Transocean Ltd. (NYSE: RIG) today reported net loss attributable to
controlling interest of $409 million, $0.88 per diluted
share, for the three months ended September 30, 2018.
Third quarter 2018 results included net unfavorable items of
$439 million, or $0.94 per diluted share, as follows:
- $432 million, $0.93 per diluted share, loss on
impairment primarily for two floaters previously announced for
retirement;
- $4 million, $0.01 per diluted share, in acquisition
costs; and
- $3 million loss related to other unfavorable items.
After consideration of these net unfavorable items,
third quarter 2018 adjusted net income was $30 million,
or $0.06 per diluted share.
Contract drilling revenues for the three months ended
September 30, 2018, sequentially increased $26 million to
$816 million due to higher utilization partially offset by
lower revenue efficiency on the company’s ultra-deepwater
fleet.
Contract drilling revenues included customer early termination
fees of $37 million on the Discoverer Clear Leader
in both the second and third quarters. The third quarter also
included a non-cash revenue reduction of $29 million from
contract intangible amortization associated with the Songa
acquisition. The second quarter non-cash revenue reduction from
contract intangible amortization was $30 million.
Operating and maintenance expense was $447 million,
compared with $431 million in the prior quarter. The sequential
increase was the result of the reactivation and contract
preparation costs related to Development Driller III and Deepwater
Nautilus, increased quarterly maintenance costs and legal fees
associated with a dual activity patent settlement; offset by
reduced operating costs and the recovery of certain legal fees in
Norway.
General and administrative expense was $35 million,
compared with $52 million in the prior quarter. The decrease
was primarily due to charges in the second quarter of 2018 related
to the early retirement of certain personnel and a legal
reimbursement, partially offset by third quarter Ocean Rig
acquisition costs.
Depreciation expense was $201 million, down from
$211 million in the second quarter of 2018. The decrease
was primarily due to the previously announced floater
retirements.
Interest expense, net of amounts capitalized, was
$160 million, compared with $148 million in the prior
quarter. The increase was due to the senior secured notes issued
during the third quarter of 2018 partially offset by senior secured
term loan facilities assumed during the Songa acquisition that were
retired. Capitalized interest was $8 million in the third
quarter of 2018, compared with $7 million in the prior
quarter. Interest income was $11 million, compared with $13
million in the prior quarter.
The Effective Tax Rate(2) was 6.7%, up from (8.0)% in
the prior quarter. The increase was due to the relative blend of
income from operations in certain jurisdictions and a tax benefit
on the pre-tax loss in the third quarter. In addition, the second
quarter of 2018 included a reasonable estimate of transition taxes
associated with U.S. tax reform (“2017 Tax Act”).
Cash flows from operating activities increased $211 million
sequentially to $214 million primarily due to the collection
of certain receivables, decreased income tax payments, insurance
prepayments, and interest payments.
Third quarter 2018 capital expenditures of $48 million were
primarily related to the company’s newbuild drillships. This
compares with $39 million in the previous quarter.
“We continued to operate at a high level in the third quarter,
with revenue efficiency again exceeding 95%, resulting in quarterly
revenue of $816 million,” said Jeremy Thigpen, President and Chief
Executive Officer. “We also delivered an industry-leading
Adjusted Normalized EBITDA margin of 42% through the efficient
conversion of our industry best $11.5 billion backlog.”
Thigpen added, “We remain encouraged by the increase that we are
experiencing in floater contracting activity. Over the past
three months, as a testament to our fleet quality, operating
performance and customer relationships, we secured almost $500
million of new backlog, bringing our 12-month total to over $1.5
billion.”
Thigpen concluded, “In preparation for an offshore recovery,
during the quarter, we also continued the high-grading of our fleet
by announcing our agreement to acquire Ocean Rig. With its
strong balance sheet, and fleet of 11 high-specification
ultra-deepwater drillships, two of which are currently under
construction, and two harsh environment semisubmersibles, Ocean Rig
presents us with a unique opportunity to continue enhancing both
our fleet and our optionality as the market recovery
unfolds. We look forward to a favorable shareholder vote at
our Extraordinary General Meeting scheduled for November 29, and to
ultimately closing the transaction in December.”
