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Transocean Ltd. Reports Second Quarter 2022 Results

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  • Total contract drilling revenues were $692 million, compared to $586 million in the first quarter of 2022 (total adjusted contract drilling revenues of $722 million, compared to $615 million in the first quarter of 2022);

  • Revenue efficiency(1) was 97.8%, compared to 94.9% in the prior quarter;

  • Operating and maintenance expense was $433 million, compared to $412 million in the prior period;

  • Net loss attributable to controlling interest was $68 million, $0.10 per diluted share, compared to $175 million, $0.26 per diluted share, in the first quarter of 2022;

  • Adjusted EBITDA was $245 million, compared to $163 million in the prior quarter;

  • On July 27, 2022, we amended the bank credit agreement for our Secured Credit Facility to extend the maturity date from June 22, 2023 to June 22, 2025. Borrowing capacity is $774 million through June 22, 2023 and thereafter is $600 million through June 22, 2025. The amended secured credit facility also permits us to increase the aggregate amount of commitments by up to $250 million; and

  • Contract backlog was $6.2 billion as of the July 2022 Fleet Status Report.

STEINHAUSEN, Switzerland, Aug. 01, 2022 (GLOBE NEWSWIRE) -- Transocean Ltd. (NYSE: RIG) today reported a net loss attributable to controlling interest of $68 million, $0.10 per diluted share, for the three months ended June 30, 2022.

Contract drilling revenues for the three months ended June 30, 2022, increased sequentially by $106 million to $692 million, primarily due to three rigs that returned to work after being idle in the prior quarter, increased dayrate for three rigs, higher revenue efficiency and one additional calendar day in the second quarter, partially offset by reduced activity for two rigs that were warm stacked in the second quarter of 2022.

Contract intangible amortization represented a non-cash revenue reduction of $30 million, compared to $29 million in the first quarter of 2022.

Operating and maintenance expense was $433 million, compared with $412 million in the prior quarter. The sequential increase was primarily due to returning the three rigs to work, as mentioned above, and higher in-service maintenance cost across our fleet.

General and administrative expense was $43 million, which is in line with the $42 million in the first quarter of 2022.

Interest expense, net of amounts capitalized, was $100 million, compared with $102 million in the prior quarter. Interest income was $4 million, compared with $2 million, in the previous quarter.

The Effective Tax Rate(2) was (4.7)% in the current quarter and (17.6)% in the prior quarter. The change in the rate was primarily due to the reduced loss before income tax expense and reduction of tax expense; however, the loss before income tax movement was much greater causing a shift in the effective tax rate. In addition, there were lower releases of uncertain tax positions as compared to last quarter. The Effective Tax Rate excluding discrete items was (5.2)% compared to (22.8)% in the previous quarter.

Cash provided by operating activities was $41 million during the second quarter of 2022, representing an increase of $42 million compared to the prior quarter. The sequential increase is primarily due to the higher level of operating activity in the second quarter and reduced payments for payroll-related items and interest.

Second quarter 2022 capital expenditures increased to $115 million from $106 million in the prior quarter, primarily due to payments 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 operate at an extremely high level throughout the second quarter, once again delivering safe, reliable, and efficient operations for our customers,” said Jeremy Thigpen, Chief Executive Officer. “Our strong uptime performance and contractual bonus conversion resulted in revenue efficiency of approximately 98% across our global floater fleet.”

Thigpen added, “While the past eight years have been extremely challenging for the entire industry, it is clear that the recovery in offshore drilling is underway, as contracting activity, utilization rates for high-specification ultra-deepwater and harsh-environment assets, and dayrates all continue to rise. And, with a backdrop of hydrocarbon supply challenges, we are increasingly encouraged that this momentum could continue for the foreseeable future.”

