Transocean Ltd. (NYSE:RIG) today reported net loss attributable to
controlling interest of $1.417 billion, $3.62 per diluted
share, for the three months ended September 30, 2017.
Third quarter 2017 results included net unfavorable items of
$1.481 billion, or $3.78 per diluted share as
follows:
- $1.386 billion, $3.54 per diluted share, loss on
impairment associated with the previously announced retirement of
six floaters;
- $90 million, $0.23 per diluted share, in discrete tax expense;
and
- $5 million, $0.01 per diluted share, for acquisition costs
related to Songa Offshore and other items.
After consideration of these net unfavorable items,
third quarter 2017 adjusted net income was $64 million,
or $0.16 per diluted share.
Contract drilling revenues for the three months ended
September 30, 2017, decreased $6 million sequentially to
$699 million. Fleet utilization improved to 52 percent,
compared with 44 percent in the prior quarter, reflecting the
positive impact of the warm-stacked reactivation of the
ultra-deepwater floaters, the Deepwater Asgard and Development
Driller III, and the harsh environment semisubmersible Transocean
Barents. The increase in activity was partially offset by the
divestiture of the company’s jackup fleet in the second quarter of
2017.
Other revenues were $109 million, compared with $46 million
in the prior quarter. The third quarter of 2017 included $87
million awarded to the company in connection with a
customer-terminated drilling contract in 2015.
Operating and maintenance expense was $323 million,
including $6 million in reimbursements related to the
aforementioned award. The third quarter of 2017 was lower than
anticipated due to the timing of certain maintenance expenses,
contract preparation costs, and recycling costs associated with the
previously announced retirements. The quarter was also favorably
impacted by the company’s ongoing cost control initiatives. This
compares with $333 million in the prior quarter, which included $4
million in unfavorable items associated with litigation matters and
restructuring charges.
General and administrative expense was $39 million, up from
$35 million in the second quarter of 2017. The increase
was due largely to acquisition costs related to Songa Offshore.
Depreciation expense was $197 million, down from
$219 million in the second quarter of 2017. The decrease was
primarily due to the sale of the jackup fleet in the second quarter
of 2017.
Interest expense, net of amounts capitalized, was
$112 million, compared with $129 million in the prior
quarter. The decrease was largely due to the company’s recent debt
capital markets transactions. Capitalized interest was
$31 million in third quarter of 2017, compared with $30
million in the prior quarter. Interest income increased $14 million
sequentially to $21 million. The increase was almost entirely
due to interest related to the aforementioned award.
The Effective Tax Rate(2) was (14.7) percent, down from
2.2 percent in the prior quarter. The decrease in the rate was
primarily due to an increase in the company’s U.S. deferred tax
asset valuation allowance and current-year losses on impairment and
disposal of assets. The Effective Tax Rate excluding discrete
items(3) was 56.5 percent, compared with 74.0 percent in
the previous quarter. For the three months ended
September 30, 2017, the company’s income tax expense was
$180 million, which includes $137 million of non‑cash
items relating to a valuation allowance on certain deferred tax
assets.
Cash flows from operating activities increased $65 million
sequentially to $384 million primarily due to the
aforementioned award.
Third quarter 2017 capital expenditures of $128 million
were primarily related to the company’s contracted newbuild
drillships. This compares with $136 million in the previous
quarter.
“Despite the challenging environment, we continue to operate at
a high level, delivering another quarter in which Revenue
Efficiency exceeded 97% and Adjusted Normalized EBITDA margin
approached 50%,” said Jeremy Thigpen, President and Chief Executive
Officer. “In addition to the strong operating results, during the
quarter, we continued the high-grading of our fleet by announcing
our intent to acquire Songa Offshore, which includes the addition
of four new, high-specification, harsh environment
semisubmersibles. We also announced our decision to recycle six
additional floaters, further improving the overall quality and
competitiveness of our fleet.”
Thigpen added: “During October, we issued $750 million of senior
unsecured debt with the intent of retiring our near-dated
maturities. This action, coupled with cash flow from operations of
$384 million, and the anticipated incremental backlog of
approximately $4 billion attributable to the Songa Offshore
transaction, further extends our liquidity runway, and positions us
well for a market recovery.”
Non-GAAP Financial Measures
We present our operating results in accordance with accounting
principles generally accepted in the U.S. (U.S. GAAP). We believe
certain financial measures, such as Adjusted Net Income, EBITDA,
Adjusted EBITDA and Adjusted Normalized EBITDA, which are non-GAAP
measures, provide users of our financial statements with
supplemental information that may be useful in evaluating our
operating performance. We believe that such non-GAAP measures, when
read in conjunction with our operating results presented under U.S.
GAAP, can be used to better assess our performance from period to
period and relative to performance of other companies in our
industry, without regard to financing methods, historical cost
basis or capital structure. Such non-GAAP measures should be
considered as a supplement to, and not as a substitute for,
financial measures prepared in accordance with U.S. GAAP.
All non-GAAP measure reconciliations to the most comparative
U.S. GAAP measures are displayed in quantitative schedules on the
company’s website at: www.deepwater.com.
About Transocean
Transocean is a leading international provider of offshore
contract drilling services for oil and gas wells. The company
specializes in technically demanding sectors of the global offshore
drilling business with a particular focus on ultra-deepwater and
harsh environment drilling services, and believes that it operates
one of the most versatile offshore drilling fleets in the
world.