Further to the above referenced Ocean Rig
acquisition, Mark Mey, Executive Vice President and Chief Financial
Officer added, “Consistent with our objective of protecting
near-term liquidity, last week we successfully issued $750 million
of seven-year priority guaranteed notes replacing the committed
Ocean Rig acquisition financing with permanent financing.”
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 41 mobile offshore drilling units
consisting of 23 ultra-deepwater floaters, 12 harsh
environment floaters, two deepwater floaters and
four midwater floaters. In addition, Transocean is
constructing two 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, 2 p.m. CEST, on Tuesday, October 30, 2018, to
discuss the results. To participate, dial +1 334-323-0522 and refer
to conference code 9280610 approximately 10 minutes prior to
the scheduled start time.
The teleconference will be simulcast in a listen-only mode at:
www.deepwater.com, by selecting Investors, News, and Webcasts.
Supplemental materials that may be referenced during the
teleconference will be available at: www.deepwater.com, by
selecting Investors, Financial Reports.
A replay of the conference call will be available after
12 p.m. EDT, 5 p.m. CEST, on October 30, 2018. The
replay, which will be archived for approximately 30 days, can
be accessed at +1 719-457-0820, passcode 9280610 and
PIN 7706. The replay will also be available on the company’s
website.
Forward-Looking Statements
The statements described in this press release that are not
historical facts are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
These statements contain words such as "possible," "intend,"
"will," "if," "expect," or other similar expressions.
Forward-looking statements are based on management’s current
expectations and assumptions, and are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict. As a result, actual results could differ
materially from those indicated in these forward-looking
statements. Factors that could cause actual results to differ
materially include, but are not limited to, estimated duration of
customer contracts, contract dayrate amounts, future contract
commencement dates and locations, planned shipyard projects and
other out-of-service time, sales of drilling units, timing of the
company’s newbuild deliveries, operating hazards and delays, risks
associated with international operations, actions by customers and
other third parties, the future prices of oil and gas, the
intention to scrap certain drilling rigs, the results of our final
accounting for the periods presented in this press release, the
timing and likelihood of the completion of the contemplated
acquisition of Ocean Rig UDW Inc. (“Ocean Rig”), the expected
benefits from the transaction, the ability to successfully
integrate the Transocean and Ocean Rig businesses, the success of
our business following the acquisition of 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, 2017, 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.
Additional Information and Where to Find
It
More information is available related to the contemplated
acquisition of Ocean Rig pursuant to the terms of the Agreement and
Plan of Merger, dated as of September 3, 2018, by and among Ocean
Rig, Transocean, Transocean Oceanus Holdings Limited and Transocean
Oceanus Limited. In connection with the contemplated acquisition,
Transocean has filed a Registration Statement on Form S‑4 with the
SEC that includes a joint proxy statement of Transocean and Ocean
Rig that also constitutes a prospectus of Transocean. This
joint proxy statement/prospectus has been mailed or otherwise
disseminated to Transocean and Ocean Rig shareholders.
INVESTORS AND SECURITYHOLDERS ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION
ABOUT THE CONTEMPLATED ACQUISITION OF OCEAN RIG. You may obtain a
free copy of the joint proxy statement/prospectus and other
relevant documents filed by Transocean and Ocean Rig with the SEC
at the SEC’s website at: www.sec.gov. Copies of the documents filed
by Transocean with the SEC will be available free of charge on
Transocean’s website at: http://www.deepwater.com or by emailing
Transocean’s Investor Relations at: info@deepwater.com. Copies of
the documents filed by Ocean Rig with the SEC will be available
free of charge on Ocean Rig’s website at: www.ocean-rig.com or by
emailing Ocean Rig’s Investor Relations at:
oceanrig@capitallink.com.
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.”
