Transocean Ltd. (NYSE: RIG) today reported a net loss attributable
to controlling interest of $28 million, $0.04 per diluted
share, for the three months ended September 30, 2022.
Third quarter results included favorable items of
$13 million, or $0.02 per diluted share as follows:
- $7 million, $0.01 per
diluted share, gain on retirement of debt; and
- $6 million, $0.01 per
diluted share, discrete tax items.
After consideration of these favorable items, third quarter 2022
adjusted net loss was $41 million, $0.06 per diluted
share.
At $691 million, contract drilling revenues for the three months
ended September 30, 2022 were approximately flat sequentially.
Lower revenue efficiency in the period was partially offset by net
$14 million in revenue associated with the early termination of the
Transocean Equinox contract and one additional calendar day in
the third quarter.
Contract intangible amortization represented a non-cash revenue
reduction of $39 million, compared to $30 million in the
second quarter of 2022. The increase was primarily due to the
accelerated recognition of $10 million of remaining contract
intangible for Transocean Equinox as the result of customer’s
early termination of the drilling contract.
Operating and maintenance expense was $411 million,
compared with $433 million in the prior quarter. The
sequential decrease was primarily due to reduced activity from rigs
that became idle in the third quarter and the favorable impact of
the strengthening U.S. dollar.
General and administrative expense was $42 million, which
is in line with the $43 million in the second quarter of
2022.
Interest expense, net of amounts capitalized, was
$96 million, compared with $100 million in the prior
quarter. Interest income was $9 million, compared with
$4 million in the previous quarter.
The Effective Tax Rate(2) was 16.3% in the current quarter
and (4.7)% in the prior quarter. The change in the rate was
primarily due to release of valuation allowance and movement in
deferred tax expense. The Effective Tax Rate excluding discrete
items was (1.2)% compared to (5.2)% in the previous quarter.
Cash provided by operating activities was $230 million,
compared to $41 million in the prior quarter. The sequential
increase is primarily due to lower payment to vendors and increased
collections from customers, partially offset by the timing of
interest payments.
Third quarter 2022 capital expenditures of $87 million,
compared to $115 million in the prior quarter, were primarily
related to the company’s newbuild drillships under construction,
including the cash component of the final milestone payment for the
delivery of Deepwater Atlas in June 2022.
“The Transocean team continued to provide safe, reliable and
efficient operations during the third quarter, resulting in uptime
of 97.5%” said Chief Executive Officer Jeremy Thigpen, “I would
like to extend my sincere gratitude to the entire Transocean team –
offshore and onshore – for delivering for our customers and
continuing to take the steps necessary to maximize value for our
shareholders.”
Thigpen added, “The robust demand for our assets and services
helped us secure an incremental $1.6 billion since our July 25
Fleet Status Report, contributing to our already industry-leading
backlog. We remain encouraged by the sustained strength in the
offshore drilling market globally and expect demand for the
increasingly scarce high-capability drilling rigs Transocean owns
and operates to remain strong for the foreseeable future, resulting
in higher utilization and dayrates.”
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 38 mobile offshore drilling units
consisting of 28 ultra-deepwater floaters and 10 harsh
environment floaters. In addition, Transocean is constructing
one ultra-deepwater drillship.
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. CET, on Thursday, November 3, 2022, to
discuss the results. To participate, dial +1 785-424-1205 and refer
to conference code 260431 approximately 15 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. CET, on Thursday, November 3,
2022. The replay, which will be archived for approximately
30 days, can be accessed at +1 402-220-4975,
passcode 260431. 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, 2021, 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 operating revenues,
excluding revenues for contract terminations and reimbursements,
for the measurement period divided by the maximum revenue
calculated for the measurement period, expressed as a percentage.
