Attached files
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| 8-K - 8-K - Transocean Ltd. | a2014yeand4qearnings8-kcov.htm |
Analyst Contacts: Thad Vayda News Release
+1 713-232-7551
Diane Vento
+1 713-232-8015
Media Contact: Guy A. Cantwell FOR RELEASE: February 26, 2014
+1 713-232-7647
TRANSOCEAN LTD. REPORTS FOURTH QUARTER AND FULL YEAR 2013 RESULTS
• | Fourth quarter 2013 revenues were $2.332 billion, compared with $2.558 billion in the third quarter of 2013; |
• | Operating and maintenance expenses for the fourth quarter were $1.532 billion, compared with $1.491 billion in the third quarter of 2013; |
• | Fourth quarter 2013 net income attributable to controlling interest was $233 million, which included $34 million of net unfavorable items. This compares with the third quarter 2013 net income attributable to controlling interest of $546 million, which included $47 million of net favorable items; |
• | Fourth quarter Annual Effective Tax Rate(1) was 17.7 percent, compared with 19.0 percent in the third quarter of 2013; |
• | Fourth quarter 2013 net income attributable to controlling interest was $233 million, or $0.64 per diluted share. After adjusting for net unfavorable items, adjusted earnings from continuing operations were $267 million, or $0.73 per diluted share; |
• | Cash flows from operating activities were $773 million in the fourth quarter, compared with $623 million in the third quarter of 2013; |
• | Revenue efficiency(2) was 91.7 percent in the fourth quarter, compared with 94.0 percent in the third quarter of 2013. Ultra-deepwater revenue efficiency was 90.0 percent, compared with 92.5 percent in the prior quarter; |
• | Total fleet rig utilization(3) was 75 percent in the fourth quarter, compared with 83 percent in the prior quarter; and |
• | Contract backlog was $27.2 billion as of the February 18, 2014 Fleet Update Summary. |
ZUG, SWITZERLAND-February 26, 2014-Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported net income attributable to controlling interest of $233 million, or $0.64 per diluted share, for the
three months ended December 31, 2013. Fourth quarter 2013 results included net unfavorable items, after tax, of $34 million, or $0.09 per diluted share, as follows:
• | $27 million, or $0.07 per diluted share, in impairments of assets classified as held for sale; |
• | $11 million, or $0.03 per diluted share, related to an unfavorable adjustment in contingencies associated with the Macondo well incident; and |
• | $8 million, or $0.02 per diluted share, of costs associated with the company’s previously announced shore-based organizational efficiency initiative. |
These net unfavorable items were partially offset by:
• | $7 million, or $0.02 per diluted share, in income from discontinued operations; and |
• | $5 million, or $0.01 per diluted share, in favorable discrete tax benefits. |
After consideration of these net unfavorable items, fourth quarter 2013 adjusted earnings from continuing operations were $267 million, or $0.73 per diluted share. A reconciliation of the non-GAAP adjusted net income and diluted earnings per share is included in the accompanying schedules.
In addition to the items above, fourth quarter 2013 results also included approximately $3 million, or $0.01 per diluted share, in charges related to accelerated recognition of existing compensation plans associated with the implementation of the company’s shore-based organizational efficiency initiative.
The fourth quarter 2013 results compare with a net income attributable to controlling interest of $456 million, or $1.26 per diluted share, for the three months ended December 31, 2012, which included net favorable items of $126 million, or $0.35 per diluted share. The net favorable items were mostly due to $101 million, or $0.28 per diluted share, of favorable discrete tax items; and $25 million, or $0.07 per diluted share, of income from discontinued operations primarily related to the sale of 38 shallow water units to Shelf Drilling. After consideration of these net favorable items, fourth quarter 2012 adjusted earnings from continuing operations were $330 million, or $0.91 per diluted share.