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
SUBSIDIARIES |
CONSOLIDATED STATEMENT OF
OPERATIONS |
(In millions, except per share data) |
(Unaudited) |
|
|
Three months
ended |
|
Nine months
ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling revenues (1) |
|
$ |
816 |
|
|
$ |
699 |
|
|
$ |
2,270 |
|
|
$ |
2,142 |
|
|
Other revenues |
|
|
— |
|
|
|
109 |
|
|
|
— |
|
|
|
202 |
|
|
|
|
|
816 |
|
|
|
808 |
|
|
|
2,270 |
|
|
|
2,344 |
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating and maintenance |
|
|
447 |
|
|
|
325 |
|
|
|
1,302 |
|
|
|
1,003 |
|
|
Depreciation |
|
|
201 |
|
|
|
197 |
|
|
|
614 |
|
|
|
648 |
|
|
General and administrative |
|
|
35 |
|
|
|
39 |
|
|
|
134 |
|
|
|
113 |
|
|
|
|
|
683 |
|
|
|
561 |
|
|
|
2,050 |
|
|
|
1,764 |
|
|
Loss on impairment |
|
|
(432 |
) |
|
|
(1,385 |
) |
|
|
(1,446 |
) |
|
|
(1,498 |
) |
|
Loss on disposal of assets, net |
|
|
(6 |
) |
|
|
(9 |
) |
|
|
— |
|
|
|
(1,602 |
) |
|
Operating loss |
|
|
(305 |
) |
|
|
(1,147 |
) |
|
|
(1,226 |
) |
|
|
(2,520 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
11 |
|
|
|
21 |
|
|
|
36 |
|
|
|
34 |
|
|
Interest expense, net of amounts capitalized |
|
|
(160 |
) |
|
|
(112 |
) |
|
|
(455 |
) |
|
|
(368 |
) |
|
Loss on retirement of debt |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(49 |
) |
|
Other, net |
|
|
16 |
|
|
|
8 |
|
|
|
6 |
|
|
|
11 |
|
|
|
|
|
(134 |
) |
|
|
(84 |
) |
|
|
(416 |
) |
|
|
(372 |
) |
|
Loss before income tax expense (benefit) |
|
|
(439 |
) |
|
|
(1,231 |
) |
|
|
(1,642 |
) |
|
|
(2,892 |
) |
|
Income tax expense (benefit) |
|
|
(30 |
) |
|
|
180 |
|
|
|
118 |
|
|
|
103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(409 |
) |
|
|
(1,411 |
) |
|
|
(1,760 |
) |
|
|
(2,995 |
) |
|
Net income (loss) attributable to
noncontrolling interest |
|
|
— |
|
|
|
6 |
|
|
|
(6 |
) |
|
|
21 |
|
|
Net loss attributable to controlling
interest |
|
$ |
(409 |
) |
|
$ |
(1,417 |
) |
|
$ |
(1,754 |
) |
|
$ |
(3,016 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.88 |
) |
|
$ |
(3.62 |
) |
|
$ |
(3.86 |
) |
|
$ |
(7.72 |
) |
|
Diluted |
|
$ |
(0.88 |
) |
|
$ |
(3.62 |
) |
|
$ |
(3.86 |
) |
|
$ |
(7.72 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
463 |
|
|
|
391 |
|
|
|
454 |
|
|
|
391 |
|
|
Diluted |
|
|
463 |
|
|
|
391 |
|
|
|
454 |
|
|
|
391 |
|
|
(1) Contract drilling revenues, in
the three and nine months ended September 30, 2018,
includes revenues of (a) $37 million and $112 million,
respectively, resulting from contract early terminations and
cancellations, (b) $43 million and $94 million,
respectively, from customer reimbursements and (c) a reduction
of $29 million and $78 million, respectively, resulting from
the amortization of contract intangible assets.
