Transocean Ltd. (NYSE: RIG) today reported a net loss attributable
to controlling interest of $103 million, $0.17 per
diluted share, for the three months ended June 30, 2021.
Second quarter 2021 results included net favorable item of
$6 million, or $0.1 per diluted share, related to
discrete tax items. After consideration of this net favorable item,
second quarter 2021 adjusted net loss was $109 million,
$0.18 per diluted share, compared to $117 million
adjusted net loss, $0.19 per diluted share, in the first
quarter of 2021.
Contract drilling revenues for the three months ended
June 30, 2021 increased sequentially by $3 million to
$656 million, primarily due to three rigs that returned to
work following a shipyard stay, partially offset by two rigs that
went idle in the second quarter.
A non-cash revenue reduction of $57 million was recognized
in the second quarter as a result of contract intangible
amortization associated with the Songa and Ocean Rig acquisitions.
This compares with $56 million in the prior quarter.
Operating and maintenance expense was $434 million,
compared with $435 million in the prior quarter.
General and administrative expense was $39 million, in line
with the first quarter of 2021.
Interest expense, net of amounts capitalized, was
$115 million, in line with the first quarter of 2021. Interest
income was $4 million, compared with $3 million in the
previous quarter.
The Effective Tax Rate(2) was (4.6)%, down from 17.8% in
the prior quarter. The decrease was primarily due to higher
earnings in jurisdictions with lower tax rates, releases of
uncertain tax positions related to settlements and other various
discrete items. The Effective Tax Rate excluding discrete items was
(10.2)% compared to (5.7)% in previous quarter.
Cash flows provided by operating activities were
$153 million, compared to $96 million in the prior
quarter. This was primarily due to the timing of interest payments
and reduced personnel-related payments.
Second quarter 2021 capital expenditures of $41 million
were primarily related to our newbuild drillships under
construction. This compares with $59 million in the previous
quarter.
“Operationally, we delivered another solid quarter, with an
Adjusted EBITDA Margin of 36% on Adjusted Revenue of $713 million,”
said President and Chief Executive Officer, Jeremy Thigpen. “These
better than anticipated results were driven largely by our
continued focus on operational excellence, as evidenced by our
strong uptime performance, which resulted in revenue efficiency of
98 percent.”
“During the quarter, we took meaningful steps to improve our
liquidity by agreeing to delay delivery and payment of our two
newbuild drillships, the Deepwater Atlas and the Deepwater Titan,
ultimately deferring over $450 million of near-term capex.
Additionally, we further improved our liquidity through the
initiation of our ATM program that provides us with additional
optionality. We will remain pragmatic yet disciplined in using this
tool now and in the future.”
Thigpen concluded: “As we enter the back half of this year, we
remain encouraged by the upcycle that is currently unfolding.
Assuming oil prices remain supportive, we see utilization and
dayrates for our ultra-deepwater assets materially improving as we
move into 2022.”
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 37 mobile offshore drilling units
consisting of 27 ultra-deepwater floaters and 10 harsh
environment floaters. In addition, Transocean is constructing
two ultra-deepwater drillships.
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, August 3, 2021, to discuss
the results. To participate, dial +1 313-209-6544 and refer to
conference code 1865445 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 Tuesday, August 3,
2021. The replay, which will be archived for approximately
30 days, can be accessed at +1 719-457-0820,
passcode 1865445, pin 1126. The replay will also be
available on the company’s website.