Revenues for the three months ended December 31, 2013 were $2.332 billion, compared with revenues of $2.558 billion during the quarter ended September 30, 2013. Contract drilling revenues decreased $200 million primarily due to lower fleet utilization and revenue efficiency, partly offset by higher average dayrates. Total fleet utilization was 75 percent in the fourth quarter of 2013, compared with 83 percent in the prior quarter, primarily reflecting the expected increase in planned out-of-service time as well as idle and stacked rigs. Total fleet revenue efficiency was 91.7 percent in the fourth quarter, compared with 94.0 percent in the third quarter of 2013, which was below the company’s expectations. The decrease in revenue efficiency was primarily due to well control equipment downtime on certain ultra-deepwater rigs.
Other Revenues also decreased $26 million to $130 million for the fourth quarter of 2013, compared with $156 million in the prior quarter, primarily due to a decrease in drilling management services activity.
As expected, operating and maintenance expenses increased $41 million to $1.532 billion for the fourth quarter of 2013, compared with $1.491 billion for the prior quarter. The increase in operating and maintenance expenses was primarily due to $69 million in contract drilling expenses mainly related to shipyard and maintenance costs. This increase was partly offset by lower overhead expenses associated
with the company’s shore-based organizational efficiency initiative; and drilling management services costs, which decreased $28 million, consistent with the decline in Other Revenues.
General and administrative expenses were $75 million for the fourth quarter of 2013, compared with $67 million in the previous quarter, an increase of $8 million, primarily due to higher professional fees and, to a lesser extent, personnel costs.
Fourth quarter 2013 results included approximately $13 million in costs associated with severance and the accelerated recognition of existing compensation plans due to the implementation of the shore-based organizational efficiency initiative. Approximately $9 million of this cost was included in operating and maintenance expenses and $4 million was included in general and administrative expenses.
Transocean’s fourth quarter Effective Tax Rate(4) was 16.8 percent, compared with 10.4 percent in the third quarter of 2013. The increase 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 of 2013 was 17.7 percent. This compares with 19.0 percent for the prior quarter. The decrease was primarily due to changes in the annual provision estimate due to the blend of income that is taxed based on gross revenues versus pre-tax income and rig movements between taxing jurisdictions, among other items. Fourth quarter 2013 income tax expense included a favorable tax benefit of $7 million, or $0.02 per diluted share, to reflect the decrease in the Annual Effective Tax Rate to 20 percent for the year ended December 31, 2013, from 20.6 percent for the nine months ended September 30, 2013.
Interest expense, net of amounts capitalized, was $139 million in the fourth quarter of 2013, compared with $142 million in the prior quarter. Capitalized interest for the fourth quarter was $22 million, compared with $19 million in the third quarter of 2013. Interest income was $13 million in the fourth quarter of 2013, compared with $11 million in the third quarter of 2013.
Cash flows from operating activities were $773 million for the fourth quarter, compared with $623 million for the third quarter of 2013, an increase of $150 million primarily due to changes in working capital. Capital expenditures increased $498 million to $948 million for the fourth quarter, compared with $450 million in the third quarter of 2013. The increase in capital expenditures was primarily associated with the company’s newbuild program.
Full Year 2013
For the year ended December 31, 2013, net income attributable to controlling interest totaled $1.407 billion, or $3.87 per diluted share. Full year results included $88 million, or $0.24 per diluted share, of net unfavorable items as follows:
• | $78 million, or $0.21 per diluted share, related to an unfavorable adjustment in contingencies associated with the Macondo well incident; |
• | $64 million, or $0.17 per diluted share, in impairments of assets classified as held for sale; |
• | $30 million, or $0.08 per diluted share, of costs primarily associated with severance plans established for the company’s previously announced shore-based organizational efficiency initiative; and |
• | $21 million, or $0.07 per diluted share, primarily associated with losses on the early termination of derivative instruments and the sale of Shelf Drilling preference shares. |
These net unfavorable items were partially offset by:
• | $82 million, or $0.22 per diluted share, in favorable discrete tax benefits; |
• | $22 million, or $0.06 per diluted share, associated with gains on disposal of assets; and |
• | $1 million, or $0.01 per diluted share, in income from discontinued operations. |
After consideration of these net unfavorable items, adjusted earnings from continuing operations for the full year 2013 were $1.495 billion, or $4.11 per diluted share. A reconciliation of the non-GAAP adjusted net income and diluted earnings per share is included in the accompanying schedules.
