Transocean Ltd. (NYSE: RIG) today reported net loss attributable to
controlling interest of $171 million, $0.28 per diluted
share, for the three months ended March 31, 2019.
First quarter 2019 results included net favorable items of
$10 million, or $0.02 per diluted share, as follows:
- $25 million, $0.05 per diluted share, related to
discrete tax items; and
- $3 million gain on bargain purchase and disposal of one
floater previously announced for retirement.
These unfavorable items were partially offset by:
- $18 million, $0.03 per diluted share, loss on
retirement of debt.
After consideration of these net favorable items,
first quarter 2019 adjusted net loss was $181 million, or
$0.30 per diluted share.
Contract drilling revenues for the three months ended
March 31, 2019, sequentially increased $6 million due to
a net increase of $43 million due to a full quarter of revenues
from three working rigs acquired in the Ocean Rig acquisition in
December, higher revenue efficiency for our ultra-deepwater
floaters and weather-related downtime in the fourth quarter for two
of our harsh environment rigs that was not repeated in the first
quarter. Partially offsetting these increases were decreases due to
lower utilization primarily for our ultra-deepwater fleet and
reduced activity related to rigs that were retired.
The first quarter included a non-cash revenue reduction of
$45 million from contract intangible amortization associated
with the Songa and Ocean Rig acquisitions. The fourth quarter
non-cash revenue reduction from contract intangible amortization
was $34 million. Fourth quarter contract drilling revenues
included the final customer early termination fees of
$12 million on the Discoverer Clear Leader.
Operating and maintenance expense was $508 million,
compared with $497 million in the prior quarter. The sequential
increase was due to a full quarter of activity as a result of the
Ocean Rig acquisition partially offset by reduced activity due to
lower legacy ultra-deepwater utilization and the disposition of two
ultra-deepwater and one midwater rig.
General and administrative expense was $49 million,
compared with $54 million in the prior quarter. The decrease
was primarily due to acquisition costs for Ocean Rig in the fourth
quarter that were not repeated in the first quarter.
Depreciation and amortization expense was $217 million, up
from $204 million in the fourth quarter of 2018. The
increase was primarily due to a full quarter of depreciation for
the Ocean Rig fleet.
Interest expense, net of amounts capitalized, was
$166 million, compared with $165 million in the prior
quarter and capitalized interest sequentially increased
$1 million to $9 million. Interest income was $10
million, compared with $17 million in the prior quarter. The
decrease was primarily due to reduction in invested cash and cash
equivalents.
The Effective Tax Rate(2) was 4.5%, up from (82.6)% in the
prior quarter. The increase was due to an increase in tax expense
related to the U.S. base erosion and anti-abuse tax, offset by the
release of certain valuation allowances and uncertain tax
provisions. Additionally, the relative blend of income from
operations in certain jurisdictions and fourth quarter financial
results impacted tax expense.
Cash flows used in operating activities was $51 million,
compared to cash provided by operating activities of
$238 million in the prior quarter. First quarter cash used in
operating activities increased primarily due to reduced collections
on customer receivables and increased cash used in our operations
including payments for suppliers and interest.
First quarter 2019 capital expenditures of $52 million were
related to the company’s newbuild drillships along with capital
expenditures relating to asset and inventory management systems,
reactivation of one rig and capital upgrades for certain rigs in
our existing fleet. This compares with $44 million in the
previous quarter.
“Operationally, we delivered a strong quarter, with almost $800
million of adjusted revenue, driven by 98% revenue efficiency
across our fleet,” said President and Chief Executive Officer
Jeremy Thigpen. “Additionally, during the quarter, we added over
$370 million to our industry leading $12.1 billion backlog, the
majority of which was attributable to two new contracts with
Petrobras for our recently acquired ultra-deepwater drillships, the
Corcovado and the Mykonos.”
“Over the past four quarters, we have secured over $2 billion in
new contract awards; and, based on our recent customer engagements,
it appears that the stabilization of oil prices, and the continued
improvement in offshore project economics, have combined to provide
our customers with the requisite confidence to move forward with
more offshore projects.”
