Transocean Ltd. (NYSE: RIG) today reported a net loss attributable
to controlling interest of $37 million, $0.06 per diluted
share, for the three months ended December 31, 2020.
Fourth quarter 2020 results included net favorable items of
$172 million, or $0.28 per diluted share, as follows:
- $137 million, $0.22 per
diluted share, gain on retirement of debt; and
- $37 million, $0.06 per
diluted share, related to discrete tax items, partially offset
by:
- $2 million of other net
unfavorable items.
After consideration of these net favorable items,
fourth quarter 2020 adjusted net loss was $209 million,
$0.34 per diluted share.
Contract drilling revenues for the three months ended
December 31, 2020, decreased sequentially by $83 million
to $690 million, primarily due to reduced activities for two
rigs that were idle, one rig that demobilized from Canada to Norway
and two rigs undertaking out-of-service maintenance in Brazil.
A non-cash revenue reduction of $57 million was recognized
in both the fourth and third quarters as a result of contract
intangible amortization associated with the Songa and Ocean Rig
acquisitions.
Operating and maintenance expense was $465 million,
compared with $470 million in the prior quarter. The
sequential decrease was primarily the result of decreased activity
partially offset by higher in-service maintenance costs,
out-of-service costs for the two rigs in Brazil, and a
$20 million increase in our allowance for excess materials and
supplies.
General and administrative expense was $50 million, up from
$45 million in the third quarter of 2020. The increase was
primarily due to legal, professional and advisory fees.
Interest expense, net of amounts capitalized, was
$117 million, reduced from $145 million, primarily as a
result of our debt exchanges in the third quarter and debt
repurchases in the fourth quarter. Interest income was
$2 million, compared with $6 million in the previous
quarter.
The Effective Tax Rate(2) was (147.9)%, down from (7.0)% in
the prior quarter. The decrease was primarily due to benefits
derived from the CARES Act and favorable changes in tax rates for
various jurisdictions, partially offset by lower earnings before
taxes due to a gain on debt restructuring booked in the prior
quarter. The Effective Tax Rate excluding discrete items was
(39.9)% compared to (45.6)% in previous quarter.
Net cash provided by operating activities was $278 million,
compared to $81 million in the prior quarter. The fourth
quarter cash provided by operating activities increased primarily
due to collections of certain receivables and decreased income tax
payments, payments to suppliers and interest payments.
Fourth quarter 2020 capital expenditures of $47 million
were primarily related to our newbuild drillships under
construction coupled with capital upgrades for certain rigs in our
fleet. This compares with $65 million in the previous
quarter.
“I would like to recognize and thank the entire Transocean team
for once again producing solid operating and financial results in
the fourth quarter,” said President and Chief Executive Officer
Jeremy Thigpen. “In the face of unprecedented challenges, we
generated revenue efficiency of 97%, clearly demonstrating our
commitment to delivering reliable and efficient operations for our
customers, while keeping personnel on our rigs healthy and
safe.”
Thigpen added: “As a direct result of our strong performance in
2020, we generated over $1 billion in EBITDA, which, when
combined with the multiple financing transactions consummated
throughout the year, further bolstered our liquidity position. This
liquidity, coupled with our industry-leading $7.8 billion backlog,
provides us the financial stability to continue to invest in our
people, the maintenance of our assets, and the development and
deployment of new technologies that will further differentiate us
in the eyes of our customers and shareholders.”
“Looking forward, we are mindful of the various challenges
facing us; however, we believe that improving longer-term market
fundamentals, and the increasing list of opportunities on the
horizon bode well for an improvement in contracting activity later
this year and into next.”
Full Year 2020
For the year ended December 31, 2020, net loss attributable
to controlling interest totaled $567 million, or
$0.92 per diluted share. Full year results included
$101 million, or $0.16 per diluted share, net unfavorable
items listed as follows:
- $597 million, $0.97 per
diluted share, loss on impairment of assets,
- $62 million, $0.10 per
diluted share, loss on impairment of investments in unconsolidated
affiliates,
- $61 million, $0.10 per
diluted share, loss on disposal of assets; and
- $5 million, $0.01 per
diluted share, in restructuring costs, including severance.
These unfavorable items were partially offset by:
- $533 million, $0.87 per
diluted share, gain on restructuring and retirement of debt;
and
- $91 million, $0.15 per
diluted share, related to discrete tax items.
After consideration of these net unfavorable items, adjusted net
loss for 2020 was $466 million, $0.76 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 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.
