Transocean Inc. Reports First Quarter 2005 Results.HOUSTON Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; -- Transocean Transocean Inc. NYSE: RIG is the world's largest offshore drilling contractor. The company was created when it was spun-off in 1993 from its parent, Birmingham, Alabama based Sonat Inc, as Sonat Offshore. Inc. (NYSE NYSE See: New York Stock Exchange :RIG) today reported net income for the three months ended March 31, 2005 of $91.8 million, or $0.28 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, on revenues of $630.5 million. The results compare to net income of $22.7 million, or $0.07 per diluted share, on revenues of $652.0 million, for the corresponding three months in 2004. Net income adjusted(1) for a loss on early debt retirement and a gain associated with the sale of the semisubmersible sem·i·sub·mers·i·ble n. A seagoing, self-propelled barge that rides at anchor, stands on partially submerged vertical legs on submerged pontoons, and serves as living quarters and a base of operations in offshore drilling. rig Sedco 600, was $79.7 million, or $0.24 per diluted share for the three months ended March 31, 2005, compared to net income adjusted(1) for a loss on early debt retirement and TODCO TODCO Technical Order Distribution Control Office initial public offering (IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. )-related items of $49.5 million, or $0.15 per diluted share, for the corresponding three months in 2004. Effective December December: see month. 17, 2004, Transocean Inc. deconsolidated TODCO from its consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: statements of operations and balance sheets and subsequently accounted for its investment in TODCO under the equity method of accounting. Financial results for the three months ended March 31, 2004 reflect the consolidation of TODCO as a business segment. Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. L. Long, President and Chief Executive Officer of Transocean Inc., stated, "The company has begun 2005 with solid financial performance. Results for the first quarter benefited from the recommencement Re`com`mence´ment n. 1. A commencement made anew. Noun 1. recommencement - beginning again resumption of operations on the jackup rig Trident 20 and semisubmersible rig Jim Cunningham, as well as the commencement of operations on four semisubmersible rigs that were previously idle. Also, we realized meaningful dayrate increases on four High-Specification Floaters floaters /float·ers/ (flo´ters) “spots before the eyes”; deposits in the vitreous of the eye, usually moving about and probably representing fine aggregates of vitreous protein occurring as a benign degenerative change. while benefiting from lower than planned operating and maintenance expenses due to the timing of rig maintenance and upgrade programs. "Of greater importance is the improving outlook for our business. We are seeing a substantial increase in customer rig needs, particularly for floating drilling units. Future quarterly financial performance should benefit from higher average dayrates on a number of our semisubmersibles and drillships, and we expect to sign several term contracts that should secure improved dayrates for several more years. At present, we are in advanced discussions with various customers regarding seven High-Specification Floaters with dayrates ranging from $260,000 to $350,000 per day and contract durations from a single well to several years." The company reported that the industry's Fifth-Generation rig supply remains constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. , the result of deepwater Deepwater or Deep Water may refer to:
Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east , West Africa West Africa A region of western Africa between the Sahara Desert and the Gulf of Guinea. It was largely controlled by colonial powers until the 20th century. West African adj. & n. , Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. and emerging regions like India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. and the Mediterranean Sea Mediterranean Sea [Lat.,=in the midst of lands], the world's largest inland sea, c.965,000 sq mi (2,499,350 sq km), surrounded by Europe, Asia, and Africa. Geography The Mediterranean is c.2,400 mi (3,900 km) long with a maximum width of c. . Contract durations for these units are lengthening lengthening (lengkˑ·the·ning), n the use of various massage or muscle energy techniques to relax and stretch muscle and connective tissue. , as evidenced by the recent contract awards for the company's semisubmersible rigs Sedco Energy and Deepwater Horizon Deepwater Horizon is a 5th generation, dynamic positioned (DP), Semi-submerisble oil rig owned by Transocean. History Designed originally for R&B Falcon, she was completed in 2001 by Hyundai Heavy Industries in Ulsan, South Korea, after their merger with Transocean. for two and five years, respectively. This favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. trend is expected to continue through 2006, resulting in higher average dayrates for the company's fleet. At present, 89% of the company's Fifth-Generation fleet days are committed to firm contracts in 2005, while 64% of the fleet days are committed in 2006. The company's Other Deepwater and Other High-Specification Floaters (harsh environment semisubmersibles) are experiencing higher utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be worldwide, leading to higher dayrates like the recent one-year adj. 1. completing its life cycle within a year. Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants contract for the Transocean Marianas Marianas: see Northern Mariana Islands and Guam. in the U.S. Gulf of Mexico at $250,000 per day and the one-year contract for the semisubmersible rig Transocean Leader offshore Norway Norway, Nor. Norge, officially Kingdom of Norway, constitutional monarchy (2005 est. pop. 4,593,000), 125,181 sq mi (324,219 sq km), N Europe, occupying the western part of the Scandinavian peninsula. at a dayrate of $245,000 per day. The company expects higher fleet utilization and average dayrates for its Other Floaters fleet, especially in the U.K. North Sea and the U.S. Gulf of Mexico. Industry dayrates in both regions have improved from approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $50,000 per day in 2004 to a general range of $100,000 to $160,000 per day at present. Operator needs in these regions are becoming increasingly evident for 2006. Also, BP has just awarded a contract for work offshore Sahkalin Island for the company's semisubmersible rig Transocean Legend legend Traditional story or group of stories told about a particular person or place. Formerly the term referred to a tale about a saint. Legends resemble folktales in content; they may include supernatural beings, elements of mythology, or explanations of natural phenomena, . The contract covers the 2005 through 2007 spring and summer drilling periods and drilling operations are expected to commence in July July: see month. , 2005 following minor rig modifications in Singapore Singapore (sĭng`gəpôr, sĭng`ə–, sĭng'gəpôr`), officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km). and mobilization mobilization Organization of a nation's armed forces for active military service in time of war or other national emergency. It includes recruiting and training, building military bases and training camps, and procuring and distributing weapons, ammunition, uniforms, to the drilling location. At present, 58% of the remaining Other Floater Floater A bond or other type of debt whose coupon rate changes with market conditions (short-term interest rates). Also known as "floating-rate debt". Notes: For example, a floater bond may have the coupon rate set at "T-bill rate plus 0.5%". Fleet days are under firm contract in 2005, while 17% of the days are committed in 2006. Finally, among the company's fleet of Jackup Rigs, utilization remains high and average dayrates continue to experience modest improvement in most regions, with contracting opportunities most prevalent prevalent widespread occurrence. in Asia and the Middle East. Speculative Speculative Securities that involve a high level of risk. speculative Of or relating to an asset or a group of assets with uncertain returns. The greater the degree of uncertainty the more speculative the asset. newbuild units, which are due to enter the active fleet in increasing numbers beginning in the second half of 2006, represent a growing concern to the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. health of the jackup rig business. At present, 77% of the remaining Jackup Rig Fleet days are under firm contract in 2005, while 38% of the days are committed in 2006. Operating and maintenance expense is expected to increase as improving activity levels lead to higher labor and rig maintenance costs. The company expects operating and maintenance expense for the second quarter of 2005 to be in a range of $415 million to $435 million, reflecting the impact of improvements in activity levels and the timing of planned shipyard and other rig maintenance programs. Operations Quarterly Review - Revenues for the three months ended March 31, 2005 improved 7% to $630.5 million from revenues of $591.0 million for the Transocean Drilling Segment for the three months ended December 31, 2004. The improvement was primarily due to increased dayrates and activity throughout the company's fleet of drillships, semisubmersibles and jackup rigs, as well as the return to active service of the jackup rig Trident 20 and semisubmersible rig Jim Cunningham following lengthy repairs resulting from operational incidents during 2004. These improvements in revenue were partially offset by lower integrated services In computer networking, IntServ or integrated services is an architecture that specifies the elements to guarantee quality of service (QoS) on networks. IntServ can for example be used to allow video and sound to reach the receiver without interruption. revenues, a scheduled shipyard program for the semisubmersible rig Henry Goodrich Goodrich is a surname, and may refer to:
Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. before general and administrative expenses(2) was $161.4 million and field operating income(2) (defined as revenues less operating and maintenance expense) was $241.9 million for the three months ended March 31, 2005. These amounts compared to Transocean Drilling Segment operating income before general and administrative expenses and field operating income for the three months ended December 31, 2004 of $73.9 million and $177.7 million, respectively. The improved results were due primarily to increased revenue during the first quarter of 2005, the gain from the sale of semisubmersible rig Sedco 600 and a 6% decline in operating and maintenance expense in the March 2005 quarter, to $388.6 million, down from $413.3 million for the three months ended December 31, 2004. The lower operating and maintenance expense was the result of a delay in some rig maintenance programs, the reduction in extraordinary repair costs incurred during the final three months in 2004 associated with the operational incidents on the jackup rig Trident 20 and semisubmersible rig Jim Cunningham, as well as a major shipyard project related to the semisubmersible rig Polar Pioneer and lower expenses pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to the reduced level of integrated services activities, partially offset by additional costs resulting from the increased activity during the period. Fleet utilization during the three months ended March 31, 2005 improved to 75%, up from 69% during the three months ended December 31, 2004 and was due significantly to improvements in the company's Jackup Rig and Other Floaters fleet. Average dayrates for the three months ended March 31, 2005 increased in the company's High-Specification Fleet, Other Floaters Fleet and Jackup Rig Fleet, resulting in an average fleet dayrate of $96,600, up from $93,900 during the final three months in 2004. Effective Tax Rate - The company's effective tax rate(3) for the three months ended March 31, 2005 was approximately 16%. The decline from an effective tax rate of approximately 50% at December 31, 2004 was primarily related to improved earnings