Transocean owns or has partial ownership interests in, and
operates a fleet of 39 mobile offshore drilling units
consisting of 26 ultra-deepwater floaters, seven harsh
environment floaters, two deepwater floaters and
four midwater floaters. In addition, the company has three
ultra-deepwater drillships under construction or under contract to
be constructed. We also continue to operate
two high-specification jackups that were under drilling
contracts when we sold the rigs, and we continue to operate these
jackups until completion or novation of the drilling contracts.
For more information about Transocean, please visit:
www.deepwater.com.
Conference Call Information
Transocean will conduct a teleconference starting at 9 a.m.
EDT, 2 p.m. CET, on Thursday, November 2, 2017, to
discuss the results. To participate, dial +1 719-457-2664 and refer
to conference code 1809944 approximately 10 minutes prior
to the scheduled start time.
The teleconference will be simulcast in a listen-only mode at:
www.deepwater.com, by selecting Investors, News, and Webcasts.
Supplemental materials that may be referenced during the
teleconference will be available at: www.deepwater.com, by
selecting Investors, Financial Reports.
A replay of the conference call will be available after
12 p.m. EDT, 5 p.m. CET, on November 2, 2017. The
replay, which will be archived for approximately 30 days, can
be accessed at +1 719-457-0820, passcode 1809944 and
PIN 9876. The replay will also be available on the company’s
website.
Forward-Looking Statements
The statements described in this press release that are not
historical facts are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
These statements contain words such as "possible," "intend,"
"will," "if," "expect," or other similar expressions.
Forward-looking statements are based on management’s current
expectations and assumptions, and are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict. As a result, actual results could differ
materially from those indicated in these forward-looking
statements. Factors that could cause actual results to differ
materially include, but are not limited to, estimated duration of
customer contracts, contract dayrate amounts, future contract
commencement dates and locations, planned shipyard projects and
other out-of-service time, sales of drilling units, timing of the
company’s newbuild deliveries, operating hazards and delays, risks
associated with international operations, actions by customers and
other third parties, the future prices of oil and gas, the
intention to scrap certain drilling rigs, the results of our final
accounting for the periods presented in this press release, the
timing and likelihood of the completion of the contemplated
acquisition of Songa Offshore SE (“Songa”), the expected benefits
from such transaction, the ability to successfully integrate the
Transocean and Songa businesses and other factors, including those
and other risks discussed in the company's most recent Annual
Report on Form 10-K for the year ended December 31, 2016,
and in the company's other filings with the SEC, which are
available free of charge on the SEC's website at: www.sec.gov.
Should one or more of these risks or uncertainties materialize (or
the other consequences of such a development worsen), or should
underlying assumptions prove incorrect, actual results may vary
materially from those indicated or expressed or implied by such
forward-looking statements. All subsequent written and oral
forward-looking statements attributable to the company or to
persons acting on our behalf are expressly qualified in their
entirety by reference to these risks and uncertainties. You should
not place undue reliance on forward-looking statements. Each
forward-looking statement speaks only as of the date of the
particular statement, and we undertake no obligation to publicly
update or revise any forward-looking statements to reflect events
or circumstances that occur, or which we become aware of, after the
date hereof, except as otherwise may be required by law. All
non-GAAP financial measure reconciliations to the most comparative
GAAP measure are displayed in quantitative schedules on the
company’s website at: www.deepwater.com.
This press release, or referenced documents, do not constitute
an offer to sell, or a solicitation of an offer to buy, any
securities, and do not constitute an offering prospectus within the
meaning of article 652a or article 1156 of the Swiss Code
of Obligations. Investors must rely on their own evaluation of
Transocean and its securities, including the merits and risks
involved. Nothing contained herein is, or shall be relied on as, a
promise or representation as to the future performance of
Transocean.
Notes
- Revenue efficiency is defined as actual contract drilling
revenues for the measurement period divided by the maximum revenue
calculated for the measurement period, expressed as a percentage.
Maximum revenue is defined as the greatest amount of contract
drilling revenues the drilling unit could earn for the measurement
period, excluding amounts related to incentive provisions. See the
accompanying schedule entitled “Revenue Efficiency.”
- Effective Tax Rate is defined as income tax expense for
continuing operations divided by income from continuing operations
before income taxes. See the accompanying schedule entitled
“Supplemental Effective Tax Rate Analysis.”
- Effective Tax Rate, excluding discrete items, is defined as
income tax expense for continuing operations, excluding various
discrete items (such as changes in estimates and tax on items
excluded from income before income taxes), divided by income from
continuing operations before income tax expense, excluding gains
and losses on sales and similar items pursuant to the accounting
standards for income taxes and estimating the annual effective tax
rate. See the accompanying schedule entitled “Supplemental
Effective Tax Rate Analysis.”