EST, 3 p.m. CET, on Tuesday, February 23, 2021, to
discuss the results. To participate, dial +1 323-794-2588 and refer
to conference code 3168985 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 Tuesday, February 23,
2021. The replay, which will be archived for approximately
30 days, can be accessed at +1 719-457-0820,
passcode 3168985 and pin 2562. 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, 2019, 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, excluding revenues for contract terminations and
reimbursements, 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 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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling revenues |
$ |
3,152 |
|
|
$ |
3,088 |
|
|
$ |
3,018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
Operating and maintenance |
|
2,000 |
|
|
|
2,140 |
|
|
|
1,799 |
|
Depreciation and amortization |
|
781 |
|
|
|
855 |
|
|
|
818 |
|
General and administrative |
|
183 |
|
|
|
193 |
|
|
|
188 |
|
|
|
2,964 |
|
|
|
3,188 |
|
|
|
2,805 |
|
Loss on impairment |
|
(597 |
) |
|
|
(609 |
) |
|
|
(1,464 |
) |
Loss on disposal of assets, net |
|
(84 |
) |
|
|
(12 |
) |
|
|
— |
|
Operating loss |
|
(493 |
) |
|
|
(721 |
) |
|
|
(1,251 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
21 |
|
|
|
43 |
|
|
|
53 |
|
Interest expense, net of amounts capitalized |
|
(575 |
) |
|
|
(660 |
) |
|
|
(620 |
) |
Gain (loss) on restructuring and retirement of debt |
|
533 |
|
|
|
(41 |
) |
|
|
(3 |
) |
Other, net |
|
(27 |
) |
|
|
181 |
|
|
|
46 |
|
|
|
(48 |
) |
|
|
(477 |
) |
|
|
(524 |
) |
Loss before income tax expense |
|
(541 |
) |
|
|
(1,198 |
) |
|
|
(1,775 |
) |
Income
tax expense |
|
27 |
|
|
|
59 |
|
|
|
228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
(568 |
) |
|
|
(1,257 |
) |
|
|
(2,003 |
) |
Net loss attributable to noncontrolling interest |
|
(1 |
) |
|
|
(2 |
) |
|
|
(7 |
) |
Net loss attributable to controlling interest |
$ |
(567 |
) |
|
$ |
(1,255 |
) |
|
$ |
(1,996 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share, basic and
diluted |
$ |
(0.92 |
) |
|
$ |
(2.05 |
) |
|
$ |
(4.27 |
) |
Weighted average shares, basic
and diluted |
|
615 |
|
|
|
612 |
|
|
|
468 |
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In millions, except share data) |
(Unaudited) |
|
|
December 31, |
|
2020 |
|
2019 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
1,154 |
|
|
$ |
1,790 |
|
Accounts receivable, net |
|
583 |
|
|
|
654 |
|
Materials and supplies, net |
|
434 |
|
|
|
479 |
|
Restricted cash and cash equivalents |
|
406 |
|
|
|
558 |
|
Other current assets |
|
163 |
|
|
|
159 |
|
Total current assets |
|
2,740 |
|
|
|
3,640 |
|
|
|
|
|
|
|
Property and equipment |
|
23,040 |
|
|
|
24,281 |
|
Less accumulated depreciation |
|
(5,373 |
) |
|
|
(5,434 |
) |
Property and equipment, net |
|
17,667 |
|
|
|
18,847 |
|
Contract intangible
assets |
|
393 |
|
|
|
608 |
|
Deferred income taxes, net |
|
9 |
|
|
|
20 |
|
Other assets |
|
995 |
|
|
|
990 |
|
Total assets |
$ |
21,804 |
|
|
$ |
24,105 |
|
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
|
Accounts payable |
$ |
194 |
|
|
$ |
311 |
|
Accrued income taxes |
|
28 |
|
|
|
64 |
|
Debt due within one year |
|
505 |
|
|
|
568 |
|
Other current liabilities |
|
659 |
|
|
|
781 |
|
Total current liabilities |
|
1,386 |
|
|
|
1,724 |
|
|
|
|
|
|
|
Long-term debt |
|
7,302 |
|
|
|
8,693 |
|
Deferred income taxes, net |
|
315 |
|
|
|
266 |
|
Other
long-term liabilities |
|
1,366 |
|
|
|
1,555 |
|
Total long-term liabilities |