expectations for the year as a result of the continued improvement in the offshore drilling Offshore drilling typically refers to the act of extracting resources, primarily oil, in an ocean or lake. Controversy As with all oil drilling, there has been a certain level of controversy surrounding the issue. business. The company estimates its effective tax rate for 2005 to be approximately 16%. The final effective tax rate for the year will depend on a number of factors including the actual geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. mix of income, as well as the occurrences of various discrete A component or device that is separate and distinct and treated as a singular unit. events. These factors could cause the rate to vary significantly from current expectations. Liquidity - Cash flow provided by operations was $176.9 million for the three months ended March 31, 2005 while net debt(4) at March 31, 2005 was $1,783.5 million, a 37% decline from $2,848.5 million at March 31, 2004. During the current quarter, the company redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. $247.8 million of 6.95% Senior Notes due 2008, utilizing existing cash balances. Conference Call Information Transocean will conduct a teleconference call at 10:00 a.m. ET on May 3rd. To participate, dial 303-262-2075 approximately five to 10 minutes prior to the scheduled start time of the call. In addition, the conference call will be simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics broadcast over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the in a listen-only mode and can be accessed by logging onto the company's website at www.deepwater.com and selecting "Investor Relations Investor relations The process by which the corporation communicates with its investors. ." It may also be accessed via the Internet at www.CompanyBoardroom.com by typing in the company's New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. trading symbol Trading symbol See: Ticker symbol , "RIG." A telephonic replay of the conference call should be available after 1:00 p.m. ET on May 3 and can be accessed by dialing 303-590-3000 and referring to the passcode 11028333. Also, a replay will be available through the Internet and can be accessed by visiting either of the above-referenced Worldwide Web addresses. Transocean Fleet Update Information - Drilling rig status and contract information on Transocean Inc.'s offshore drilling fleet has been condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. into a report titled "Transocean Fleet Update," which is available through the company's website at www.deepwater.com. The report is located in the "Investor Relations/Financial Reports" section of the website. By subscribing subscribing - subscribe to the Transocean Financial Report Alert, you will be immediately notified when new postings are made to this page by an automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. e-mail that will provide a link directly to the page that has been updated. Shareholders and other interested parties are invited to sign up for this service. Forward-Looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. Disclaimer (networking) disclaimer - Statement ritually appended to many Usenet postings (sometimes automatically, by the posting software) reiterating the fact (which should be obvious, but is easily forgotten) that the article reflects its author's opinions and not necessarily those of the Statements regarding opportunities and outlook for the company and its fleet, including the company's Transocean Drilling business segment, rig demand, contracts under discussion, dayrates, utilization, rig capacity constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. , contract duration, operating and maintenance expenses, the effective tax rate, as well as any other statements that are not historical facts in this release, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve certain risks, uncertainties and assumptions. These include but are not limited to operating hazards
Hazards is an independent, union-friendly magazine based in Sheffield, England, which has won major international awards. and delays, risks associated with international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , effect of strike and other labor relations issues, effect of fire, future financial results, actions by customers and other third parties, the future price of oil and gas and other factors detailed in the company's most recent Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , or should underlying assumptions prove incorrect Incorrect means to not be correct and may also refer to:
Transocean Inc. is the world's largest offshore drilling contractor contractor n. 1) a person or entity that enters into a contract. 2) commonly, a person or entity that agrees to construct a building or to provide or install specialized portions of the construction. with a fleet of 93 mobile offshore drilling units. The company's mobile offshore drilling fleet, consisting of a large number of high-specification deepwater and harsh environment drilling units, is considered one of the most modern and versatile For the use of the term "versatile" to describe the sexual role, see . Versatile is a Canadian brand of agricultural equipment that has produced augers, swathers, combine harvesters and most notably tractors. in the world due to its emphasis on technically demanding segments of the offshore drilling business. The company's fleet consists of 32 High-Specification Floaters (semisubmersibles and drillships), 24 Other Floaters, 26 Jackup Rigs and other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. utilized in the support of offshore drilling activities worldwide. With a current equity market capitalization Equity Market Capitalization A measure of the total market value of an equity market. The measure is calculated by taking the market capitalization of all companies in the equity market and adding them together to arrive at the capitalization for the market as a whole. in excess of $15 billion, Transocean Inc.'s ordinary shares are traded on the New York Stock Exchange under the symbol "RIG."