Analyst Contacts:Bradley
Alexander+1 713-232-7515
Diane Vento+1 713-232-8015
Media Contact:Pam Easton+1 713-232-7647
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS |
(In millions, except share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
|
September 30, |
|
September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Contract
drilling revenues |
|
$ |
699 |
|
|
$ |
886 |
|
|
$ |
2,142 |
|
|
$ |
2,912 |
|
Other revenues |
|
|
109 |
|
|
|
20 |
|
|
|
202 |
|
|
|
275 |
|
|
|
|
808 |
|
|
|
906 |
|
|
|
2,344 |
|
|
|
3,187 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
and maintenance |
|
|
323 |
|
|
|
409 |
|
|
|
999 |
|
|
|
1,561 |
|
Depreciation |
|
|
197 |
|
|
|
225 |
|
|
|
648 |
|
|
|
667 |
|
General and administrative |
|
|
39 |
|
|
|
41 |
|
|
|
113 |
|
|
|
125 |
|
|
|
|
559 |
|
|
|
675 |
|
|
|
1,760 |
|
|
|
2,353 |
|
Loss
on impairment |
|
|
(1,385 |
) |
|
|
(11 |
) |
|
|
(1,498 |
) |
|
|
(26 |
) |
Gain (loss) on disposal of assets, net |
|
|
(9 |
) |
|
|
9 |
|
|
|
(1,602 |
) |
|
|
8 |
|
Operating income (loss) |
|
|
(1,145 |
) |
|
|
229 |
|
|
|
(2,516 |
) |
|
|
816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
|
21 |
|
|
|
5 |
|
|
|
34 |
|
|
|
15 |
|
Interest
expense, net of amounts capitalized |
|
|
(112 |
) |
|
|
(109 |
) |
|
|
(368 |
) |
|
|
(296 |
) |
Gain
(loss) on retirement of debt |
|
|
(1 |
) |
|
|
110 |
|
|
|
(49 |
) |
|
|
148 |
|
Other, net |
|
|
6 |
|
|
|
7 |
|
|
|
7 |
|
|
|
9 |
|
|
|
|
(86 |
) |
|
|
13 |
|
|
|
(376 |
) |
|
|
(124 |
) |
Income (loss) before income tax expense |
|
|
(1,231 |
) |
|
|
242 |
|
|
|
(2,892 |
) |
|
|
692 |
|
Income
tax expense |
|
|
180 |
|
|
|
6 |
|
|
|
103 |
|
|
|
122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
(1,411 |
) |
|
|
236 |
|
|
|
(2,995 |
) |
|
|
570 |
|
Net income attributable to noncontrolling interest |
|
|
6 |
|
|
|
18 |
|
|
|
21 |
|
|
|
35 |
|
Net income (loss) attributable to controlling
interest |
|
$ |
(1,417 |
) |
|
$ |
218 |
|
|
$ |
(3,016 |
) |
|
$ |
535 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per share—basic |
|
$ |
(3.62 |
) |
|
$ |
0.59 |
|
|
$ |
(7.72 |
) |
|
$ |
1.44 |
|
Earnings
(loss) per share—diluted |
|
$ |
(3.62 |
) |
|
$ |
0.59 |
|
|
$ |
(7.72 |
) |
|
$ |
1.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
391 |
|
|
|
365 |
|
|
|
391 |
|
|
|
365 |
|
Diluted |
|
|
391 |
|
|
|
365 |
|
|
|
391 |
|
|
|
365 |
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In millions, except share data) |
(Unaudited) |
|
|
|
September 30, |
|
December 31, |
|
|
2017 |
|
2016 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Cash
and cash equivalents |
|
$ |
2,717 |
|
|
$ |
3,052 |
|
Accounts receivable,
net of allowance for doubtful accounts of less than $1 at September
30, 2017 and December 31, 2016 |
|
|
663 |
|
|
|
898 |
|
Materials and supplies,
net of allowance for obsolescence of $154 and $153 at September 30,
2017 and December 31, 2016, respectively |
|
|
437 |
|
|
|
561 |
|
Restricted cash |
|
|
480 |
|
|
|
466 |
|
Other current assets |
|
|
154 |
|
|
|
121 |
|
Total current assets |
|
|
4,451 |
|
|
|
5,098 |
|
|
|
|
|
|
|
|
Property and equipment |
|
|
22,599 |
|
|
|
27,372 |
|
Less accumulated depreciation |
|
|
(5,117 |
) |
|
|
(6,279 |
) |
Property and equipment, net |
|
|
17,482 |
|
|
|
21,093 |
|
Deferred income taxes, net |
|
|
167 |
|
|
|
298 |
|
Other assets |
|
|
341 |
|
|
|
400 |
|
Total assets |
|
$ |
22,441 |
|
|
$ |
26,889 |
|
|
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
|
|
Accounts payable |
|
$ |
172 |
|
|
$ |
206 |
|
Accrued income taxes |
|
|
159 |
|
|
|
95 |
|
Debt
due within one year |
|
|
799 |
|
|
|
724 |
|
Other current liabilities |
|
|
755 |
|
|
|
960 |
|
Total current liabilities |
|
|
1,885 |
|
|
|
1,985 |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
6,501 |
|
|
|
7,740 |
|
Deferred income taxes, net |
|
|
106 |
|
|
|
178 |
|
Other
long-term liabilities |
|
|
1,098 |
|
|
|
1,153 |
|
Total long-term liabilities |
|
|
7,705 |
|
|
|
9,071 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
