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Transocean Ltd. Reports Fourth Quarter and Full Year 2022 Results

  • Total contract drilling revenues were $606 million, compared to $691 million in the third quarter of 2022 (total adjusted contract drilling revenues of $625 million, compared to $730 million in the third quarter of 2022);

  • Revenue efficiency(1) was 98.0%, compared to 95.0% in the prior quarter;

  • Operating and maintenance expense was $423 million, compared to $411 million in the prior period;

  • Net loss attributable to controlling interest was $350 million, $0.48 per diluted share, compared to $28 million, $0.04 per diluted share, in the third quarter of 2022;

  • Adjusted EBITDA was $140 million, compared to $268 million in the prior quarter; and

  • Contract backlog was $8.5 billion as of the February 2023 Fleet Status Report.

STEINHAUSEN, Switzerland, Feb. 21, 2023 (GLOBE NEWSWIRE) -- Transocean Ltd. (NYSE: RIG) today reported a net loss attributable to controlling interest of $350 million, $0.48 per diluted share, for the three months ended December 31, 2022.

Fourth quarter results included net favorable items of $6 million, or $0.01 per diluted share as follows:

  • $5 million, $0.01 per diluted share, discrete tax items; and

  • $1 million gain on retirement of debt.

After consideration of these net favorable items, fourth quarter 2022 adjusted net loss was $356 million, $0.49 per diluted share.

Contract drilling revenues for the three months ended December 31, 2022, decreased sequentially by $85 million to $606 million, primarily due to reduced activity for five rigs that were idle in the fourth quarter, partially offset by higher revenue efficiency and revenues earned by the newbuild ultra-deepwater floater Deepwater Atlas, which commenced operations in October 2022.

Contract intangible amortization represented a non-cash revenue reduction of $19 million. The reduction, compared to $39 million in the prior period, resulted from the accelerated recognition of remaining contract intangible for Transocean Equinox following the customer’s early termination of the drilling contract in the third quarter 2022.

Operating and maintenance expense was $423 million, compared with $411 million in the prior quarter. The sequential increase was primarily due to higher maintenance cost across our fleet and the commencement of operations of the newbuild Deepwater Atlas, partially offset by reduced activity from rigs that became idle in the fourth quarter.

General and administrative expense was $55 million, up from $42 million in the third quarter of 2022. The increase was primarily due to increased personnel costs and increased legal, professional fees and advisory fees.

Interest expense, net of amounts capitalized, was $263 million, compared with $96 million in the prior quarter. The increase was primarily due to a non-cash loss of $157 million associated with a fair value adjustment of the bifurcated exchange feature embedded in our exchangeable bonds issued in the third quarter. Interest income was $12 million, compared with $9 million in the previous quarter.

The Effective Tax Rate(2) was (11.0)% in the current quarter and 16.3% in the prior quarter. The change in the rate was primarily due to incurring over half of the actual earnings for the year in the current quarter. The Effective Tax Rate excluding discrete items was (12.6)% compared to (1.2)% in the previous quarter.

Cash provided by operating activities was $178 million, compared to $230 million in the prior quarter. The sequential decrease is primarily due to increased payments for accounts payable and income taxes, partially offset by the timing of interest payments.

Fourth quarter 2022 capital expenditures of $409 million, compared to $87 million in the prior quarter, were primarily related to our newbuild drillships under construction, including the cash component of the final milestone payment for the delivery of Deepwater Titan in December 2022.

“Looking back, 2022 will be remembered as a pivotal year in Transocean’s history,” said Chief Executive Officer, Jeremy Thigpen. “During the year, we continued to high-grade our fleet through the deployment of innovative technologies and the delivery of the industry’s only two 8th generation drillships, Deepwater Atlas and Deepwater Titan. Perhaps most importantly, we secured approximately $4 billion in incremental backlog, our largest annual backlog addition since prior to the industry downturn in 2014.”