(1) Net income adjusted for certain items, a non-GAAP measure, is
computed by subtracting from or adding to net income, a GAAP
measure, items that occurred during the periods reported and are
considered by management to be outside the normal course of
operations. A reconciliation for the periods reported may be found
in the accompanying schedule titled Non-GAAP Financial Measures
and Reconciliations - Adjusted Net Income (Loss) and Diluted
Earnings (Loss) Per Share.
(2) For a reconciliation of segment operating income before general
and administrative expense to field operating income, see the
accompanying schedule titled Non-GAAP Financial Measures and
Reconciliations - Operating Income (Loss) Before General and
Administrative Expense to Field Operating Income (Loss) by
Segment.
(3) For the analysis of the effective tax rate, see the accompanying
schedule titled Effective Tax Rate Analysis.
(4) Net Debt is a non-GAAP measure defined as total debt less cash and
cash equivalents.
TRANSOCEAN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months Ended March 31,
-----------------------------
2005 2004
-------------- --------------
Operating Revenues
Contract drilling revenues $600.6 $597.5
Other revenues 29.9 54.5
---------------------------------------------------------------------
630.5 652.0
---------------------------------------------------------------------
Costs and Expenses
Operating and maintenance 388.6 412.4
Depreciation 100.7 131.5
General and administrative 18.1 15.1
Gain from sale of assets, net (20.2) (3.8)
---------------------------------------------------------------------
487.2 555.2
---------------------------------------------------------------------
Operating Income 143.3 96.8
Other Income (Expense), net
Equity in earnings of unconsolidated
affiliates 3.1 2.3
Interest income 4.0 2.1
Interest expense (33.1) (47.4)
Gain from TODCO Offerings - 39.4
Loss on retirement of debt (6.7) (28.1)
Other, net (1.1) 1.4
---------------------------------------------------------------------
(33.8) (30.3)
---------------------------------------------------------------------
Income Before Income Taxes and Minority
Interest 109.5 66.5
Income Tax Expense 17.5 48.0
Minority Interest 0.2 (4.2)
---------------------------------------------------------------------
Net Income $91.8 $22.7
=====================================================================
Earnings Per Share
Basic and Diluted $0.28 $0.07
=====================================================================
Weighted Average Shares Outstanding
Basic 323.6 320.6
---------------------------------------------------------------------
Diluted 331.0 324.1
---------------------------------------------------------------------
TODCO deconsolidated effective December 17, 2004
TRANSOCEAN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
March 31, December 31,
2005 2004
-------------- --------------
(Unaudited)
ASSETS
Cash and Cash Equivalents $420.7 $451.3
Accounts Receivable, net of allowance
for doubtful accounts of $16.5 and
$16.8 at March 31, 2005 and December
31, 2004, respectively 484.5 442.0
Materials and Supplies, net of allowance
for obsolescence of $20.2 and $20.3 at
March 31, 2005 and December 31, 2004,
respectively 148.5 144.7
Deferred Income Taxes, net 15.3 19.0
Other Current Assets 33.9 52.1
---------------------------------------------------------------------
Total Current Assets 1,102.9 1,109.1
---------------------------------------------------------------------
Property and Equipment 9,740.7 9,732.9
Less Accumulated Depreciation 2,817.1 2,727.7
---------------------------------------------------------------------
Property and Equipment, net 6,923.6 7,005.2
---------------------------------------------------------------------
Goodwill 2,251.9 2,251.9
Investments in and Advances to
Unconsolidated Affiliates 110.7 109.2
Deferred Income Taxes 39.4 43.8
Other Assets 263.0 239.1
---------------------------------------------------------------------