|
8,983 |
|
|
|
10,514 |
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
Shares, CHF 0.10 par value,
824,650,660 authorized, 142,363,647 conditionally authorized,
639,676,165 issued |
|
|
|
|
|
and 615,140,276 outstanding at December 31, 2020, and 639,674,422
authorized, 142,365,398 conditionally |
|
|
|
|
|
authorized, 617,970,525 issued and 611,871,374 outstanding at
December 31, 2019 |
|
60 |
|
|
|
59 |
|
Additional paid-in capital |
|
13,501 |
|
|
|
13,424 |
|
Accumulated deficit |
|
(1,866 |
) |
|
|
(1,297 |
) |
Accumulated other comprehensive loss |
|
(263 |
) |
|
|
(324 |
) |
Total controlling interest shareholders’ equity |
|
11,432 |
|
|
|
11,862 |
|
Noncontrolling interest |
|
3 |
|
|
|
5 |
|
Total equity |
|
11,435 |
|
|
|
11,867 |
|
Total liabilities and equity |
$ |
21,804 |
|
|
$ |
24,105 |
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In millions) |
(Unaudited) |
|
|
Years ended December 31, |
|
2020 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities |
|
|
|
|
|
|
|
|
Net loss |
$ |
(568 |
) |
|
$ |
(1,257 |
) |
|
$ |
(2,003 |
) |
Adjustments to reconcile to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Contract intangible asset amortization |
|
215 |
|
|
|
187 |
|
|
|
112 |
|
Depreciation and amortization |
|
781 |
|
|
|
855 |
|
|
|
818 |
|
Share-based compensation expense |
|
31 |
|
|
|
37 |
|
|
|
45 |
|
Loss on impairment |
|
597 |
|
|
|
609 |
|
|
|
1,464 |
|
Loss on impairment of investment in unconsolidated affiliates |
|
62 |
|
|
|
— |
|
|
|
— |
|
Loss on disposal of assets, net |
|
84 |
|
|
|
12 |
|
|
|
— |
|
(Gain) loss on restructuring and retirement of debt |
|
(533 |
) |
|
|
41 |
|
|
|
3 |
|
Gain on termination of construction contracts |
|
— |
|
|
|
(132 |
) |
|
|
— |
|
Deferred income tax expense (benefit) |
|
60 |
|
|
|
248 |
|
|
|
(16 |
) |
Other, net |
|
83 |
|
|
|
41 |
|
|
|
6 |
|
Changes in deferred revenues, net |
|
(73 |
) |
|
|
43 |
|
|
|
(139 |
) |
Changes in deferred costs, net |
|
12 |
|
|
|
(33 |
) |
|
|
34 |
|
Changes in other operating assets and liabilities, net |
|
(353 |
) |
|
|
(311 |
) |
|
|
234 |
|
Net
cash provided by operating activities |
|
398 |
|
|
|
340 |
|
|
|
558 |
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
|
Capital expenditures |
|
(265 |
) |
|
|
(387 |
) |
|
|
(184 |
) |
Proceeds from disposal of assets, net |
|
24 |
|
|
|
70 |
|
|
|
43 |
|
Investments in unconsolidated affiliates |
|
(19 |
) |
|
|
(77 |
) |
|
|
(107 |
) |
Cash paid in business combinations, net of cash acquired |
|
— |
|
|
|
— |
|
|
|
(883 |
) |
Proceeds from maturities of unrestricted and restricted
investments |
|
5 |
|
|
|
123 |
|
|
|
507 |
|
Deposits to unrestricted investments |
|
— |
|
|
|
— |
|
|
|
(173 |
) |
Other, net |
|
(2 |
) |
|
|
3 |
|
|
|
— |
|
Net
cash used in investing activities |
|
(257 |
) |
|
|
(268 |
) |
|
|
(797 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
|
|
Proceeds from issuance of debt, net of discounts and issue
costs |
|
743 |
|
|
|
1,056 |
|
|
|
2,054 |
|
Repayments of debt |
|
(1,637 |
) |
|
|
(1,325 |
) |
|
|
(2,105 |
) |
Proceeds from investments restricted for financing activities |
|
— |
|
|
|
— |
|
|
|
26 |
|
Payments to terminate derivative instruments |
|
— |
|
|
|
— |
|
|
|
(92 |
) |
Other, net |
|
(36 |
) |
|
|
(43 |
) |
|
|
(30 |
) |
Net
cash used in financing activities |
|
(930 |
) |
|
|
(312 |
) |
|
|
(147 |
) |
|
|
|
|
|
|
|
|
|
Net
decrease in unrestricted and restricted cash and cash
equivalents |
|
(789 |
) |
|
|
(240 |
) |
|
|
(386 |
) |