Maximum revenue is defined as the greatest amount of contract
drilling revenues the drilling unit could earn for the measurement
period, excluding revenues for incentive provisions, reimbursements
and contract terminations. See the accompanying schedule entitled
“Revenue Efficiency.” |
|
|
(2) |
Effective Tax Rate is defined as income tax expense divided by
income before income taxes. See the accompanying schedule entitled
“Supplemental Effective Tax Rate Analysis.” |
Analyst Contact:Alison
Johnson+1 713-232-7214
Media Contact:Pam Easton+1 713-232-7647
TRANSOCEAN LTD. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In millions, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling
revenues |
|
$ |
691 |
|
|
$ |
626 |
|
|
$ |
1,969 |
|
|
$ |
1,935 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating and maintenance |
|
|
411 |
|
|
|
398 |
|
|
|
1,256 |
|
|
|
1,267 |
|
|
Depreciation and amortization |
|
|
182 |
|
|
|
185 |
|
|
|
549 |
|
|
|
558 |
|
|
General and administrative |
|
|
42 |
|
|
|
40 |
|
|
|
127 |
|
|
|
118 |
|
|
|
|
|
635 |
|
|
|
623 |
|
|
|
1,932 |
|
|
|
1,943 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on disposal of assets, net |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
(6 |
) |
|
|
(61 |
) |
|
Operating income (loss) |
|
|
53 |
|
|
|
— |
|
|
|
31 |
|
|
|
(69 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
9 |
|
|
|
4 |
|
|
|
15 |
|
|
|
11 |
|
|
Interest expense, net of amounts capitalized |
|
|
(96 |
) |
|
|
(110 |
) |
|
|
(298 |
) |
|
|
(340 |
) |
|
Gain on retirement of debt |
|
|
7 |
|
|
|
— |
|
|
|
7 |
|
|
|
51 |
|
|
Other, net |
|
|
(6 |
) |
|
|
3 |
|
|
|
(2 |
) |
|
|
26 |
|
|
|
|
|
(86 |
) |
|
|
(103 |
) |
|
|
(278 |
) |
|
|
(252 |
) |
|
Loss before income tax expense (benefit) |
|
|
(33 |
) |
|
|
(103 |
) |
|
|
(247 |
) |
|
|
(321 |
) |
|
Income
tax expense (benefit) |
|
|
(5 |
) |
|
|
27 |
|
|
|
24 |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(28 |
) |
|
|
(130 |
) |
|
|
(271 |
) |
|
|
(331 |
) |
|
Net income attributable to noncontrolling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
Net loss attributable to controlling interest |
|
$ |
(28 |
) |
|
$ |
(130 |
) |
|
$ |
(271 |
) |
|
$ |
(332 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share, basic and
diluted |
|
$ |
(0.04 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.39 |
) |
|
$ |
(0.53 |
) |
|
Weighted-average shares, basic
and diluted |
|
|
714 |
|
|
|
653 |
|
|
|
690 |
|
|
|
630 |
|
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In millions, except share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
954 |
|
|
$ |
976 |
|
|
Accounts receivable, net of
allowance of $2 at September 30, 2022 and December 31, 2021 |
|
|
599 |
|
|
|
492 |
|
|
Materials and supplies, net of
allowance of $194 and $183 at September 30, 2022 and December 31,
2021, respectively |
|
|
398 |
|
|
|
392 |
|
|
Restricted cash and cash equivalents |
|
|
387 |
|
|
|
436 |
|
|
Other current assets |
|
|
131 |
|
|
|
148 |
|
|
Total current assets |
|
|
2,469 |
|
|
|
2,444 |
|
|
|
|
|
|
|
|
|
|
Property and equipment |
|
|
23,728 |
|
|
|
23,152 |
|
|
Less accumulated depreciation |
|
|
(6,570 |
) |
|
|
(6,054 |
) |
|