Forward-Looking Statements
The statements described herein 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 could 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 fluctuation of current and future prices
of oil and gas, the global and regional supply and demand for oil
and gas, the intention to scrap certain drilling rigs, the success
of our business following prior acquisitions, the effects of the
spread of and mitigation efforts by governments, businesses and
individuals related to contagious illnesses, such as COVID-19, 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, 2020, 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 the Swiss Financial Services Act (“FinSA”) or
advertising within the meaning of the FinSA. 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
(1) |
Revenue efficiency is defined as actual contract drilling revenues,
excluding revenues for contract terminations and reimbursements,
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 revenues for incentive provisions, reimbursements
and contract terminations. See the accompanying schedule entitled
“Revenue Efficiency.” |
(2) |
Effective Tax Rate is defined
as income tax expense divided by income before income taxes. See
the accompanying schedule entitled “Supplemental Effective Tax Rate
Analysis.” |
Analyst Contact:Lexington May+1
832-587-6515
Media Contact:Pam Easton+1 713-232-7647
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In millions, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling revenues |
|
$ |
656 |
|
|
$ |
930 |
|
|
$ |
1,309 |
|
|
$ |
1,689 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating and maintenance |
|
|
434 |
|
|
|
525 |
|
|
|
869 |
|
|
|
1,065 |
|
|
Depreciation and amortization |
|
|
186 |
|
|
|
196 |
|
|
|
373 |
|
|
|
402 |
|
|
General and administrative |
|
|
39 |
|
|
|
45 |
|
|
|
78 |
|
|
|
88 |
|
|
|
|
|
659 |
|
|
|
766 |
|
|
|
1,320 |
|
|
|
1,555 |
|
|
Loss on impairment |
|
|
— |
|
|
|
(429 |
) |
|
|
— |
|
|
|
(597 |
) |
|
Gain (loss) on disposal of assets, net |
|
|
1 |
|
|
|
1 |
|
|
|
(58 |
) |
|
|
— |
|
|
Operating loss |
|
|
(2 |
) |
|
|
(264 |
) |
|
|
(69 |
) |
|
|
(463 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
4 |
|
|
|
4 |
|
|
|
7 |
|
|
|
13 |
|
|
Interest expense, net of amounts capitalized |
|
|
(115 |
) |
|
|
(153 |
) |
|
|
(230 |
) |
|
|
(313 |
) |
|
Gain (loss) on retirement of debt |
|
|
— |
|
|
|
4 |
|
|
|
51 |
|
|
|
(53 |
) |
|
Other, net |
|
|
14 |
|
|
|
(56 |
) |
|
|
23 |
|
|
|
(44 |
) |
|
|
|
|
(97 |
) |
|
|
(201 |
) |
|
|
(149 |
) |
|
|
(397 |
) |
|
Loss before income tax expense |
|
|
(99 |
) |
|
|
(465 |
) |
|
|
(218 |
) |
|
|
(860 |
) |
|
Income
tax expense (benefit) |
|
|
4 |
|
|
|
32 |
|
|
|
(17 |
) |
|
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(103 |
) |
|
|
(497 |
) |
|
|
(201 |
) |
|
|
(888 |
) |
|
Net income attributable to noncontrolling interest |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
Net loss attributable to controlling interest |
|
$ |
(103 |
) |
|
$ |
(497 |
) |
|
$ |
(202 |
) |
|
$ |
(889 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share, basic and
diluted |
|
$ |
(0.17 |
) |
|
$ |
(0.81 |
) |
|
$ |
(0.33 |
) |
|
$ |
(1.45 |
) |
|
Weighted average shares, basic
and diluted |
|
|
621 |
|
|
|
615 |
|
|
|
619 |
|
|
|
615 |
|
|
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In millions, except share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
988 |
|
|
$ |
1,154 |
|
|
Accounts receivable, net of
allowance of $2 at June 30, 2021 and December 31, 2020 |
|
|
539 |
|
|
|
583 |
|
|
Materials and supplies, net of