In addition to the items above, full year 2013 results also included approximately $25 million, or $0.07 per diluted share, in charges related to accelerated recognition of existing compensation plans associated with the implementation of the company’s shore-based organizational efficiency initiative.
Interest expense, net of amounts capitalized, was $584 million for the full year 2013, compared with $723 million for the full year 2012. Capitalized interest for the full year 2013 was $78 million, compared with $54 million in 2012. Interest income was $52 million for the full year 2013, compared with $56 million in 2012.
For the full year 2013, cash flow from operating activities totaled $1.918 billion, compared with $2.708 billion for 2012, a decrease of $790 million. The decrease was primarily due to $560 million in payments associated with the January 2013 partial settlement with the DOJ on the Macondo well incident.
For the year ended December 31, 2012, net loss attributable to controlling interest totaled $219 million, or $0.62 per diluted share, which included net unfavorable items of $1.638 billion, or $4.58 per diluted share. The net unfavorable items were mostly due to $961 million, or $2.70 per diluted share, for loss on impairment of assets included in discontinued operations; and $756 million, or $2.11 per diluted share, primarily for estimated loss contingencies associated with the Macondo well incident. After consideration of the net unfavorable items, adjusted earnings from continuing operations for the full year 2012 were $1.419 billion, or $3.96 per diluted share.
Full Year 2014 Guidance Summary
The following table is a summary of the company’s full year 2014 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 |
Fleet Average Revenue Efficiency | Approximately 94 percent |
Other Revenues * | $125 million - $150 million |
Operating and Maintenance Expenses | $5.2 billion - $5.4 billion |
Depreciation | $1.1 billion - $1.2 billion |
General and Administrative Expenses | $230 million - $250 million |
Net Interest Expense ** | $460 million - $480 million |
Annual Effective Tax Rate | Between 18% and 21% |
Capital Expenditures | Approximately $2.6 billion |
* Other Revenues primarily includes recharges and other miscellaneous revenues. ** Net Interest Expense is net of capitalized interest of approximately $130 million and interest income of approximately $30 million. | |
Forward-Looking Statements
The statements described in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements which could be made include, but are not limited to, Transocean’s full year 2014 guidance, estimated loss contingencies associated with the Macondo well incident, and changes in tax estimates. These include but are not limited to operating hazards and delays, risks associated with international operations, actions by customers and other third parties, the future prices of oil and gas and other factors, including those discussed in the company's most recent Annual Report on Form 10-K for the year ended December 31, 2013, and in the company's other filings with the 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 the other consequences of such a development worsen), or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or expressed or implied by such forward-looking statements. All subsequent written and oral forward-looking statements attributable to the company or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements. All non-GAAP financial measure reconciliations to the most comparative GAAP measure are displayed in quantitative schedules on the company’s web site at www.deepwater.com.
This press release or referenced documents does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, and it does not constitute an offering prospectus within the meaning of article 652a or article 1156 of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of the SIX Swiss Exchange. Investors must rely on their own evaluation of Transocean Ltd. and its securities, including the merits and risks involved. Nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of Transocean Ltd.
Conference Call Information
Transocean will conduct a teleconference call at 10:00 a.m. EST, 4:00 p.m. CET, on Thursday, February 27, 2014. To participate, dial +1 913-312-1489 and refer to confirmation code 9752275 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/Overview." 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." Supplemental materials that may be referenced during the conference call have been posted to Transocean's website and can be found by selecting "Investor Relations/Financial Reports."