Property and equipment, net |
|
|
17,158 |
|
|
|
17,098 |
|
|
Contract intangible
assets |
|
|
75 |
|
|
|
173 |
|
|
Deferred tax assets, net |
|
|
11 |
|
|
|
7 |
|
|
Other assets |
|
|
908 |
|
|
|
959 |
|
|
Total assets |
|
$ |
20,621 |
|
|
$ |
20,681 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
275 |
|
|
$ |
228 |
|
|
Accrued income taxes |
|
|
4 |
|
|
|
17 |
|
|
Debt due within one year |
|
|
750 |
|
|
|
513 |
|
|
Other current liabilities |
|
|
476 |
|
|
|
545 |
|
|
Total current liabilities |
|
|
1,505 |
|
|
|
1,303 |
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
6,451 |
|
|
|
6,657 |
|
|
Deferred tax liabilities, net |
|
|
471 |
|
|
|
447 |
|
|
Other
long-term liabilities |
|
|
963 |
|
|
|
1,068 |
|
|
Total long-term liabilities |
|
|
7,885 |
|
|
|
8,172 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares, CHF 0.10 par value,
905,093,509 authorized, 142,362,675 conditionally authorized,
797,244,753 issued |
|
|
|
|
|
|
|
and 721,888,427 outstanding at September 30, 2022, and 891,379,306
authorized, 142,363,356 conditionally |
|
|
|
|
|
|
|
authorized, 728,176,456 issued and 655,505,335 outstanding at
December 31, 2021 |
|
|
71 |
|
|
|
64 |
|
|
Additional paid-in capital |
|
|
13,979 |
|
|
|
13,683 |
|
|
Accumulated deficit |
|
|
(2,729 |
) |
|
|
(2,458 |
) |
|
Accumulated other comprehensive loss |
|
|
(91 |
) |
|
|
(84 |
) |
|
Total controlling interest shareholders’ equity |
|
|
11,230 |
|
|
|
11,205 |
|
|
Noncontrolling interest |
|
|
1 |
|
|
|
1 |
|
|
Total equity |
|
|
11,231 |
|
|
|
11,206 |
|
|
Total liabilities and equity |
|
$ |
20,621 |
|
|
$ |
20,681 |
|
|
TRANSOCEAN LTD. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In millions) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
|
September 30, |
|
|
|
2022 |
|
2021 |
|
Cash flows from
operating activities |
|
|
|
|
|
|
|
Net loss |
|
$ |
(271 |
) |
|
$ |
(331 |
) |
|
Adjustments to reconcile to net cash provided by operating
activities: |
|
|
|
|
|
|
|
Contract intangible asset amortization |
|
|
98 |
|
|
|
170 |
|
|
Depreciation and amortization |
|
|
549 |
|
|
|
558 |
|
|
Share-based compensation expense |
|
|
22 |
|
|
|
21 |
|
|
Loss on disposal of assets, net |
|
|
6 |
|
|
|
61 |
|
|
Gain on retirement of debt |
|
|
(7 |
) |
|
|
(51 |
) |
|
Deferred income tax expense |
|
|
20 |
|
|
|
43 |
|
|
Other, net |
|
|
56 |
|
|
|
29 |
|
|
Changes in deferred revenues, net |
|
|
(49 |
) |
|
|
(87 |
) |
|
Changes in deferred costs, net |
|
|
23 |
|
|
|
8 |
|
|
Changes in other operating assets and liabilities, net |
|
|
(177 |
) |
|
|
(31 |
) |
|
Net
cash provided by operating activities |
|
|
270 |
|
|
|
390 |
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
Capital expenditures |
|
|
(308 |
) |
|
|
(137 |
) |
|
Investments in equity of unconsolidated affiliates |
|
|
(27 |
) |
|
|
— |
|
|
Investment in loans to unconsolidated affiliates |
|
|
(2 |
) |
|
|
(33 |
) |
|
Proceeds from disposal of assets, net |
|
|
4 |
|
|
|
8 |
|
|
Net
cash used in investing activities |
|
|
(333 |
) |
|
|
(162 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
|
Repayments of debt |
|
|
(453 |
) |
|
|
(423 |
) |
|
Proceeds from issuance of shares, net of issue costs |
|
|