allowance of $145 and $143 at June 30, 2021 and December 31, 2020,
respectively |
|
|
433 |
|
|
|
434 |
|
|
Restricted cash and cash equivalents |
|
|
502 |
|
|
|
406 |
|
|
Other current assets |
|
|
156 |
|
|
|
163 |
|
|
Total current assets |
|
|
2,618 |
|
|
|
2,740 |
|
|
|
|
|
|
|
|
|
|
Property and equipment |
|
|
23,054 |
|
|
|
23,040 |
|
|
Less accumulated depreciation |
|
|
(5,718 |
) |
|
|
(5,373 |
) |
|
Property and equipment, net |
|
|
17,336 |
|
|
|
17,667 |
|
|
Contract intangible
assets |
|
|
280 |
|
|
|
393 |
|
|
Deferred income taxes, net |
|
|
8 |
|
|
|
9 |
|
|
Other assets |
|
|
956 |
|
|
|
995 |
|
|
Total assets |
|
$ |
21,198 |
|
|
$ |
21,804 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
198 |
|
|
$ |
194 |
|
|
Accrued income taxes |
|
|
8 |
|
|
|
28 |
|
|
Debt due within one year |
|
|
536 |
|
|
|
505 |
|
|
Other current liabilities |
|
|
577 |
|
|
|
659 |
|
|
Total current liabilities |
|
|
1,319 |
|
|
|
1,386 |
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
6,991 |
|
|
|
7,302 |
|
|
Deferred income taxes, net |
|
|
325 |
|
|
|
315 |
|
|
Other
long-term liabilities |
|
|
1,251 |
|
|
|
1,366 |
|
|
Total long-term liabilities |
|
|
8,567 |
|
|
|
8,983 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares, CHF 0.10 par value,
891,379,015 authorized, 142,363,647 conditionally authorized,
685,676,165 issued |
|
|
|
|
|
|
|
and 634,629,502 outstanding at June 30, 2021, and 824,650,660
authorized, 142,363,647 conditionally |
|
|
|
|
|
|
|
authorized, 639,676,165 issued and 615,140,276 outstanding at
December 31, 2020 |
|
|
62 |
|
|
|
60 |
|
|
Additional paid-in capital |
|
|
13,578 |
|
|
|
13,501 |
|
|
Accumulated deficit |
|
|
(2,068 |
) |
|
|
(1,866 |
) |
|
Accumulated other comprehensive loss |
|
|
(264 |
) |
|
|
(263 |
) |
|
Total controlling interest shareholders’ equity |
|
|
11,308 |
|
|
|
11,432 |
|
|
Noncontrolling interest |
|
|
4 |
|
|
|
3 |
|
|
Total equity |
|
|
11,312 |
|
|
|
11,435 |
|
|
Total liabilities and equity |
|
$ |
21,198 |
|
|
$ |
21,804 |
|
|
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In millions) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
|
June 30, |
|
|
|
2021 |
|
|
2020 |
|
|
Cash flows from
operating activities |
|
|
|
|
|
|
|
Net loss |
|
$ |
(201 |
) |
|
$ |
(888 |
) |
|
Adjustments to reconcile to net cash provided by operating
activities: |
|
|
|
|
|
|
|
Contract intangible asset amortization |
|
|
113 |
|
|
|
101 |
|
|
Depreciation and amortization |
|
|
373 |
|
|
|
402 |
|
|
Share-based compensation expense |
|
|
14 |
|
|
|
15 |
|
|
Loss on impairment |
|
|
— |
|
|
|
597 |
|
|
Loss on impairment of investment in unconsolidated affiliates |
|
|
— |
|
|
|
59 |
|
|
Loss on disposal of assets, net |
|
|
58 |
|
|
|
— |
|
|
(Gain) loss on retirement of debt |
|
|
(51 |
) |
|
|
53 |
|
|
Deferred income tax expense |
|
|
11 |
|
|
|
30 |
|
|
Other, net |
|
|
14 |
|
|
|
32 |
|
|
Changes in deferred revenues, net |
|
|
(72 |
) |
|
|
(10 |
) |
|
Changes in deferred costs, net |
|
|
7 |
|
|
|
(4 |
) |
|
Changes in other operating assets and liabilities, net |
|
|
(17 |
) |
|
|
(348 |
) |
|
Net
cash provided by operating activities |
|
|
249 |
|
|
|
39 |
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
Capital expenditures |
|
|
(100 |
) |
|
|
(153 |
) |
|
Proceeds from disposal of assets, net |
|
|
7 |
|
|
|
3 |
|
|
Investments in loans to unconsolidated affiliates |
|
|
(33 |
) |
|
|
— |
|
|
Investments in unconsolidated affiliates |
|
|
— |
|
|
|
(6 |
) |
|
Net
cash used in investing activities |
|
|
(126 |
) |
|
|