“With the recent high-grading of our fleet, an industry-leading
backlog, and a solid liquidity position, Transocean is
well-positioned to capitalize on what we believe to be the early
stages of a sustained recovery in offshore drilling.”
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 Contract Drilling
Revenues, EBITDA, Adjusted EBITDA and Adjusted Net Income, 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 48 mobile offshore drilling units
consisting of 31 ultra-deepwater floaters, 13 harsh
environment floaters and four midwater floaters. In addition,
Transocean is constructing four ultra-deepwater drillships and
one harsh environment semisubmersible in which the company
holds a 33.0% interest.
For more information about Transocean, please visit:
www.deepwater.com.
Conference Call Information
Transocean will conduct a teleconference starting at 9 a.m.
EDT, 3 p.m. CEST, on Tuesday, April 30, 2019, to discuss
the results. To participate, dial +1 334-323-0522 and refer to
conference code 2036923 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, 6 p.m. CEST, on April 30, 2019. The
replay, which will be archived for approximately 30 days, can
be accessed at +1 719-457-0820, passcode 2036923 and
PIN 3332. 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
ability to successfully integrate the Transocean and Ocean Rig
businesses, the success of our business following the acquisition
of Ocean Rig UDW Inc. (“Ocean Rig”) and Songa Offshore SE
(“Songa”), 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, 2018, 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.”
Analyst Contacts:Bradley
Alexander+1 713-232-7515
Lexington May+1 832-587-6515
Media Contact:Pam Easton+1 713-232-7647
TRANSOCEAN LTD. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In millions, except per share
data)(Unaudited)
|
Three months ended |
|
March 31, |
|
2019 |
|
2018 |
|
|
|
|
|
|
Contract
drilling revenues |
$ |
754 |
|
|
$ |
664 |
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
Operating
and maintenance |
|
508 |
|
|
|
424 |
|
Depreciation and amortization |
|
217 |
|
|
|
202 |
|
General and administrative |
|
49 |
|
|
|
47 |
|
|
|
774 |
|
|
|
673 |
|
Gain on disposal of assets, net |
|
7 |
|
|
|
5 |
|
Operating loss |
|
(13 |
) |
|
|
(4 |
) |
|
|
|
|
|
|
Other income (expense), net |
|
|
|
|
|
Interest
income |
|
10 |
|
|
|
12 |
|
Interest
expense, net of amounts capitalized |
|
(166 |
) |
|
|
(147 |
) |
Loss on
retirement of debt |
|
(18 |
) |
|
|
— |
|
Other, net |
|
8 |
|
|
|
(10 |
) |
|
|
(166 |
) |
|
|
(145 |
) |
Loss
before income tax expense |
|
(179 |
) |
|
|
(149 |
) |
Income
tax expense (benefit) |
|
(8 |
) |
|
|
63 |
|
|
|
|
|
|
|
Net loss |
|
(171 |
) |
|
|
(212 |
) |
Net loss attributable to noncontrolling interest |
|
— |
|
|
|
(2 |
) |
Net loss attributable to controlling interest |
$ |
(171 |
) |
|
$ |
(210 |
) |
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
Basic |
$ |
(0.28 |
) |
|
$ |
(0.48 |
) |
Diluted |
$ |
(0.28 |
) |
|
$ |
(0.48 |
) |
|
|
|
|
|
|
Weighted-average shares outstanding |
|
|
|
|
|
Basic |
|
611 |
|
|
|
438 |
|
Diluted |
|
611 |
|
|
|