264 |
|
|
|
141 |
|
|
Proceeds from issuance of debt, net of issue costs |
|
|
176 |
|
|
|
— |
|
|
Proceeds from issuance of warrants, net of issue costs |
|
|
12 |
|
|
|
— |
|
|
Other, net |
|
|
(7 |
) |
|
|
(30 |
) |
|
Net
cash used in financing activities |
|
|
(8 |
) |
|
|
(312 |
) |
|
|
|
|
|
|
|
|
|
Net
decrease in unrestricted and restricted cash and cash
equivalents |
|
|
(71 |
) |
|
|
(84 |
) |
|
Unrestricted and restricted cash and cash equivalents, beginning of
period |
|
|
1,412 |
|
|
|
1,560 |
|
|
Unrestricted and restricted cash and cash equivalents, end of
period |
|
$ |
1,341 |
|
|
$ |
1,476 |
|
|
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 (in millions) |
|
2022 |
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
Contract drilling
revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ultra-deepwater floaters |
|
$ |
433 |
|
$ |
451 |
|
$ |
428 |
|
|
$ |
1,274 |
|
$ |
1,288 |
|
Harsh environment floaters |
|
|
258 |
|
|
241 |
|
|
198 |
|
|
|
695 |
|
|
647 |
|
Total contract drilling
revenues |
|
$ |
691 |
|
$ |
692 |
|
$ |
626 |
|
|
$ |
1,969 |
|
$ |
1,935 |
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
September 30, |
|
September 30, |
|
Average Daily
Revenue (1) |
|
2022 |
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
Ultra-deepwater floaters |
|
$ |
326,600 |
|
$ |
334,400 |
|
$ |
351,900 |
|
|
$ |
324,000 |
|
$ |
362,100 |
|
Harsh environment
floaters |
|
|
374,000 |
|
|
406,000 |
|
|
401,600 |
|
|
|
385,800 |
|
|
385,700 |
|
Total fleet average daily revenue |
|
$ |
343,400 |
|
|
358,100 |
|
$ |
367,100 |
|
|
$ |
344,600 |
|
$ |
370,100 |
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
September 30, |
|
September 30, |
|
Utilization
(2) |
|
|
2022 |
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
Ultra-deepwater floaters |
|
|
53.1 |
% |
|
53.8 |
% |
|
50.2 |
% |
|
|
52.2 |
% |
|
48.7 |
% |
|
Harsh environment
floaters |
|
|
75.7 |
% |
|
70.0 |
% |
|
59.8 |
% |
|
|
68.7 |
% |
|
65.9 |
% |
|
Total fleet average rig utilization |
|
|
59.4 |
% |
|
58.2 |
% |
|
52.8 |
% |
|
|
56.7 |
% |
|
53.4 |
% |
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
September 30, |
|
September 30, |
Revenue
Efficiency (3) |
|
|
2022 |
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
Ultra-deepwater floaters |
|
|
93.5 |
% |
|
96.8 |
% |
|
96.0 |
% |
|
|
95.1 |
% |
|
97.0 |
% |
Harsh environment
floaters |
|
|
97.5 |
% |
|
99.5 |
% |
|
102.5 |
% |
|
|
97.4 |
% |
|
99.5 |
% |
Total fleet average revenue efficiency |
|
|
95.0 |
% |
|
97.8 |
% |
|
98.1 |
% |
|
|
95.9 |
% |
|
97.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average daily revenue is defined as operating revenues,
excluding revenues for contract terminations, reimbursements and
contract intangible amortization, earned per operating day. An
operating day is defined as a day for which a rig is contracted to
earn a dayrate during the firm contract period after operations
commence. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 operating revenues,
excluding revenues for contract terminations and reimbursements,
for the measurement period divided by the maximum revenue
calculated for the measurement period, expressed as a percentage.