(156 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
|
Repayments of debt |
|
|
(239 |
) |
|
|
(1,009 |
) |
|
Proceeds from issuance of shares, net of issue costs |
|
|
66 |
|
|
|
— |
|
|
Proceeds from issuance of debt, net of issue costs |
|
|
— |
|
|
|
743 |
|
|
Other, net |
|
|
(20 |
) |
|
|
(18 |
) |
|
Net
cash used in financing activities |
|
|
(193 |
) |
|
|
(284 |
) |
|
|
|
|
|
|
|
|
|
Net
decrease in unrestricted and restricted cash and cash
equivalents |
|
|
(70 |
) |
|
|
(401 |
) |
|
Unrestricted and restricted cash and cash equivalents, beginning of
period |
|
|
1,560 |
|
|
|
2,349 |
|
|
Unrestricted and restricted cash and cash equivalents, end of
period |
|
$ |
1,490 |
|
|
$ |
1,948 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRANSOCEAN
LTD. AND SUBSIDIARIES |
|
|
FLEET
OPERATING STATISTICS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
|
June 30, |
|
March
31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
Contract Drilling Revenues (in millions) |
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
Contract
drilling revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ultra-deepwater floaters |
|
$ |
424 |
|
|
$ |
436 |
|
|
$ |
636 |
|
|
$ |
860 |
|
|
$ |
1,164 |
|
|
Harsh
environment floaters |
|
|
232 |
|
|
|
217 |
|
|
|
293 |
|
|
|
449 |
|
|
|
513 |
|
|
Midwater
floaters |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
12 |
|
|
Total
contract drilling revenues |
|
$ |
656 |
|
|
$ |
653 |
|
|
$ |
930 |
|
|
$ |
1,309 |
|
|
$ |
1,689 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
|
June 30, |
|
March
31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
Average Daily Revenue (1) |
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
Ultra-deepwater floaters |
|
$ |
363,500 |
|
|
$ |
371,600 |
|
|
$ |
296,500 |
|
|
$ |
367,500 |
|
|
$ |
314,800 |
|
|
Harsh
environment floaters |
|
|
379,900 |
|
|
|
377,800 |
|
|
|
331,900 |
|
|
|
378,900 |
|
|
|
317,000 |
|
|
Midwater
floaters |
|
|
— |
|
|
|
— |
|
|
|
99,400 |
|
|
|
— |
|
|
|
111,400 |
|
|
Total fleet
average daily revenue |
|
$ |
369,400 |
|
|
$ |
373,700 |
|
|
$ |
307,800 |
|
|
$ |
371,500 |
|
|
$ |
311,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
|
June 30, |
|
March
31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
Utilization (2) |
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
Ultra-deepwater floaters |
|
|
48 |
% |
|
|
48 |
% |
|
|
61 |
% |
|
|
48 |
% |
|
|
61 |
% |
|
Harsh
environment floaters |
|
|
73 |
% |
|
|
65 |
% |
|
|
80 |
% |
|
|
69 |
% |
|
|
71 |
% |
|
Midwater
floaters |
|
|
— |
% |
|
|
— |
% |
|
|
25 |
% |
|
|
— |
% |
|
|
37 |
% |
|
Total fleet
average rig utilization |
|
|
55 |
% |
|
|
53 |
% |
|
|
66 |
% |
|
|
54 |
% |
|
|
63 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
|
June 30, |
|
March
31, |
|
|
June 30, |
|
June 30, |
|
June 30, |
|
Revenue Efficiency (3) |
|
2021 |
|
2020 |
|
2020 |
|
2021 |
|
2020 |
|
Ultra-deepwater floaters |
|
|
98 |
% |
|
|
97 |
% |
|
|
98 |
% |
|
|
98 |
% |
|
|
98 |
% |
|
Harsh
environment floaters |
|
|
98 |
% |
|
|
98 |
% |
|
|
97 |
% |
|
|
98 |
% |
|
|
93 |
% |
|
Midwater
floaters |
|
|
— |
% |
|
|
— |
% |
|
|
79 |
% |
|
|
— |
% |
|
|
86 |
% |
|
Total fleet
average revenue efficiency |
|
|
98 |
% |
|
|
97 |
% |
|
|
97 |
% |
|
|
98 |
% |
|
|
96 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average daily
revenue is defined as contract drilling revenues, excluding
revenues for contract terminations, reimbursements and contract
intangible amortization, 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 rig calendar days in the measurement period,