438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRANSOCEAN LTD. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(In millions, except share data)(Unaudited)
|
March 31, |
|
December 31, |
|
2019 |
|
2018 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
Cash and cash
equivalents |
$ |
1,886 |
|
|
$ |
2,160 |
|
Accounts receivable,
net of allowance for doubtful accounts of less than $1 at March 31,
2019 and December 31, 2018 |
|
665 |
|
|
|
604 |
|
Materials and supplies,
net of allowance for obsolescence of $135 and $134 at March 31,
2019 and December 31, 2018, respectively |
|
488 |
|
|
|
474 |
|
Restricted cash accounts and investments |
|
583 |
|
|
|
551 |
|
Other current assets |
|
170 |
|
|
|
159 |
|
Total current assets |
|
3,792 |
|
|
|
3,948 |
|
|
|
|
|
|
|
Property and equipment |
|
25,118 |
|
|
|
25,811 |
|
Less accumulated depreciation |
|
(5,427 |
) |
|
|
(5,403 |
) |
Property and equipment, net |
|
19,691 |
|
|
|
20,408 |
|
Contract intangible
assets |
|
750 |
|
|
|
795 |
|
Deferred income taxes, net |
|
58 |
|
|
|
66 |
|
Other assets |
|
1,159 |
|
|
|
448 |
|
Total assets |
$ |
25,450 |
|
|
$ |
25,665 |
|
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
|
Accounts payable |
$ |
212 |
|
|
$ |
269 |
|
Accrued income taxes |
|
50 |
|
|
|
70 |
|
Debt
due within one year |
|
343 |
|
|
|
373 |
|
Other current liabilities |
|
791 |
|
|
|
746 |
|
Total current liabilities |
|
1,396 |
|
|
|
1,458 |
|
|
|
|
|
|
|
Long-term debt |
|
9,071 |
|
|
|
9,605 |
|
Deferred income taxes, net |
|
62 |
|
|
|
64 |
|
Other
long-term liabilities |
|
1,968 |
|
|
|
1,424 |
|
Total long-term liabilities |
|
11,101 |
|
|
|
11,093 |
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
Shares, CHF 0.10 par
value, 639,674,422 authorized, 142,365,398 conditionally
authorized, 611,970,525 issued and 611,614,353 outstanding at
March 31, 2019, and 638,285,574 authorized, 143,754,246
conditionally authorized, 610,581,677 issued and 609,649,291
outstanding at December 31, 2018 |
|
59 |
|
|
|
59 |
|
Additional paid-in capital |
|
13,396 |
|
|
|
13,394 |
|
Accumulated deficit |
|
(213 |
) |
|
|
(67 |
) |
Accumulated other comprehensive loss |
|
(296 |
) |
|
|
(279 |
) |
Total controlling interest shareholders’ equity |
|
12,946 |
|
|
|
13,107 |
|
Noncontrolling interest |
|
7 |
|
|
|
7 |
|
Total equity |
|
12,953 |
|
|
|
13,114 |
|
Total liabilities and equity |
$ |
25,450 |
|
|
$ |
25,665 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRANSOCEAN LTD. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(In millions)(Unaudited)
|
Three months ended |
|
March 31, |
|
2019 |
|
2018 |
Cash flows from
operating activities |
|
|
|
|
|
Net loss |
$ |
(171 |
) |
|
$ |
(212 |
) |
Adjustments to reconcile to net cash provided by (used in)
operating activities: |
|
|
|
|
|
Contract
intangible asset amortization |
|
45 |
|
|
|
19 |
|
Depreciation and amortization |
|
217 |
|
|
|
202 |
|
Share-based compensation expense |
|
9 |
|
|
|
10 |
|
Gain on
disposal of assets, net |
|
(7 |
) |
|
|
(5 |
) |
Loss on
retirement of debt |
|
18 |
|
|
|
— |
|
Deferred
income tax benefit |
|
(19 |
) |
|
|
(3 |
) |
Other,
net |
|
11 |
|
|
|
13 |
|