Unrestricted and restricted cash and cash equivalents, beginning of
period |
|
2,349 |
|
|
|
2,589 |
|
|
|
2,975 |
|
Unrestricted and restricted
cash and cash equivalents, end of period |
$ |
1,560 |
|
|
$ |
2,349 |
|
|
$ |
2,589 |
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
FLEET OPERATING STATISTICS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Years ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
Contract Drilling
Revenues (in millions) |
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Contract drilling
revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ultra-deepwater floaters |
$ |
440 |
|
$ |
490 |
|
$ |
502 |
|
$ |
2,094 |
|
$ |
1,957 |
Harsh environment floaters |
|
250 |
|
|
283 |
|
|
278 |
|
|
1,046 |
|
|
1,069 |
Deepwater floaters |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
7 |
Midwater floaters |
|
— |
|
|
— |
|
|
12 |
|
|
12 |
|
|
55 |
Total contract drilling
revenues |
$ |
690 |
|
$ |
773 |
|
$ |
792 |
|
$ |
3,152 |
|
$ |
3,088 |
|
Three months ended |
|
Years ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
Average Daily
Revenue (1) |
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Ultra-deepwater floaters |
$ |
342,100 |
|
$ |
329,300 |
|
$ |
336,800 |
|
$ |
324,500 |
|
$ |
337,900 |
Harsh environment
floaters |
|
357,500 |
|
|
372,500 |
|
|
307,700 |
|
|
339,600 |
|
|
298,500 |
Midwater floaters |
|
— |
|
|
— |
|
|
119,400 |
|
|
111,400 |
|
|
118,400 |
Total drilling fleet |
$ |
347,500 |
|
|
343,500 |
|
$ |
317,700 |
|
$ |
327,500 |
|
$ |
313,400 |
|
Three months ended |
|
Years ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
Utilization
(2) |
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Ultra-deepwater floaters |
52 |
% |
|
60 |
% |
|
56 |
% |
|
59 |
% |
|
51 |
% |
Harsh environment
floaters |
74 |
% |
|
75 |
% |
|
76 |
% |
|
73 |
% |
|
78 |
% |
Midwater floaters |
— |
% |
|
— |
% |
|
33 |
% |
|
37 |
% |
|
37 |
% |
Total drilling fleet |
58 |
% |
|
65 |
% |
|
61 |
% |
|
62 |
% |
|
58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Years ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
Revenue
Efficiency (3) |
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Ultra-deepwater floaters |
97 |
% |
|
97 |
% |
|
98 |
% |
|
97 |
% |
|
99 |
% |
Harsh environment
floaters |
98 |
% |
|
96 |
% |
|
94 |
% |
|
95 |
% |
|
95 |
% |
Midwater floaters |
— |
% |
|
— |
% |
|
91 |
% |
|
86 |
% |
|
99 |
% |
Total drilling fleet |
97 |
% |
|
97 |
% |
|
96 |
% |
|
96 |
% |
|
97 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, excluding revenues for contract
terminations and reimbursements, 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 |
|
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 |
) |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
12/31/19 |
|
12/31/19 |
|
09/30/19 |
|
09/30/19 |
|
06/30/19 |
|
06/30/19 |
|
03/31/19 |
Adjusted Net
Loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to controlling interest, as reported |
$ |
(1,255 |
) |
|
$ |
(51 |
) |
|
$ |
(1,204 |
) |
|
$ |
(825 |
) |
|
$ |
(379 |
) |
|
$ |
(208 |
) |
|
$ |
(171 |
) |
Restructuring costs |
|
6 |
|
|
|
5 |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
Gain on bargain purchase |
|
(11 |
) |
|
|
— |
|
|
|
(11 |
) |
|
|
— |
|
|
|
(11 |
) |
|
|
(9 |
) |
|
|
(2 |
) |
Loss on impairment of assets |
|
609 |
|
|
|
25 |
|
|
|
584 |
|
|
|
583 |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
(Gain) loss on disposal of assets, net |
|
5 |
|
|
|
(2 |
) |
|
|
7 |
|
|
|
6 |
|
|
|
1 |
|
|
|
2 |
|
|
|
(1 |
) |