Redeemable
noncontrolling interest |
|
|
48 |
|
|
|
28 |
|
|
|
|
|
|
|
|
Shares, CHF 0.10 par
value, 417,060,033 authorized, 143,783,041 conditionally authorized
and 394,801,990 issued at September 30, 2017 and December 31, 2016
and 391,211,739 and 389,366,241 outstanding at September 30, 2017
and December 31, 2016, respectively |
|
|
37 |
|
|
|
36 |
|
Additional paid-in capital |
|
|
11,020 |
|
|
|
10,993 |
|
Retained earnings |
|
|
2,040 |
|
|
|
5,056 |
|
Accumulated other comprehensive loss |
|
|
(298 |
) |
|
|
(283 |
) |
Total controlling interest shareholders’ equity |
|
|
12,799 |
|
|
|
15,802 |
|
Noncontrolling interest |
|
|
4 |
|
|
|
3 |
|
Total equity |
|
|
12,803 |
|
|
|
15,805 |
|
Total liabilities and equity |
|
$ |
22,441 |
|
|
$ |
26,889 |
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In millions) |
(Unaudited) |
|
|
|
|
|
Nine months ended |
|
|
September 30, |
|
|
2017 |
|
2016 |
Cash flows from
operating activities |
|
|
|
|
|
|
Net
income (loss) |
|
$ |
(2,995 |
) |
|
$ |
570 |
|
Adjustments to reconcile to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
648 |
|
|
|
667 |
|
Share-based compensation expense |
|
|
30 |
|
|
|
31 |
|
Loss on
impairment |
|
|
1,498 |
|
|
|
26 |
|
(Gain)
loss on disposal of assets, net |
|
|
1,602 |
|
|
|
(8 |
) |
(Gain)
loss on retirement of debt |
|
|
49 |
|
|
|
(148 |
) |
Deferred
income tax expense |
|
|
32 |
|
|
|
44 |
|
Other,
net |
|
|
29 |
|
|
|
11 |
|
Changes
in deferred revenues, net |
|
|
(109 |
) |
|
|
(30 |
) |
Changes
in deferred costs, net |
|
|
42 |
|
|
|
64 |
|
Changes in other operating assets and liabilities, net |
|
|
61 |
|
|
|
51 |
|
Net cash
provided by operating activities |
|
|
887 |
|
|
|
1,278 |
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
Capital
expenditures |
|
|
(386 |
) |
|
|
(1,072 |
) |
Proceeds
from disposal of assets, net |
|
|
330 |
|
|
|
16 |
|
Other, net |
|
|
10 |
|
|
|
— |
|
Net cash
used in investing activities |
|
|
(46 |
) |
|
|
(1,056 |
) |
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
Proceeds
from issuance of debt, net of discounts and issue costs |
|
|
403 |
|
|
|
1,210 |
|
Repayments of debt |
|
|
(1,629 |
) |
|
|
(1,316 |
) |
Deposits
to cash accounts restricted for financing activities |
|
|
(78 |
) |
|
|
(24 |
) |
Proceeds
from cash accounts and investments restricted for financing
activities |
|
|
131 |
|
|
|
124 |
|
Distributions to holders of noncontrolling interest |
|
|
— |
|
|
|
(23 |
) |
Other, net |
|
|
(3 |
) |
|
|
2 |
|
Net cash
used in financing activities |
|
|
(1,176 |
) |
|
|
(27 |
) |
|
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents |
|
|
(335 |
) |
|
|
195 |
|
Cash and
cash equivalents at beginning of period |
|
|
3,052 |
|
|
|
2,339 |
|
Cash and
cash equivalents at end of period |
|
$ |
2,717 |
|
|
$ |
2,534 |
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
FLEET OPERATING STATISTICS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues (in millions) |
|
|
Three months ended |
|
Nine months ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Contract drilling
revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ultra-deepwater floaters |
|
$ |
511 |
|
$ |
497 |
|
$ |
584 |
|
$ |
1,513 |
|
$ |
1,758 |
Harsh
environment floaters |
|
|
106 |
|
|
104 |
|
|
102 |
|
|
332 |
|
|
383 |
Deepwater
floaters |
|
|
35 |
|
|
36 |
|
|
43 |
|
|
106 |
|
|
179 |
Midwater
floaters |
|
|
18 |
|
|
18 |
|
|
87 |
|
|
49 |
|
|
358 |
High-specification jackups |
|
|
29 |
|
|
50 |
|
|
66 |
|
|
142 |
|
|
223 |
Contract
intangible revenue |
|
|
— |
|
|
— |
|
|
4 |
|
|
— |
|
|
11 |
Total contract drilling
revenues |
|
|
699 |
|
|
705 |
|
|
886 |
|
|
2,142 |
|
|
2,912 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer
early termination fees |
|
|
100 |
|
|
40 |
|
|
9 |
|
|
176 |
|
|
227 |
Customer
reimbursement revenues and other |
|
|
9 |
|
|
6 |
|
|
11 |
|
|
26 |
|
|
48 |
Total other
revenues |
|
|
109 |
|
|
46 |
|
|
20 |
|
|
202 |
|
|
275 |
Total revenues |
|
$ |
808 |
|
$ |
751 |
|
$ |
906 |
|
$ |
2,344 |
|
$ |
3,187 |
