Transocean CEO Discusses Q3 2010 Results – Earnings Call Transcript
Transocean Ltd. (
)
Q3 2010 Earnings Call
November 4, 2010 10:00 AM EST
Executives
Gregory Panagos – VP, IR and Communications.
Steven Newman – CEO
Ricardo Rosa – SVP and CFO
Terry Bonno – VP, Marketing
Analysts
Jim Crandell – Barclays Capital
Jeff Tillery – Tudor Pickering Holt
Robin Shoemaker – Citi
Scott Burk – Oppenheimer
Doug Becker – Merrill Lynch
Roger Read – Natixis Bleichroeder
Ian Macpherson – Simmons
Matt Conlan – Wells Fargo Securities
Kurt Hallead – RBC Capital Markets
Jud Bailey – Jefferies & Co.
Lukas Daul – SEB
Waqar Syed – Macquarie Capital
Presentation
Operator
Good day, everyone. Welcome to the third quarter 2010 results conference call for Transocean Limited. Today’s conference is being recorded.
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Transocean Ltd. Q3 2009 Earnings Call Transcript
At this time, for opening remarks and introductions, I would like to turn this conference over to Mr. Gregory Panagos, Vice President of Investor Relations and Communications. Please go ahead, sir.
Gregory Panagos
Thank you, Camille. Hello, everyone, and welcome to Transocean’s third quarter 2010 earnings conference call. A copy of the third quarter press release covering our financial results along with supporting statements and schedules is posted on the company’s website at www.deepwater.com. We’ve also posted a file containing four charts that will be discussed during this morning’s call. That file can be found on the company’s website by selecting Investor Relations, Quarterly Toolkit and then PowerPoint Charts.
The charts included cover average contracted dayrate by rig type, out of service rig months, operating and maintenance cost trends and free cash flow backlog and debt maturities. The Quarterly Toolkit also has four additional financial tables for your convenience covering revenue efficiency, other revenue details, daily operating and maintenance costs by rig type and contract intangible revenues.
Joining me on this morning’s call are Steven Newman, our Chief Executive Officer; Ricardo Rosa, Senior Vice President and Chief Financial Officer; Ihab Toma, Senior Vice President of Marketing and Planning; and Terry Bonno, Vice President of Marketing.
Before I turn the call over to Steven, I would like to point out that during the course of this conference call participants may make certain forward-looking statements regarding various matters related to our business and company that are not historical facts, including future financial performance, operating results and the prospects for the contract drilling business.
As you know, it is inherently difficult to make projections or other forward-looking statements in a cyclical industry, since the risks, assumptions and uncertainties involved in these forward-looking statements include the level of crude oil and natural gas prices, rig demand and operational and other risks which are described in the company’s most recent Form 10-K and other filings with the US Securities and Exchange Commission. Should one or more of these risks and uncertainties materialize or underlying assumptions prove incorrect, actual results may vary materially from those indicated.
Also note that we may use various numerical measures on the call today that are or may be considered non-GAAP financial measures under Regulation G. As I indicated earlier, you will find the required supplemental financial disclosure for these measures, including the most directly comparable GAAP measure and an associated reconciliation on our website at www.deepwater.com under Investor Relations, Quarterly Toolkit, and Non-GAAP Financial Measures and Reconciliations.
Finally, in order to give more people an opportunity to ask questions, please limit your questions to one initial question and one follow-up. Thank you and that concludes the preliminary details.
And now I’ll turn the call over to Steven.
Steven Newman
Thanks Greg. Hello, everyone, and thank you for joining us today. Our reported third quarters were $1.15 per diluted share. After adjusting for the items highlighted in our press release, the diluted earnings per share would have be $1.36.
Before I turn the call over to Ricardo, to provide some additional insight into the numbers, I want to make a couple of comments about the company and our business.
Our investigation into the events of the Macondo tragedy continues. Next week, we will review some of our preliminary findings with the Presidential Spill Commission. I expect our final report will be available late this year or early in 2011.
We are currently finalizing our own conclusions and are waiting the results of inspection work on the Deepwater Horizon's blowout preventer. While the general public’s interest in the tragedy has subsided and the media have turned their attention elsewhere, I want to assure you that our focus is squarely on the execution of safe and efficient operations around the world, and the resolution of Macondo related litigation and public policy issues.
During the third quarter, there were a few developments with respect to our shareholder approved distribution. As you know, the commercial register in Zug rejected our request to register the first installment of the par value reduction. We appealed this decision in the Zug administrative court and we are currently awaiting the court’s decision on our appeal.
We expect to hear from the Zug administrative court sometime in the next couple of months. If we are unsuccessful at this level, we will evaluate our options including a further appeal at the Federal level. We maintain the position that we have met all of the legal requirements to register the par value reduction and make the distribution.
Let me now make a few comments about the market. We continued to view the worldwide jackup market is stable, though there are some clear trends developing. I think it’s pretty clear that a bifurcation in the jackup market is taking place.
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