Transocean Ltd. (NYSE:RIG) today reported net loss attributable to
controlling interest of $111 million, $0.28 per diluted
share, for the three months ended December 31, 2017.
Fourth quarter 2017 results included net unfavorable items of
$18 million, $0.04 per diluted share, as follows:
- $20 million, $0.04 per diluted share, in discrete tax expense;
and
- $6 million, $0.01 per diluted share, loss on the early
retirement of debt.
These net unfavorable items were partially offset by:
- $6 million, $0.01 per diluted share, gain on disposal of
assets; and
- $2 million associated with other favorable items.
After consideration of these net unfavorable items,
fourth quarter 2017 adjusted net loss was $93 million, or
$0.24 per diluted share.
Contract drilling revenues for the three months ended
December 31, 2017, decreased $110 million sequentially to
$589 million. The decline was primarily due to fewer operating
days and lower revenue efficiency. The lower revenue efficiency was
primarily driven by the Petrobras 10000, which is returning to work
in the first quarter of 2018. The quarter results were also
impacted by lower dayrates on the Deepwater Invictus. These
decreases were partly offset by the commencement of operations of
the ultra-deepwater newbuild drillship Deepwater Pontus.
Other revenues were $40 million, which included $25 million of
early termination fees associated with the Discoverer Clear Leader.
This compares with $109 million in the prior quarter, which
included $99 million of early termination fees.
Operating and maintenance expense was $389 million,
compared with $323 million in the prior quarter. The anticipated
sequential increase was the result of the reactivation and contract
preparation costs related to the Development Driller I and
Deepwater Nautilus; and the commencement of operations of the
Deepwater Pontus. The quarter results were also impacted by timing
from the prior quarter of scheduled maintenance costs and recycling
costs associated with previously announced floater retirements.
General and administrative expense was $43 million compared
with $39 million in the third quarter of 2017. The sequential
increase was primarily due to anticipated IT system enhancements
and other corporate costs.
Depreciation expense was $184 million, down from
$197 million in the third quarter of 2017. The decrease was
primarily due to the previously announced floater retirements.
Interest expense, net of amounts capitalized, was
$123 million, compared with $112 million in the prior
quarter. The increase in interest expense was largely due to the
senior unsecured notes issued during the fourth quarter of 2017,
partly offset by the company’s early debt retirements. Capitalized
interest decreased $6 million sequentially to $25 million
primarily due to the commencement of operations of the Deepwater
Pontus. Interest income was $9 million, compared with $21 million
in the prior quarter, which included interest associated with an
award on a customer-terminated drilling contract in 2015.
The Effective Tax Rate(2) was 8.3 percent, up from
(14.7) percent in the prior quarter. In the fourth quarter of
2017, income tax expense included a $66 million charge associated
with the re-measurement of deferred tax assets and liabilities
related to the recent Tax Cuts and Jobs Act (“U.S. Tax Reform”).
Offsetting this charge was a decrease in the U.S. valuation
allowance totaling $31 million. The U.S. Tax Reform also includes a
one-time tax on unrepatriated earnings of non-U.S. subsidiaries.
Due to the complexities associated with the repatriation tax
analysis, the company has elected to defer estimating this amount
until 2018. The Effective Tax Rate excluding discrete items(3)
was 25.4 percent, compared with 56.5 percent in the
previous quarter.
Cash flows from operating activities decreased $127 million
sequentially to $257 million primarily due to an award in the
prior quarter that was not repeated in the fourth quarter of
2017.
Fourth quarter 2017 capital expenditures of $111 million
were primarily related to the newbuilds, Deepwater Poseidon and
Deepwater Pontus, including milestone shipyard payments. This
compares with $128 million in the previous quarter.
“Despite challenging market conditions, Transocean made great
progress in 2017,” said President and Chief Executive Officer
Jeremy Thigpen. “Just recently, we upgraded our fleet with the
newbuild additions of the Deepwater Pontus and Deepwater Poseidon,
both of which are backed by ten-year contracts. We announced the
acquisition of Songa Offshore, adding seven semisubmersibles to our
fleet, including four harsh environment high-specification floaters
with $3.7 billion of backlog. We divested our jackup fleet; and, we
retired another nine assets, including five older, less competitive
ultra-deepwater rigs.”