|
|
Average Daily Revenue (1) |
|
|
Three months ended |
|
Nine months ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Ultra-deepwater
floaters |
|
$ |
449,300 |
|
$ |
482,200 |
|
$ |
487,800 |
|
$ |
481,900 |
|
$ |
492,600 |
Harsh environment
floaters |
|
|
213,100 |
|
|
262,200 |
|
|
225,900 |
|
|
248,700 |
|
|
356,700 |
Deepwater floaters |
|
|
187,300 |
|
|
199,000 |
|
|
234,100 |
|
|
192,800 |
|
|
266,400 |
Midwater floaters |
|
|
98,900 |
|
|
100,300 |
|
|
240,400 |
|
|
97,500 |
|
|
303,300 |
High-specification
jackups |
|
|
151,200 |
|
|
142,800 |
|
|
143,100 |
|
|
143,600 |
|
|
143,800 |
Total
drilling fleet |
|
$ |
319,000 |
|
|
329,900 |
|
$ |
332,100 |
|
$ |
328,800 |
|
$ |
360,700 |
|
|
|
Utilization (2) |
|
|
|
Three months ended |
|
Nine months ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Ultra-deepwater
floaters |
|
|
42 |
% |
|
38 |
% |
|
45 |
% |
|
39 |
% |
|
46 |
% |
Harsh environment
floaters |
|
|
77 |
% |
|
62 |
% |
|
71 |
% |
|
70 |
% |
|
56 |
% |
Deepwater floaters |
|
|
69 |
% |
|
67 |
% |
|
50 |
% |
|
67 |
% |
|
54 |
% |
Midwater floaters |
|
|
50 |
% |
|
33 |
% |
|
42 |
% |
|
35 |
% |
|
43 |
% |
High-specification
jackups |
|
|
95 |
% |
|
54 |
% |
|
50 |
% |
|
56 |
% |
|
57 |
% |
Total
drilling fleet |
|
|
52 |
% |
|
44 |
% |
|
49 |
% |
|
46 |
% |
|
49 |
% |
|
|
|
Revenue Efficiency (3) |
|
|
|
Three months ended |
|
Nine months ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Ultra-deepwater
floaters |
|
|
98.6 |
% |
|
97.1 |
% |
|
99.6 |
% |
|
97.9 |
% |
|
97.8 |
% |
Harsh environment
floaters |
|
|
92.0 |
% |
|
98.4 |
% |
|
96.6 |
% |
|
95.8 |
% |
|
97.8 |
% |
Deepwater floaters |
|
|
90.0 |
% |
|
95.6 |
% |
|
96.0 |
% |
|
92.7 |
% |
|
96.3 |
% |
Midwater floaters |
|
|
97.4 |
% |
|
98.8 |
% |
|
103.5 |
% |
|
96.2 |
% |
|
99.0 |
% |
High-specification
jackups |
|
|
99.3 |
% |
|
98.7 |
% |
|
114.5 |
% |
|
101.2 |
% |
|
97.6 |
% |
Total
drilling fleet |
|
|
97.1 |
% |
|
97.4 |
% |
|
100.4 |
% |
|
97.4 |
% |
|
97.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Average daily revenue is defined as contract drilling revenues
earned per operating day. An operating day is defined as a
calendar day during which a rig is contracted to earn a
dayrate during the firm contract period after commencement of
operations. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Rig
utilization is defined as the total number of operating days
divided by the total number of available rig calendar days in the
measurement period, expressed as a percentage. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
Revenue efficiency is defined as actual contract drilling revenues
for the measurement period divided by the maximum revenue
calculation for the measurement period, expressed as a
percentage. Maximum revenue is defined as the greatest amount
of contract drilling revenues the drilling unit could earn for
the measurement period, excluding amounts related to incentive
provisions. |
TRANSOCEAN LTD. AND SUBSIDIARIES |
NON-GAAP FINANCIAL MEASURES AND
RECONCILIATIONS |
ADJUSTED NET INCOME AND ADJUSTED DILUTED
EARNINGS PER SHARE |
(In millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
QTD |
|
|
09/30/17 |
|
09/30/17 |
|
06/30/17 |
|
06/30/17 |
|
03/31/17 |
Adjusted Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to controlling interest, as reported |
|
$ |
(3,016 |
) |
|
$ |
(1,417 |
) |
|
$ |
(1,599 |
) |
|
$ |
(1,690 |
) |
|
$ |
91 |
|
Add back
(subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation matters |
|
|
(7 |
) |
|
|
— |
|
|
|
(7 |
) |
|
|
1 |
|
|
|
(8 |
) |
Restructuring charges |
|
|
1 |
|
|
|
(1 |
) |
|
|
2 |
|
|
|
2 |
|
|
|
— |
|
Acquisition costs |
|
|
4 |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on
impairment of assets |
|
|
1,499 |
|
|
|
1,386 |
|
|
|
113 |
|
|
|
113 |
|
|
|
— |
|
(Gain)
loss on disposal of assets, net |
|
|
1,596 |
|
|
|
1 |
|
|
|
1,595 |
|
|
|
1,597 |
|
|
|
(2 |
) |
Loss on
retirement of debt |
|
|
49 |
|
|
|
1 |
|
|
|
48 |
|
|
|
48 |
|
|
|
— |
|
Discrete
tax items and other, net |
