Transocean Inc. Reports Second Quarter 2006 Results, Announces Repurchase of $800 Million of Shares.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 June June: see month. 30, 2006 of $249.5 million, or $0.75 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 $853.3 million. The results compare to net income of $301.8 million, or $0.90 per diluted share, on revenues of $727.4 million for the corresponding three months in 2005. Net income for the three months ended June 30, 2006 included after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. gains totaling $110.7 million, or $0.33 per diluted share, resulting from 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 Transocean Explorer, idle since January January: see month. 1999, and the drilling barge barge, large boat, generally flat-bottomed, used for transporting goods. Most barges on inland waterways are towed, but some river barges are self-propelled. There are also sailing barges. Searex XII. Net income for the corresponding three months in 2005 included after-tax gains of $165.0 million, or $0.49 per diluted share, resulting from the sale of TODCO TODCO Technical Order Distribution Control Office common stock and $9.1 million, or $0.03 per diluted share, resulting from the sale of two rigs. For the six months ended June 30, 2006, net income totaled $455.2 million, or $1.36 per diluted share, on revenues of $1,670.6 million, compared to net income of $393.6 million, or $1.18 per diluted share, on revenues of $1,357.9 million for the six months ended June 30, 2005. Net income for the six months ended June 30, 2006 included after-tax gains totaling $153.6 million, or $0.46 per diluted share, resulting from the sale of the Transocean Explorer, Searex XII, the drillship
A drillship is a maritime vessel that has been fitted with drilling apparatus. It is most often used for exploratory drilling of new oil or gas wells in deep water but can also be used for scientific drilling. Peregrine III and a platform rig. Net income for the corresponding six months in 2005 included the previously mentioned gain from the sale of TODCO common stock, after-tax gains of $27.9 million, or $0.08 per share, resulting from the sale of three rigs and a loss of $6.7 million, or $0.02 per diluted share, resulting from the early retirement of debt. During the three months ended June 30, 2006, the company repurchased and retired $400 million of its ordinary shares, or 5.2 million shares at an average price of $76.23 per share, pursuant to the share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program that was initially authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: by the company's Board of Directors in October October: see month. 2005 at $2.0 billion and increased in May 2006 to $4.0 billion. During July July: see month. 2006, the company repurchased and retired an additional $400 million of its ordinary shares, or 5.2 million shares at an average price of $77.00 per share. At July 31, 2006, the company had repurchased and retired a total of $1.4 billion of its ordinary shares, or 19.0 million shares at an average price of $73.54 per share, and still had authority to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. up to an additional $2.6 billion of its ordinary shares under the terms of the share repurchase program. 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, "Financial results for the second quarter and first six months of 2006 were at levels consistent with our previous guidance. The growth in revenues reflects the excellent contract signings seen over the past 18 months, partially offset by increased fleet out-of-service The out-of-service tone, or SIT (special information tone) is a special tone heard on a phone line when a number dialed is out of service, not working, or currently unavailable. It consists of three tones, and can vary from country to country. time and higher operating and maintenance expenses, including the costs associated with three rig reactivations. The second half of 2006 is expected to see additional improvement in financial results as revenues continue to grow. Operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. for each of the third and fourth quarters of 2006 are expected to be at record levels with the fourth quarter exceeding $1.0 billion for the first time in the company's history, while operating and maintenance expenses for each of the third and fourth quarters of 2006 are expected to approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. the level of expenses reported for the second quarter of 2006. With strong demand for our fleet of mobile 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. rigs in both the domestic and international market sectors, the company's contract backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. has grown to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $19.4 billion at July 31, 2006, up from approximately $10.9 billion at December December: see month. 31, 2005." Operations Quarterly Review Revenues for the three months ended June 30, 2006 increased 4% to $853.3 million, compared to revenues of $817.3 million during the three months ended March 31, 2006. The revenue improvement was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to higher dayrates experienced throughout the fleet. The semisubmersible rig Transocean Marianas Marianas: see Northern Mariana Islands and Guam. completed its first full quarter of operation since sustaining damage in September September: see month. 2005 during Hurricane Rita Hurricane Rita was the fourth-most intense Atlantic hurricane ever recorded and the most intense tropical cyclone ever observed in the Gulf of Mexico. Rita caused $11.3 billion in damage on the U.S. Gulf Coast in September 2005. and the semisubmersible rig Jim Cunningham and jackup rig Trident IV experienced improved 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 in the second quarter of 2006 following mobilizations to new regions during the first quarter of 2006. The improvement in revenues was partially offset by planned out-of-service time on 13 rigs, and in the case of the drillship Deepwater Deepwater or Deep Water may refer to:
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, of the rig from 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. to 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. ahead of the commencement of a multi-year contract. The out-of-service time contributed to a slight decline in fleet utilization during the three months ended June 30, 2006 to 81% from 82% during the first quarter of 2006. Over the same comparative period, the average fleet dayrate improved 8% to an average of $129,000 from an average of $119,600, due chiefly to 12% and 7% improvements in average dayrates among the company's High-Specification and Other 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. fleets, respectively. 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 totaled $312.6 million, and field operating income (defined as revenues less operating and maintenance expenses) was $304.0 million for the three months ended June 30, 2006. The results compare to operating income before general and administrative expenses and field operating income of $304.8 million and $342.3 million, respectively, during the three months ended March 31, 2006. The decline in field operating income was primarily attributable to an increase in operating and maintenance expenses during the second quarter of 2006, which totaled $549.3 million compared to $475.0 million in the first quarter of 2006. Approximately $20 million of the increase in operating and maintenance expenses, compared to the first quarter of 2006, related to the continuation of reactivation reactivation to become active after a period of quiescence or, as in bacterial and viral infections, latency. cross reactivation programs on the semisubmersible rigs Transocean Prospect, Transocean Winner and C.K. Rhein Rhein: see Rhine, river. , Jr. Another $45 million was associated with shipyard programs on 13 rigs, as well as an increase in major maintenance projects on a number of active rigs. A weak U.S. dollar and increases in the cost for rig supplies, personnel and insurance contributed further to this increase in operating and maintenance expenses in the second quarter of 2006. Liquidity Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses totaled $443.8 million for the six months ended June 30, 2006. Total debt at June 30, 2006 was $1,596.0 million, effectively level with total debt reported at March 31, 2006. Although the company had not drawn against its $1.0 billion revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility at June 30, 2006, approximately $360 million was drawn against the facility at July 31, 2006, with the primary use of the proceeds to fund rig construction programs and the repurchase of company ordinary shares. Conference Call Information Transocean will conduct a teleconference call at 10:00 a.m. Eastern DST (1) (DeSTination) Contrast with SRC, which is an abbreviation of "source." (2) (Digital Signal Trust Company, Salt Lake City, UT, www.digsigtrust.com) An organization that sets up and manages PKI systems for companies and industry groups. on August 3, 2006. To participate, dial 913-981-5592 and refer to confirmation code 5208498 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 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. Eastern DST on August 3, 2006 and can be accessed by dialing 719-457-0820 and referring to the passcode 5208498. Also, a replay will be available through the Internet and can be accessed by visiting either of the above-referenced Worldwide Web addresses. Analyst Meeting In addition, the senior management of Transocean will discuss the company's strategic focus and regional business outlook during an analyst meeting in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. on August 7, 2006. The meeting will be held in the Trianon Trianon (trēänôN`), two small châteaux in the park of Versailles, Seine-et-Oise dept., N France. The Grand Trianon was built by J. H. Mansart in 1687 for Louis XIV; Napoleon I sometimes used it as a retreat. Ballroom
A ballroom is a large room inside a building, the designated purpose of which is holding formal dances called balls. of the Hilton Hil·ton , Conrad Nicholson 1887-1979. American hotel-chain organizer who acquired hotels in many American cities and in 1946 founded the Hilton Hotel Corporation. New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of beginning at 9:00 a.m. Eastern DST. Those wishing to attend the meeting should notify Leslie Leslie (Gaelic, derived from a surname meaning 'garden of hollies,'grey fortress, or'garden by the pool')[1] can refer to any of the following: Places in Scotland:
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 financial results, operating revenues, operating and maintenance expenses, 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. , future financial results, actions by customers and other third parties, factors affecting the supply of drilling rigs, including newbuilds, reactivations and the reallocation Noun 1. reallocation - a share that has been allocated again allocation, allotment - a share set aside for a specific purpose 2. reallocation of current rigs, factors affecting the duration of contracts including well-in-progress provisions, the actual amount of downtime The time during which a computer is not functioning due to hardware, operating system or application program failure. , factors resulting in reduced applicable dayrates, hurricanes and other weather conditions, 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 with a fleet of 87 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 33 High-Specification Floaters (semisubmersibles and drillships), 20 Other Floaters, 25 Jackups 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 $25 billion, Transocean Inc.'s ordinary shares are traded on the New York Stock Exchange under the symbol "RIG." (1) For a reconciliation of segment operating income before general and administrative expense to field operating income, see the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. schedule titled Non-GAAP Financial Measures and Reconciliations - Operating Income Before General and Administrative Expense to Field Operating Income by Segment. (2) References to effective tax rate are based on the Effective Tax Rate as shown in the accompanying schedule titled Effective Tax Rate Analysis.