Gain on terminated construction contracts |
|
(132 |
) |
|
|
(132 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on retirement of debt |
|
41 |
|
|
|
2 |
|
|
|
39 |
|
|
|
12 |
|
|
|
27 |
|
|
|
9 |
|
|
|
18 |
|
Discrete tax items and other, net |
|
(150 |
) |
|
|
(110 |
) |
|
|
(40 |
) |
|
|
(10 |
) |
|
|
(30 |
) |
|
|
(5 |
) |
|
|
(25 |
) |
Net loss, as adjusted |
$ |
(887 |
) |
|
$ |
(263 |
) |
|
$ |
(624 |
) |
|
$ |
(234 |
) |
|
$ |
(390 |
) |
|
$ |
(209 |
) |
|
$ |
(181 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Loss
Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share, as
reported |
$ |
(2.05 |
) |
|
$ |
(0.08 |
) |
|
$ |
(1.97 |
) |
|
$ |
(1.35 |
) |
|
$ |
(0.62 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.28 |
) |
Restructuring costs |
|
0.01 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gain on bargain purchase |
|
(0.02 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
|
(0.01 |
) |
|
|
— |
|
Loss on impairment of assets |
|
0.99 |
|
|
|
0.04 |
|
|
|
0.97 |
|
|
|
0.96 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
(Gain) loss on disposal of assets, net |
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gain on terminated construction contracts |
|
(0.22 |
) |
|
|
(0.22 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on retirement of debt |
|
0.07 |
|
|
|
— |
|
|
|
0.06 |
|
|
|
0.02 |
|
|
|
0.05 |
|
|
|
0.01 |
|
|
|
0.03 |
|
Discrete tax items and other, net |
|
(0.24 |
) |
|
|
(0.18 |
) |
|
|
(0.07 |
) |
|
|
(0.02 |
) |
|
|
(0.05 |
) |
|
|
— |
|
|
|
(0.05 |
) |
Diluted loss per share, as
adjusted |
$ |
(1.45 |
) |
|
$ |
(0.43 |
) |
|
$ |
(1.02 |
) |
|
$ |
(0.38 |
) |
|
$ |
(0.64 |
) |
|
$ |
(0.34 |
) |
|
$ |
(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 |
|
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 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 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 |
|
% |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
|
12/31/19 |
|
12/31/19 |
|
09/30/19 |
|
09/30/19 |
|
06/30/19 |
|
06/30/19 |
|
03/31/19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling revenues |
$ |
3,088 |
|
|
$ |
792 |
|
|
$ |
2,296 |
|
|
$ |
784 |
|
|
$ |
1,512 |
|
|
$ |
758 |
|
|
$ |
754 |
|
|
Contract intangible amortization |
|
187 |
|
|
|
47 |
|
|
|
140 |
|
|
|
48 |
|
|
|
92 |
|
|
|
47 |
|
|
|
45 |
|
|
Adjusted Contract
Drilling Revenues |
$ |
3,275 |
|
|
$ |
839 |
|
|
$ |
2,436 |
|
|
$ |
832 |
|
|
$ |
1,604 |
|
|
$ |
805 |
|
|
$ |
799 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(1,257 |
) |
|
$ |
(55 |
) |
|
$ |
(1,202 |
) |
|
$ |
(825 |
) |
|
$ |
(377 |
) |
|
$ |
(206 |
) |
|
$ |
(171 |
) |
|
Interest expense, net of interest income |
|
617 |
|
|
|
150 |
|
|
|
467 |
|
|
|
155 |
|
|
|
312 |
|
|
|
156 |
|
|
|
156 |
|
|
Income tax expense (benefit) |
|
59 |
|
|
|
(24 |
) |
|
|
83 |
|
|
|
54 |
|
|
|
29 |
|
|
|
37 |
|
|
|
(8 |
) |
|
Depreciation and amortization |
|
855 |
|
|
|
207 |
|
|
|
648 |
|
|
|
212 |
|
|
|
436 |
|
|
|
219 |
|
|
|
217 |
|
|
Contract intangible amortization |
|
187 |
|
|
|
47 |
|
|
|
140 |
|
|
|
48 |
|
|
|
92 |
|
|
|
47 |
|
|
|
45 |
|
|
EBITDA |
|
461 |
|
|
|
325 |
|
|
|
136 |
|
|
|
(356 |
) |
|
|
492 |
|
|
|
253 |
|
|
|
239 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs |
|
6 |
|
|
|
5 |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
|
Loss on impairment of assets |
|
609 |
|
|
|
25 |
|
|
|
584 |
|
|
|
583 |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
|
(Gain) loss on disposal of assets, net |
|
5 |
|
|
|
(2 |