Thigpen added: “In addition to enhancing our fleet, we continued
to operate at a high level for our customers, delivering full year
2017 revenue efficiency of just over 96%. This consistently strong
performance helped us to secure 25 new floater awards throughout
the year, adding almost $900 million to our industry-leading
backlog.”
“As we enter 2018, our ongoing balance sheet management has
provided us the means to continue carrying out our strategic
objectives, while extending our liquidity runway,” said Thigpen.
“We are encouraged by the upward momentum we continue to see in oil
prices, and the resulting increase in demand for our assets and
services. In the harsh environment market, we are experiencing
strong demand for high-specification semisubmersibles, resulting in
a meaningful year-over-year improvement in dayrates. While demand
in ultra-deepwater is not as strong, we are encouraged to see
customers seeking multi-year fixtures for assets in various basins
around the world.”
Full Year 2017
For the year ended December 31, 2017, net loss attributable to
controlling interest totaled $3.13 billion, or $8.00 per diluted
share. Full year results included $3.10 billion, $7.94 per diluted
share, of net unfavorable items as follows:
- $1.59 billion, $4.07 per diluted share, loss on divestiture of
the jackup fleet and three midwater floaters;
- $1.50 billion, $3.84 per diluted share, loss on impairment
associated with the retirement of six floaters and the midwater
floater asset group; and
- $55 million, $0.14 per diluted share, loss related to the early
retirement of debt.
These net unfavorable items were partially offset by:
- $37 million, $0.10 per diluted share, in discrete tax benefits;
and
- $2 million, $0.01 per diluted share, in favorable litigation
matters and other costs.
After excluding these net unfavorable items, adjusted net loss
for 2017 was $24 million, or $0.06 per diluted share.
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 47 mobile offshore drilling units
consisting of 27 ultra-deepwater floaters, 12 harsh
environment floaters, two deepwater floaters and
six midwater floaters. In addition, the company has two
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.
EST, 3 p.m. CET, on Wednesday, February 21, 2018, to
discuss the results. To participate, dial +1 719-325-2494 and refer
to conference code 4018515 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. EST, 6 p.m. CET, on February 21, 2018. The
replay, which will be archived for approximately 30 days, can
be accessed at +1 719-457-0820, passcode 4018515 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
expected benefits from the acquisition of Songa Offshore SE
(“Songa”), 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
(1) 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.”
(2) 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.”
(3) 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 |
CONSOLIDATED STATEMENT OF OPERATIONS |
(In millions, except share data) |
(Unaudited) |
|
|
Years ended
December 31, |