|
|
(57 |
) |
|
|
90 |
|
|
|
(147 |
) |
|
|
(70 |
) |
|
|
(77 |
) |
Net income, as
adjusted |
|
$ |
69 |
|
|
$ |
64 |
|
|
$ |
5 |
|
|
$ |
1 |
|
|
$ |
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss)
per share, as reported |
|
$ |
(7.72 |
) |
|
$ |
(3.62 |
) |
|
$ |
(4.09 |
) |
|
$ |
(4.32 |
) |
|
$ |
0.23 |
|
Add back
(subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation matters |
|
|
(0.02 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
|
— |
|
|
|
(0.02 |
) |
Restructuring charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Acquisition costs |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on
impairment of assets |
|
|
3.84 |
|
|
|
3.54 |
|
|
|
0.29 |
|
|
|
0.29 |
|
|
|
— |
|
Loss on
disposal of assets, net |
|
|
4.08 |
|
|
|
— |
|
|
|
4.08 |
|
|
|
4.08 |
|
|
|
— |
|
Loss on
retirement of debt |
|
|
0.12 |
|
|
|
— |
|
|
|
0.12 |
|
|
|
0.12 |
|
|
|
— |
|
Discrete
tax items and other, net |
|
|
(0.13 |
) |
|
|
0.23 |
|
|
|
(0.37 |
) |
|
|
(0.17 |
) |
|
|
(0.20 |
) |
Diluted earnings per
share, as adjusted |
|
$ |
0.18 |
|
|
$ |
0.16 |
|
|
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
QTD |
|
|
12/31/16 |
|
12/31/16 |
|
09/30/16 |
|
09/30/16 |
|
06/30/16 |
|
06/30/16 |
|
03/31/16 |
Adjusted Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to controlling interest, as reported |
|
$ |
778 |
|
|
$ |
243 |
|
|
$ |
535 |
|
|
$ |
218 |
|
|
$ |
317 |
|
|
$ |
82 |
|
|
$ |
235 |
|
Add back
(subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation matters |
|
|
(28 |
) |
|
|
(28 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Restructuring charges |
|
|
26 |
|
|
|
11 |
|
|
|
15 |
|
|
|
4 |
|
|
|
11 |
|
|
|
7 |
|
|
|
4 |
|
Loss on
impairment of assets |
|
|
91 |
|
|
|
66 |
|
|
|
25 |
|
|
|
11 |
|
|
|
14 |
|
|
|
12 |
|
|
|
2 |
|
Gain on
disposal of assets, net |
|
|
(13 |
) |
|
|
(5 |
) |
|
|
(8 |
) |
|
|
(3 |
) |
|
|
(5 |
) |
|
|
(4 |
) |
|
|
(1 |
) |
Gain on
retirement of debt |
|
|
(148 |
) |
|
|
— |
|
|
|
(148 |
) |
|
|
(110 |
) |
|
|
(38 |
) |
|
|
(38 |
) |
|
|
— |
|
(Income)
loss from discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
1 |
|
Discrete
tax items and other, net |
|
|
(50 |
) |
|
|
(26 |
) |
|
|
(24 |
) |
|
|
(32 |
) |
|
|
8 |
|
|
|
7 |
|
|
|
1 |
|
Net income, as
adjusted |
|
$ |
656 |
|
|
$ |
261 |
|
|
$ |
395 |
|
|
$ |
88 |
|
|
$ |
307 |
|
|
$ |
65 |
|
|
$ |
242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share, as reported |
|
$ |
2.08 |
|
|
$ |
0.64 |
|
|
$ |
1.44 |
|
|
$ |
0.59 |
|
|
$ |
0.86 |
|
|
$ |
0.22 |
|
|
$ |
0.64 |
|
Add back
(subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation matters |
|
|
(0.08 |
) |
|
|
(0.07 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Restructuring charges |
|
|
0.07 |
|
|
|
0.03 |
|
|
|
0.04 |
|
|
|
0.01 |
|
|
|
0.03 |
|
|
|
0.02 |
|
|
|
0.01 |
|
Loss on
impairment of assets |
|
|
0.25 |
|
|
|
0.16 |
|
|
|
0.06 |
|
|
|
0.03 |
|
|
|
0.04 |
|
|
|
0.03 |
|
|
|
— |
|
Gain on
disposal of assets, net |
|
|
(0.04 |
) |
|
|
(0.01 |
) |
|
|
(0.02 |
) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
— |
|
Gain on
retirement of debt |
|
|
(0.40 |
) |
|
|
— |
|
|
|
(0.40 |
) |
|
|
(0.30 |
) |
|
|
(0.11 |
) |
|
|
(0.11 |
) |
|
|
— |
|
(Income)
loss from discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Discrete
tax items and other, net |
|
|
(0.12 |
) |
|
|
(0.06 |
) |
|
|
(0.06 |
) |
|
|
(0.08 |
) |
|
|
0.02 |
|
|
|
0.02 |
|
|
|
— |
|
Diluted earnings per
share, as adjusted |
|
$ |
1.76 |
|
|
$ |
0.69 |
|
|
$ |
1.06 |
|
|
$ |
0.24 |
|
|
$ |
0.83 |
|
|
$ |
0.17 |
|
|
$ |
0.65 |
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
NON-GAAP FINANCIAL MEASURES AND
RECONCILIATIONS |
EARNINGS BEFORE INTEREST, TAXES AND
DEPRECIATION AND RELATED MARGINS |
(In millions, except percentages) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
QTD |
|
09/30/17 |
|
09/30/17 |
|
06/30/17 |
|
06/30/17 |
|
03/31/17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues |
$ |
2,344 |
|
|
$ |
808 |
|
|
$ |
1,536 |
|
|
$ |
751 |
|
|
$ |
785 |
|