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. EDT, 3 p.m. CEST, on Tuesday, August 2, 2022, to discuss the results. To participate, dial +1 313-209-6672 and refer to conference code 5258095 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, 6 p.m. CEST, on Tuesday, August 2, 2022. The replay, which will be archived for approximately 30 days, can be accessed at +1 719-457-0820, passcode 5258095, pin 3505. 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

 

Six months ended

 

 

 

June 30, 

 

June 30, 

 

 

   

2022

   

2021

   

2022

   

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling revenues

 

$

692

 

 

$

656

 

 

$

1,278

 

 

$

1,309

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating and maintenance

 

 

433

 

 

 

434

 

 

 

845

 

 

 

869

 

 

Depreciation and amortization

 

 

184

 

 

 

186

 

 

 

367

 

 

 

373

 

 

General and administrative

 

 

43

 

 

 

39

 

 

 

85

 

 

 

78

 

 

 

 

 

660

 

 

 

659

 

 

 

1,297

 

 

 

1,320

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on disposal of assets, net

 

 

(4

)

 

 

1

 

 

 

(3

)

 

 

(58

)

 

Operating income (loss)

 

 

28

 

 

 

(2

)

 

 

(22

)

 

 

(69

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

4

 

 

 

4

 

 

 

6

 

 

 

7

 

 

Interest expense, net of amounts capitalized

 

 

(100

)

 

 

(115

)

 

 

(202

)

 

 

(230

)

 

Gain on retirement of debt

 

 

 

 

 

 

 

 

 

 

 

51

 

 

Other, net

 

 

3

 

 

 

14

 

 

 

4

 

 

 

23

 

 

 

 

 

(93

)

 

 

(97

)

 

 

(192

)

 

 

(149

)

 

Loss before income tax expense (benefit)

 

 

(65

)

 

 

(99

)

 

 

(214

)

 

 

(218

)

 

Income tax expense (benefit)

 

 

3

 

 

 

4

 

 

 

29

 

 

 

(17

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(68

)

 

 

(103

)

 

 

(243

)

 

 

(201

)

 

Net income attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

1

 

 

Net loss attributable to controlling interest

 

$

(68

)

 

$

(103

)

 

$

(243

)

 

$

(202

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share, basic and diluted

 

$

(0.10

)

 

$

(0.17

)

 

$

(0.36

)

 

$

(0.33

)

 

Weighted-average shares, basic and diluted

 

 

692

 

 

 

621

 

 

 

678

 

 

 

619

 

 


 

TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)


 

 

 

 

 

 

 

 

 

 

June 30, 

 

December 31, 

 

 

   

2022

   

2021

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

729

 

 

$

976

 

 

Accounts receivable, net of allowance of $2 at June 30, 2022 and December 31, 2021

 

 

610

 

 

 

492

 

 

Materials and supplies, net of allowance of $191 and $183 at June 30, 2022 and December 31, 2021, respectively

 

 

389

 

 

 

392

 

 

Restricted cash and cash equivalents

 

 

432

 

 

 

436

 

 

Other current assets

 

 

126

 

 

 

148

 

 

Total current assets

 

 

2,286

 

 

 

2,444

 

 

 

 

 

 

 

 

 

 

Property and equipment

 

 

23,633

 

 

 

23,152

 

 

Less accumulated depreciation

 

 

(6,394

)

 

 

(6,054

)

 

Property and equipment, net

 

 

17,239

 

 

 

17,098

 

 

Contract intangible assets

 

 

114

 

 

 

173

 

 

Deferred tax assets, net

 

 

7

 

 

 

7

 

 

Other assets

 

 

904

 

 

 

959

 

 

Total assets

 

$

20,550

 

 

$

20,681

 

 

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

 

Accounts payable

 

$

173

 

 

$

228

 

 

Accrued income taxes

 

 

6

 

 

 

17

 

 

Debt due within one year

 

 

847

 

 

 

513

 

 

Other current liabilities

 

 

507

 

 

 

545

 

 

Total current liabilities

 

 

1,533

 

 

 

1,303

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

6,376

 

 

 

6,657

 

 

Deferred tax liabilities, net

 

 

472

 

 

 

447

 

 

Other long-term liabilities

 

 

994

 

 

 

1,068

 

 

Total long-term liabilities

 

 

7,842

 

 

 

8,172

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares, CHF 0.10 par value, 905,093,509 authorized, 142,362,675 conditionally authorized, 754,244,753 issued

 

 

 

 

 

 

 

and 705,711,203 outstanding at June 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

 

 

69

 

 

 

64

 

 

Additional paid-in capital

 

 

13,899

 

 

 

13,683

 

 

Accumulated deficit

 

 

(2,701

)

 

 