|
TRANSOCEAN LTD. AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(In millions, except share data) |
(Unaudited) |
|
|
September 30, |
|
December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,307 |
|
|
$ |
2,519 |
|
|
Short-term investments |
|
|
— |
|
|
|
450 |
|
|
Accounts receivable, net of allowance for doubtful accounts |
|
|
|
|
|
|
|
of less than $1 at September 30, 2018 and December
31, 2017 |
|
|
627 |
|
|
|
596 |
|
|
Materials and supplies, net of allowance for obsolescence |
|
|
|
|
|
|
|
of $139 and $141 at September 30, 2018 and December
31, 2017, respectively |
|
|
401 |
|
|
|
418 |
|
|
Restricted cash accounts and investments |
|
|
561 |
|
|
|
466 |
|
|
Other current assets |
|
|
169 |
|
|
|
157 |
|
|
Total current assets |
|
|
4,065 |
|
|
|
4,606 |
|
|
|
|
|
|
|
|
|
|
Property and equipment |
|
|
23,565 |
|
|
|
22,693 |
|
|
Less accumulated depreciation |
|
|
(5,206 |
) |
|
|
(5,291 |
) |
|
Property and equipment, net |
|
|
18,359 |
|
|
|
17,402 |
|
|
Contract intangible assets |
|
|
554 |
|
|
|
— |
|
|
Deferred income taxes, net |
|
|
40 |
|
|
|
47 |
|
|
Other assets |
|
|
444 |
|
|
|
355 |
|
|
Total assets |
|
$ |
23,462 |
|
|
$ |
22,410 |
|
|
|
|
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
172 |
|
|
$ |
201 |
|
|
Accrued income taxes |
|
|
26 |
|
|
|
79 |
|
|
Debt due within one year |
|
|
372 |
|
|
|
250 |
|
|
Other current liabilities |
|
|
752 |
|
|
|
839 |
|
|
Total current liabilities |
|
|
1,322 |
|
|
|
1,369 |
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
8,955 |
|
|
|
7,146 |
|
|
Deferred income taxes, net |
|
|
75 |
|
|
|
44 |
|
|
Other long-term liabilities |
|
|
1,149 |
|
|
|
1,082 |
|
|
Total long-term liabilities |
|
|
10,179 |
|
|
|
8,272 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
Redeemable noncontrolling interest |
|
|
— |
|
|
|
58 |
|
|
|
|
|
|
|
|
|
|
Shares, CHF 0.10 par value, 490,584,698 authorized, 143,754,927
conditionally authorized, 462,880,809 issued |
|
|
|
|
|
|
|
and 461,903,386 outstanding at September 30,
2018, and 417,060,033 authorized, 143,783,041 conditionally |
|
|
|
|
|
|
|
authorized, 394,801,990 issued and 391,237,308
outstanding at December 31, 2017 |
|
|
44 |
|
|
|
37 |
|
|
Additional paid-in capital |
|
|
12,033 |
|
|
|
11,031 |
|
|
Retained earnings |
|
|
175 |
|
|
|
1,929 |
|
|
Accumulated other comprehensive loss |
|
|
(290 |
) |
|
|
(290 |
) |
|
Total controlling interest shareholders’
equity |
|
|
11,962 |
|
|
|
12,707 |
|
|
Noncontrolling interest |
|
|
(1 |
) |
|
|
4 |
|
|
Total equity |
|
|
11,961 |
|
|
|
12,711 |
|
|
Total liabilities and equity |
|
$ |
23,462 |
|
|
$ |
22,410 |
|
|
|
TRANSOCEAN LTD. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In millions) |
(Unaudited) |
|
|
Nine months
ended |
|
|
|
September 30, |
|
|
|
2018 |
|
|
2017 |
|
|
Cash flows from operating activities |
|
|
|
|
|
|
|
Net loss |
|
$ |
(1,760 |
) |
|
$ |
(2,995 |
) |
|
Adjustments to reconcile to net cash provided by
operating activities: |
|
|
|
|
|
|
|
Contract intangible asset amortization |
|
|
78 |
|
|
|
— |
|
|
Depreciation |
|
|
614 |
|
|
|
648 |
|
|
Share-based compensation expense |
|
|
36 |
|
|
|
30 |
|
|
Loss on impairment |
|
|
1,446 |
|
|
|
1,498 |
|
|
Loss on disposal of assets, net |
|
|
— |
|
|
|
1,602 |
|
|
Loss on retirement of debt |
|
|
3 |
|
|
|
49 |
|
|
Deferred income tax expense (benefit) |
|
|
50 |
|
|
|
32 |
|
|
Other, net |
|
|
12 |
|
|
|
29 |
|
|
Changes in deferred revenues, net |
|
|
(127 |
) |
|
|
(109 |
) |
|
Changes in deferred costs, net |