) |
|
|
7 |
|
|
|
6 |
|
|
|
1 |
|
|
|
2 |
|
|
|
(1 |
) |
|
Gain on bargain purchase |
|
(11 |
) |
|
|
— |
|
|
|
(11 |
) |
|
|
— |
|
|
|
(11 |
) |
|
|
(9 |
) |
|
|
(2 |
) |
|
Loss on retirement of debt |
|
41 |
|
|
|
2 |
|
|
|
39 |
|
|
|
12 |
|
|
|
27 |
|
|
|
9 |
|
|
|
18 |
|
|
Gain on termination of construction contracts |
|
(132 |
) |
|
|
(132 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Adjusted
EBITDA |
$ |
979 |
|
|
$ |
223 |
|
|
$ |
756 |
|
|
$ |
245 |
|
|
$ |
511 |
|
|
$ |
257 |
|
|
$ |
254 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
14 |
|
% |
|
39 |
|
% |
|
6 |
|
% |
|
(43 |
) |
% |
|
31 |
|
% |
|
31 |
|
% |
|
30 |
|
% |
Adjusted EBITDA margin |
|
30 |
|
% |
|
27 |
|
% |
|
31 |
|
% |
|
29 |
|
% |
|
32 |
|
% |
|
32 |
|
% |
|
32 |
|
% |
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, |
|
|
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
$ |
(16 |
) |
|
$ |
335 |
|
|
$ |
(79 |
) |
|
$ |
(541 |
) |
|
$ |
(1,198 |
) |
|
Restructuring costs |
|
(1 |
) |
|
|
5 |
|
|
|
5 |
|
|
|
5 |
|
|
|
6 |
|
|
Gain on bargain purchase |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11 |
) |
|
Loss on impairment of assets |
|
— |
|
|
|
— |
|
|
|
25 |
|
|
|
597 |
|
|
|
609 |
|
|
(Gain) loss on disposal of assets, net |
|
— |
|
|
|
61 |
|
|
|
(2 |
) |
|
|
61 |
|
|
|
5 |
|
|
Loss on impairment of investment in unconsolidated affiliates |
|
3 |
|
|
|
— |
|
|
|
— |
|
|
|
62 |
|
|
|
— |
|
|
Gain on terminated construction contracts |
|
— |
|
|
|
— |
|
|
|
(132 |
) |
|
|
— |
|
|
|
(132 |
) |
|
(Gain) loss on restructuring and retirement of debt |
|
(137 |
) |
|
|
(449 |
) |
|
|
2 |
|
|
|
(533 |
) |
|
|
41 |
|
|
Adjusted loss before income
taxes |
$ |
(151 |
) |
|
$ |
(48 |
) |
|
$ |
(181 |
) |
|
$ |
(349 |
) |
|
$ |
(680 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues recognized for the settlement of disputes |
|
|
|
|
|
|
|
|
|
|
(157 |
) |
|
|
|
|
Adjusted loss before income
taxes for determining effective tax rate |
|
|
|
|
|
|
|
|
|
|
(506 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) |
$ |
23 |
|
|
$ |
(24 |
) |
|
$ |
(24 |
) |
|
$ |
27 |
|
|
$ |
59 |
|
|
Restructuring costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Gain on bargain purchase |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Loss on impairment of assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(Gain) loss on disposal of assets, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Loss on impairment of investment in unconsolidated affiliates |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Gain on terminated construction contracts |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(Gain) loss on restructuring and retirement of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Changes in estimates (1) |
|
41 |
|
|
|
43 |
|
|
|
110 |
|
|
|
95 |
|
|
|
150 |
|
|
Revenues recognized for the settlement of disputes |
|
(4 |
) |
|
|
2 |
|
|
|
— |
|
|
|
(4 |
) |
|
|
— |
|
|
Adjusted income tax expense
(2) |
$ |
60 |
|
|
$ |
21 |
|
|
$ |
86 |
|
|
$ |
118 |
|
|
$ |
209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate (3) |
|
(147.9 |
) |
% |
|
(7.0 |
) |
% |
|
30.3 |
|
% |
|
(5.1 |
) |
% |
|
(4.9 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate,
excluding discrete items (4) |
|
(39.9 |
) |
% |
|
(45.6 |
) |
% |
|
(47.2 |
) |
% |
|
(23.4 |
) |
% |
|
(30.7 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 December 31, 2020 included $25 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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