(2,458

)

 

Accumulated other comprehensive loss

 

 

(93

)

 

 

(84

)

 

Total controlling interest shareholders’ equity

 

 

11,174

 

 

 

11,205

 

 

Noncontrolling interest

 

 

1

 

 

 

1

 

 

Total equity

 

 

11,175

 

 

 

11,206

 

 

Total liabilities and equity

 

$

20,550

 

 

$

20,681

 

 


 

TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


 

 

 

 

 

 

 

 

 

 

Six months ended

 

 

 

June 30, 

 

 

    

2022

    

2021

   

Cash flows from operating activities

 

 

 

 

 

 

 

Net loss

 

$

(243

)

 

$

(201

)

 

Adjustments to reconcile to net cash provided by operating activities:

 

 

 

 

 

 

 

Contract intangible asset amortization

 

 

59

 

 

 

113

 

 

Depreciation and amortization

 

 

367

 

 

 

373

 

 

Share-based compensation expense

 

 

15

 

 

 

14

 

 

Loss on disposal of assets, net

 

 

3

 

 

 

58

 

 

Gain on retirement of debt

 

 

 

 

 

(51

)

 

Deferred income tax expense

 

 

25

 

 

 

11

 

 

Other, net

 

 

32

 

 

 

14

 

 

Changes in deferred revenues, net

 

 

(31

)

 

 

(72

)

 

Changes in deferred costs, net

 

 

13

 

 

 

7

 

 

Changes in other operating assets and liabilities, net

 

 

(200

)

 

 

(17

)

 

Net cash provided by operating activities

 

 

40

 

 

 

249

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Capital expenditures

 

 

(221

)

 

 

(100

)

 

Investments in unconsolidated affiliates

 

 

(19

)

 

 

 

 

Investment in loans to unconsolidated affiliates

 

 

 

 

 

(33

)

 

Proceeds from disposal of assets, net

 

 

4

 

 

 

7

 

 

Net cash used in investing activities

 

 

(236

)

 

 

(126

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

Repayments of debt

 

 

(257

)

 

 

(239

)

 

Proceeds from issuance of shares, net of issue costs

 

 

206

 

 

 

66

 

 

Other, net

 

 

(4

)

 

 

(20

)

 

Net cash used in financing activities

 

 

(55

)

 

 

(193

)

 

 

 

 

 

 

 

 

 

Net decrease in unrestricted and restricted cash and cash equivalents

 

 

(251

)

 

 

(70

)

 

Unrestricted and restricted cash and cash equivalents, beginning of period

 

 

1,412

 

 

 

1,560

 

 

Unrestricted and restricted cash and cash equivalents, end of period

 

$

1,161

 

 

$

1,490

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TRANSOCEAN LTD. AND SUBSIDIARIES

 

FLEET OPERATING STATISTICS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30, 

 

March 31,

 

June 30, 

 

 

June 30, 

 

June 30, 

 

Contract Drilling Revenues (in millions)

    

2022

  

2022

  

2021

  

 

2022

  

2021

  

Contract drilling revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ultra-deepwater floaters

 

$

451

 

$

390

 

$

424

 

 

$

841

 

$

860

 

Harsh environment floaters

 

 

241

 

 

196

 

 

232

 

 

 

437

 

 

449

 

Total contract drilling revenues

 

$

692

 

$

586

 

$

656

 

 

$

1,278

 

$

1,309

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30, 

 

March 31,

 

June 30, 

 

 

June 30, 

 

June 30, 

 

Average Daily Revenue (1)

    

2022

  

2022

  

2021

  

 

2022

  

2021

  

Ultra-deepwater floaters

 

$

334,400

 

$

305,600

 

$

363,500

 

 

$

320,300

 

$

367,500

 

Harsh environment floaters

 

 

406,000

 

 

399,100

 

 

379,900

 

 

 

402,800

 

 

378,900

 

Total fleet average daily revenue

 

$

358,100

 

 

334,500

 

$

369,400

 

 

$

346,800

 

$

371,500

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Six months ended

 

 

  

June 30, 

  

March 31,

  

June 30, 

 

  

June 30, 

  

June 30, 

 

Utilization (2)

 

2022

 

2022

 

2021

 

 

2022

 

2021

 