TRANSOCEAN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Operating Revenues
Contract drilling revenues $828.1 $682.1 $1,607.0 $1,282.7
Other revenues 25.2 45.3 63.6 75.2
----------------------------------------------------------------------
853.3 727.4 1,670.6 1,357.9
----------------------------------------------------------------------
Costs and Expenses
Operating and maintenance 549.3 437.0 1,024.3 825.3
Depreciation 102.0 101.2 203.6 201.9
General and administrative 24.6 18.0 44.8 36.1
----------------------------------------------------------------------
675.9 556.2 1,272.7 1,063.3
----------------------------------------------------------------------
Gain from disposal of assets,
net 110.6 13.6 174.7 33.5
----------------------------------------------------------------------
Operating Income 288.0 184.8 572.6 328.1
----------------------------------------------------------------------
Other Income (Expense), net
Equity in earnings of
unconsolidated affiliates 3.4 3.4 2.9 6.5
Interest income 5.3 4.8 10.5 8.8
Interest expense, net of
amounts capitalized (20.4) (29.8) (44.3) (62.9)
Gain from TODCO stock sales - 165.0 - 165.0
Loss on retirement of debt - - - (6.7)
Other, net (0.9) (3.0) (0.2) (4.1)
----------------------------------------------------------------------
(12.6) 140.4 (31.1) 106.6
----------------------------------------------------------------------
Income Before Income Taxes and
Minority Interest 275.4 325.2 541.5 434.7
Income Tax Expense 25.9 23.6 86.3 41.1
Minority Interest - (0.2) - -
----------------------------------------------------------------------
Net Income $249.5 $301.8 $455.2 $393.6
======================================================================
Earnings Per Share
Basic $0.77 $0.93 $1.40 $1.21
Diluted $0.75 $0.90 $1.36 $1.18
======================================================================
Weighted Average Shares
Outstanding
Basic 323.6 326.1 324.5 324.8
----------------------------------------------------------------------
Diluted 335.8 338.0 337.0 336.9
----------------------------------------------------------------------
TRANSOCEAN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
June 30, December 31,
2006 2005
------------ ------------
(Unaudited)
ASSETS
Cash and Cash Equivalents $282.2 $445.4
Accounts Receivable, net of allowance for
doubtful accounts of $19.1 and $15.3 at
June 30, 2006 and December 31, 2005,
respectively 703.6 599.7
Materials and Supplies, net of allowance for
obsolescence of $16.1 and $19.1 at June 30,
2006 and December 31, 2005, respectively 164.2 156.2
Deferred Income Taxes, net 24.7 23.4
Other Current Assets 74.6 54.4
----------------------------------------------------------------------
Total Current Assets 1,249.3 1,279.1
----------------------------------------------------------------------
Property and Equipment 10,018.5 9,791.0
Less Accumulated Depreciation 3,199.6 3,042.8
----------------------------------------------------------------------
Property and Equipment, net 6,818.9 6,748.2
----------------------------------------------------------------------
Goodwill 2,208.9 2,208.9
Investments in and Advances to
Unconsolidated Affiliates 11.0 8.1
Other Assets 266.9 212.9
----------------------------------------------------------------------
Total Assets $10,555.0 $10,457.2
======================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts Payable $337.4 $254.0
Accrued Income Taxes 18.9 27.5
Debt Due Within One Year 95.4 400.0
Other Current Liabilities 259.7 242.1
----------------------------------------------------------------------
Total Current Liabilities 711.4 923.6
----------------------------------------------------------------------
Long-Term Debt 1,500.6 1,197.1
Deferred Income Taxes, net 112.1 65.0
Other Long-Term Liabilities 323.5 286.2
----------------------------------------------------------------------
