Each one in plain English, with the numbers worked through for a shareholder.
10 Dec 2007debt financing● NeutralMajor
Transocean signed underwriting agreements (Dec 4 and 5, 2007) for the senior notes and for $2 billion each of three series of convertible senior notes due 2037 (1.625% Series A, 1.50% Series B and C), with an option for up to $200 million more of each. The convertibles start at a conversion price of about $168.61 per share, a 32.5% premium to the $127.25 close on Dec 5, and principal is settled in cash with any excess in shares, so share dilution only arises if the price rises well above that level. Net proceeds of about $5.94 billion (convertibles) and $2.47 billion (senior notes), plus $1.5 billion from the 364-day revolver, are meant to repay part of the bridge loan; closing is expected around Dec 11.
To pay down the $15.0 billion bridge loan used for the cash paid to shareholders in the merger, Transocean signed a $1.5 billion 364-day revolving credit facility on Dec 3, 2007 (LIBOR +0.28% at current rating) and priced $2.5 billion of senior notes: $0.5B 5.25% due 2013, $1.0B 6.00% due 2018 and $1.0B 6.80% due 2038, expected to close Dec 11. It also said it intends to raise a further $6 billion of convertible notes and to use the proceeds plus $1.5 billion of the new revolver to repay part of the bridge loan. This continues the merger financing thread and replaces short-term bridge debt with longer-term debt.
3 Dec 2007capital raising announcement● NeutralMajor
Transocean issued about 315,941,000 ordinary shares in the reclassification and GlobalSantaFe merger, exempt from registration under Section 3(a)(10). It also issued 65,455 shares on conversion of $8,025,000 of Zero Coupon debentures between Nov 10 and 15, 2007. On Nov 15 the remaining $18,000 Zero Coupon and $3,118,000 1.5% debentures were redeemed for $3,130,785, which closes the convertible debenture thread.
On November 27, 2007 Transocean completed the GlobalSantaFe merger agreed in July: GlobalSantaFe merged into Transocean Worldwide by a Cayman scheme of arrangement, and Transocean shares were reclassified just before. This resolves the pending-merger thread. Alongside it Transocean signed a new $2.0 billion five-year revolving credit facility (JPMorgan agent, LIBOR +0.26% at current rating) and ended its prior $1.0 billion revolver (no termination penalty), amended the warrant agreement so warrant holders get the post-reclassification consideration, had Transocean Worldwide assume GlobalSantaFe's 5% notes due 2013 (~$250M outstanding), noted ~$300M of Global Marine 7% notes due 2028 outstanding (Transocean has not guaranteed either), and set up a two-year severance plan for certain US shore-based employees of both companies. The filing text provided is cut off before the share-exchange details and closing mechanics.
14 Nov 2007capital raising announcement▲ GoodMajor
Both Transocean and GlobalSantaFe shareholders approved the proposed merger on November 9, 2007. Completion is still estimated by end of 2007 and still needs certain regulatory clearances and Cayman court approval. Separately, between Oct 27 and Nov 9, 2007 holders converted $150,000 of Zero Coupon and $332,774,000 of 1.5% convertible debentures into 1,223 and 4,613,094 new ordinary shares respectively, which adds shares and reduces that debt.
24 Oct 2007capital raising announcement● NeutralMajor
On October 18, 2007 Transocean exercised its option from the April 2007 Pacific Drilling deal, after obtaining a drilling commitment for one of the two drillships. It paid about $238 million for a 50% interest in the joint venture plus a promissory note from it, representing 50% of the documented drillship costs. From October 18, 2010 Pacific Drilling can exchange its half for Transocean shares or cash (shares capped below 15% of those outstanding), so this could later dilute shareholders.
On September 28, 2007 Transocean signed the one-year $15.0 billion bridge loan with Goldman Sachs Credit Partners, Lehman Brothers and other lenders that had been committed in July for the GlobalSantaFe merger. Nothing is borrowed yet, borrowing is expected only at about the time the merger takes effect, and the margin is 0.4% over LIBOR at current ratings. Transocean says it will likely seek to refinance it before the year is up. The same filing announces shareholder meetings for Nov 9, 2007, with a Cayman court hearing on Nov 20, 2007 and completion still estimated by end of 2007.