A telephonic replay of the conference call will be available after 1:00 p.m. EST, 7:00 p.m. CET, on February 27, 2014, and can be accessed by dialing +1 719-457-0820 and referring to the confirmation code 9752275. Also, a replay will be available by visiting either of the aforementioned website addresses. The archived call 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, 79 mobile offshore drilling units consisting of 46 high-specification floaters (ultra-deepwater, deepwater and harsh environment drilling rigs), 22 midwater floaters and 11 high-specification jackups. In addition, the company has nine ultra-deepwater drillships and five 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 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)
Three months ended December 31, | Years ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Operating revenues | |||||||||||||||||||||
Contract drilling revenues | $ | 2,202 | $ | 2,275 | $ | 9,070 | $ | 8,773 | |||||||||||||
Other revenues | 130 | 51 | 414 | 423 | |||||||||||||||||
2,332 | 2,326 | 9,484 | 9,196 | ||||||||||||||||||
Costs and expenses | |||||||||||||||||||||
Operating and maintenance | 1,532 | 1,438 | 5,791 | 6,106 | |||||||||||||||||
Depreciation | 275 | 278 | 1,109 | 1,123 | |||||||||||||||||
General and administrative | 75 | 65 | 286 | 282 | |||||||||||||||||
1,882 | 1,781 | 7,186 | 7,511 | ||||||||||||||||||
Loss on impairment | (27 | ) | — | (81 | ) | (140 | ) | ||||||||||||||
Gain (loss) on disposal of assets, net | (16 | ) | (4 | ) | 7 | 36 | |||||||||||||||
Operating income | 407 | 541 | 2,224 | 1,581 | |||||||||||||||||
Other income (expense), net | |||||||||||||||||||||
Interest income | 13 | 13 | 52 | 56 | |||||||||||||||||
Interest expense, net of amounts capitalized | (139 | ) | (180 | ) | (584 | ) | (723 | ) | |||||||||||||
Other, net | (7 | ) | (16 | ) | (28 | ) | (48 | ) | |||||||||||||
(133 | ) | (183 | ) | (560 | ) | (715 | ) | ||||||||||||||
Income from continuing operations before income tax expense | 274 | 358 | 1,664 | 866 | |||||||||||||||||
Income tax expense (benefit) | 46 | (74 | ) | 258 | 50 | ||||||||||||||||
Income from continuing operations | 228 | 432 | 1,406 | 816 | |||||||||||||||||
Income (loss) from discontinued operations, net of tax | 7 | 25 | 1 | (1,027 | ) | ||||||||||||||||
Net income (loss) | 235 | 457 | 1,407 | (211 | ) | ||||||||||||||||
Net income attributable to noncontrolling interest | 2 | 1 | — | 8 | |||||||||||||||||
Net income (loss) attributable to controlling interest | $ | 233 | $ | 456 | $ | 1,407 | $ | (219 | ) | ||||||||||||
Earnings (loss) per share‑basic | |||||||||||||||||||||
Earnings from continuing operations | $ | 0.62 | $ | 1.19 | $ | 3.87 | $ | 2.27 | |||||||||||||
Earnings (loss) from discontinued operations | 0.02 | 0.07 | — | (2.89 | ) | ||||||||||||||||
Earnings (loss) per share | $ | 0.64 | $ | 1.26 | $ | 3.87 | $ | (0.62 | ) | ||||||||||||
Earnings (loss) per share‑diluted | |||||||||||||||||||||
Earnings from continuing operations | $ | 0.62 | $ | 1.19 | $ | 3.87 | $ | 2.27 | |||||||||||||
Earnings (loss) from discontinued operations | 0.02 | 0.07 | — | (2.89 | ) | ||||||||||||||||
Earnings (loss) per share | $ | 0.64 | $ | 1.26 | $ | 3.87 | $ | (0.62 | ) | ||||||||||||