expressed as a percentage. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Revenue
efficiency is defined as actual contract drilling revenues,
excluding revenues for contract terminations and reimbursements,
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 revenues for incentive provisions, reimbursements
and contract terminations. |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
QTD |
|
YTD |
|
|
|
|
06/30/21 |
|
06/30/21 |
|
03/31/21 |
|
Adjusted Net
Loss |
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to controlling interest, as reported |
|
|
$ |
(202 |
) |
|
$ |
(103 |
) |
|
$ |
(99 |
) |
|
Loss on disposal of assets, net |
|
|
|
60 |
|
|
|
— |
|
|
|
60 |
|
|
Gain on retirement of debt |
|
|
|
(51 |
) |
|
|
— |
|
|
|
(51 |
) |
|
Discrete tax items |
|
|
|
(33 |
) |
|
|
(6 |
) |
|
|
(27 |
) |
|
Net loss, as adjusted |
|
|
$ |
(226 |
) |
|
$ |
(109 |
) |
|
$ |
(117 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Loss
Per Share: |
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share, as
reported |
|
|
$ |
(0.33 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.16 |
) |
|
Loss on disposal of assets, net |
|
|
|
0.10 |
|
|
|
— |
|
|
|
0.10 |
|
|
Gain on retirement of debt |
|
|
|
(0.08 |
) |
|
|
— |
|
|
|
(0.08 |
) |
|
Discrete tax items |
|
|
|
(0.06 |
) |
|
|
(0.01 |
) |
|
|
(0.05 |
) |
|
Diluted loss per share, as
adjusted |
|
|
$ |
(0.37 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.19 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
|
|
12/31/20 |
|
12/31/20 |
|
09/30/20 |
|
09/30/20 |
|
06/30/20 |
|
06/30/20 |
|
03/31/20 |
|
Adjusted Net
Loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to controlling interest, as
reported |
|
$ |
(567 |
) |
|
$ |
(37 |
) |
|
$ |
(530 |
) |
|
$ |
359 |
|
|
$ |
(889 |
) |
|
$ |
(497 |
) |
|
$ |
(392 |
) |
|
Restructuring costs |
|
|
5 |
|
|
|
(1 |
) |
|
|
6 |
|
|
|
5 |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
|
Loss on impairment of assets |
|
|
597 |
|
|
|
— |
|
|
|
597 |
|
|
|
— |
|
|
|
597 |
|
|
|
430 |
|
|
|
167 |
|
|
Loss on disposal of assets, net |
|
|
61 |
|
|
|
— |
|
|
|
61 |
|
|
|
61 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Loss on impairment of investment in unconsolidated affiliates |
|
|
62 |
|
|
|
3 |
|
|
|
59 |
|
|
|
— |
|
|
|
59 |
|
|
|
59 |
|
|
|
— |
|
|
(Gain) loss on restructuring and retirement of debt |
|
|
(533 |
) |
|
|
(137 |
) |
|
|
(396 |
) |
|
|
(449 |
) |
|
|
53 |
|
|
|
(4 |
) |
|
|
57 |
|
|
Discrete tax items |
|
|
(91 |
) |
|
|
(37 |
) |
|
|
(54 |
) |
|
|
(45 |
) |
|
|
(9 |
) |
|
|
10 |
|
|
|
(19 |
) |
|
Net loss, as adjusted |
|
$ |
(466 |
) |
|
$ |
(209 |
) |
|
$ |
(257 |
) |
|
$ |
(69 |
) |
|
$ |
(188 |
) |
|
$ |
(1 |
) |
|
$ |
(187 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Loss
Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per
share, as reported |
|
$ |
(0.92 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.86 |
) |
|
$ |
0.51 |
|
|
$ |
(1.45 |
) |
|
$ |
(0.81 |
) |
|
$ |
(0.64 |
) |
|
Restructuring costs |
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Loss on impairment of assets |
|
|
0.97 |
|
|
|
— |
|
|
|
0.97 |
|
|
|
— |
|
|
|
0.97 |
|
|
|
0.70 |
|
|
|
0.28 |
|
|
Loss on disposal of assets, net |
|
|
0.10 |
|
|
|
— |
|
|
|
0.10 |
|
|
|
0.09 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Loss on impairment of investment in unconsolidated affiliates |
|
|
0.10 |
|
|
|
— |
|
|
|
0.10 |
|
|
|
— |
|
|
|
0.10 |
|
|
|
0.10 |
|
|
|
— |
|
|
(Gain) loss on restructuring and retirement of debt |
|
|
(0.87 |
) |
|
|
(0.22 |
) |
|
|
(0.65 |
) |
|
|
(0.65 |
) |