Changes
in deferred revenues, net |
|
1 |
|
|
|
(20 |
) |
Changes
in deferred costs, net |
|
(1 |
) |
|
|
1 |
|
Changes in other operating assets and liabilities, net |
|
(154 |
) |
|
|
98 |
|
Net cash
provided by (used in) operating activities |
|
(51 |
) |
|
|
103 |
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
Capital
expenditures |
|
(52 |
) |
|
|
(53 |
) |
Proceeds
from disposal of assets, net |
|
12 |
|
|
|
13 |
|
Investments in unconsolidated affiliates |
|
(60 |
) |
|
|
(15 |
) |
Unrestricted and restricted cash acquired in business
combination |
|
— |
|
|
|
131 |
|
Proceeds
from maturities of unrestricted and restricted investments |
|
123 |
|
|
|
350 |
|
Deposits to unrestricted investments |
|
— |
|
|
|
(50 |
) |
Net cash
provided by investing activities |
|
23 |
|
|
|
376 |
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
Proceeds
from issuance of debt, net of discount and issue costs |
|
540 |
|
|
|
— |
|
Repayments of debt |
|
(616 |
) |
|
|
(168 |
) |
Proceeds
from investments restricted for financing activities |
|
— |
|
|
|
26 |
|
Payments
to terminate derivative instruments |
|
— |
|
|
|
(92 |
) |
Other, net |
|
(15 |
) |
|
|
(14 |
) |
Net cash
used in financing activities |
|
(91 |
) |
|
|
(248 |
) |
|
|
|
|
|
|
Net
increase (decrease) in unrestricted and restricted cash and cash
equivalents |
|
(119 |
) |
|
|
231 |
|
Unrestricted and restricted cash and cash equivalents, beginning of
period |
|
2,589 |
|
|
|
2,975 |
|
Unrestricted and restricted cash and cash equivalents, end of
period |
$ |
2,470 |
|
|
$ |
3,206 |
|
|
|
|
|
|
|
|
|
|
|
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
FLEET OPERATING STATISTICS |
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
March 31, |
|
December 31, |
|
March 31, |
Contract
Drilling Revenues (1) (in millions) |
2019 |
|
2018 |
|
2018 |
Contract drilling
revenues |
|
|
|
|
|
|
|
|
Ultra-deepwater floaters |
$ |
476 |
|
$ |
457 |
|
$ |
378 |
Harsh
environment floaters |
|
258 |
|
|
253 |
|
|
204 |
Deepwater
floaters |
|
7 |
|
|
18 |
|
|
35 |
Midwater
floaters |
|
13 |
|
|
17 |
|
|
20 |
High-specification jackups |
|
— |
|
|
3 |
|
|
27 |
Total contract drilling
revenues |
$ |
754 |
|
$ |
748 |
|
$ |
664 |
|
Three months ended |
|
March 31, |
|
December 31, |
|
March 31, |
Average Daily
Revenue (2) |
2019 |
|
2018 |
|
2018 |
Ultra-deepwater
floaters |
$ |
339,900 |
|
$ |
337,100 |
|
$ |
381,600 |
Harsh environment
floaters |
|
286,300 |
|
|
290,500 |
|
|
279,100 |
Deepwater floaters |
|
— |
|
|
154,500 |
|
|
193,400 |
Midwater floaters |
|
88,600 |
|
|
90,800 |
|
|
111,500 |
High-specification
jackups |
|
— |
|
|
314,300 |
|
|
150,000 |
Total
drilling fleet |
$ |
306,500 |
|
|
293,100 |
|
$ |
287,600 |
|
Three months ended |
|
March 31, |
|
December
31, |
|
March 31, |
Utilization
(3) |
2019 |
|
2018 |
|
2018 |
Ultra-deepwater floaters |
47% |
|
54% |
|
35% |
Harsh environment
floaters |
80% |
|
82% |
|
84% |
Deepwater floaters |
—% |
|
67% |
|
100% |
Midwater floaters |
40% |
|
50% |
|
38% |
High-specification
jackups |
—% |
|
100% |
|
97% |
Total
drilling fleet |
56% |
|
62% |
|
52% |
|
Three months ended |
|
March 31, |