Total Long-Term Liabilities 1,936.2 1,548.3
----------------------------------------------------------------------
Commitments and Contingencies
Minority Interest 3.8 3.6
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, 319,904,208
and 324,750,166 shares issued and
outstanding at June 30, 2006 and December
31, 2005, respectively 3.2 3.2
Additional Paid-in Capital 10,032.1 10,565.3
Accumulated Other Comprehensive Loss (20.5) (20.4)
Retained Deficit (2,111.2) (2,566.4)
----------------------------------------------------------------------
Total Shareholders' Equity 7,903.6 7,981.7
----------------------------------------------------------------------
Total Liabilities and Shareholders'
Equity $10,555.0 $10,457.2
======================================================================
TRANSOCEAN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions, except share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Cash Flows from Operating
Activities
Net income $249.5 $301.8 $455.2 $393.6
Adjustments to reconcile
net income to net cash
provided by operating
activities
Depreciation 102.0 101.2 203.6 201.9
Stock-based compensation
expense 5.2 3.1 8.0 6.2
Deferred income taxes (8.6) (2.4) 25.4 2.2
Equity in earnings of
unconsolidated
affiliates (3.4) (3.4) (2.9) (6.5)
Net gain from disposal of
assets (110.6) (13.6) (174.7) (33.5)
Gain from TODCO stock
sales - (165.0) - (165.0)
Loss on retirement of
debt - - - 6.7
Amortization of debt-
related
discounts/premiums, fair
value adjustments and
issue costs, net (0.3) (2.3) (0.6) (5.5)
Deferred income, net 10.8 2.1 20.0 12.1
Deferred expenses, net (46.9) 10.3 (54.5) 9.1
Tax benefit from exercise
of stock options to
purchase and vesting of
ordinary shares under
stock-based compensation
plans (7.9) 5.7 (7.9) 4.9
Other, net 16.7 4.9 25.0 13.7
Changes in operating
assets and liabilities
Accounts receivable (32.7) (79.6) (103.9) (119.6)
Accounts payable and
other current
liabilities 46.1 55.4 90.5 70.8
Income taxes
receivable/payable,
net 5.9 12.2 11.6 7.1
Other current assets (49.9) (24.2) (51.0) (20.1)
------------------------------ ---------------------------------------
Net Cash Provided by Operating
Activities 175.9 206.2 443.8 378.1
------------------------------ ---------------------------------------
Cash Flows from Investing
Activities
Capital expenditures (98.0) (78.4) (275.6) (109.6)
Proceeds from disposal of
assets, net 121.3 25.0 203.0 58.0
Proceeds from TODCO stock
sales, net - 271.9 - 271.9
Joint ventures and other
investments, net - 1.4 - 4.5
------------------------------ ---------------------------------------
Net Cash Provided by (Used in)
Investing Activities 23.3 219.9 (72.6) 224.8
------------------------------ ---------------------------------------
Cash Flows from Financing
Activities
Repayments of debt - (7.9) - (287.8)
Net proceeds from issuance
of ordinary shares under
stock-based compensation
plans 21.6 87.0 66.1 159.4
Proceeds from issuance of
ordinary shares upon
exercise of warrants - 4.6 - 4.6
Repurchase of ordinary
shares (400.1) - (600.1) -
Decrease in cash dedicated
to debt service - 12.0 - 12.0
Other, net (0.4) - (0.4) 0.1
------------------------------ ---------------------------------------
Net Cash Provided by (Used in)
Financing Activities (378.9) 95.7 (534.4) (111.7)
------------------------------ ---------------------------------------
Net Increase (Decrease) in
Cash and Cash Equivalents (179.7) 521.8 (163.2) 491.2
------------------------------ ---------------------------------------
Cash and Cash Equivalents at
Beginning of Period 461.9 420.7 445.4 451.3
------------------------------ ---------------------------------------
Cash and Cash Equivalents at
End of Period $282.2 $942.5 $282.2 $942.5
============================== =======================================
Transocean Inc.