Total Assets $10,691.5 $10,758.3
=====================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts Payable $165.6 $180.8
Accrued Income Taxes 10.4 17.1
Debt Due Within One Year 7.9 19.4
Other Current Liabilities 248.4 213.0
---------------------------------------------------------------------
Total Current Liabilities 432.3 430.3
---------------------------------------------------------------------
Long-Term Debt 2,196.3 2,462.1
Deferred Income Taxes, net 147.6 124.1
Other Long-Term Liabilities 349.6 345.2
---------------------------------------------------------------------
Total Long-Term Liabilities 2,693.5 2,931.4
---------------------------------------------------------------------
Commitments and Contingencies
Minority Interest 4.2 4.0
Preference Shares, $0.10 par value;
50,000,000 shares authorized, none
issued and outstanding - -
Ordinary Shares, $0.01 par value;
800,000,000 shares authorized,
324,824,322 and 321,533,998 shares
issued and outstanding at March 31,
2005 and December 31, 2004,
respectively 3.2 3.2
Additional Paid-in Capital 10,771.3 10,695.8
Accumulated Other Comprehensive Loss (22.8) (24.4)
Retained Deficit (3,190.2) (3,282.0)
---------------------------------------------------------------------
Total Shareholders' Equity 7,561.5 7,392.6
---------------------------------------------------------------------
Total Liabilities and Shareholders'
Equity $10,691.5 $10,758.3
=====================================================================
TRANSOCEAN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended March 31,
-----------------------------
2005 2004
-------------- --------------
Cash Flows from Operating Activities
Net income $91.8 $22.7
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation 100.7 131.5
Stock-based compensation expense 3.1 10.0
Deferred income taxes 4.6 31.3
Equity in earnings of unconsolidated
affiliates (3.1) (2.3)
Net gain from disposal of assets (19.9) (1.9)
Gain from TODCO Offerings - (39.4)
Loss on retirement of debt 6.7 28.1
Amortization of debt-related
discounts/premiums, fair value
adjustments and issue costs, net (3.2) (7.6)
Deferred income, net 10.0 (3.3)
Deferred expenses, net (1.2) (1.9)
Tax benefit from exercise of stock
options (0.8) -
Other long-term liabilities 5.2 2.3
Other, net 1.1 (4.8)
Changes in operating assets and
liabilities
Accounts receivable (40.0) 29.8
Accounts payable and other
current liabilities 22.9 23.6
Income taxes receivable/payable,
net (5.1) (2.4)
Other current assets 4.1 (24.5)
---------------------------------------------------------------------
Net Cash Provided by Operating
Activities 176.9 191.2
---------------------------------------------------------------------
Cash Flows from Investing Activities
Capital expenditures (31.2) (17.4)
Proceeds from disposal of assets, net 35.5 10.5
Proceeds from TODCO Offerings - 155.7
Joint ventures and other investments,
net 3.1 1.5
---------------------------------------------------------------------
Net Cash Provided by Investing
Activities 7.4 150.3
---------------------------------------------------------------------
Cash Flows from Financing Activities
Repayments on revolving credit
agreement - (50.0)
Repayments on other debt instruments (287.4) (381.6)
Net proceeds from issuance of ordinary
shares under stock-based compensation
plans 72.4 14.0
Other, net 0.1 -
---------------------------------------------------------------------
Net Cash Used in Financing Activities (214.9) (417.6)
---------------------------------------------------------------------
Net Decrease in Cash and Cash
Equivalents (30.6) (76.1)
---------------------------------------------------------------------
Cash and Cash Equivalents at Beginning
of Period 451.3 474.0
---------------------------------------------------------------------
Cash and Cash Equivalents at End of
Period $420.7 $397.9
=====================================================================
Transocean Inc.