Thigpen concluded, “As an industry, it is clear that we have finally emerged from eight exceptionally challenging years and are now in the early stages of what we believe will be a multi-year upcycle. To maximize value for our shareholders during this upcycle, Transocean will continue to secure high-quality backlog, maintain our acute focus on operational excellence, exercise capital discipline, and take the necessary steps to right-size our balance sheet.”

Full Year 2022

For the year ended December 31, 2022, net loss attributable to controlling interest totaled $621 million, or $0.89 per diluted share. Full year results included $27 million, or $0.04 per diluted share, net favorable items listed as follows:

  • $19 million, $0.03 per diluted share, related to discrete tax items; and

  • $8 million, $0.01 per diluted share, gain on retirement of debt.

After consideration of these net favorable items, adjusted net loss for 2022 was $648 million, $0.93 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 operates the highest specification floating offshore drilling fleet 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 one ultra-deepwater drillship and holds a noncontrolling ownership interest in a company that 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. EST, 3 p.m. CET, on Wednesday, February 22, 2023, to discuss the results. To participate, dial +1 785-424-1226 and refer to conference code 401741 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. EST, 6 p.m. CET, on Wednesday, February 22, 2023. The replay, which will be archived for approximately 30 days, can be accessed at +1 402-220-1175, passcode 401741. 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 or benefit divided by income or loss 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

2022

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Contract drilling revenues

$

2,575

 

 

$

2,556

 

 

$

3,152

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

Operating and maintenance

 

1,679

 

 

 

1,697

 

 

 

2,000

 

Depreciation and amortization

 

735

 

 

 

742

 

 

 

781

 

General and administrative

 

182

 

 

 

167

 

 

 

183

 

 

 

2,596

 

 

 

2,606

 

 

 

2,964

 

Loss on impairment

 

 

 

 

 

 

 

(597

)

Loss on disposal of assets, net

 

(10

)

 

 

(62

)

 

 

(84

)

Operating loss

 

(31

)

 

 

(112

)

 

 

(493

)

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

 

 

 

 

 

 

Interest income

 

27

 

 

 

15

 

 

 

21

 

Interest expense, net of amounts capitalized

 

(561

)

 

 

(447

)

 

 

(575

)

Gain on restructuring and retirement of debt

 

8

 

 

 

51

 

 

 

533

 

Other, net

 

(5

)

 

 

23

 

 

 

(27

)

 

 

(531

)

 

 

(358

)

 

 

(48

)

Loss before income tax expense

 

(562

)

 

 

(470

)

 

 

(541

)

Income tax expense

 

59

 

 

 

121

 

 

 

27

 

 

 

 

 

 

 

 

 

 

Net loss

 

(621

)

 

 

(591

)

 

 

(568

)

Net income (loss) attributable to noncontrolling interest

 

 

 

 

1

 

 

 

(1

)

Net loss attributable to controlling interest

$

(621

)

 

$

(592

)

 

$

(567

)

 

 

 

 

 

 

 

 

 

Loss per share, basic and diluted

$

(0.89

)

 

$

(0.93

)

 

$

(0.92

)

Weighted-average shares, basic and diluted

 

699

 

 

 

637

 

 

 

615

 


TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)

 

 

December 31,

 

2022

 

2021

 

 

 

 

 

 

Assets

 

 

 

 

 

Cash and cash equivalents

$

683

 

 

$

976

 

Accounts receivable, net

 

485

 

 

 

492

 

Materials and supplies, net

 

388

 

 

 

392

 

Restricted cash and cash equivalents

 

308

 

 

 

436

 

Other current assets

 

144

 

 

 

148

 

Total current assets

 

2,008

 

 

 

2,444

 

 

 

 

 

 

 

Property and equipment

 

24,217

 

 

 

23,152

 

Less accumulated depreciation

 

(6,748

)

 

 

(6,054

)

Property and equipment, net

 

17,469

 

 

 

17,098

 

Contract intangible assets

 

56

 

 

 

173

 

Deferred tax assets, net

 

13

 

 

 

7

 

Other assets

 

890

 

 

 

959

 

Total assets

$

20,436

 