Fleet Operating Statistics
Operating Revenues
($ Millions) (1)
------------------------------
Three Months Ended
------------------------------
June 30, March 31, June 30,
Transocean Drilling Segment: 2006 2006 2005
--------- ---------- ---------
Contract Drilling Revenues
High-Specification Floaters:
Fifth-Generation Deepwater
Floaters $227.8 $225.6 $213.8
Other Deepwater Floaters $193.8 $171.7 $145.7
Other High-Specification
Floaters $62.5 $51.0 $56.0
Total High-Specification Floaters $484.1 $448.3 $415.5
Other Floaters $167.4 $166.0 $114.2
Jackups $155.1 $143.6 $128.3
Other Rigs $21.5 $21.0 $24.1
Subtotal $828.1 $778.9 $682.1
Other Revenues
Client Reimbursable Revenues $21.8 $24.7 $25.0
Integrated Services and Other $3.4 $13.7 $20.3
Subtotal $25.2 $38.4 $45.3
Total Company $853.3 $817.3 $727.4
Average Daily Revenue (1)
------------------------------
Three Months Ended
------------------------------
June 30, March 31, June 30,
Transocean Drilling Segment: 2006 2006 2005
--------- ---------- ---------
High-Specification Floaters:
Fifth-Generation Deepwater
Floaters $216,500 $209,000 $197,100
Other Deepwater Floaters $190,200 $154,000 $132,700
Other High-Specification
Floaters $174,700 $158,800 $170,500
Total High-Specification Floaters $199,300 $178,200 $165,500
Other Floaters $118,200 $110,000 $82,400
Jackups $73,000 $70,300 $58,200
Other Rigs $47,500 $47,300 $47,000
Total Drilling Fleet $129,000 $119,600 $103,100
Utilization (1)
------------------------------
Three Months Ended
------------------------------
June 30, March 31, June 30,
Transocean Drilling Segment: 2006 2006 2005
--------- ---------- ---------
High-Specification Floaters:
Fifth-Generation Deepwater
Floaters 89% 92% 92%
Other Deepwater Floaters 70% 83% 80%
Other High-Specification
Floaters 98% 89% 90%
Total High-Specification Floaters 81% 87% 86%
Other Floaters 74% 73% 63%
Jackups 93% 91% 94%
Other Rigs 62% 58% 57%
Total Drilling Fleet 81% 82% 79%
(1) Average daily revenue is defined as contract drilling revenue
earned per revenue earning day in the period. A revenue earning
day is defined as a day for which a rig earns dayrate after
commencement of operations. Utilization is defined as the total
actual number of revenue earning days in the period as a
percentage of the total number of calendar days in the period for
all drilling rigs in our fleet.
Transocean Inc. and Subsidiaries
Non-GAAP Financial Measures and Reconciliations
Operating Income Before General and Administrative Expense
to Field Operating Income by Segment
(in US$ millions)
Three Months Ended Six Months Ended
------------------------------ -------------------
June 30, March 31, June 30, June 30, June 30,
2006 2006 2005 2006 2005
--------- ---------- --------- --------- ---------
Transocean
Drilling
Segment
Operating
revenue $853.3 $817.3 $727.4 $1,670.6 $1,357.9
Operating and
maintenance
expense (1) 549.3 475.0 437.0 1,024.3 825.3
Depreciation 102.0 101.6 101.2 203.6 201.9
Gain from
disposal of
assets, net (110.6) (64.1) (13.6) (174.7) (33.5)
--------- ---------- --------- --------- ---------
Operating income
before general
and
administrative
expense 312.6 304.8 202.8 617.4 364.2
Add back
(subtract):
Depreciation 102.0 101.6 101.2 203.6 201.9
Gain from
disposal of
assets, net
(1) (110.6) (64.1) (13.6) (174.7) (33.5)
--------- ---------- --------- --------- ---------
Field
operating
income $304.0 $342.3 $290.4 $646.3 $532.6
--------- ---------- --------- --------- ---------
(1) Loss on retirement for Q2 05 and YTD Q2 05 of $0.3 million and
$2.2 million, respectively, was reclassed out of operating and
maintenance expense and into gain from disposal of assets, net.
Transocean Inc. and Subsidiaries
Effective Tax Rate Analysis
(in US$ millions)
Three Months Ended Six Months Ended
----------------------------- -------------------
June 30, March 31, June 30, June 30,
2006 2006 2005 2006 2005
--------- --------- --------- --------- ---------
Income (Loss) before
Income Taxes and
Minority Interest $275.4 $266.1 $325.2 $541.5 $434.7
Add back
(subtract):
Loss on
retirement of
debt - - - - 6.7
Gain on sale of
assets (110.6) (64.6) (14.0) (175.2) (32.8)
Gain on TODCO
stock sales - - (165.0) - (165.0)
--------- --------- --------- --------- ---------
Adjusted Income
before Income Taxes
and Minority
Interest $164.8 $201.5 $146.2 $366.3 $243.6
Income Tax Expense $25.9 $60.4 $23.6 $86.3 $41.1
Add back
(subtract): -
Gain on sale of
assets 0.1 (21.7) (4.8) (21.6) (4.8)
Changes in
estimates (1) 3.4 (3.2) 7.8 0.2 5.6
--------- --------- --------- --------- ---------
Adjusted Income Tax
Expense (2) $29.4 $35.5 $26.6 $64.9 $41.9
Tax Rate 9.4% 22.7% 7.3% 15.9% 9.5%
Effective Tax Rate 17.8% 17.6% 18.2% 17.7% 17.2%
(1) Our estimates change as we file tax returns, settle disputes with
tax authorities or become aware of other events and include
changes in deferred taxes, valuation allowances on deferred taxes
and other tax liabilities.
(2) The three months ended June 30, 2005 include 1.4 million of
additional tax expense reflecting the catch-up effect of an
increase in the annual effective tax rate.
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