Fleet Operating Statistics
Operating Revenues ($ Millions) (1)
----------------------------------------
Three Months Ended
----------------------------------------
March 31, December 31, March 31,
Transocean Drilling Segment: 2005 2004 2004
------------- ------------- ------------
Contract Drilling Revenues
High-Specification
Floaters:
Fifth-Generation
Deepwater Floaters $192.3 $190.7 $208.5
Other Deepwater
Floaters $125.3 $114.2 $108.1
Other High-
Specification
Floaters $50.2 $45.7 $30.6
Total High-Specification
Floaters $367.8 $350.6 $347.2
Other Floaters $88.2 $71.6 $62.7
Jackups $126.4 $108.1 $101.5
Other Rigs $18.2 $23.7 $24.1
Subtotal $600.6 $554.0 $535.5
Other Revenues
Client Reimbursable
Revenues $18.9 $18.2 $16.6
Integrated Services
and Other $11.0 $18.8 $26.1
Subtotal $29.9 $37.0 $42.7
Segment Total $630.5 $591.0 $578.2
TODCO Segment (3)
Contract Drilling Revenues $- $72.9 $62.0
Other Revenues
Client
Reimbursables $- $5.7 $5.0
Delta Towing and
Other $- $7.3 $6.8
Subtotal $- $13.0 $11.8
Segment Total $- $85.9 $73.8
Total Company $630.5 $676.9 $652.0
Average Dayrates (1) (2)
Three Months Ended
----------------------------------------
March 31, December 31, March 31,
Transocean Drilling Segment: 2005 2004 2004
------------- ------------- ------------
High-Specification
Floaters:
Fifth-Generation
Deepwater Floaters $182,300 $180,100 $191,800
Other Deepwater
Floaters $124,500 $119,400 $101,300
Other High-
Specification
Floaters $153,000 $135,700 $115,200
Total High-Specification
Floaters $153,900 $149,000 $143,500
Other Floaters $71,200 $64,000 $62,800
Jackups $57,600 $55,800 $51,400
Other Rigs $45,800 $48,100 $44,200
Segment Total $96,600 $93,900 $90,200
TODCO Segment (3) $- $28,600 $25,700
Total Drilling Fleet $96,600 $74,200 $71,600
Utilization (1) (2)
----------------------------------------
Three Months Ended
----------------------------------------
March 31, December 31, March 31,
Transocean Drilling Segment: 2005 2004 2004
------------- ------------- ------------
High-Specification
Floaters:
Fifth-Generation
Deepwater Floaters 90% 89% 92%
Other Deepwater
Floaters 75% 69% 78%
Other High-
Specification
Floaters 91% 92% 73%
Total High-Specification
Floaters 83% 80% 83%
Other Floaters 57% 50% 42%
Jackups 94% 81% 83%
Other Rigs 44% 54% 54%
Segment Total 75% 69% 69%
TODCO Segment (3) - 47% 38%
Total Drilling Fleet 75% 61% 56%
(1) Certain reclassifications have been made to prior periods to
conform to current quarter presentation.
(2) Average dayrates are defined as contract drilling revenue earned
per revenue earning day in the period. A revenue earning day is
defined as a day for which a rig earns dayrate after commencement
of operations. Utilization is defined as the total actual number
of revenue earning days in the period as a percentage of the total
number of calendar days in the period.
(3) TODCO was deconsolidated effective December 17, 2004. Statistics
for the TODCO segment are through December 16, 2004 for the three
months ended December 31, 2004.
