Transocean Reports 4Q & FY 2011 Results

Transocean Ltd. reported a net loss attributable to controlling interest of $6.119 billion, or $18.62 per diluted share, for the three months ended December 31, 2011. The results compare to a net loss attributable to controlling interest of $799 million, or $2.51 per diluted share, for the three months ended December 31, 2010.
 
• Revenues improved eight percent in the fourth quarter to $2.422 billion compared to $2.242 billion in the third quarter 2011,
 
• Fourth quarter 2011 net loss attributable to controlling interest was $6.119 billion, which included $ 6.176 billion of certain net unfavorable items including an estimated goodwill impairment of $5.2 billion and an estimated loss contingency of $1.0 billion associated with the Macondo Well incident, compared to a net loss attributable to controlling interest of $71 million in the third quarter 2011, which included $81 million of certain net unfavorable items,
 
• Revenue efficiency(1) was 91.9 percent in the fourth quarter, up from 89.5 percent in the third quarter 2011,
 
• Fleet utilization(2) was 61 percent in the fourth quarter, up from 58 percent in the third quarter 2011,
 
• Excluding $1.0 billion for estimated loss contingencies associated with the Macondo Well incident, fourth quarter 2011 operating and maintenance expenses were $1.565 billion, up from $1.540 billion in the third quarter 2011,
 
• Cash flows from operating activities were $563 million in the fourth quarter, up from $492 million in the third quarter 2011,
 
• The Annual Effective Tax Rate(3) for 2011 increased to 41.3 percent from 34.1 percent in the third quarter 2011, and
 
• New contracts totaling $1.4 billion were secured in the Fleet Status Report period October 17, 2011 through February 14, 2012.
 
Fourth quarter 2011 results included the following items, after tax, which resulted in a net adverse impact of $ 6.176 billion, or $18.80 per diluted share:
 
• An estimated, non-cash charge of $5.2 billion, or $15.83 per diluted share, resulting from a goodwill impairment associated with the contract drilling services reporting unit. The impairment was primarily due to a decline in the market valuation of the contract drilling services business,
 
• $1.0 billion, or $3.04 per diluted share, for estimated loss contingencies associated with the Macondo Well incident that the company believes is probable and for which a reasonable estimate can be made at this time.  This estimate will be adjusted to reflect new information and future developments as they become known,
 
• $30 million, or $0.09 per diluted share, of charges associated with the company's acquisition of Aker Drilling,
 
• $26 million, or $0.08 per diluted share,  of income from discontinued operations, primarily related to the gain on the sale of Challenger Minerals (North Sea) Limited,
 
• $18 million, or $0.05 per diluted share,  of favorable discrete tax items, and
 
• $11 million, or $0.03 per diluted share, from the gain on the sale of the GSF Adriatic XI.