Transocean reported a net loss attributable to controlling interest for the three months ended March 31, 2015 of $483 million, or $1.33 per diluted share.
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First quarter 2015 results included net unfavorable items of $881 million, $2.43 per diluted share:
$481 million, or $1.34 per diluted share, associated with an impairment of the Deepwater Floater asset group;
As previously announced, $393 million, or $1.07 per diluted share, in impairments of assets classified as held for sale;
$5 million, or $0.01 per diluted share, in costs related to one-time termination benefits; and
$2 million, or $0.01 per diluted share, primarily associated with discontinued operations and other items.
After consideration of these net unfavorable items, first quarter adjusted net income was $398 million, or $1.10 per diluted share.
For the three months ended March 31, 2014, the company reported net income attributable to controlling interest of $456 million, or $1.25 per diluted share, which included net unfavorable items of $64 million, or $0.18 per diluted share. After consideration of these net unfavorable items, adjusted net income was $520 million, or $1.43 per diluted share.
Revenues for the three months ended March 31, 2015 decreased $194 million sequentially to $2.043 billion due primarily to reduced activity associated with stacked and idle rigs, and asset disposals, partly offset by fewer out-of-service days.
Operating and maintenance expenses decreased $226 million sequentially to $1.084 billion. The decrease was mainly associated with the company's onshore and offshore cost reduction initiatives including the optimization of maintenance and out-of-service costs, asset disposals, and stacking of rigs.
General and administrative expenses decreased $16 million from the prior quarter to $46 million due primarily to the company's cost reduction initiatives and certain costs incurred in the fourth quarter of 2014 that were not repeated in the first quarter.
Due primarily to the asset impairments and favorable changes in estimates related to prior years' tax liabilities, Transocean's first quarter 2015 Effective Tax Rate(4) was (21.6) percent, compared with (1.3) percent in the fourth quarter of 2014.
Transocean's Annual Effective Tax Rate for the first quarter of 2015 was 25.8 percent, compared with the full year 2014 Annual Effective Tax Rate of 18.7 percent. The increase was due partly to the overall level of pre-tax income and to U.K. legislation associated with bareboat charter payments to affiliates. The Annual Effective Tax Rate excludes the effect of the impairments.
Interest expense, net of amounts capitalized, was $116 million in the first quarter of 2015, down from $123 million in the prior quarter. Interest income was $6 million, compared with $8 million in the fourth quarter of 2014. Capitalized interest was $26 million, compared with $24 million in the prior quarter.
Cash flows from operating activities decreased $40 million from the fourth quarter of 2014 to $526 million. ■