Transocean Inc. and Subsidiaries
Non-GAAP Financial Measures and Reconciliations
Adjusted Net Income (Loss) and Diluted Earnings (Loss) Per Share
(in US$ millions)
Three Months Ended
----------------------------------------
March 31, December 31, March 31,
2005 2004 2004
------------- -------------- -----------
Adjusted Net Income (Loss)
Net income (loss) as reported $91.8 $(73.4) $22.7
Add back (subtract):
After-tax non-cash TODCO tax
sharing agreement charge - 167.1 -
After-tax gain from TODCO
offerings - (140.0) (39.4)
After-tax loss on retirement
of debt 6.7 48.4 28.1
After-tax gain from sale of
Sedco 600 (18.8) - -
Tax valuation allowance
related to TODCO IPO - - 31.0
Stock option vesting
resulting from the TODCO
IPO - - 7.1
------------- -------------- -----------
Net income as adjusted $79.7 $2.1 $49.5
------------- -------------- -----------
Diluted Earnings (Loss) Per
Share:
Net income (loss) as reported $0.28 $(0.23) $0.07
Add back (subtract):
After-tax non-cash TODCO tax
sharing agreement charge - 0.52 -
After-tax gain from TODCO
offerings - (0.43) (0.12)
After-tax loss on retirement
of debt 0.02 0.15 0.09
After-tax gain from sale of
Sedco 600 (0.06) - -
Tax valuation allowance
related to TODCO IPO - - 0.09
Stock option vesting
resulting from the TODCO
IPO - - 0.02
------------- -------------- -----------
Net income as adjusted $0.24 $0.01 $0.15
------------- -------------- -----------
Transocean Inc. and Subsidiaries
Non-GAAP Financial Measures and Reconciliations
Operating Income (Loss) Before General and Administrative Expense
to Field Operating Income (Loss) by Segment
(in US$ millions)
Three Months Ended
----------------------------------------
March 31, December 31, March 31,
2005 2004 2004
------------- ------------- ------------
Transocean Drilling Segment
Operating revenue $630.5 $591.0 $578.2
Operating and maintenance
expense 388.6 413.3 333.2
Depreciation 100.7 106.2 107.3
Gain from sale of assets,
net (20.2) (2.4) (1.1)
------------- ------------- ------------
Operating income before
general and administrative
expense 161.4 73.9 138.8
Add back: Depreciation 100.7 106.2 107.3
Gain from sale of
assets, net (20.2) (2.4) (1.1)
------------- ------------- ------------
Field operating income $241.9 $177.7 $245.0
------------- ------------- ------------
TODCO Segment (1)
Operating revenue $- $85.9 $73.8
Operating and maintenance
expense (2) - 61.5 79.2
Depreciation - 20.0 24.2
Gain from sale of assets,
net - (0.6) (2.7)
------------- ------------- ------------
Operating income (loss) before
general and administrative
expense - 5.0 (26.9)
Add back: Depreciation - 20.0 24.2
Gain from sale of
assets, net - (0.6) (2.7)
------------- ------------- ------------
Field operating income (loss) $- $24.4 $(5.4)
------------- ------------- ------------
(1) Amounts are representative of TODCO's results through December 16,
2004. TODCO was deconsolidated effective December 17, 2004 in
connection with the December offering and conversion of the
Company's remaining TODCO Class B common stock to Class A common
(2) Q4 04 and Q1 04 include $6.0 million and $12.3 million,
respectively, of operating and maintenance expense that TODCO
classified as general and administrative expense.
Transocean Inc. and Subsidiaries
Non-GAAP Financial Measures and Reconciliations
Total Debt to Net Debt Reconciliations
(in US$ millions)
As of
----------------------------------------
3/31/05 12/31/04 3/31/04
------------- -------------- -----------
Total Debt to Net Debt
Reconciliation
Total Debt $2,204.2 $2,481.5 $3,246.4
Deduct: Cash and Cash
Equivalents 420.7 451.3 397.9
------------- -------------- -----------
Net Debt $1,783.5 $2,030.2 $2,848.5
------------- -------------- -----------
Transocean Inc. and Subsidiaries
Effective Tax Rate Analysis
(in US$ millions)
Three Months Ended
----------------------------------------
March 31, December 31, March 31,
2005 2004 2004
------------- ------------- ------------
Income before Income Taxes and
Minority Interest $109.5 $(54.1) $66.5
Add back (subtract):
Stock option vesting
resulting from the TODCO
IPO - - 7.1
Loss on retirement of debt 6.7 48.4 28.1
Gain on sale of Sedco 600 (18.8) - -
Gain on sale of Sedco 602 - (0.1) -
Gain on TODCO offerings - (140.0) (39.4)
Non-cash TODCO tax sharing
agreement charge - 167.1 -
------------- ------------- ------------
Adjusted Income before Income
Taxes and Minority Interest $97.4 $21.3 $62.3
Income Tax Expense $17.5 $17.1 $48.0
Add back (subtract):
Valuation allowance
related to TODCO
offerings - (15.1) (31.0)
Other - (0.2) -
Changes in estimates (1) (2.2) 16.4 -
------------- ------------- ------------
Adjusted Income Tax
Expense (2) $15.3 $18.2 $17.0
Effective Tax Rate 16.0% -31.6% 72.2%
Effective Tax Rate Adjusted 15.7% 85.4% 27.3%
(1) Our estimates change as we file tax returns, settle disputes with
tax authorities or become aware of other events.
Also includes changes in our valuation allowance on our UK net
operating loss carryforwards.
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