|
|
0.09 |
|
|
|
(0.01 |
) |
|
|
0.09 |
|
|
Discrete tax items |
|
|
(0.15 |
) |
|
|
(0.06 |
) |
|
|
(0.09 |
) |
|
|
(0.07 |
) |
|
|
(0.02 |
) |
|
|
0.02 |
|
|
|
(0.03 |
) |
|
Diluted loss per share, as
adjusted |
|
$ |
(0.76 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.42 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.31 |
) |
|
$ |
— |
|
|
$ |
(0.30 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
QTD |
|
YTD |
|
|
|
|
06/30/21 |
|
06/30/21 |
|
03/31/21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling revenues |
|
|
$ |
1,309 |
|
|
$ |
656 |
|
|
$ |
653 |
|
|
Contract intangible asset amortization |
|
|
|
113 |
|
|
|
57 |
|
|
|
56 |
|
|
Adjusted Contract
Drilling Revenues |
|
|
$ |
1,422 |
|
|
$ |
713 |
|
|
$ |
709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
$ |
(201 |
) |
|
$ |
(103 |
) |
|
$ |
(98 |
) |
|
Interest expense, net of interest income |
|
|
|
223 |
|
|
|
111 |
|
|
|
112 |
|
|
Income tax expense (benefit) |
|
|
|
(17 |
) |
|
|
4 |
|
|
|
(21 |
) |
|
Depreciation and amortization |
|
|
|
373 |
|
|
|
186 |
|
|
|
187 |
|
|
Contract intangible asset amortization |
|
|
|
113 |
|
|
|
57 |
|
|
|
56 |
|
|
EBITDA |
|
|
|
491 |
|
|
|
255 |
|
|
|
236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on disposal of assets, net |
|
|
|
60 |
|
|
|
— |
|
|
|
60 |
|
|
Gain on retirement of debt |
|
|
|
(51 |
) |
|
|
— |
|
|
|
(51 |
) |
|
Adjusted
EBITDA |
|
|
$ |
500 |
|
|
$ |
255 |
|
|
$ |
245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
|
|
35 |
|
% |
|
36 |
|
% |
|
33 |
|
% |
Adjusted EBITDA margin |
|
|
|
35 |
|
% |
|
36 |
|
% |
|
35 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
|
|
12/31/20 |
|
12/31/20 |
|
09/30/20 |
|
09/30/20 |
|
06/30/20 |
|
06/30/20 |
|
03/31/20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling revenues |
|
$ |
3,152 |
|
|
$ |
690 |
|
|
$ |
2,462 |
|
|
$ |
773 |
|
|
$ |
1,689 |
|
|
$ |
930 |
|
|
$ |
759 |
|
|
Contract intangible asset amortization |
|
|
215 |
|
|
|
57 |
|
|
|
158 |
|
|
|
57 |
|
|
|
101 |
|
|
|
53 |
|
|
|
48 |
|
|
Adjusted Contract
Drilling Revenues |
|
$ |
3,367 |
|
|
$ |
747 |
|
|
$ |
2,620 |
|
|
$ |
830 |
|
|
$ |
1,790 |
|
|
$ |
983 |
|
|
$ |
807 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
(568 |
) |
|
$ |
(39 |
) |
|
$ |
(529 |
) |
|
$ |
359 |
|
|
$ |
(888 |
) |
|
$ |
(497 |
) |
|
$ |
(391 |
) |
|
Interest expense, net of interest income |
|
|
554 |
|
|
|
115 |
|
|
|
439 |
|
|
|
139 |
|
|
|
300 |
|
|
|
149 |
|
|
|
151 |
|
|
Income tax expense (benefit) |
|
|
27 |
|
|
|
23 |
|
|
|
4 |
|
|
|
(24 |
) |
|
|
28 |
|
|
|
32 |
|
|
|
(4 |
) |
|
Depreciation and amortization |
|
|
781 |
|
|
|
189 |
|
|
|
592 |
|
|
|
190 |
|
|
|
402 |
|
|
|
196 |
|
|
|
206 |
|
|
Contract intangible asset amortization |
|
|
215 |
|
|
|
57 |
|
|
|
158 |
|
|
|
57 |
|
|
|
101 |
|
|
|
53 |
|
|
|
48 |
|
|
EBITDA |
|
|
1,009 |
|
|
|
345 |
|
|
|
664 |
|
|
|
721 |
|
|
|
(57 |
) |
|
|
(67 |
) |
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs |
|
|
5 |
|
|
|
(1 |
) |
|
|
6 |
|
|
|
5 |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
|
Loss on impairment of assets |
|
|
597 |
|
|
|
— |
|
|
|
597 |
|
|
|
— |
|
|
|
597 |
|
|
|
429 |
|
|
|
168 |
|
|
Loss on disposal of assets, net |
|
|
61 |
|
|
|
— |
|
|
|
61 |
|
|
|
61 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(Gain) loss on restructuring and retirement of debt |
|
|
(533 |
) |
|
|
(137 |
) |
|
|
(396 |
) |
|
|
(449 |
) |
|
|
53 |
|
|
|
(4 |
) |
|
|
57 |
|
|
Loss on impairment of investment in unconsolidated affiliates |
|
|
62 |
|
|
|
3 |
|
|
|
59 |
|
|
|
— |
|
|
|
59 |
|
|
|
59 |
|