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
Operating revenues |
|
|
|
|
|
|
|
|
|
Contract
drilling revenues |
|
$ |
2,731 |
|
|
$ |
3,705 |
|
|
$ |
6,802 |
|
Other revenues |
|
|
242 |
|
|
|
456 |
|
|
|
584 |
|
|
|
|
2,973 |
|
|
|
4,161 |
|
|
|
7,386 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
Operating
and maintenance |
|
|
1,388 |
|
|
|
1,875 |
|
|
|
2,955 |
|
Depreciation |
|
|
832 |
|
|
|
893 |
|
|
|
963 |
|
General and administrative |
|
|
156 |
|
|
|
172 |
|
|
|
192 |
|
|
|
|
2,376 |
|
|
|
2,940 |
|
|
|
4,110 |
|
Loss
on impairment |
|
|
(1,498 |
) |
|
|
(93 |
) |
|
|
(1,875 |
) |
Gain (loss) on disposal of assets, net |
|
|
(1,603 |
) |
|
|
4 |
|
|
|
(36 |
) |
Operating income (loss) |
|
|
(2,504 |
) |
|
|
1,132 |
|
|
|
1,365 |
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
|
|
|
|
|
|
|
Interest
income |
|
|
43 |
|
|
|
20 |
|
|
|
22 |
|
Interest
expense, net of amounts capitalized |
|
|
(491 |
) |
|
|
(409 |
) |
|
|
(432 |
) |
Gain
(loss) on retirement of debt |
|
|
(55 |
) |
|
|
148 |
|
|
|
23 |
|
Other, net |
|
|
4 |
|
|
|
43 |
|
|
|
37 |
|
|
|
|
(499 |
) |
|
|
(198 |
) |
|
|
(350 |
) |
Income (loss) from continuing operations before income tax
expense |
|
|
(3,003 |
) |
|
|
934 |
|
|
|
1,015 |
|
Income
tax expense |
|
|
94 |
|
|
|
107 |
|
|
|
120 |
|
Income (loss) from continuing operations |
|
|
(3,097 |
) |
|
|
827 |
|
|
|
895 |
|
Income (loss) from discontinued operations, net of tax |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
(3,097 |
) |
|
|
827 |
|
|
|
897 |
|
Net income attributable to noncontrolling interest |
|
|
30 |
|
|
|
49 |
|
|
|
32 |
|
Net income (loss) attributable to controlling
interest |
|
$ |
(3,127 |
) |
|
$ |
778 |
|
|
$ |
865 |
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share—basic |
|
|
|
|
|
|
|
|
|
Earnings
(loss) from continuing operations |
|
$ |
(8.00 |
) |
|
$ |
2.08 |
|
|
$ |
2.36 |
|
Earnings (loss) from discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Earnings (loss) per share |
|
$ |
(8.00 |
) |
|
$ |
2.08 |
|
|
$ |
2.36 |
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share—diluted |
|
|
|
|
|
|
|
|
|
Earnings
(loss) from continuing operations |
|
$ |
(8.00 |
) |
|
$ |
2.08 |
|
|
$ |
2.36 |
|
Earnings (loss) from discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Earnings (loss) per share |
|
$ |
(8.00 |
) |
|
$ |
2.08 |
|
|
$ |
2.36 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding |
|
|
|
|
|
|
|
|
|
Basic |
|
|
391 |
|
|
|
367 |
|
|
|
363 |
|
Diluted |
|
|
391 |
|
|
|
367 |
|
|
|
363 |
|
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(In millions, except share data) |
(Unaudited) |
|
|
December 31, |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Cash
and cash equivalents |
|
$ |
2,519 |
|
|
$ |
3,052 |
|
Short-term investments |
|
|
450 |
|
|
|
— |
|
Accounts receivable,
net |
|
|
|
|
|
|
Trade |
|
|
597 |
|
|
|
833 |
|
Other |
|
|
44 |
|
|
|
65 |
|
Materials and supplies, net |
|
|
418 |
|
|
|
561 |
|
Restricted cash accounts and investments |
|
|
466 |
|
|
|
466 |
|
Other current assets |
|