Maximum revenue is defined as the greatest amount of contract
drilling revenues the drilling unit could earn for the measurement
period, excluding revenues for incentive provisions, reimbursements
and contract terminations. |
TRANSOCEAN LTD. AND SUBSIDIARIES |
|
NON-GAAP FINANCIAL MEASURES AND
RECONCILIATIONS |
|
ADJUSTED NET INCOME (LOSS) AND ADJUSTED DILUTED EARNINGS
(LOSS) PER SHARE |
|
(In millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
|
09/30/22 |
|
09/30/22 |
|
06/30/22 |
|
06/30/22 |
|
03/31/22 |
|
Adjusted Net
Loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to
controlling interest, as reported |
$ |
(271 |
) |
|
$ |
(28 |
) |
|
$ |
(243 |
) |
|
$ |
(68 |
) |
|
$ |
(175 |
) |
|
Gain on retirement of debt |
|
(7 |
) |
|
|
(7 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Discrete tax items |
|
(14 |
) |
|
|
(6 |
) |
|
|
(8 |
) |
|
|
— |
|
|
|
(8 |
) |
|
Net loss, as adjusted |
$ |
(292 |
) |
|
$ |
(41 |
) |
|
$ |
(251 |
) |
|
$ |
(68 |
) |
|
$ |
(183 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Loss
Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share, as
reported |
$ |
(0.39 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.36 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.26 |
) |
|
Gain on retirement of debt |
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Discrete tax items |
|
(0.02 |
) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
Diluted loss per share, as
adjusted |
$ |
(0.42 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.37 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.28 |
) |
|
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
|
12/31/21 |
|
12/31/21 |
|
09/30/21 |
|
09/30/21 |
|
06/30/21 |
|
06/30/21 |
|
03/31/21 |
|
Adjusted Net
Loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to
controlling interest, as reported |
$ |
(592 |
) |
|
$ |
(260 |
) |
|
$ |
(332 |
) |
|
$ |
(130 |
) |
|
$ |
(202 |
) |
|
$ |
(103 |
) |
|
$ |
(99 |
) |
|
Allowance for excess materials and supplies, certain items |
|
28 |
|
|
|
28 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(Gain) loss on disposal of assets, net |
|
57 |
|
|
|
(3 |
) |
|
|
60 |
|
|
|
— |
|
|
|
60 |
|
|
|
— |
|
|
|
60 |
|
|
Loss on impairment of investment in unconsolidated affiliate |
|
37 |
|
|
|
37 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Gain on retirement of debt |
|
(51 |
) |
|
|
— |
|
|
|
(51 |
) |
|
|
— |
|
|
|
(51 |
) |
|
|
— |
|
|
|
(51 |
) |
|
Discrete tax items |
|
47 |
|
|
|
72 |
|
|
|
(25 |
) |
|
|
8 |
|
|
|
(33 |
) |
|
|
(6 |
) |
|
|
(27 |
) |
|
Net loss, as adjusted |
$ |
(474 |
) |
|
$ |
(126 |
) |
|
$ |
(348 |
) |
|
$ |
(122 |
) |
|
$ |
(226 |
) |
|
$ |
(109 |
) |
|
$ |
(117 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted Loss
Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share, as
reported |
$ |
(0.93 |
) |
|
$ |
(0.40 |
) |
|
$ |
(0.53 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.33 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.16 |
) |
|
Allowance for excess materials and supplies, certain items |
