 17.4 | % | 13.8 | % | 16.0 | % |
(1) | Our estimates change as we file tax returns, settle disputes with tax authorities or become aware of other events and include changes in (a) deferred taxes, (b) valuation allowances on deferred taxes and (c) other tax liabilities. |
(2) | The three months ended December 31, 2010 includes ($61) 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. |