Drilling
contract termination fees |
|
(176 |
) |
|
|
(99 |
) |
|
|
(77 |
) |
|
|
(40 |
) |
|
|
(37 |
) |
Adjusted
Normalized Revenues |
$ |
2,168 |
|
|
$ |
709 |
|
|
$ |
1,459 |
|
|
$ |
711 |
|
|
$ |
748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
(2,995 |
) |
|
$ |
(1,411 |
) |
|
$ |
(1,584 |
) |
|
$ |
(1,679 |
) |
|
$ |
95 |
|
Interest
expense, net of interest income |
|
334 |
|
|
|
91 |
|
|
|
243 |
|
|
|
122 |
|
|
|
121 |
|
Income
tax expense (benefit) |
|
103 |
|
|
|
180 |
|
|
|
(77 |
) |
|
|
(37 |
) |
|
|
(40 |
) |
Depreciation expense |
|
648 |
|
|
|
197 |
|
|
|
451 |
|
|
|
219 |
|
|
|
232 |
|
EBITDA |
|
(1,910 |
) |
|
|
(943 |
) |
|
|
(967 |
) |
|
|
(1,375 |
) |
|
|
408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation matters |
|
(6 |
) |
|
|
— |
|
|
|
(6 |
) |
|
|
2 |
|
|
|
(8 |
) |
Restructuring charges |
|
2 |
|
|
|
— |
|
|
|
2 |
|
|
|
2 |
|
|
|
— |
|
Acquisition costs |
|
4 |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on
impairment of assets |
|
1,498 |
|
|
|
1,385 |
|
|
|
113 |
|
|
|
113 |
|
|
|
— |
|
(Gain)
loss on disposal of assets, net |
|
1,596 |
|
|
|
1 |
|
|
|
1,595 |
|
|
|
1,597 |
|
|
|
(2 |
) |
Loss on
retirement of debt |
|
49 |
|
|
|
1 |
|
|
|
48 |
|
|
|
48 |
|
|
|
— |
|
Adjusted
EBITDA |
|
1,233 |
|
|
|
448 |
|
|
|
785 |
|
|
|
387 |
|
|
|
398 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling
contract termination fees |
|
(176 |
) |
|
|
(99 |
) |
|
|
(77 |
) |
|
|
(40 |
) |
|
|
(37 |
) |
Adjusted
Normalized EBITDA |
$ |
1,057 |
|
|
$ |
349 |
|
|
$ |
708 |
|
|
$ |
347 |
|
|
$ |
361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
(81 |
)% |
|
|
(117 |
)% |
|
|
(63 |
)% |
|
|
(183 |
)% |
|
|
52 |
% |
Adjusted EBITDA
margin |
|
53 |
% |
|
|
55 |
% |
|
|
51 |
% |
|
|
52 |
% |
|
|
51 |
% |
Adjusted Normalized
EBITDA margin |
|
49 |
% |
|
|
49 |
% |
|
|
49 |
% |
|
|
49 |
% |
|
|
48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
QTD |
|
|
12/31/16 |
|
12/31/16 |
|
09/30/16 |
|
09/30/16 |
|
06/30/16 |
|
06/30/16 |
|
03/31/16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues |
|
$ |
4,161 |
|
|
$ |
974 |
|
|
$ |
3,187 |
|
|
$ |
906 |
|
|
$ |
2,281 |
|
|
$ |
940 |
|
|
$ |
1,341 |
|
Drilling
contract termination fees |
|
|
(396 |
) |
|
|
(169 |
) |
|
|
(227 |
) |
|
|
(9 |
) |
|
|
(218 |
) |
|
|
(9 |
) |
|
|
(209 |
) |
Adjusted
Normalized Revenues |
|
$ |
3,765 |
|
|
$ |
805 |
|
|
$ |
2,960 |
|
|
$ |
897 |
|
|
$ |
2,063 |
|
|
$ |
931 |
|
|
$ |
1,132 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
827 |
|
|
$ |
257 |
|
|
$ |
570 |
|
|
$ |
236 |
|
|
$ |
334 |
|
|
$ |
93 |
|
|
$ |
241 |
|
Interest
expense, net of interest income |
|
|
389 |
|
|
|
108 |
|
|
|
281 |
|
|
|
104 |
|
|
|
177 |
|
|
|
94 |
|
|
|
83 |
|
Income
tax expense (benefit) |
|
|
107 |
|
|
|
(15 |
) |
|
|
122 |
|
|
|
6 |
|
|
|
116 |
|
|
|
18 |
|
|
|
98 |
|
Depreciation expense |
|
|
893 |
|
|
|
226 |
|
|
|
667 |
|
|
|
225 |
|
|
|
442 |
|
|
|
225 |
|
|
|
217 |
|
EBITDA |
|
|
2,216 |
|
|
|
576 |
|
|
|
1,640 |
|
|
|
571 |
|
|
|
1,069 |
|
|
|
430 |
|
|
|
639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges |
|
|
28 |
|
|
|
11 |
|
|
|
17 |
|
|
|
4 |
|
|
|
13 |
|
|
|
8 |
|
|
|
5 |
|
Litigation matters |
|
|
(30 |
) |
|
|
(30 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on
impairment of assets |
|
|
93 |
|
|
|
67 |
|
|
|
26 |
|
|
|
11 |
|
|
|
15 |
|
|
|
12 |
|
|
|
3 |
|
Gain on
disposal of assets, net |
|
|
(13 |
) |
|
|
(5 |
) |
|
|
(8 |
) |
|
|
(3 |
) |
|
|
(5 |
) |
|
|
(4 |
) |
|
|
(1 |
) |
Gain on
retirement of debt |
|
|
(148 |
) |
|
|
— |
|
|
|
(148 |
) |
|
|
(110 |
) |
|
|
(38 |
) |
|
|
(38 |
) |
|
|
— |
|
(Income)
loss from discontinued operations, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
1 |
|
Adjusted
EBITDA |
|
|
2,146 |
|
|
|
619 |
|
|
|
1,527 |
|
|
|
473 |
|
|
|
1,054 |
|
|
|
407 |
|
|
|
647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling
contract termination fees |
|
|
(396 |
) |
|
|
(169 |
) |
|
|
(227 |
) |
|
|
(9 |
) |
|
|
(218 |
) |
|
|
(9 |
) |
|
|
(209 |
) |
Adjusted
Normalized EBITDA |