On July 21, 2007 Transocean agreed to merge with GlobalSantaFe. Each Transocean share would become 0.6996 new shares plus $33.03 in cash, and each GlobalSantaFe share would get 0.4757 Transocean shares plus $22.46 in cash, with about 318 million Transocean shares expected afterwards. Goldman Sachs and Lehman have committed a $15.0 billion one-year bridge loan to fund the cash, and closing is targeted by year-end, subject to shareholder votes, regulatory clearances and financing. The board would have 14 members (seven from each company), with GlobalSantaFe's Robert Rose as Chairman, Robert Long staying CEO and Jon Marshall as President and COO; a $300 million termination fee applies under specified circumstances. The filing also says Transocean expects to call its two convertible debenture issues for redemption before closing, and that warrant holders would get the same shares-plus-cash treatment.
On June 1, 2007 Transocean amended its $1.0 billion bank revolving credit agreement, extending its availability and maturity from July 8, 2011 to July 8, 2012 and clarifying how it may insure its fleet. Nothing was borrowed under it as of June 1, 2007; this is a longer-dated version of the revolver set up in 2005 and amended in May 2006.
On April 9, 2007 Transocean announced a deal with Pacific Drilling giving it the exclusive right to market two deepwater drillships under construction, plus an option to buy 50% of a joint venture company that would own them. It is only an option, and the filing says Transocean has discretion over whether to exercise it, so no purchase has happened yet.
On April 2, 2007 CEO Robert Long presented slides at the Howard Weil Energy Conference in New Orleans, furnished as Exhibit 99.1. The filing text itself contains no figures or new announcements; the substance is only in the slides, which are not reproduced here.
On March 21, 2007 Transocean posted a slide presentation (Exhibit 99.1) on its website because of technical difficulties with the related webcast. The filing text itself contains no figures; the substance is only in the slides, which are not reproduced here.
On November 27, 2006 Transocean settled a dispute with TODCO, the former subsidiary it listed in 2004, over their Tax Sharing Agreement. TODCO will pay Transocean 55% of the value of tax deductions from exercises of Transocean stock options by TODCO's current and former employees and directors, and gets a $2.9 million federal tax benefit. Transocean expects to recognize about $50 million of revenue, net of tax, in the fourth quarter of 2006 that had been deferred pending the dispute.
On August 29, 2006 Transocean agreed with a group of underwriters led by Goldman Sachs to sell $1.0 billion of Floating Rate Notes due September 5, 2008, with closing expected around September 5, 2006. The notes pay three-month LIBOR plus 0.20%, adding new debt that matures the same year as the new term credit facility; the filing does not state how the proceeds will be used.
On August 30, 2006 Transocean signed a new $1.0 billion multi-draw term credit facility led by JPMorgan Chase, ending August 29, 2008, priced at LIBOR plus 30 basis points with a 6.5 basis point fee on unused amounts. Nothing was borrowed as of that date, so it adds borrowing capacity alongside the July 2005 $500 million revolver.
On July 13, 2006 the compensation committee set new base salaries effective July 16, 2006: Long $850,000 (from $750,000), Cahuzac $515,000 (from $435,000), Cauthen $385,000 (from $360,000), Brown $365,000 (from $315,000), Newman $315,000. It also set 2006 target bonuses at 90%, 75%, 60%, 55% and 50% of base salary respectively; Cauthen's rose from 55% in the February filing.
On February 8, 2006 the compensation committee set 2005 cash bonuses for named executives (Long $750,000; Cahuzac $362,596; Cauthen $152,274; Brown $133,686; Newman $146,909) and set the 2006 bonus design (50% financial, 50% corporate goals, payout 0-200% of target). Outside directors are expected to receive deferred units worth $128,000 for 2006 (up from about $88,000 for 2005 in the prior context), and director Pattarozzi, who is not standing for reelection, will have his unvested units vest when he leaves the board.
On December 28, 2005 Transocean amended its Deferred Compensation Plan so participants who made 2005 deferral elections can cancel them, and stopped any new deferrals after December 31, 2005. Those who cancel from the Ordinary Share fund receive shares; those in other funds receive cash for their investments. The filing gives no amounts or reasons.
On August 5, 2005 Transocean approved a one-off $25,000 cash bonus for Barbara Wood, Vice President and Chief Information Officer. It is a small payment with no stated reason in the filing.