 

$

20,681

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

Accounts payable

$

281

 

 

$

228

 

Accrued income taxes

 

19

 

 

 

17

 

Debt due within one year

 

719

 

 

 

513

 

Other current liabilities

 

539

 

 

 

545

 

Total current liabilities

 

1,558

 

 

 

1,303

 

 

 

 

 

 

 

Long-term debt

 

6,628

 

 

 

6,657

 

Deferred tax liabilities, net

 

493

 

 

 

447

 

Other long-term liabilities

 

965

 

 

 

1,068

 

Total long-term liabilities

 

8,086

 

 

 

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 December 31, 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

 

13,984

 

 

 

13,683

 

Accumulated deficit

 

(3,079

)

 

 

(2,458

)

Accumulated other comprehensive loss

 

(185

)

 

 

(84

)

Total controlling interest shareholders’ equity

 

10,791

 

 

 

11,205

 

Noncontrolling interest

 

1

 

 

 

1

 

Total equity

 

10,792

 

 

 

11,206

 

Total liabilities and equity

$

20,436

 

 

$

20,681

 


TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

2022

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

$

(621

)

 

$

(591

)

 

$

(568

)

Adjustments to reconcile to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Contract intangible asset amortization

 

117

 

 

 

220

 

 

 

215

 

Depreciation and amortization

 

735

 

 

 

742

 

 

 

781

 

Share-based compensation expense

 

29

 

 

 

28

 

 

 

31

 

Loss on impairment

 

 

 

 

 

 

 

597

 

Loss on impairment of investment in unconsolidated affiliates

 

 

 

 

37

 

 

 

62

 

Loss on disposal of assets, net

 

10

 

 

 

62

 

 

 

84

 

Fair value adjustment to bifurcated compound exchange feature

 

157

 

 

 

 

 

 

 

Gain on restructuring and retirement of debt

 

(8

)

 

 

(51

)

 

 

(533

)

Deferred income tax expense

 

46

 

 

 

128

 

 

 

60

 

Other, net

 

77

 

 

 

77

 

 

 

83

 

Changes in deferred revenues, net

 

(20

)

 

 

(108

)

 

 

(73

)

Changes in deferred costs, net

 

1

 

 

 

(6

)

 

 

12

 

Changes in other operating assets and liabilities, net

 

(75

)

 

 

37

 

 

 

(353

)

Net cash provided by operating activities

 

448

 

 

 

575

 

 

 

398

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Capital expenditures

 

(717

)

 

 

(208

)

 

 

(265

)

Investments in equity of unconsolidated affiliates

 

(42

)

 

 

(1

)

 

 

(19

)

Investments in loans to unconsolidated affiliates

 

(5

)

 

 

(33

)

 

 

(2

)

Proceeds from disposal of assets, net

 

7

 

 

 

9

 

 

 

24

 

Proceeds from maturities of unrestricted and restricted investments

 

 

 

 

 

 

 

5

 

Net cash used in investing activities

 

(757

)

 

 

(233

)

 

 

(257

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Repayments of debt

 

(554

)

 

 

(606

)

 

 

(1,637

)

Proceeds from issuance of shares, net of issue costs

 

263

 

 

 

158

 

 

 

 

Proceeds from issuance of debt, net of issue costs

 

175

 

 

 

 

 

 

743

 

Proceeds from issuance of warrants, net of issue costs

 

12

 

 

 

 

 

 

 

Other, net

 

(8

)

 

 

(42

)

 

 

(36

)

Net cash used in financing activities

 

(112

)

 

 

(490

)

 

 

(930

)

 

 

 

 

 

 

 

 

 

Net decrease in unrestricted and restricted cash and cash equivalents

 

(421

)

 

 

(148

)

 

 

(789

)

Unrestricted and restricted cash and cash equivalents, beginning of period

 

1,412

 

 

 

1,560

 

 

 

2,349

 

Unrestricted and restricted cash and cash equivalents, end of period

$

991

 

 

$

1,412

 

 