Ultra-deepwater floaters

 

53.8

%

 

49.8

%

 

48.1

%

 

 

51.8

%

 

48.0

%

 

Harsh environment floaters

 

70.0

%

 

60.3

%

 

73.2

%

 

 

65.2

%

 

68.9

%

 

Total fleet average rig utilization

 

58.2

%

 

52.7

%

 

54.9

%

 

 

55.4

%

 

53.8

%

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Six months ended

 

 

June 30, 

 

March 31,

 

June 30, 

 

 

June 30, 

 

June 30, 

Revenue Efficiency (3)

  

2022

  

2022

  

2021

 

  

2022

  

2021

Ultra-deepwater floaters

 

96.8

%

 

94.9

%

 

97.9

%

 

 

95.9

%

 

97.5

%

Harsh environment floaters

 

99.5

%

 

95.0

%

 

98.2

%

 

 

97.4

%

 

98.1

%

Total fleet average revenue efficiency

 

97.8

%

 

94.9

%

 

98.0

%

 

 

96.4

%

 

97.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

  

06/30/22

  

06/30/22

  

03/31/22

 

Adjusted Net Loss

 

 

 

 

 

 

 

 

 

 

Net loss attributable to controlling interest, as reported

 

$

(243

)

 

$

(68

)

 

$

(175

)

 

Discrete tax items

 

 

(8

)

 

 

 

 

 

(8

)

 

Net loss, as adjusted

 

$

(251

)

 

$

(68

)

 

$

(183

)

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Diluted Loss Per Share:

 

 

 

 

 

 

 

 

 

 

Diluted loss per share, as reported

 

$

(0.36

)

 

$

(0.10

)

 

$

(0.26

)

 

Discrete tax items

 

 

(0.01

)

 

 

 

 

 

(0.02

)

 

Diluted loss per share, as adjusted

 

$

(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

 

 

 

06/30/22

 

06/30/22

 

03/31/22

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling revenues

 

$

1,278

 

 

$

692

 

 

$

586

 

 

Contract intangible asset amortization

 

 

59

 

 

 

30

 

 

 

29

 

 

Adjusted Contract Drilling Revenues

 

$

1,337

 

 

$

722

 

 

$

615

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(243

)

 

$

(68

)

 

$

(175

)

 

Interest expense, net of interest income

 

 

196

 

 

 

96

 

 

 

100

 

 

Income tax expense

 

 

29

 

 

 

3

 

 

 

26

 

 

Depreciation and amortization

 

 

367

 

 

 

184

 

 

 

183

 

 

Contract intangible asset amortization

 

 

59

 

 

 

30

 

 

 

29

 

 

EBITDA

 

 

408

 

 

 

245

 

 

 

163

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

408

 

 

$

245

 

 

$

163

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA margin

 

 

30.5

%

 

 

33.9

%

 

 

26.5

%

 

Adjusted EBITDA margin

 

 

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

 

Six months ended

 

 

 

June 30, 

    

March 31,

    

June 30, 

 

June 30, 

 

June 30, 

 

 

 

2022

    

2022

    

2021

    

2022

    

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

$

(65

)

 

$

(149

)

 

$

(99

)

 

$

(214

)

 

$

(218

)

 

Loss on disposal of assets, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

60

 

 

Gain on retirement of debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(51

)

 

Adjusted loss before income taxes

 

$

(65

)

 

$

(149

)

 

$

(99

)

 

$

(214

)

 

$

(209

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

$

3

 

 

$

26

 

 

$

4

 

 

$

29

 

 

$

(17

)

 

Loss on disposal of assets, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on retirement of debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in estimates (1)

 

 

 

 

 

8

 

 

 

6

 

 

 

8

 

 

 

33

 

 

Adjusted income tax expense (2)

 

$

3

 

 

$

34

 

 

$

10

 

 

$

37

 

 

$

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate (3)

 

 

(4.7

)%

 

 

(17.6

)%

 

 

(4.6

)%

 

 

(13.7

)%

 

 

7.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate, excluding discrete items (4)

 

 

(5.2

)%

 

 

(22.8

)%

 

 

(10.2

)%

 

 

(17.5

)%

 

 

(7.8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 June 30, 2022 included $8 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.