|
$ |
1,750 |
|
|
$ |
450 |
|
|
$ |
1,300 |
|
|
$ |
464 |
|
|
$ |
836 |
|
|
$ |
398 |
|
|
$ |
438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
|
53 |
% |
|
|
59 |
% |
|
|
51 |
% |
|
|
63 |
% |
|
|
47 |
% |
|
|
46 |
% |
|
|
48 |
% |
Adjusted EBITDA
margin |
|
|
52 |
% |
|
|
64 |
% |
|
|
48 |
% |
|
|
52 |
% |
|
|
46 |
% |
|
|
43 |
% |
|
|
48 |
% |
Adjusted Normalized
EBITDA margin |
|
|
46 |
% |
|
|
56 |
% |
|
|
44 |
% |
|
|
52 |
% |
|
|
41 |
% |
|
|
43 |
% |
|
|
39 |
% |
TRANSOCEAN LTD. AND SUBSIDIARIES |
SUPPLEMENTAL EFFECTIVE TAX RATE
ANALYSIS |
(In millions, except tax rates) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Year ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Income (loss) from
continuing operations before income taxes |
|
$ |
(1,231 |
) |
|
$ |
(1,716 |
) |
|
$ |
242 |
|
|
$ |
(2,892 |
) |
|
$ |
692 |
|
Add back
(subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation matters |
|
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
(6 |
) |
|
|
— |
|
Restructuring charges |
|
|
— |
|
|
|
2 |
|
|
|
4 |
|
|
|
2 |
|
|
|
17 |
|
Acquisition costs |
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
Loss on
impairment of assets |
|
|
1,385 |
|
|
|
113 |
|
|
|
11 |
|
|
|
1,498 |
|
|
|
26 |
|
(Gain)
loss on disposal of assets, net |
|
|
1 |
|
|
|
1,597 |
|
|
|
(3 |
) |
|
|
1,596 |
|
|
|
(8 |
) |
(Gain)
loss on retirement of debt |
|
|
1 |
|
|
|
48 |
|
|
|
(110 |
) |
|
|
49 |
|
|
|
(148 |
) |
Adjusted income from
continuing operations before income taxes |
|
$ |
160 |
|
|
$ |
46 |
|
|
$ |
144 |
|
|
$ |
251 |
|
|
$ |
579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) from continuing operations |
|
$ |
180 |
|
|
$ |
(37 |
) |
|
$ |
6 |
|
|
$ |
103 |
|
|
$ |
122 |
|
Add back
(subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation matters |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Restructuring charges |
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
2 |
|
Acquisition costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on
impairment of assets |
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
1 |
|
Gain on
disposal of assets, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Changes
in estimates (1) |
|
|
(90 |
) |
|
|
70 |
|
|
|
32 |
|
|
|
57 |
|
|
|
24 |
|
Adjusted income tax
expense from continuing operations (2) |
|
$ |
90 |
|
|
$ |
34 |
|
|
$ |
38 |
|
|
$ |
161 |
|
|
$ |
149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate (3) |
|
|
(14.7 |
)% |
|
|
2.2 |
% |
|
|
2.5 |
% |
|
|
(3.6 |
)% |
|
|
17.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate, excluding discrete items (4) |
|
|
56.5 |
% |
|
|
74.0 |
% |
|
|
26.6 |
% |
|
|
64.2 |
% |
|
|
25.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Our
estimates change as we file tax returns, settle disputes with tax
authorities or become aware of other events and include changes in
(a) deferred taxes, (b) valuation allowances on deferred taxes and
(c) other tax liabilities. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) The
three and nine months ended September 30, 2017 includes $(13)
million of additional tax expense (benefit) reflecting the catch-up
effect of an increase (decrease) in the annual effective tax
rate from the previous quarter estimate. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Our
effective tax rate is calculated as income tax expense for
continuing operations divided by income from continuing operations
before income taxes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Our
effective tax rate, excluding discrete items, is calculated as
income tax expense for continuing operations, excluding various
discrete items (such as changes in estimates and tax on items
excluded from income before income taxes), divided by income from
continuing operations before income tax expense, excluding
gains and losses on sales and similar items pursuant to the
accounting standards for income taxes and estimating the
annual effective tax rate. |
|
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