|
112 |
|
|
|
121 |
|
Total current assets |
|
|
4,606 |
|
|
|
5,098 |
|
|
|
|
|
|
|
|
Property and equipment |
|
|
22,693 |
|
|
|
27,372 |
|
Less accumulated depreciation |
|
|
(5,291 |
) |
|
|
(6,279 |
) |
Property and equipment, net |
|
|
17,402 |
|
|
|
21,093 |
|
Deferred income taxes, net |
|
|
47 |
|
|
|
298 |
|
Other assets |
|
|
355 |
|
|
|
400 |
|
Total assets |
|
$ |
22,410 |
|
|
$ |
26,889 |
|
|
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
|
|
Accounts payable |
|
$ |
201 |
|
|
$ |
206 |
|
Accrued income taxes |
|
|
79 |
|
|
|
95 |
|
Debt
due within one year |
|
|
250 |
|
|
|
724 |
|
Other current liabilities |
|
|
839 |
|
|
|
960 |
|
Total current liabilities |
|
|
1,369 |
|
|
|
1,985 |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
7,146 |
|
|
|
7,740 |
|
Deferred income taxes, net |
|
|
44 |
|
|
|
178 |
|
Other
long-term liabilities |
|
|
1,082 |
|
|
|
1,153 |
|
Total long-term liabilities |
|
|
8,272 |
|
|
|
9,071 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
Redeemable
noncontrolling interest |
|
|
58 |
|
|
|
28 |
|
|
|
|
|
|
|
|
Shares, CHF 0.10 par
value, 417,060,033 authorized, 143,783,041 conditionally authorized
and 394,801,990 issued at December 31, 2017 and 2016 and
391,237,308 and 389,366,241 outstanding at December 31, 2017 and
2016, respectively |
|
|
37 |
|
|
|
36 |
|
Additional paid-in capital |
|
|
11,031 |
|
|
|
10,993 |
|
Retained earnings |
|
|
1,929 |
|
|
|
5,056 |
|
Accumulated other comprehensive loss |
|
|
(290 |
) |
|
|
(283 |
) |
Total controlling interest shareholders’ equity |
|
|
12,707 |
|
|
|
15,802 |
|
Noncontrolling interest |
|
|
4 |
|
|
|
3 |
|
Total equity |
|
|
12,711 |
|
|
|
15,805 |
|
Total liabilities and equity |
|
$ |
22,410 |
|
|
$ |
26,889 |
|
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In millions) |
(Unaudited) |
|
|
Years ended
December 31, |
|
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities |
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
|
$ |
(3,097 |
) |
|
$ |
827 |
|
|
$ |
897 |
|
|
Adjustments to reconcile to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
832 |
|
|
|
893 |
|
|
|
963 |
|
|
Share-based compensation expense |
|
|
41 |
|
|
|
42 |
|
|
|
64 |
|
|
Loss on
impairment |
|
|
1,498 |
|
|
|
93 |
|
|
|
1,875 |
|
|
(Gain)
loss on disposal of assets, net |
|
|
1,603 |
|
|
|
(4 |
) |
|
|
35 |
|
|
(Gain)
loss on retirement of debt |
|
|
55 |
|
|
|
(148 |
) |
|
|
(23 |
) |
|
Deferred
income tax expense (benefit) |
|
|
89 |
|
|
|
68 |
|
|
|
(134 |
) |
|
Other,
net |
|
|
55 |
|
|
|
14 |
|
|
|
74 |
|
|
Changes
in deferred revenues, net |
|
|
33 |
|
|
|
219 |
|
|
|
(90 |
) |
|
Changes
in deferred costs, net |
|
|
54 |
|
|
|
72 |
|
|
|
179 |
|
|
Changes in other operating assets and liabilities, net |
|
|
(19 |
) |
|
|
(165 |
) |
|
|
(395 |
) |
|
Net cash
provided by operating activities |
|
|
1,144 |
|
|
|
1,911 |
|
|
|
3,445 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
|
|
|
Capital
expenditures |
|
|
(497 |
) |
|
|
(1,344 |
) |
|
|
(2,001 |
) |
|
Proceeds
from disposal of assets, net |
|
|
350 |