Weighted‑average shares outstanding | |||||||||||||||||||||
Basic | 361 | 359 | 360 | 356 | |||||||||||||||||
Diluted | 361 | 360 | 360 | 356 | |||||||||||||||||
TRANSOCEAN LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
December 31, | ||||||||||
2013 | 2012 | |||||||||
Assets | ||||||||||
Cash and cash equivalents | $ | 3,243 | $ | 5,134 | ||||||
Accounts receivable, net | ||||||||||
Trade | 2,112 | 1,940 | ||||||||
Other | 50 | 260 | ||||||||
Materials and supplies, net | 743 | 610 | ||||||||
Assets held for sale | 148 | 179 | ||||||||
Deferred income taxes, net | 151 | 142 | ||||||||
Other current assets | 325 | 382 | ||||||||
Total current assets | 6,772 | 8,647 | ||||||||
Property and equipment | 28,443 | 26,967 | ||||||||
Less accumulated depreciation | (7,720 | ) | (7,118 | ) | ||||||
Property and equipment of consolidated variable interest entities, net of accumulated depreciation | 984 | 1,031 | ||||||||
Property and equipment, net | 21,707 | 20,880 | ||||||||
Goodwill | 2,987 | 2,987 | ||||||||
Other assets | 1,080 | 1,741 | ||||||||
Total assets | $ | 32,546 | $ | 34,255 | ||||||
Liabilities and equity | ||||||||||
Accounts payable | $ | 1,106 | $ | 1,047 | ||||||
Accrued income taxes | 53 | 116 | ||||||||
Debt due within one year | 160 | 1,339 | ||||||||
Debt of consolidated variable interest entities due within one year | 163 | 28 | ||||||||
Other current liabilities | 2,072 | 2,933 | ||||||||
Total current liabilities | 3,554 | 5,463 | ||||||||
Long‑term debt | 10,379 | 10,929 | ||||||||
Long‑term debt of consolidated variable interest entities | — | 163 | ||||||||
Deferred income taxes, net | 374 | 366 | ||||||||
Other long‑term liabilities | 1,554 | 1,604 | ||||||||
Total long‑term liabilities | 12,307 | 13,062 | ||||||||
Commitments and contingencies | ||||||||||
Shares, CHF 15.00 par value, 373,830,649 authorized, 167,617,649 conditionally authorized, 373,830,649 issued and 360,764,100 outstanding at December 31, 2013 and 402,282,355 authorized 167,617,649 conditionally authorized, 373,830,649 issued and 359,505,251 outstanding at December 31, 2012 | 5,147 | 5,130 | ||||||||
Additional paid‑in capital | 6,784 | 7,521 | ||||||||
Treasury shares, at cost, 2,863,267 held at December 31, 2013 and 2012 | (240 | ) | (240 | ) | ||||||
Retained earnings | 5,262 | 3,855 | ||||||||
Accumulated other comprehensive loss | (262 | ) | (521 | ) | ||||||
Total controlling interest shareholders’ equity | 16,691 | 15,745 | ||||||||
Noncontrolling interest | (6 | ) | (15 | ) | ||||||
Total equity | 16,685 | 15,730 | ||||||||
Total liabilities and equity | $ | 32,546 | $ | 34,255 | ||||||
TRANSOCEAN LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Three months ended December 31, | Years ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Cash flows from operating activities | |||||||||||||||||||||
Net income (loss) | $ | 235 | $ | 457 | $ | 1,407 | $ | (211 | ) | ||||||||||||
Adjustments to reconcile to net cash provided by operating activities | |||||||||||||||||||||
Amortization of drilling contract intangibles | 6 | (10 | ) | (15 | ) | (42 | ) | ||||||||||||||
Depreciation | 275 | 278 | 1,109 | 1,123 | |||||||||||||||||
Depreciation and amortization of assets in discontinued operations | — | — | — | 183 | |||||||||||||||||