|
|
23 |
|
|
|
42 |
|
|
Changes in other operating assets and
liabilities, net |
|
|
(55 |
) |
|
|
100 |
|
|
Net cash provided by operating
activities |
|
|
320 |
|
|
|
926 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
Capital expenditures |
|
|
(140 |
) |
|
|
(386 |
) |
|
Proceeds from disposal of assets, net |
|
|
37 |
|
|
|
330 |
|
|
Unrestricted and restricted cash acquired in
business combination |
|
|
131 |
|
|
|
— |
|
|
Investment in unconsolidated affiliates |
|
|
(107 |
) |
|
|
— |
|
|
Deposits into short-term investments |
|
|
(50 |
) |
|
|
— |
|
|
Proceeds from maturities of short-term
investments |
|
|
500 |
|
|
|
— |
|
|
Other, net |
|
|
— |
|
|
|
10 |
|
|
Net cash provided by (used in) investing
activities |
|
|
371 |
|
|
|
(46 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
Proceeds from issuance of debt, net of discounts
and issue costs |
|
|
1,319 |
|
|
|
403 |
|
|
Repayments of debt |
|
|
(2,015 |
) |
|
|
(1,629 |
) |
|
Proceeds from investments restricted for financing
activities |
|
|
26 |
|
|
|
102 |
|
|
Payments to terminate derivative instruments |
|
|
(92 |
) |
|
|
— |
|
|
Other, net |
|
|
(29 |
) |
|
|
(3 |
) |
|
Net cash used in financing activities |
|
|
(791 |
) |
|
|
(1,127 |
) |
|
|
|
|
|
|
|
|
|
Net decrease in unrestricted and restricted
cash and cash equivalents |
|
|
(100 |
) |
|
|
(247 |
) |
|
Unrestricted and restricted cash and cash
equivalents, beginning of period |
|
|
2,975 |
|
|
|
3,433 |
|
|
Unrestricted and restricted cash and cash
equivalents, end of period |
|
$ |
2,875 |
|
|
$ |
3,186 |
|
|
TRANSOCEAN LTD. AND
SUBSIDIARIES |
|
FLEET OPERATING
STATISTICS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
Nine months
ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
Contract Drilling Revenues (1) (in millions) |
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Contract drilling revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ultra-deepwater floaters |
|
$ |
482 |
|
$ |
470 |
|
$ |
511 |
|
$ |
1,330 |
|
$ |
1,513 |
|
Harsh environment floaters |
|
|
265 |
|
|
252 |
|
|
106 |
|
|
721 |
|
|
332 |
|
Deepwater floaters |
|
|
36 |
|
|
35 |
|
|
35 |
|
|
106 |
|
|
106 |
|
Midwater floaters |
|
|
19 |
|
|
18 |
|
|
18 |
|
|
58 |
|
|
49 |
|
High-specification jackups |
|
|
14 |
|
|
15 |
|
|
29 |
|
|
55 |
|
|
142 |
|
Total contract drilling revenues |
|
|
816 |
|
|
790 |
|
|
699 |
|
|
2,270 |
|
|
2,142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer early termination fees |
|
|
— |
|
|
— |
|
|
99 |
|
|
— |
|
|
176 |
|
Customer reimbursement revenues and other |
|
|
— |
|
|
— |
|
|
10 |
|
|
— |
|
|
26 |
|
Total other revenues |
|
|
— |
|
|
— |
|
|
109 |
|
|
— |
|
|
202 |
|
Total revenues |
|
$ |
816 |
|
$ |
790 |
|
$ |
808 |
|
$ |
2,270 |
|
$ |
2,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
Nine months
ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
Average Daily Revenue (2) |
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Ultra-deepwater floaters |
|
$ |
340,500 |
|
$ |
377,600 |
|
$ |
449,300 |
|
$ |
364,500 |
|
$ |
481,900 |
|
Harsh environment floaters |
|
|
309,000 |
|
|
304,600 |
|
|
213,100 |
|
|
298,500 |
|
|
248,700 |
|
Deepwater floaters |
|
|
195,700 |
|
|
189,800 |
|
|
187,300 |
|
|
193,000 |
|
|
192,800 |
|
Midwater floaters |
|
|
98,500 |
|
|
99,100 |
|
|
98,900 |
|
|
103,000 |
|
|
97,500 |
|
High-specification jackups |
|
|
145,700 |
|
|
150,600 |
|
|
151,200 |
|
|
149,100 |
|
|
143,600 |
|
Total drilling fleet |
|
$ |
295,000 |
|
|