|
0.04 |
|
|
|
0.04 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(Gain) loss on disposal of assets, net |
|
0.09 |
|
|
|
— |
|
|
|
0.10 |
|
|
|
— |
|
|
|
0.10 |
|
|
|
— |
|
|
|
0.10 |
|
|
Loss on impairment of investment in unconsolidated affiliate |
|
0.06 |
|
|
|
0.06 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Gain on retirement of debt |
|
(0.08 |
) |
|
|
— |
|
|
|
(0.08 |
) |
|
|
— |
|
|
|
(0.08 |
) |
|
|
— |
|
|
|
(0.08 |
) |
|
Discrete tax items |
|
0.08 |
|
|
|
0.11 |
|
|
|
(0.04 |
) |
|
|
0.01 |
|
|
|
(0.06 |
) |
|
|
(0.01 |
) |
|
|
(0.05 |
) |
|
Diluted loss per share, as
adjusted |
$ |
(0.74 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.55 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.37 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.19 |
) |
|
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 |
|
|
09/30/22 |
|
09/30/22 |
|
06/30/22 |
|
06/30/22 |
|
03/31/22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling
revenues |
$ |
1,969 |
|
|
$ |
691 |
|
|
$ |
1,278 |
|
|
$ |
692 |
|
|
$ |
586 |
|
|
Contract intangible asset amortization |
|
98 |
|
|
|
39 |
|
|
|
59 |
|
|
|
30 |
|
|
|
29 |
|
|
Adjusted Contract
Drilling Revenues |
$ |
2,067 |
|
|
$ |
730 |
|
|
$ |
1,337 |
|
|
$ |
722 |
|
|
$ |
615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(271 |
) |
|
$ |
(28 |
) |
|
$ |
(243 |
) |
|
$ |
(68 |
) |
|
$ |
(175 |
) |
|
Interest expense, net of interest income |
|
283 |
|
|
|
87 |
|
|
|
196 |
|
|
|
96 |
|
|
|
100 |
|
|
Income tax expense (benefit) |
|
24 |
|
|
|
(5 |
) |
|
|
29 |
|
|
|
3 |
|
|
|
26 |
|
|
Depreciation and amortization |
|
549 |
|
|
|
182 |
|
|
|
367 |
|
|
|
184 |
|
|
|
183 |
|
|
Contract intangible asset amortization |
|
98 |
|
|
|
39 |
|
|
|
59 |
|
|
|
30 |
|
|
|
29 |
|
|
EBITDA |
|
683 |
|
|
|
275 |
|
|
|
408 |
|
|
|
245 |
|
|
|
163 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on retirement of debt |
|
(7 |
) |
|
|
(7 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Adjusted
EBITDA |
$ |
676 |
|
|
$ |
268 |
|
|
$ |
408 |
|
|
$ |
245 |
|
|
$ |
163 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
33.0 |
|
% |
|
37.6 |
|
% |
|
30.5 |
|
% |
|
33.9 |
|
% |
|
26.5 |
|
% |
Adjusted EBITDA margin |
|
32.7 |
|
% |
|
36.7 |
|
% |
|
30.5 |
|
% |
|
33.9 |
|
% |
|
26.5 |
|
% |
|
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
QTD |
|
YTD |
|
|
|
12/31/21 |
|
12/31/21 |
|
09/30/21 |
|
09/30/21 |
|
06/30/21 |
|
06/30/21 |
|
03/31/21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling
revenues |
|
$ |
2,556 |
|
|
$ |
621 |
|
|
$ |
1,935 |
|
|
$ |
626 |
|
|
$ |
1,309 |
|
|
$ |
656 |
|
|
$ |
653 |
|
|
Contract intangible asset amortization |
|
|
220 |
|
|
|
50 |
|
|
|
170 |
|
|
|
57 |
|
|
|
113 |
|
|
|
57 |
|
|
|
56 |
|
|
Adjusted Contract
Drilling Revenues |
|
$ |
2,776 |
|
|
$ |
671 |
|
|
$ |
2,105 |
|
|
$ |
683 |
|
|
$ |
1,422 |
|
|
$ |
713 |
|
|
$ |
709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(591 |
) |
|
$ |
(260 |
) |
|
$ |
(331 |
) |
|
$ |
(130 |
) |
|
$ |
(201 |
) |
|
$ |
(103 |
) |
|
$ |
(98 |