|
December
31, |
|
March 31, |
Revenue
Efficiency (4) |
2019 |
|
2018 |
|
2018 |
Ultra-deepwater floaters |
100% |
|
99% |
|
88% |
Harsh environment
floaters |
94% |
|
91% |
|
95% |
Deepwater floaters |
—% |
|
91% |
|
93% |
Midwater floaters |
92% |
|
96% |
|
97% |
High-specification
jackups |
—% |
|
100% |
|
99% |
Total
drilling fleet |
98% |
|
96% |
|
92% |
|
|
|
|
|
|
(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 (LOSS) AND ADJUSTED DILUTED
EARNINGS (LOSS) PER SHARE |
(In millions, except per share data) |
|
|
|
|
|
|
|
YTD |
|
03/31/19 |
Adjusted Net Loss |
|
|
Net loss attributable to
controlling interest, as reported |
$ |
(171 |
) |
Gain on
bargain purchase |
|
(2 |
) |
Gain on
disposal of assets, net |
|
(1 |
) |
Loss on
retirement of debt |
|
18 |
|
Discrete
tax items and other, net |
|
(25 |
) |
Net loss, as
adjusted |
$ |
(181 |
) |
|
|
|
Adjusted
Diluted Loss Per Share: |
|
|
Diluted loss per share,
as reported |
$ |
(0.28 |
) |
Gain on
bargain purchase |
|
— |
|
Gain on
disposal of assets, net |
|
— |
|
Loss on
retirement of debt |
|
0.03 |
|
Discrete
tax items and other, net |
|
(0.05 |
) |
Diluted loss per share,
as adjusted |
$ |
(0.30 |
) |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
12/31/18 |
|
12/31/18 |
|
09/30/18 |
|
09/30/18 |
|
06/30/18 |
|
06/30/18 |
|
03/31/18 |
Adjusted Net Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to
controlling interest, as reported |
$ |
(1,996 |
) |
|
$ |
(242 |
) |
|
$ |
(1,754 |
) |
|
$ |
(409 |
) |
|
$ |
(1,345 |
) |
|
$ |
(1,135 |
) |
|
$ |
(210 |
) |
Acquisition and restructuring costs |
|
34 |
|
|
|
12 |
|
|
|
22 |
|
|
|
4 |
|
|
|
18 |
|
|
|
11 |
|
|
|
7 |
|
Gain on
bargain purchase |
|
(10 |
) |
|
|
(10 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on
impairment of goodwill and other assets |
|
1,464 |
|
|
|
18 |
|
|
|
1,446 |
|
|
|
432 |
|
|
|
1,014 |
|
|
|
1,014 |
|
|
|
— |
|
(Gain)
loss on disposal of assets, net |
|
(7 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
|
|
1 |
|
|
|
(7 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
Loss on
retirement of debt |
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
|
— |
|
Discrete
tax items and other, net |
|
143 |
|
|
|
52 |
|
|
|
91 |
|
|
|
1 |
|
|
|
90 |
|
|
|
91 |
|
|
|
(1 |
) |
Net income (loss), as
adjusted |
$ |
(369 |
) |
|
$ |
(171 |
) |
|
$ |
(198 |
) |
|
$ |
30 |
|
|
$ |
(228 |
) |
|
$ |
(18 |
) |
|
$ |
(210 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Diluted Earnings (Loss) Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share,
as reported |
$ |
(4.27 |
) |
|
$ |
(0.48 |
) |
|
$ |
(3.86 |
) |
|
$ |
(0.88 |
) |
|
$ |
(2.99 |
) |
|
$ |
(2.46 |
) |
|
$ |
(0.48 |
) |
Acquisition and restructuring costs |
|
0.07 |
|
|
|
0.02 |
|
|
|
0.05 |
|
|
|
0.01 |
|
|
|
0.05 |
|
|
|
0.03 |
|
|
|
0.02 |
|
Gain on
bargain purchase |
|
(0.02 |
) |
|
|
(0.02 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on
impairment of goodwill and other assets |
|
3.13 |
|
|
|
0.03 |
|
|
|
3.18 |
|
|
|
0.93 |
|
|
|
2.26 |
|
|
|
2.19 |
|
|
|
— |
|
Gain on
disposal of assets, net |
|
(0.01 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
|
— |
|
|