Share-based compensation expense | 28 | 25 | 113 | 97 | |||||||||||||||||
Loss on impairment | 27 | — | 81 | 140 | |||||||||||||||||
Loss on impairment of assets in discontinued operations | — | 3 | 14 | 986 | |||||||||||||||||
(Gain) loss on disposal of assets, net | 16 | 4 | (7 | ) | (36 | ) | |||||||||||||||
(Gain) loss on disposal of assets in discontinued operations, net | (5 | ) | (12 | ) | (54 | ) | (82 | ) | |||||||||||||
Amortization of debt issue costs, discounts and premiums, net | 2 | 16 | 6 | 68 | |||||||||||||||||
Deferred income taxes | 55 | (29 | ) | (9 | ) | (133 | ) | ||||||||||||||
Other, net | 20 | 25 | 93 | 72 | |||||||||||||||||
Changes in deferred revenue, net | (10 | ) | 15 | (78 | ) | (54 | ) | ||||||||||||||
Changes in deferred expenses, net | 36 | 55 | 74 | 85 | |||||||||||||||||
Changes in operating assets and liabilities | 88 | 96 | (816 | ) | 512 | ||||||||||||||||
Net cash provided by operating activities | 773 | 923 | 1,918 | 2,708 | |||||||||||||||||
Cash flows from investing activities | |||||||||||||||||||||
Capital expenditures | (948 | ) | (657 | ) | (2,238 | ) | (1,303 | ) | |||||||||||||
Capital expenditures for discontinued operations | — | (31 | ) | — | (106 | ) | |||||||||||||||
Proceeds from disposal of assets, net | — | 2 | 174 | 191 | |||||||||||||||||
Proceeds from disposal of assets in discontinued operations, net | 73 | 593 | 204 | 789 | |||||||||||||||||
Proceeds from sale of preference shares | — | — | 185 | — | |||||||||||||||||
Other, net | 3 | 8 | 17 | 40 | |||||||||||||||||
Net cash used in investing activities | (872 | ) | (85 | ) | (1,658 | ) | (389 | ) | |||||||||||||
Cash flows from financing activities | |||||||||||||||||||||
Changes in short-term borrowings, net | — | — | — | (260 | ) | ||||||||||||||||
Proceeds from debt | — | — | — | 1,493 | |||||||||||||||||
Repayments of debt | (19 | ) | (1,698 | ) | (1,692 | ) | (2,282 | ) | |||||||||||||
Proceeds from restricted cash investments | 15 | 13 | 298 | 311 | |||||||||||||||||
Deposits to restricted cash investments | (7 | ) | (9 | ) | (119 | ) | (167 | ) | |||||||||||||
Distribution of qualifying additional paid‑in capital | (202 | ) | — | (606 | ) | (276 | ) | ||||||||||||||
Other, net | (4 | ) | (11 | ) | (32 | ) | (21 | ) | |||||||||||||
Net cash provided by (used in) financing activities | (217 | ) | (1,705 | ) | (2,151 | ) | (1,202 | ) | |||||||||||||
Net increase (decrease) in cash and cash equivalents | (316 | ) | (867 | ) | (1,891 | ) | 1,117 | ||||||||||||||
Cash and cash equivalents at beginning of period | 3,559 | 6,001 | 5,134 | 4,017 | |||||||||||||||||
Cash and cash equivalents at end of period | $ | 3,243 | $ | 5,134 | $ | 3,243 | $ | 5,134 | |||||||||||||
TRANSOCEAN LTD. AND SUBSIDIARIES
FLEET OPERATING STATISTICS
Operating Revenues (in millions) | ||||||||||||||||||||||||||
Three months ended | Years ended December 31, | |||||||||||||||||||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | 2013 | 2012 | ||||||||||||||||||||||
Contract drilling revenues | ||||||||||||||||||||||||||
High-Specification Floaters: | ||||||||||||||||||||||||||
Ultra-Deepwater Floaters: | $ | 1,098 | $ | 1,177 | $ | 1,198 | $ | 4,523 | $ | 4,643 | ||||||||||||||||
Deepwater Floaters | 255 | 345 | 275 | 1,142 | 1,152 | |||||||||||||||||||||