) |
|
Interest expense, net of interest income |
|
|
432 |
|
|
|
103 |
|
|
|
329 |
|
|
|
106 |
|
|
|
223 |
|
|
|
111 |
|
|
|
112 |
|
|
Income tax expense (benefit) |
|
|
121 |
|
|
|
111 |
|
|
|
10 |
|
|
|
27 |
|
|
|
(17 |
) |
|
|
4 |
|
|
|
(21 |
) |
|
Depreciation and amortization |
|
|
742 |
|
|
|
184 |
|
|
|
558 |
|
|
|
185 |
|
|
|
373 |
|
|
|
186 |
|
|
|
187 |
|
|
Contract intangible asset amortization |
|
|
220 |
|
|
|
50 |
|
|
|
170 |
|
|
|
57 |
|
|
|
113 |
|
|
|
57 |
|
|
|
56 |
|
|
EBITDA |
|
|
924 |
|
|
|
188 |
|
|
|
736 |
|
|
|
245 |
|
|
|
491 |
|
|
|
255 |
|
|
|
236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for excess materials and supplies, certain items |
|
|
28 |
|
|
|
28 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(Gain) loss on disposal of assets, net |
|
|
57 |
|
|
|
(3 |
) |
|
|
60 |
|
|
|
— |
|
|
|
60 |
|
|
|
— |
|
|
|
60 |
|
|
Loss on impairment of investment in unconsolidated affiliate |
|
|
37 |
|
|
|
37 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Gain on retirement of debt |
|
|
(51 |
) |
|
|
— |
|
|
|
(51 |
) |
|
|
— |
|
|
|
(51 |
) |
|
|
— |
|
|
|
(51 |
) |
|
Adjusted
EBITDA |
|
$ |
995 |
|
|
$ |
250 |
|
|
$ |
745 |
|
|
$ |
245 |
|
|
$ |
500 |
|
|
$ |
255 |
|
|
$ |
245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin |
|
|
33.3 |
|
% |
|
28.0 |
|
% |
|
35.0 |
|
% |
|
35.9 |
|
% |
|
34.5 |
|
% |
|
35.8 |
|
% |
|
33.3 |
|
% |
Adjusted EBITDA margin |
|
|
35.8 |
|
% |
|
37.3 |
|
% |
|
35.4 |
|
% |
|
35.9 |
|
% |
|
35.2 |
|
% |
|
35.8 |
|
% |
|
34.6 |
|
% |
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, |
|
|
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
$ |
(33 |
) |
|
$ |
(65 |
) |
|
$ |
(103 |
) |
|
$ |
(247 |
) |
|
$ |
(321 |
) |
|
Loss on disposal of assets, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
60 |
|
|
Gain on retirement of debt |
|
|
(7 |
) |
|
|
— |
|
|
|
— |
|
|
|
(7 |
) |
|
|
(51 |
) |
|
Adjusted loss before income
taxes |
|
$ |
(40 |
) |
|
$ |
(65 |
) |
|
$ |
(103 |
) |
|
$ |
(254 |
) |
|
$ |
(312 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) |
|
$ |
(5 |
) |
|
$ |
3 |
|
|
$ |
27 |
|
|
$ |
24 |
|
|
$ |
10 |
|
|
Loss on disposal of assets, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Gain on retirement of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Changes in estimates (1) |
|
|
6 |
|
|
|
— |
|
|
|
(8 |
) |
|
|
14 |
|
|
|
25 |
|
|
Adjusted income tax expense
(2) |
|
$ |
1 |
|
|
$ |
3 |
|
|
$ |
19 |
|
|
$ |
38 |
|
|
$ |
35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate (3) |
|
|
16.3 |
|
% |
|
(4.7 |
) |
% |
|
(26.1 |
) |
% |
|
(9.6 |
) |
% |
|
(3.2 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate,
excluding discrete items (4) |
|
|
(1.2 |
) |
% |
|
(5.2 |
) |
% |
|
(18.1 |
) |
% |
|
(14.9 |
) |
% |
|
(11.2 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 September 30, 2022 included $6 million of additional
tax benefit, reflecting the cumulative effect of a decrease 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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