308,300 |
|
$ |
319,000 |
|
$ |
297,300 |
|
$ |
328,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
Nine months
ended |
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
Utilization (3) |
|
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Ultra-deepwater floaters |
|
|
56 |
% |
|
47 |
% |
|
42 |
% |
|
46 |
% |
|
39 |
% |
|
Harsh environment floaters |
|
|
83 |
% |
|
81 |
% |
|
77 |
% |
|
83 |
% |
|
70 |
% |
|
Deepwater floaters |
|
|
100 |
% |
|
100 |
% |
|
69 |
% |
|
100 |
% |
|
67 |
% |
|
Midwater floaters |
|
|
43 |
% |
|
35 |
% |
|
50 |
% |
|
38 |
% |
|
35 |
% |
|
High-specification jackups |
|
|
100 |
% |
|
95 |
% |
|
95 |
% |
|
97 |
% |
|
56 |
% |
|
Total drilling fleet |
|
|
65 |
% |
|
57 |
% |
|
52 |
% |
|
58 |
% |
|
46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
Nine months
ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
Revenue Efficiency (4) |
|
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Ultra-deepwater floaters |
|
|
94.8 |
% |
|
99.7 |
% |
|
98.6 |
% |
|
94.5 |
% |
|
97.9 |
% |
Harsh environment floaters |
|
|
95.3 |
% |
|
94.5 |
% |
|
92.0 |
% |
|
95.0 |
% |
|
95.8 |
% |
Deepwater floaters |
|
|
96.3 |
% |
|
92.3 |
% |
|
90.0 |
% |
|
93.9 |
% |
|
92.7 |
% |
Midwater floaters |
|
|
97.9 |
% |
|
99.1 |
% |
|
97.4 |
% |
|
97.8 |
% |
|
96.2 |
% |
High-specification jackups |
|
|
99.4 |
% |
|
99.7 |
% |
|
99.3 |
% |
|
99.5 |
% |
|
101.2 |
% |
Total drilling fleet |
|
|
95.2 |
% |
|
97.4 |
% |
|
97.1 |
% |
|
94.9 |
% |
|
97.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Contract drilling revenues, in the three and nine
months ended September 30, 2018, includes revenues of (a) $37
million and $112 million, respectively, resulting |
from contract early terminations and cancellations,
(b) $43 million and $94 million, respectively, from customer
reimbursement and (c) a reduction of $29 million |
and $78 million, resulting from the amortization of
contract intangible assets. |
|
|
|
|
|
|
|
|
(2) 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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) 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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) 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 |
|
|
|
|
|
|
|
09/30/18 |
|
09/30/18 |
|
06/30/18 |
|
06/30/18 |
|
03/31/18 |
|
Adjusted Net Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to controlling interest, as
reported |
|
|
|
|
|
|
|
$ |
(1,754 |
) |
|
$ |
(409 |
) |
|
$ |
(1,345 |
) |
|
$ |
(1,135 |
) |
|
$ |
(210 |
) |
|
Acquisition and restructuring costs |
|
|
|
|
|
|
|
|
22 |
|
|
|
4 |
|
|
|
18 |
|
|
|
11 |
|
|
|
7 |
|
|
Loss on impairment of goodwill and other
assets |
|
|
|
|
|
|
|
|
1,446 |
|
|
|
432 |
|
|
|
1,014 |
|
|
|
1,014 |
|
|
|
— |
|
|
(Gain) loss on disposal of assets, net |
|
|
|
|
|
|
|
|
(6 |
) |
|
|
1 |
|
|
|
(7 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
|
Loss on retirement of debt |
|
|
|
|
|
|
|
|
3 |
|
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
|
— |
|
|
Discrete tax items and other, net |
|
|
|
|
|
|
|
|
91 |
|
|
|
1 |
|
|
|
90 |
|
|
|
91 |
|
|
|
(1 |
) |
|
Net income (loss), as adjusted |
|
|
|
|
|
|
|
$ |
(198 |
) |
|
$ |
30 |
|
|
$ |
(228 |
) |
|
$ |
(18 |
) |
|
$ |
(210 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Earnings (Loss) Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share, as reported |
|
|
|
|
|
|
|
$ |
(3.86 |
) |
|
$ |
(0.88 |
) |
|
$ |
(2.99 |
) |
|
$ |
(2.46 |
) |
|
$ |
(0.48 |
) |
|
Acquisition and restructuring costs |
