Transocean Ltd. Reports Second Quarter 2015 Results Mittwoch, 05. August 2015 - 23:16

• Revenues were $1.884 billion, compared with $2.043 billion in the first quarter of 2015;
• Operating and maintenance expenses were $197 million, including $788 million in net favorable items associated with Macondo-related settlement agreements and insurance recoveries. This compares with $1.084 billion in the prior period;
• Adjusted net income was $408 million, $1.11 per diluted share, excluding net unfavorable items. This compares with $398 million, $1.10 per diluted share, in the first quarter of 2015;
• Net income attributable to controlling interest was $342 million, $0.93 per diluted share, including $66 million of net unfavorable items. This compares with first quarter net loss of $483 million, $1.33 per diluted share, including $881 million of net unfavorable items;
• The Annual Effective Tax Rate⁽¹⁾ was 16.9 percent, down from 25.8 percent in the prior quarter;
• Cash flows from operating activities were $1.311 billion, up from $526 million in the first quarter of 2015 primarily due to $445 million of Macondo-related insurance recoveries;
• Fleet revenue efficiency⁽²⁾ was 97.3 percent, up from 95.9 percent in the first quarter of 2015;
• Fleet utilization⁽³⁾ was 75 percent, compared with 79 percent in the first quarter of 2015; and
• Subsequent to the April 16, 2015 Fleet Status Report, the total value of new contracts secured was approximately $178 million. Contract backlog was $18.6 billion as of the July 15, 2015 Fleet Status Report.

ZUG, SWITZERLAND-August 5, 2015-Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported net income attributable to controlling interest of $342 million, $0.93 per diluted share, for the three months ended June 30, 2015. Second quarter 2015 results included net unfavorable items of $66 million, $0.18 per diluted share, as follows:

• $653 million, $1.79 per diluted share, associated with an impairment of the Midwater Floater asset group due primarily to the deterioration of the market outlook for this rig class;
• $144 million, $0.39 per diluted share, primarily related to impairment of assets held for sale; and
• $11 million, $0.03 per diluted share, in costs related to one-time termination benefits.

These net unfavorable items were partially offset by:

• $735 million, $2.02 per diluted share, associated with Macondo-related settlement agreements and insurance recoveries; and
• $7 million, $0.01 per diluted share, associated with the gain on disposal of assets and other miscellaneous items.

After consideration of these net unfavorable items, second quarter 2015 adjusted net income was $408 million, or $1.11 per diluted share.

For the three months ended June 30, 2014, the company reported both net income attributable to controlling interest and adjusted net income of $587 million, or $1.61 per diluted share.

Revenues for the three months ended June 30, 2015 decreased $159 million sequentially to $1.884 billion due primarily to lower utilization partly offset by higher revenue efficiency.

Excluding $788 million ($735 million after taxes) in net favorable items associated with Macondo-related insurance proceeds, reimbursement of legal fees, crew claims and other contingent liability adjustments, operating and maintenance expenses were $985 million. This compares with $1.084 billion in the prior quarter. The decrease of $99 million was due primarily to reduced activity mainly related to rig retirements, stacked and idle rigs, and the company's ongoing cost reduction initiatives.

General and administrative expenses decreased $2 million to $44 million from the prior quarter.

Depreciation expense decreased $42 million sequentially to $249 million due to rig retirements and the impairment of the Deepwater Floater asset group.

Transocean's second quarter 2015 Effective Tax Rate⁽⁴⁾ was 10.3 percent, compared with (21.6) percent in the previous quarter. The increase was due mainly to the Macondo-related settlements. Transocean's Annual Effective Tax Rate for the second quarter of 2015 was 16.9 percent, down from 25.8 percent in the prior quarter. The decrease was due to the overall level of adjusted pre-tax income. Second quarter income tax expense also included a tax benefit of $23 million, $0.06 per diluted share, to reflect the decrease in the Annual Effective Tax Rate to 21.6 percent for the six months ended June 30, 2015 from 25.8 percent for the three months ended March 31, 2015.

Interest expense, net of amounts capitalized, was $120 million in the second quarter, compared with $116 million in the previous quarter. Interest income was $6 million, unchanged from the prior quarter. Capitalized interest was $29 million, compared with $26 million in the first quarter of 2015.

Cash flows from operating activities increased $785 million from the first quarter of 2015 to $1.311 billion due mainly to the Macondo-related settlements.

Fleet-wide capital expenditures were $195 million, including costs associated with the company's newbuild program. Capital expenditures were $201 million in the first quarter of 2015.

"Despite the challenging market conditions, Transocean delivered strong operating results and underlying cash flow in the period due to exceptional revenue efficiency and a relentless emphasis on cost management," said President and Chief Executive Officer, Jeremy Thigpen. "Although this is a full team effort, I particularly commend our operations teams and crews for their hard work and dedication to maximizing uptime on our rigs. In addition, I remind all of our stakeholders of our commitment to the continuous improvement of our business, which includes taking the necessary steps to ensure that we have the right rig fleet to compete effectively in all market conditions."

Non-GAAP Financial Measures

All non-GAAP financial measure reconciliations to the most comparative GAAP measure are displayed in quantitative schedules on the company's website at www.deepwater.com.

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. These statements contain words such as "possible," "intend," "will," "if," "expect" or other similar expressions. Forward-looking statements are based on management's current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in tax estimates, impairment of goodwill, asset impairments, operating hazards and delays, risks associated with international operations, actions by customers and other third parties, the future prices of oil and gas, capital markets and other factors, including those and other risks discussed in the company's most recent Annual Report on Form 10-K for the year ended December 31, 2014, 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 to reflect events or circumstances that occur, or which we become aware of, after the date hereof, except as otherwise may be required by law.

This press release, or referenced documents, do not constitute an offer to sell, or a solicitation of an offer to buy, any securities, and do 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 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.

Conference Call Information

Transocean will conduct a teleconference starting at 9:30 a.m. EDT, 3:30 p.m. CEST, on Thursday, August 6, 2015, to discuss the results. To participate, dial +1 913-312-9323 and refer to confirmation code 5105813 approximately 10 minutes prior to the scheduled start time.

The teleconference will be simulcast in a listen-only mode over the Internet and can be accessed at Transocean's website, www.deepwater.com, by selecting "Investor Relations/Overview." Supplemental materials that may be referenced during the teleconference will be posted to Transocean's website and can be found by selecting "Investor Relations/Financial Reports."

A replay of the conference call will be available after 12:30 p.m. EDT, 6:30 p.m. CEST, on August 6, 2015. The replay, which will be archived for approximately 30 days, can be accessed by dialing +1 719-457-0820 and referring to the confirmation code 5105813. The replay will also be available on the company's website.

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 63 mobile offshore drilling units consisting of 27 ultra-deepwater floaters, seven harsh-environment semisubmersibles, six deepwater floaters, 13 midwater semisubmersibles and 10 high-specification jackups. In addition, the company has seven ultra-deepwater drillships and five high-specification jackups under construction.

For more information about Transocean, please visit: www.deepwater.com.

Analyst Contacts:
Thad Vayda
+1 713-232-7551

Diane Vento
+1 713-232-8015

Media Contact:
Pam Easton
+1 713-232-7647

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 for continuing operations divided by income from continuing operations before income taxes. See the accompanying schedule entitled "Supplemental Effective Tax Rate Analysis."

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