$

1,560

 


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)

2022

 

2022

 

2021

 

2022

 

2021

Contract drilling revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ultra-deepwater floaters

$

434

 

$

433

 

$

432

 

$

1,708

 

$

1,720

Harsh environment floaters

 

172

 

 

258

 

 

189

 

 

867

 

 

836

Total contract drilling revenues

$

606

 

$

691

 

$

621

 

$

2,575

 

$

2,556


 

Three months ended

 

Years ended

 

December 31,

 

September 30

 

December 31,

 

December 31,

 

December 31,

Average Daily Revenue(1)

2022

 

2022

 

2021

 

2022

 

2021

Ultra-deepwater floaters

$

344,800

 

$

326,600

 

$

337,100

 

$

329,100

 

$

355,500

Harsh environment floaters

 

357,900

 

 

374,000

 

 

387,700

 

 

380,000

 

 

386,200

Total fleet average daily revenue

$

348,600

 

$

343,400

 

$

352,500

 

$

345,500

 

$

365,600


 

Three months ended

 

Years ended

 

December 31,

 

September 30

 

December 31,

 

December 31,

 

December 31,

Utilization(2)

2022

 

2022

 

2021

 

2022

 

2021

Ultra-deepwater floaters

47.9

%

 

53.1

%

 

50.9

%

 

50.1

%

 

49.3

%

Harsh environment floaters

53.5

%

 

75.7

%

 

60.0

%

 

64.9

%

 

64.4

%

Total fleet average rig utilization

49.4

%

 

59.4

%

 

53.4

%

 

54.1

%

 

53.4

%


 

Three months ended

 

Years ended

 

December 31,

 

September 30

 

December 31,

 

December 31,

 

December 31,

Revenue Efficiency(3)

2022

 

2022

 

2021

 

2022

 

2021

Ultra-deepwater floaters

97.8

%

 

93.5

%

 

93.4

%

 

95.7

%

 

96.1

%

Harsh environment floaters

98.4

%

 

97.5

%

 

96.7

%

 

97.6

%

 

98.8

%

Total fleet average revenue efficiency

98.0

%

 

95.0

%

 

94.5

%

 

96.4

%

 

97.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

QTD

 

YTD

 

12/31/22

 

12/31/22

 

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

$

(621

)

 

$

(350

)

 

$

(271

)

 

$

(28

)

 

$

(243

)

 

$

(68

)

 

$

(175

)

Gain on retirement of debt

 

(8

)

 

 

(1

)

 

 

(7

)

 

 

(7

)

 

 

 

 

 

 

 

 

 

Discrete tax items

 

(19

)

 

 

(5

)

 

 

(14

)

 

 

(6

)

 

 

(8

)

 

 

 

 

 

(8

)

Net loss, as adjusted

$

(648

)

 

$

(356

)

 

$

(292

)

 

$

(41

)

 

$

(251

)

 

$

(68

)

 

$

(183

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Diluted Loss Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted loss per share, as reported

$

(0.89

)

 

$

(0.48

)

 

$

(0.39

)

 

$

(0.04

)

 

$

(0.36

)

 

$

(0.10

)

 

$

(0.26

)

Gain on retirement of debt

 

(0.01

)

 

 

 

 

 

(0.01

)

 

 

(0.01

)

 

 

 

 

 

 

 

 

 

Discrete tax items

 

(0.03

)

 

 

(0.01

)

 

 

(0.02

)

 

 

(0.01

)

 

 

(0.01

)

 

 

 

 

 

(0.02

)

Diluted loss per share, as adjusted

$

(0.93

)

 

$

(0.49

)

 

$

(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

 

QTD

 

YTD

 

 

12/31/22

 

12/31/22

 

09/30/22

 

09/30/22

 

06/30/22

 

06/30/22

 

03/31/22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling revenues

$

2,575

 

 

$

606

 

 

$

1,969

 

 

$

691

 

 

$

1,278

 

 

$

692

 

 

$

586

 

 

Contract intangible asset amortization

 