|
|
|
|
|
|
|
|
0.05 |
|
|
|
0.01 |
|
|
|
0.05 |
|
|
|
0.03 |
|
|
|
0.02 |
|
|
Loss on impairment of goodwill and other
assets |
|
|
|
|
|
|
|
|
3.18 |
|
|
|
0.93 |
|
|
|
2.26 |
|
|
|
2.19 |
|
|
|
— |
|
|
(Gain) loss on disposal of assets, net |
|
|
|
|
|
|
|
|
(0.02 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
Loss on retirement of debt |
|
|
|
|
|
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Discrete tax items and other, net |
|
|
|
|
|
|
|
|
0.20 |
|
|
|
— |
|
|
|
0.20 |
|
|
|
0.20 |
|
|
|
— |
|
|
Diluted earnings (loss) per share, as adjusted |
|
|
|
|
|
|
|
$ |
(0.44 |
) |
|
$ |
0.06 |
|
|
$ |
(0.50 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.48 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
|
|
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 |
) |
|
Acquisition and restructuring costs |
|
|
6 |
|
|
|
1 |
|
|
|
5 |
|
|
|
3 |
|
|
|
2 |
|
|
|
2 |
|
|
|
— |
|
|
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 |
) |
|
Acquisition and restructuring costs |
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Loss on impairment of assets |
|
|
3.84 |
|
|
|
— |
|
|
|
3.84 |
|
|
|
3.54 |
|
|
|
0.29 |
|
|
|
0.29 |
|
|
|
— |
|
|
(Gain) 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
09/30/18 |
|
09/30/18 |
|
06/30/18 |
|
06/30/18 |
|
03/31/18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling revenues |
|
|
|
|
|
|
|
$ |
2,270 |
|
|
$ |
816 |
|
|
$ |
1,454 |
|
|
$ |
790 |
|
|
$ |
664 |
|
|
Drilling contract termination fees |
|
|
|
|
|
|
|
|
(112 |
) |
|
|
(37 |
) |
|
|
(75 |
) |
|
|
(37 |
) |
|
|
(38 |
) |
|
Contract intangible amortization |
|
|
|
|
|
|
|
|
78 |
|
|
|
29 |
|
|
|
49 |
|
|
|
30 |
|
|
|
19 |
|
|
Adjusted Normalized Revenues |
|
|
|
|
|
|
|
$ |
2,236 |
|
|
$ |
808 |
|
|
$ |
1,428 |
|
|
$ |
783 |
|
|
$ |
645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
$ |
(1,760 |
) |
|
$ |
(409 |
) |
|
$ |
(1,351 |
) |
|
$ |
(1,139 |
) |
|
$ |
(212 |
) |
|
Interest expense, net of interest income |
|
|
|
|
|
|
|
|
419 |
|
|
|
149 |
|
|
|
270 |
|
|
|
135 |
|
|
|
135 |
|
|
Income tax expense (benefit) |
|
|
|
|
|
|
|
|
118 |
|
|
|
(30 |
) |
|
|
148 |
|
|
|
85 |
|
|
|
63 |
|
|
Depreciation expense |
|
|
|
|
|
|
|
|
614 |
|
|
|
201 |
|
|
|
413 |
|
|
|
211 |
|
|
|
202 |
|
|
Contract intangible amortization |
|
|
|
|
|
|
|
|
78 |
|
|
|
29 |
|
|
|
49 |
|
|
|
30 |
|
|
|
19 |
|
|
EBITDA |
|
|
|
|
|
|
|
|
(531 |
) |
|
|
(60 |
) |
|
|
(471 |
) |
|
|
(678 |
) |
|
|
207 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and restructuring costs |
|
|
|
|
|
|
|
|
22 |
|
|
|
4 |
|
|
|
18 |
|
|
|
11 |
|
|
|
7 |
|
|
Loss on impairment of goodwill and other assets |
|
|
|
|
|
|
|
|
1,446 |
|
|
|
432 |
|
|
|
1,014 |
|
|
|
1,014 |
|
|
|
— |
|
|
Gain (loss) on disposal of assets, net |
|
|
|
|
|
|
|
|
(6 |
) |
|
|
1 |
|
|
|
(7 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
|
Loss on retirement of debt |
|
|
|
|
|
|
|
|
3 |
|
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
|
— |
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
934 |
|
|
|
378 |
|
|
|
556 |
|
|
|
348 |
|
|
|
208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling contract termination fees |
|
|
|
|
|
|
|
|
(112 |
) |
|
|
(37 |
) |
|
|
(75 |
) |
|
|
(37 |
) |
|
|
(38 |
) |
|
Adjusted Normalized EBITDA |
|
|
|
|
|
|
|
$ |
822 |
|
|
$ |
341 |
|
|
$ |
481 |
|
|
$ |
311 |
|
|
$ |
170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
|
|
|
|
|
|
|
(23 |
) |
% |
|
(7 |
) |
% |
|
(32 |
) |
% |
|
(86 |
) |
% |
|
31 |