Harsh Environment Floaters | 283 | 300 | 220 | 1,150 | 985 | |||||||||||||||||||||
Total High-Specification Floaters | 1,636 | 1,822 | 1,693 | 6,815 | 6,780 | |||||||||||||||||||||
Midwater Floaters | 429 | 419 | 464 | 1,658 | 1,573 | |||||||||||||||||||||
High-Specification Jackups | 143 | 157 | 108 | 582 | 378 | |||||||||||||||||||||
Contract intangible revenue | (6 | ) | 4 | 10 | 15 | 42 | ||||||||||||||||||||
Total contract drilling revenues | 2,202 | 2,402 | 2,275 | 9,070 | 8,773 | |||||||||||||||||||||
Other revenues | ||||||||||||||||||||||||||
Client reimbursable revenues | 42 | 46 | 40 | 167 | 162 | |||||||||||||||||||||
Integrated services and other | 8 | 2 | 3 | 12 | 10 | |||||||||||||||||||||
Drilling management services - non-US | 80 | 108 | 8 | 235 | 251 | |||||||||||||||||||||
Total other revenues | 130 | 156 | 51 | 414 | 423 | |||||||||||||||||||||
Total revenues | 2,332 | 2,558 | 2,326 | 9,484 | 9,196 | |||||||||||||||||||||
Average Daily Revenue (1) | ||||||||||||||||||||||||||
Three months ended | Years ended December 31, | |||||||||||||||||||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | 2013 | 2012 | ||||||||||||||||||||||
High-Specification Floaters: | ||||||||||||||||||||||||||
Ultra-Deepwater Floaters | $ | 510,200 | $ | 525,900 | $ | 514,300 | $ | 500,200 | $ | 500,300 | ||||||||||||||||
Deepwater Floaters | 370,700 | 363,400 | 337,100 | 353,400 | 338,200 | |||||||||||||||||||||
Harsh Environment Floaters | 438,200 | 466,800 | 476,400 | 451,700 | 444,500 | |||||||||||||||||||||
Total High-Specification Floaters | 469,400 | 475,700 | 469,300 | 459,800 | 455,000 | |||||||||||||||||||||
Midwater Floaters | 338,400 | 316,400 | 280,300 | 311,100 | 262,200 | |||||||||||||||||||||
High-Specification Jackups | 165,600 | 164,300 | 162,400 | 164,400 | 141,300 | |||||||||||||||||||||
Total | $ | 393,100 | 392,400 | $ | 382,000 | $ | 382,300 | $ | 370,300 | |||||||||||||||||
(1) Average daily revenue is defined as contract drilling revenue earned per operating day. An operating day is defined as a calendar 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) | ||||||||||||||||||
Three months ended | Years ended December 31, | |||||||||||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | 2013 | 2012 | ||||||||||||||
High-Specification Floaters: | ||||||||||||||||||
Ultra-Deepwater Floaters | 87% | 90% | 94% | 92% | 94% | |||||||||||||
Deepwater Floaters | 62% | 83% | 64% | 68% | 61% | |||||||||||||
Harsh Environment Floaters | 100% | 100% | 72% | 100% | 87% | |||||||||||||
Total High-Specification Floaters | 82% | 90% | 82% | 86% | 83% | |||||||||||||
Midwater Floaters | 60% | 63% | 72% | 61% | 66% | |||||||||||||
High-Specification Jackups | 79% | 95% | 81% | 91% | 84% | |||||||||||||
Total Drilling Fleet | 75% | 83% | 79% | 79% | 78% | |||||||||||||
(2) Rig utilization is defined as the total number of operating days divided by the total number of rig calendar days in the measurement period, expressed as a percentage. | ||||||||||||||||||
Revenue Efficiency(3) | |||||||||
Trailing Five Quarters and Historical Data | |||||||||
4Q 2013 | 3Q 2013 | 2Q 2013 | 1Q 2013 | 4Q 2012 | FY 2013 | FY 2012 | FY 2011 | ||
Ultra-Deepwater | 90.0% | 92.5% | 91.1% | 83.8% | 95.5% | 89.4% | 93.2% | 87.9% | |