|
|
|
30 |
|
|
|
54 |
|
|
Deposits
into short-term investments |
|
|
(450 |
) |
|
|
— |
|
|
|
— |
|
|
Other, net |
|
|
10 |
|
|
|
1 |
|
|
|
15 |
|
|
Net cash
used in investing activities |
|
|
(587 |
) |
|
|
(1,313 |
) |
|
|
(1,932 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
|
|
|
|
Proceeds
from issuance of debt, net of discounts and issue costs |
|
|
1,144 |
|
|
|
2,401 |
|
|
|
— |
|
|
Repayments of debt |
|
|
(2,284 |
) |
|
|
(2,295 |
) |
|
|
(1,506 |
) |
|
Deposits
to cash accounts restricted for financing activities |
|
|
(97 |
) |
|
|
(85 |
) |
|
|
— |
|
|
Proceeds
from cash accounts and investments restricted for financing
activities |
|
|
150 |
|
|
|
124 |
|
|
|
110 |
|
|
Distributions of qualifying additional paid-in capital |
|
|
— |
|
|
|
— |
|
|
|
(381 |
) |
|
Distributions to holders of noncontrolling interest |
|
|
— |
|
|
|
(30 |
) |
|
|
(29 |
) |
|
Other, net |
|
|
(3 |
) |
|
|
— |
|
|
|
(3 |
) |
|
Net cash
provided by (used in) financing activities |
|
|
(1,090 |
) |
|
|
115 |
|
|
|
(1,809 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents |
|
|
(533 |
) |
|
|
713 |
|
|
|
(296 |
) |
|
Cash and
cash equivalents at beginning of period |
|
|
3,052 |
|
|
|
2,339 |
|
|
|
2,635 |
|
|
Cash and
cash equivalents at end of period |
|
$ |
2,519 |
|
|
$ |
3,052 |
|
|
$ |
2,339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
|
FLEET OPERATING STATISTICS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues (in millions) |
|
|
|
Three months ended |
|
Years ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Contract drilling
revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ultra-deepwater floaters |
|
$ |
404 |
|
$ |
511 |
|
$ |
560 |
|
$ |
1,917 |
|
$ |
2,318 |
|
Harsh
environment floaters |
|
|
105 |
|
|
106 |
|
|
100 |
|
|
437 |
|
|
483 |
|
Deepwater
floaters |
|
|
37 |
|
|
35 |
|
|
35 |
|
|
143 |
|
|
214 |
|
Midwater
floaters |
|
|
17 |
|
|
18 |
|
|
30 |
|
|
66 |
|
|
388 |
|
High-specification jackups |
|
|
26 |
|
|
29 |
|
|
66 |
|
|
168 |
|
|
289 |
|
Contract
intangible revenue |
|
|
— |
|
|
— |
|
|
2 |
|
|
— |
|
|
13 |
|
Total contract drilling
revenues |
|
|
589 |
|
|
699 |
|
|
793 |
|
|
2,731 |
|
|
3,705 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer
early termination fees |
|
|
25 |
|
|
99 |
|
|
169 |
|
|
201 |
|
|
396 |
|
Customer
reimbursement revenues and other |
|
|
15 |
|
|
10 |
|
|
12 |
|
|
41 |
|
|
60 |
|
Total other
revenues |
|
|
40 |
|
|
109 |
|
|
181 |
|
|
242 |
|
|
456 |
|
Total revenues |
|
$ |
629 |
|
$ |
808 |
|
$ |
974 |
|
$ |
2,973 |
|
$ |
4,161 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Daily Revenue (1) |
|
|
|
Three months ended |
|
Years ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Ultra-deepwater
floaters |
|
$ |
440,000 |
|
$ |
449,300 |
|
$ |
490,600 |
|
$ |
472,400 |
|
$ |
492,100 |
|
Harsh environment
floaters |
|
|
202,900 |
|
|
213,100 |
|
|
253,500 |
|
|
235,900 |
|
|
329,100 |
|
Deepwater floaters |
|
|
202,400 |
|
|
187,300 |
|
|
204,500 |
|
|
195,200 |
|
|
253,900 |
|
Midwater floaters |
|
|
90,300 |
|
|
98,900 |
|