|
% |
Adjusted EBITDA margin |
|
|
|
|
|
|
|
|
41 |
|
% |
|
46 |
|
% |
|
38 |
|
% |
|
44 |
|
% |
|
31 |
|
% |
Adjusted Normalized EBITDA margin |
|
|
|
|
|
|
|
|
37 |
|
% |
|
42 |
|
% |
|
34 |
|
% |
|
40 |
|
% |
|
26 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
|
|
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 |
) |
|
Acquisition and restructuring costs |
|
|
7 |
|
|
|
1 |
|
|
|
6 |
|
|
|
4 |
|
|
|
2 |
|
|
|
2 |
|
|
|
— |
|
|
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 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRANSOCEAN LTD. AND
SUBSIDIARIES |
|
SUPPLEMENTAL EFFECTIVE
TAX RATE ANALYSIS |
|
(In millions, except tax
rates) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
Nine months
ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2018 |
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
Loss before income taxes |
|
$ |
(439 |
) |
|
$ |
(1,054 |
) |
|
$ |
(1,231 |
) |
|
$ |
(1,642 |
) |
|
$ |
(2,892 |
) |
|
Litigation matters |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6 |
) |
|
Acquisition and restructuring costs |
|
|
4 |
|
|
|
11 |
|
|
|
4 |
|
|
|
22 |
|
|
|
6 |
|
|
Loss on impairment of goodwill and other
assets |
|
|
432 |
|
|
|
1,014 |
|
|
|
1,385 |
|
|
|
1,446 |
|
|
|
1,498 |
|
|
(Gain) loss on disposal of assets, net |
|
|
1 |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
(6 |
) |
|
|
1,596 |
|
|
Loss on retirement of debt |
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
|
|
3 |
|
|
|
49 |
|
|
Adjusted income (loss) before income taxes |
|
$ |
(1 |
) |
|
$ |
(28 |
) |
|
$ |
160 |
|
|
$ |
(177 |
) |
|
$ |
251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
$ |
(30 |
) |
|
$ |
85 |
|
|
$ |
180 |
|
|
$ |
118 |
|
|
$ |
103 |
|
|
Litigation matters |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
Acquisition and restructuring costs |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
Loss on impairment of goodwill and other
assets |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
(Gain) loss on disposal of assets, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Changes in estimates (1) |
|
|
(1 |
) |
|
|
(91 |
) |
|
|
(90 |
) |
|
|
(91 |
) |
|
|
57 |
|
|
Adjusted income tax expense (benefit) (2) |
|
$ |
(31 |
) |
|
$ |
(6 |
) |
|
$ |
90 |
|
|
$ |
27 |
|
|
$ |
161 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate (3) |
|
|
6.7 |
|
% |
|
(8.0 |
) |
% |
|
(14.7 |
) |
% |
|
(7.2 |
) |
% |
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(3.6 |
) |
% |
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|
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Effective Tax Rate, excluding discrete items
(4) |
|
|
2,757.6 |
|
% |
|
22.0 |
|
% |
|
56.5 |
|
% |
|
(15.6 |
) |
% |
|
64.2 |
|
% |
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(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. |
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(2) The three and nine months ended September 30,
2018 included $(30) million of additional tax expense (benefit)
reflecting the cumulative effect of an |
|
increase (decrease) in the annual effective tax
rate from the previous quarter estimate. |
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(3) Our effective tax rate is calculated as income
tax expense divided by income before income taxes. |
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(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 and
estimating the annual effective tax rate. |
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