Deepwater | 95.0% | 91.1% | 91.8% | 86.4% | 90.9% | 91.0% | 91.4% | 90.7% | |
Harsh Environment Floaters | 92.1% | 99.9% | 98.3% | 97.6% | 97.3% | 96.9% | 97.1% | 97.4% | |
Midwater Floaters | 92.3% | 95.3% | 94.5% | 92.1% | 93.9% | 93.5% | 90.9% | 93.4% | |
High-Specification Jackups | 97.2% | 98.9% | 98.6% | 96.4% | 95.2% | 97.8% | 95.0% | 94.8% | |
Total | 91.7% | 94.0% | 93.1% | 88.0% | 94.7% | 91.7% | 93.0% | 90.5% | |
(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) | ||||||||||||||||||||||||
Three months ended | Years ended | |||||||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||||||
2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Income from continuing operations before income taxes | $ | 274 | $ | 607 | $ | 358 | $ | 1,664 | $ | 866 | ||||||||||||||
Add back (subtract): | ||||||||||||||||||||||||
Litigation matters | 17 | 29 | — | 120 | 758 | |||||||||||||||||||
One-time termination benefits | 6 | 16 | — | 32 | — | |||||||||||||||||||
Loss on early lease termination | 3 | — | — | 3 | — | |||||||||||||||||||
Acquisition costs | — | — | — | — | 1 | |||||||||||||||||||
Loss on impairment of goodwill and other assets | 27 | — | — | 64 | 140 | |||||||||||||||||||
Gain on disposal of assets, net | — | (34 | ) | ) | — | (33 | ) | ) | (51 | ) | ||||||||||||||
Loss on financial instruments | — | — | — | 19 | — | |||||||||||||||||||
(Gain) loss on retirement of debt | — | — | — | 2 | (2 | ) | ||||||||||||||||||
Loss on redeemed noncontrolling interest | — | — | — | — | 25 | |||||||||||||||||||
Adjusted income from continuing operations before income taxes | 327 | 618 | 358 | 1,871 | 1,737 | |||||||||||||||||||
Income tax expense (benefit) from continuing operations | 46 | 63 | (74 | ) | ) | 258 | 50 | |||||||||||||||||
Add back (subtract): | ||||||||||||||||||||||||
Litigation matters | 6 | 10 | — | 42 | 2 | |||||||||||||||||||
One-time termination benefits | 1 | 1 | — | 5 | — | |||||||||||||||||||
Loss on impairment of goodwill and other assets | — | — | — | — | 5 | |||||||||||||||||||
Gain on disposal of assets, net | — | (12 | ) | — | (12 | ) | ) | (3 | ) | |||||||||||||||
Changes in estimates (1) | 5 | 55 | 102 | 82 | 256 | |||||||||||||||||||
Other, net | — | — | — | — | — | |||||||||||||||||||
Adjusted income tax expense from continuing operations (2) | $ | 58 | $ | 117 | $ | 28 | $ | 375 | $ | 310 | ||||||||||||||
Effective Tax Rate (3) | 16.8 | % | 10.4 | % | (20.7 | ) | % | 15.5 | % | 5.8 | % | |||||||||||||
Annual Effective Tax Rate (4) | 17.7 | % | 19 | % | 7.8 | % | 20 | % | 17.8 | % | ||||||||||||||
(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 of allowances on deferred taxes and (c) other tax liabilities. | ||||||||||||||||||||||||
(2) The three months and year ended December 31, 2013 includes ($7) 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 for continuing operations, divided by income from continuing operations before income taxes. | ||||||||||||||||||||||||
(4) Annual Effective Tax Rate is income tax expense for continuing operations, excluding various discrete items (such as changes in estimates and tax on items excluded from income before income taxes), divided by income from continuing operations 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. | ||||||||||||||||||||||||