|
(0.02 |
) |
Loss on
retirement of debt |
|
0 |
|
|
|
— |
|
|
|
0 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Discrete
tax items and other, net |
|
0.30 |
|
|
|
0.11 |
|
|
|
0.20 |
|
|
|
— |
|
|
|
0.20 |
|
|
|
0.20 |
|
|
|
— |
|
Diluted earnings (loss)
per share, as adjusted |
$ |
(0.79 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.44 |
) |
|
$ |
0.06 |
|
|
$ |
(0.50 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.48 |
) |
|
|
|
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
NON-GAAP FINANCIAL MEASURES AND
RECONCILIATIONS |
ADJUSTED CONTRACT DRILLING
REVENUES |
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION
AND AMORTIZATION AND RELATED MARGINS |
(In millions, except percentages) |
|
|
|
|
|
|
|
YTD |
|
03/31/19 |
|
|
|
Contract
drilling revenues |
$ |
754 |
|
Contract
intangible amortization |
|
45 |
|
Adjusted
Contract Drilling Revenues |
$ |
799 |
|
|
|
|
Net
loss |
$ |
(171 |
) |
Interest
expense, net of interest income |
|
156 |
|
Income
tax benefit |
|
(8 |
) |
Depreciation and amortization |
|
217 |
|
Contract
intangible amortization |
|
45 |
|
EBITDA |
|
239 |
|
|
|
|
Gain on
bargain purchase |
|
(2 |
) |
Gain on
disposal of assets, net |
|
(1 |
) |
Loss on
retirement of debt |
|
18 |
|
Adjusted
EBITDA |
$ |
254 |
|
|
|
|
|
|
|
EBITDA margin |
|
30 |
% |
Adjusted EBITDA
margin |
|
32 |
% |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
12/31/18 |
|
12/31/18 |
|
09/30/18 |
|
09/30/18 |
|
06/30/18 |
|
06/30/18 |
|
03/31/18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
drilling revenues |
$ |
3,018 |
|
|
$ |
748 |
|
|
$ |
2,270 |
|
|
$ |
816 |
|
|
$ |
1,454 |
|
|
$ |
790 |
|
|
$ |
664 |
|
Contract
intangible amortization |
|
112 |
|
|
|
34 |
|
|
|
78 |
|
|
|
29 |
|
|
|
49 |
|
|
|
30 |
|
|
|
19 |
|
Contract
drilling revenues before amortization |
|
3,130 |
|
|
|
782 |
|
|
|
2,348 |
|
|
|
845 |
|
|
|
1,503 |
|
|
|
820 |
|
|
|
683 |
|
Drilling
contract termination fees |
|
(124 |
) |
|
|
(12 |
) |
|
|
(112 |
) |
|
|
(37 |
) |
|
|
(75 |
) |
|
|
(37 |
) |
|
|
(38 |
) |
Adjusted
Contract Drilling Revenues |
$ |
3,006 |
|
|
$ |
770 |
|
|
$ |
2,236 |
|
|
$ |
808 |
|
|
$ |
1,428 |
|
|
$ |
783 |
|
|
$ |
645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
(2,003 |
) |
|
$ |
(243 |
) |
|
$ |
(1,760 |
) |
|
$ |
(409 |
) |
|
$ |
(1,351 |
) |
|
$ |
(1,139 |
) |
|
$ |
(212 |
) |
Interest
expense, net of interest income |
|
567 |
|
|
|
148 |
|
|
|
419 |
|
|
|
149 |
|
|
|
270 |
|
|
|
135 |
|
|
|
135 |
|
Income
tax expense (benefit) |
|
228 |
|
|
|
110 |
|
|
|
118 |
|
|
|
(30 |
) |
|
|
148 |
|
|
|
85 |
|
|
|
63 |
|
Depreciation expense |
|
818 |
|
|
|
204 |
|
|
|
614 |
|
|
|
201 |
|
|
|
413 |
|
|
|
211 |
|
|
|
202 |
|
Contract
intangible amortization |
|
112 |
|
|
|
34 |
|
|
|
78 |
|
|
|
29 |
|
|
|
49 |
|
|
|
30 |
|
|
|
19 |
|
EBITDA |
|
(278 |
) |
|
|
253 |
|
|
|
(531 |
) |
|
|
(60 |
) |
|
|
(471 |
) |
|
|
(678 |
) |
|
|
207 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and restructuring costs |
|
34 |
|
|
|
12 |
|
|
|
22 |
|
|
|
4 |
|
|
|
18 |
|
|
|
11 |
|
|
|
7 |
|
Loss on
impairment of goodwill and other assets |
|
1,464 |
|
|
|
18 |
|
|
|
1,446 |