|
|
— |
|
|
Adjusted
EBITDA |
|
$ |
1,201 |
|
|
$ |
210 |
|
|
$ |
991 |
|
|
$ |
338 |
|
|
$ |
653 |
|
|
$ |
418 |
|
|
$ |
235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
|
30 |
|
% |
|
46 |
|
% |
|
25 |
|
% |
|
87 |
|
% |
|
(3 |
) |
% |
|
(7 |
) |
% |
|
1 |
|
% |
Adjusted EBITDA margin |
|
|
36 |
|
% |
|
28 |
|
% |
|
38 |
|
% |
|
41 |
|
% |
|
36 |
|
% |
|
43 |
|
% |
|
29 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
|
SUPPLEMENTAL EFFECTIVE TAX RATE ANALYSIS |
|
(In millions, except tax rates) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2021 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
$ |
(99 |
) |
|
$ |
(119 |
) |
|
$ |
(465 |
) |
|
$ |
(218 |
) |
|
$ |
(860 |
) |
|
Restructuring costs |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
Loss on impairment of assets |
|
|
— |
|
|
|
— |
|
|
|
429 |
|
|
|
— |
|
|
|
597 |
|
|
Loss on disposal of assets, net |
|
|
— |
|
|
|
60 |
|
|
|
— |
|
|
|
60 |
|
|
|
— |
|
|
Loss on impairment of investment in unconsolidated affiliates |
|
|
— |
|
|
|
— |
|
|
|
59 |
|
|
|
— |
|
|
|
59 |
|
|
(Gain) loss on retirement of debt |
|
|
— |
|
|
|
(51 |
) |
|
|
(4 |
) |
|
|
(51 |
) |
|
|
53 |
|
|
Adjusted income (loss) before
income taxes |
|
$ |
(99 |
) |
|
$ |
(110 |
) |
|
|
20 |
|
|
$ |
(209 |
) |
|
|
(150 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues recognized for the settlement of disputes |
|
|
|
|
|
|
|
|
(157 |
) |
|
|
|
|
|
(157 |
) |
|
Adjusted loss before income
taxes for determining effective tax rate |
|
|
|
|
|
|
|
$ |
(137 |
) |
|
|
|
|
$ |
(307 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) |
|
$ |
4 |
|
|
$ |
(21 |
) |
|
$ |
32 |
|
|
$ |
(17 |
) |
|
$ |
28 |
|
|
Restructuring costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Loss on impairment of assets |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
Loss on disposal of assets, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Loss on impairment of investment in unconsolidated affiliates |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(Gain) loss on retirement of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Changes in estimates (1) |
|
|
6 |
|
|
|
27 |
|
|
|
(8 |
) |
|
|
33 |
|
|
|
11 |
|
|
Revenues recognized for the settlement of disputes |
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
(2 |
) |
|
Adjusted income tax expense
(2) |
|
$ |
10 |
|
|
$ |
6 |
|
|
$ |
21 |
|
|
$ |
16 |
|
|
$ |
37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate (3) |
|
|
(4.6 |
) |
% |
|
17.8 |
|
% |
|
(6.8 |
) |
% |
|
7.7 |
|
% |
|
(3.2 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate,
excluding discrete items (4) |
|
|
(10.2 |
) |
% |
|
(5.7 |
) |
% |
|
(15.0 |
) |
% |
|
(7.8 |
) |
% |
|
(12.0 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Our estimates change as we file tax returns, settle disputes
with tax authorities, or become aware of changes in laws and other
events that have an effect on our (a) deferred taxes, (b) valuation
allowances on deferred taxes and (c) other tax liabilities. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) The three
months ended June 30, 2021 included $2 million of additional tax
expense, reflecting the cumulative effect of an increase in the
annual effective tax rate from the previous quarter estimate. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Our effective
tax rate is calculated as income tax expense divided by income
before income taxes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) 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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