|
128,600 |
|
|
95,600 |
|
|
274,100 |
|
High-specification
jackups |
|
|
145,500 |
|
|
151,200 |
|
|
143,500 |
|
|
143,900 |
|
|
143,800 |
|
Total
drilling fleet |
|
$ |
296,700 |
|
|
319,000 |
|
$ |
329,400 |
|
$ |
321,300 |
|
$ |
353,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utilization (2) |
|
|
|
|
Three months ended |
|
Years ended |
|
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Ultra-deepwater
floaters |
|
|
39 |
% |
|
42 |
% |
|
43 |
% |
|
39 |
% |
|
45 |
% |
|
Harsh environment
floaters |
|
|
80 |
% |
|
77 |
% |
|
61 |
% |
|
73 |
% |
|
57 |
% |
|
Deepwater floaters |
|
|
100 |
% |
|
69 |
% |
|
53 |
% |
|
73 |
% |
|
54 |
% |
|
Midwater floaters |
|
|
50 |
% |
|
50 |
% |
|
37 |
% |
|
38 |
% |
|
42 |
% |
|
High-specification
jackups |
|
|
100 |
% |
|
95 |
% |
|
50 |
% |
|
61 |
% |
|
55 |
% |
|
Total
drilling fleet |
|
|
53 |
% |
|
52 |
% |
|
46 |
% |
|
48 |
% |
|
48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Efficiency (3) |
|
|
|
Three months ended |
|
Years ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Ultra-deepwater
floaters |
|
|
90.9 |
% |
|
98.6 |
% |
|
100.1 |
% |
|
96.3 |
% |
|
97.8 |
% |
Harsh environment
floaters |
|
|
94.8 |
% |
|
92.0 |
% |
|
97.1 |
% |
|
95.5 |
% |
|
97.8 |
% |
Deepwater floaters |
|
|
96.3 |
% |
|
90.0 |
% |
|
93.4 |
% |
|
93.6 |
% |
|
96.3 |
% |
Midwater floaters |
|
|
95.8 |
% |
|
97.4 |
% |
|
94.7 |
% |
|
96.1 |
% |
|
99.0 |
% |
High-specification
jackups |
|
|
99.3 |
% |
|
99.3 |
% |
|
115.0 |
% |
|
100.9 |
% |
|
97.6 |
% |
Total
drilling fleet |
|
|
92.4 |
% |
|
97.1 |
% |
|
100.3 |
% |
|
96.3 |
% |
|
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 (LOSS) AND ADJUSTED
DILUTED EARNINGS (LOSS) PER SHARE |
|
(In millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
QTD |
|
|
|
12/31/17 |
|
12/31/17 |
|
09/30/17 |
|
09/30/17 |
|
06/30/17 |
|
06/30/17 |
|
03/31/17 |
|
Adjusted Net Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to controlling interest, as reported |
|
$ |
(3,127 |
) |
|
$ |
(111 |
) |
|
$ |
(3,016 |
) |
|
$ |
(1,417 |
) |
|
$ |
(1,599 |
) |
|
$ |
(1,690 |
) |
|
$ |
91 |
|
|
Litigation matters |
|
|
(8 |
) |
|
|
(1 |
) |
|
|
(7 |
) |
|
|
— |
|
|
|
(7 |
) |
|
|
1 |
|
|
|
(8 |
) |
|
Restructuring charges |
|
|
2 |
|
|
|
1 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
2 |
|
|
|
2 |
|
|
|
— |
|
|
Acquisition costs |
|
|
4 |
|
|
|
— |
|
|
|
4 |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Loss on
impairment of assets |
|
|
1,497 |
|
|
|
(2 |
) |
|
|
1,499 |
|
|
|
1,386 |
|
|
|
113 |
|
|
|
113 |
|
|
|
— |
|
|
(Gain)
loss on disposal of assets, net |
|
|
1,590 |
|
|
|
(6 |
) |
|
|
1,596 |
|
|
|
1 |
|
|
|
1,595 |
|
|
|
1,597 |
|
|
|
(2 |
) |
|
Loss on
retirement of debt |
|
|
55 |
|
|
|
6 |
|
|
|
49 |
|
|
|
1 |
|
|
|
48 |
|
|
|
48 |
|
|
|
— |
|
|
Discrete
tax items and other, net |
|
|
(37 |
) |
|
|
20 |
|
|
|
(57 |
) |
|
|
90 |
|
|
|
(147 |
) |
|
|
(70 |
) |
|
|
(77 |
) |
|
Net income (loss), as
adjusted |
|
$ |
(24 |
) |
|
$ |
(93 |
) |
|
$ |
69 |
|
|
$ |
64 |
|
|
$ |
5 |
|
|
$ |
1 |
|
|
$ |