|
|
|
432 |
|
|
|
1,014 |
|
|
|
1,014 |
|
|
|
— |
|
Gain on
bargain purchase |
|
(10 |
) |
|
|
(10 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
(Gain)
loss on disposal of assets, net |
|
(7 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
|
|
1 |
|
|
|
(7 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
Loss on
retirement of debt |
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
|
— |
|
|
|
1,206 |
|
|
|
272 |
|
|
|
934 |
|
|
|
378 |
|
|
|
556 |
|
|
|
348 |
|
|
|
208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling
contract termination fees |
|
(124 |
) |
|
|
(12 |
) |
|
|
(112 |
) |
|
|
(37 |
) |
|
|
(75 |
) |
|
|
(37 |
) |
|
|
(38 |
) |
Adjusted
EBITDA |
$ |
1,082 |
|
|
$ |
260 |
|
|
$ |
822 |
|
|
$ |
341 |
|
|
$ |
481 |
|
|
$ |
311 |
|
|
$ |
170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
(9 |
)% |
|
|
32 |
% |
|
|
(23 |
)% |
|
|
(7 |
)% |
|
|
(31 |
)% |
|
|
(83 |
)% |
|
|
30 |
% |
Adjusted EBITDA
margin |
|
36 |
% |
|
|
34 |
% |
|
|
37 |
% |
|
|
42 |
% |
|
|
34 |
% |
|
|
40 |
% |
|
|
26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
SUPPLEMENTAL EFFECTIVE TAX RATE
ANALYSIS |
(In millions, except tax rates) |
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
2019 |
|
2018 |
|
2018 |
Loss before income
taxes |
$ |
(179 |
) |
|
$ |
(133 |
) |
|
$ |
(149 |
) |
Acquisition and restructuring costs |
|
— |
|
|
|
12 |
|
|
|
7 |
|
Gain on
bargain purchase |
|
(2 |
) |
|
|
(10 |
) |
|
|
— |
|
Loss on
impairment of goodwill and other assets |
|
— |
|
|
|
18 |
|
|
|
— |
|
Gain on
disposal of assets, net |
|
(1 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
Loss on
retirement of debt |
|
18 |
|
|
|
— |
|
|
|
— |
|
Adjusted loss before
income taxes |
$ |
(164 |
) |
|
$ |
(114 |
) |
|
$ |
(148 |
) |
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) |
$ |
(8 |
) |
|
$ |
110 |
|
|
$ |
63 |
|
Acquisition and restructuring costs |
|
— |
|
|
|
— |
|
|
|
— |
|
Gain on
bargain purchase |
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on
impairment of goodwill and other assets |
|
— |
|
|
|
— |
|
|
|
— |
|
Gain on
disposal of assets, net |
|
— |
|
|
|
— |
|
|
|
— |
|
Changes
in estimates (1) |
|
25 |
|
|
|
(52 |
) |
|
|
1 |
|
Adjusted income tax
expense |
$ |
17 |
|
|
$ |
58 |
|
|
$ |
64 |
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate (2) |
|
4.5 |
% |
|
|
(82.6 |
)% |
|
|
(42.2 |
)% |
|
|
|
|
|
|
|
|
|
Effective Tax
Rate, excluding discrete items (3) |
|
(10.6 |
)% |
|
|
(50.5 |
)% |
|
|
(42.8 |
)% |
|
|
|
|
|
|
|
|
|
(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) Our effective tax rate is calculated as income tax expense
divided by income before income taxes.
(3) Our effective tax rate, excluding discrete items, is
calculated as income tax expense, excluding various discrete items
(such as changes in estimates and tax on items excluded from
income before income taxes), divided by income before income tax
expense, excluding gains and losses on sales and similar items
pursuant to the accounting standards for income taxes related to
estimating the annual effective tax rate.
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