117

 

 

 

19

 

 

 

98

 

 

 

39

 

 

 

59

 

 

 

30

 

 

 

29

 

 

Adjusted Contract Drilling Revenues

$

2,692

 

 

$

625

 

 

$

2,067

 

 

$

730

 

 

$

1,337

 

 

$

722

 

 

$

615

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(621

)

 

$

(350

)

 

$

(271

)

 

$

(28

)

 

$

(243

)

 

$

(68

)

 

$

(175

)

 

Interest expense, net of interest income

 

534

 

 

 

251

 

 

 

283

 

 

 

87

 

 

 

196

 

 

 

96

 

 

 

100

 

 

Income tax expense (benefit)

 

59

 

 

 

35

 

 

 

24

 

 

 

(5

)

 

 

29

 

 

 

3

 

 

 

26

 

 

Depreciation and amortization

 

735

 

 

 

186

 

 

 

549

 

 

 

182

 

 

 

367

 

 

 

184

 

 

 

183

 

 

Contract intangible asset amortization

 

117

 

 

 

19

 

 

 

98

 

 

 

39

 

 

 

59

 

 

 

30

 

 

 

29

 

 

EBITDA

 

824

 

 

 

141

 

 

 

683

 

 

 

275

 

 

 

408

 

 

 

245

 

 

 

163

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on retirement of debt

 

(8

)

 

 

(1

)

 

 

(7

)

 

 

(7

)

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

816

 

 

$

140

 

 

$

676

 

 

$

268

 

 

$

408

 

 

$

245

 

 

$

163

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss margin

 

(24.1

)

%

 

(57.8

)

%

 

(13.8

)

%

 

(4.1

)

%

 

(19.0

)

%

 

(9.8

)

%

 

(29.9

)

%

EBITDA margin

 

30.6

 

%

 

22.7

 

%

 

33.0

 

%

 

37.6

 

%

 

30.5

 

%

 

33.9

 

%

 

26.5

 

%

Adjusted EBITDA margin

 

30.3

 

%

 

22.4

 

%

 

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

 

Years ended

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

 

 

2022

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

$

(315

)

 

$

(33

)

 

$

(149

)

 

$

(562

)

 

$

(470

)

 

Allowance for excess materials and supplies, certain items

 

 

 

 

 

 

 

28

 

 

 

 

 

 

28

 

 

(Gain) loss on disposal of assets, net

 

 

 

 

 

 

 

(3

)

 

 

 

 

 

57

 

 

Loss on impairment of investment in unconsolidated affiliate

 

 

 

 

 

 

 

37

 

 

 

 

 

 

37

 

 

Gain on retirement of debt

 

(1

)

 

 

(7

)

 

 

 

 

 

(8

)

 

 

(51

)

 

Adjusted loss before income taxes

$

(316

)

 

$

(40

)

 

$

(87

)

 

$

(570

)

 

$

(399

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

$

35

 

 

$

(5

)

 

$

111

 

 

$

59

 

 

$

121

 

 

Allowance for excess materials and supplies, certain items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Gain) loss on disposal of assets, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on impairment of investment in unconsolidated affiliate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on retirement of debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in estimates (1)

 

5

 

 

 

6

 

 

 

(72

)

 

 

19

 

 

 

(47

)

 

Adjusted income tax expense (2)

$

40

 

 

$

1

 

 

$

39

 

 

$

78

 

 

$

74

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate(3)

 

(11.0

)

%

 

16.3

 

%

 

(74.0

)

%

 

(10.4

)

%

 

(25.7

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate, excluding discrete items(4)

 

(12.6

)

%

 

(1.2

)

%

 

(44.9

)

%

 

(13.6

)

%

 

(18.5

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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, 2022 included $3 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 or benefit divided by income or loss before income taxes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4) Our effective tax rate, excluding discrete items, is calculated as income tax expense or benefit, excluding various discrete items (such as changes in estimates and tax on items excluded from income before income taxes), divided by income or loss before income taxes, 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.