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Diluted Earnings (Loss) Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss)
per share, as reported |
|
$ |
(8.00 |
) |
|
$ |
(0.28 |
) |
|
$ |
(7.72 |
) |
|
$ |
(3.62 |
) |
|
$ |
(4.09 |
) |
|
$ |
(4.32 |
) |
|
$ |
0.23 |
|
|
Litigation matters |
|
|
(0.02 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
Restructuring charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Acquisition costs |
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Loss on
impairment of assets |
|
|
3.84 |
|
|
|
— |
|
|
|
3.84 |
|
|
|
3.54 |
|
|
|
0.29 |
|
|
|
0.29 |
|
|
|
— |
|
|
Loss on
disposal of assets, net |
|
|
4.07 |
|
|
|
(0.01 |
) |
|
|
4.08 |
|
|
|
— |
|
|
|
4.08 |
|
|
|
4.08 |
|
|
|
— |
|
|
Loss on
retirement of debt |
|
|
0.14 |
|
|
|
0.01 |
|
|
|
0.12 |
|
|
|
— |
|
|
|
0.12 |
|
|
|
0.12 |
|
|
|
— |
|
|
Discrete
tax items and other, net |
|
|
(0.10 |
) |
|
|
0.04 |
|
|
|
(0.13 |
) |
|
|
0.23 |
|
|
|
(0.37 |
) |
|
|
(0.17 |
) |
|
|
(0.20 |
) |
|
Diluted earnings (loss)
per share, as adjusted |
|
$ |
(0.06 |
) |
|
$ |
(0.24 |
) |
|
$ |
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 |
|
|
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 |
|
|
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 |
|
YTD |
|
QTD |
|
QTD |
|
|
12/31/17 |
|
12/31/17 |
|
09/30/17 |
|
09/30/17 |
|
06/30/17 |
|
06/30/17 |
|
03/31/17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues |
|
$ |
2,973 |
|
|
$ |
629 |
|
|
$ |
2,344 |
|
|
$ |
808 |
|
|
$ |
1,536 |
|
|
$ |
751 |
|
|
$ |
785 |
|
Drilling
contract termination fees |
|
|
(201 |
) |
|
|
(25 |
) |
|
|
(176 |
) |
|
|
(99 |
) |
|
|
(77 |
) |
|
|
(40 |
) |
|
|
(37 |
) |
Adjusted
Normalized Revenues |
|
$ |
2,772 |
|
|
$ |
604 |
|
|
$ |
2,168 |
|
|
$ |
709 |
|
|
$ |
1,459 |
|
|
$ |
711 |
|
|
$ |
748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
(3,097 |
) |
|
$ |
(102 |
) |
|
$ |
(2,995 |
) |
|
$ |
(1,411 |
) |
|
$ |
(1,584 |
) |
|
$ |
(1,679 |
) |
|
$ |
95 |
|
Interest
expense, net of interest income |
|
|
448 |
|
|
|
114 |
|
|
|
334 |
|
|
|
91 |
|
|
|
243 |
|
|
|
122 |
|
|
|
121 |
|
Income
tax expense (benefit) |
|
|
94 |
|
|
|
(9 |
) |
|
|
103 |
|
|
|
180 |
|
|
|
(77 |
) |
|
|
(37 |
) |
|
|
(40 |
) |
Depreciation expense |
|
|
832 |
|
|
|
184 |
|
|
|
648 |
|
|
|
197 |
|
|
|
451 |
|
|
|
219 |
|
|
|
232 |
|
EBITDA |
|
|
(1,723 |
) |
|
|
187 |
|
|
|
(1,910 |
) |
|
|
(943 |
) |
|
|
(967 |
) |
|
|
(1,375 |
) |
|
|
408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation matters |
|
|
(8 |
) |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
— |
|
|
|
(6 |
) |
|
|
2 |
|
|
|
(8 |
) |
Restructuring charges |
|
|
3 |
|
|
|
1 |
|
|
|
2 |
|
|
|
— |
|
|
|
2 |
|
|
|
2 |
|
|
|
— |
|
Acquisition costs |
|
|
4 |
|
|
|
— |
|
|
|
4 |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on
impairment of assets |
|
|
1,498 |
|
|
|
— |
|
|
|
1,498 |
|
|
|
1,385 |
|
|
|
113 |
|
|
|
113 |
|
|
|
— |
|
(Gain)
loss on disposal of assets, net |
|
|
1,590 |
|
|
|
(6 |
) |
|
|
1,596 |
|
|
|
1 |
|
|
|
1,595 |
|
|
|
1,597 |
|
|
|
(2 |
) |
Loss on