Effective July 15, 2005 the board set new annual base salaries for named executives (CEO Long $750,000, COO Cahuzac $435,000, CFO Cauthen $360,000, GC Brown $315,000, CIO Wood $225,000) and created a change-of-control severance policy covering Long, Cahuzac, Brown and Cauthen. If one of them is terminated without cause or leaves for good reason within 24 months after a change of control, they get cash of 2.99 times salary plus target bonus, plus other benefits including excise-tax gross-ups. This adds to the February 2005 severance policy described earlier and is a cost-bearing protection for executives, not a sign of a pending deal (the filing states no transaction).
On July 8, 2005 Transocean replaced its five-year, $800 million bank credit facility (which was due to expire in 2008) with a new five-year, $500 million revolving credit facility led by Citibank, ending July 8, 2010. Borrowings are priced at LIBOR/Euribor plus 22.5 basis points based on current ratings, and nothing was borrowed as of July 11, 2005.
Shareholders approved on May 12, 2005 an amendment to the Employee Stock Purchase Plan raising the ordinary shares reserved for it from 2,500,000 to 3,500,000. This slightly increases potential share issuance (up to 1,000,000 more shares) for employees.
Transocean approved a one-time special cash bonus of $50,000 to Gregory L. Cauthen, Senior Vice President and Chief Financial Officer, on March 30, 2005. The filing gives no reason for the bonus.
Transocean disclosed its executive and director pay decisions: 2004 cash bonuses to named executives (for example $410,449 to CEO Robert L. Long and $120,870 to CFO Gregory L. Cauthen), 2005 bonus opportunities of 30% to 90% of base pay, and a rise in the annual outside-director retainer from $40,000 to $50,000. A new executive severance policy, effective February 9, 2005, pays a terminated executive one year's base salary plus other items. The filing also shows Robert Long is now President and CEO and J. Michael Talbert is non-executive Chairman after retiring from active employment in October 2004, a leadership change from earlier context.
Transocean amended its report on the December 2004 TODCO share sale to correct figures: net proceeds are now about $257.1 million (previously $257.4 million), with the pro forma balance sheet adjusted accordingly, and pro forma nine-month diluted earnings per share shown as $0.78 (previously $0.80). The facts of the sale (14,950,000 shares at $18.00, roughly 22% stake retained, TODCO deconsolidated) are unchanged.
29 Dec 2004asset acquisition disposition▲ GoodMajor
Transocean closed a December 22, 2004 public sale of 14,950,000 TODCO Class A shares at $18.00 each, receiving about $257.4 million net, which it plans to use to reduce corporate debt and for general purposes. After the sale and converting its remaining 13,310,000 Class B shares to Class A, Transocean owns about 22% of TODCO, no longer has majority voting control, and will stop consolidating TODCO and use the equity method instead. This completes the TODCO sell-down that began with a February 2004 IPO (about $155.7 million net) and a September 2004 offering (about $269.9 million net). The filing includes pro forma financials.
Transocean filed Amendment No. 1 to its January 18, 2002 registration for the offer to swap six series of R&B Falcon notes (about $1.477 billion principal) for new Transocean notes with the same terms. It now fills in the dates left blank before: the consent payment deadline is February 13, 2002 (cash consent payments of $2.50 to $6.00 per $1,000 of notes, paid by R&B Falcon), and the offers expire March 1, 2002 unless extended. Goldman, Sachs & Co. is named as dealer manager. This continues the January 2002 exchange offer; no new debt is added.
Transocean filed a registration statement offering to swap six series of R&B Falcon notes (about $1.48 billion principal, due 2003 to 2018) for new Transocean notes with the same principal, rates and maturities, while also seeking holder consents to amend the old indentures. This moves debt of the R&B Falcon subsidiary acquired in the 2001 merger up to Transocean itself; the document is a preliminary draft and the deadlines are left blank.
Transocean filed a registration statement to swap the $1.3 billion of privately placed 2011 and 2031 notes (issued in April 2001) for identical registered notes. It is a follow-through on the earlier placement and adds no new debt or new terms.
Transocean sold $700 million of 6.625% notes due 2011 and $600 million of 7.500% notes due 2031 in a private placement that closed April 5, 2001, for expected net proceeds of about $1,283 million. The money is meant to fund R&B Falcon's tender offer for its 11.375% Senior Secured Notes due 2009 and the redemption of its 11% and 12.25% notes due 2006, plus general corporate purposes, so it replaces the debt taken on in the merger with new Transocean debt.