retirement of debt |
|
|
55 |
|
|
|
6 |
|
|
|
49 |
|
|
|
1 |
|
|
|
48 |
|
|
|
48 |
|
|
|
— |
|
Adjusted
EBITDA |
|
|
1,419 |
|
|
|
186 |
|
|
|
1,233 |
|
|
|
448 |
|
|
|
785 |
|
|
|
387 |
|
|
|
398 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling
contract termination fees |
|
|
(201 |
) |
|
|
(25 |
) |
|
|
(176 |
) |
|
|
(99 |
) |
|
|
(77 |
) |
|
|
(40 |
) |
|
|
(37 |
) |
Adjusted
Normalized EBITDA |
|
$ |
1,218 |
|
|
$ |
161 |
|
|
$ |
1,057 |
|
|
$ |
349 |
|
|
$ |
708 |
|
|
$ |
347 |
|
|
$ |
361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
|
(58 |
) |
% |
|
30 |
|
% |
|
(81 |
) |
% |
|
(117 |
) |
% |
|
(63 |
) |
% |
|
(183 |
) |
% |
|
52 |
% |
Adjusted EBITDA
margin |
|
|
48 |
|
% |
|
30 |
|
% |
|
53 |
|
% |
|
55 |
|
% |
|
51 |
|
% |
|
52 |
|
% |
|
51 |
% |
Adjusted Normalized
EBITDA margin |
|
|
44 |
|
% |
|
27 |
|
% |
|
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 |
|
Years ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
Income (loss) from
continuing operations before income taxes |
|
$ |
(111 |
) |
|
$ |
(1,231 |
) |
|
$ |
242 |
|
|
$ |
(3,003 |
) |
|
$ |
934 |
|
|
Litigation matters |
|
|
(2 |
) |
|
|
— |
|
|
|
(30 |
) |
|
|
(8 |
) |
|
|
(30 |
) |
|
Restructuring charges |
|
|
1 |
|
|
|
— |
|
|
|
11 |
|
|
|
3 |
|
|
|
28 |
|
|
Acquisition costs |
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
Loss on
impairment of assets |
|
|
— |
|
|
|
1,385 |
|
|
|
67 |
|
|
|
1,498 |
|
|
|
93 |
|
|
(Gain)
loss on disposal of assets, net |
|
|
(6 |
) |
|
|
1 |
|
|
|
(5 |
) |
|
|
1,590 |
|
|
|
(13 |
) |
|
(Gain)
loss on retirement of debt |
|
|
6 |
|
|
|
1 |
|
|
|
— |
|
|
|
55 |
|
|
|
(148 |
) |
|
Adjusted income from
continuing operations before income taxes |
|
$ |
(112 |
) |
|
$ |
160 |
|
|
$ |
285 |
|
|
$ |
139 |
|
|
$ |
864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) from continuing operations |
|
$ |
(9 |
) |
|
$ |
180 |
|
|
$ |
(15 |
) |
|
$ |
94 |
|
|
$ |
107 |
|
|
Litigation matters |
|
|
(1 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
(2 |
) |
|
Restructuring charges |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
2 |
|
|
Acquisition costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Loss on
impairment of assets |
|
|
2 |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
Gain on
disposal of assets, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Changes
in estimates (1) |
|
|
(20 |
) |
|
|
(90 |
) |
|
|
26 |
|
|
|
37 |
|
|
|
50 |
|
|
Adjusted income tax
expense from continuing operations (2) |
|
$ |
(28 |
) |
|
$ |
90 |
|
|
$ |
10 |
|
|
$ |
133 |
|
|
$ |
159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate (3) |
|
|
8.3 |
|
% |
|
(14.7 |
) |
% |
|
(6.5 |
) |
% |
|
(3.1 |
) |
% |
|
11.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate, excluding discrete items (4) |
|
|
25.4 |
|
% |
|
56.5 |
|
% |
|
3.3 |
|
% |
|
95.2 |
|
% |
|
18.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 months and year ended December 31, 2017 includes $78 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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