EX-99.1 2 rig-20231030xex99d1.htm EX-99.1

EXHIBIT 99.1

Graphic

TRANSOCEAN LTD. REPORTS THIRD QUARTER 2023 RESULTS

Total contract drilling revenues were $713 million, compared to $729 million in the second quarter of 2023 (total adjusted contract drilling revenues of $721 million, compared to $748 million in the second quarter of 2023);
Revenue efficiency(1) was 95.4%, compared to 97.2% in the prior quarter;
Operating and maintenance expense was $524 million, compared to $484 million in the prior quarter;
Net loss attributable to controlling interest was $220 million, $0.28 per diluted share, compared to $165 million, $0.22 per diluted share, in the second quarter of 2023;
Adjusted EBITDA was $162 million, compared to $237 million in the prior quarter; and
Contract backlog was $9.4 billion as of the October 2023 Fleet Status Report.

STEINHAUSEN, Switzerland—October 30, 2023—Transocean Ltd. (NYSE: RIG) today reported a net loss attributable to controlling interest of $220 million, $0.28 per diluted share, for the three months ended September 30, 2023.

Third quarter results included net favorable items of $60 million, or $0.08 per diluted share as follows:

$65 million, $0.09 per diluted share, discrete tax items, net; and
$5 million, $0.01 per diluted share, loss on impairment of assets.

After consideration of these net favorable items, third quarter 2023 adjusted net loss was $280 million, or $0.36 per diluted share.

Contract drilling revenues for the three months ended September 30, 2023 decreased sequentially by $16 million to $713 million, primarily due to idle time on three ultra-deepwater floaters and lower revenue generated by four rigs that were undergoing contract preparation and mobilization activities during the quarter. Lower fleet revenue efficiency in the third quarter also contributed to the decrease. This was partially offset by increased average daily revenues for three rigs and a full quarter of revenues from the newbuild ultra-deepwater drillship Deepwater Titan and the harsh environment semisubmersible floater Transocean Norge.

Contract intangible amortization represented a non-cash revenue reduction of $8 million, compared to $19 million in the prior quarter.

Operating and maintenance expense was $524 million, compared with $484 million in the prior quarter. The sequential increase was primarily due to higher shipyard costs and contract preparation for seven rigs and a full quarter of operations from Deepwater Titan and Transocean Norge.


Interest expense, net of amounts capitalized, was $232 million, compared with $168 million in the prior quarter. Interest expense included a non-cash loss of $93 million, compared with $46 million in the prior quarter, associated with the fair value adjustment of the bifurcated exchange feature embedded in our exchangeable bonds issued in September of 2022. Interest income was $12 million, compared with $11 million in the previous quarter.

The Effective Tax Rate(2) was 16.3%, up from 8.8% in the prior quarter. The increase was primarily due to settlements and expirations of uncertain tax positions and releases of valuation allowances. The Effective Tax Rate excluding discrete items was (8.7)% compared to 11.7% in the previous quarter.

Cash used in operating activities was $44 million during the third quarter of 2023, representing a decrease of $201 million compared to the prior quarter. The sequential decrease is primarily due to increased cash disbursements for preparing and mobilizing seven rigs for contracts and timing of interest payments.

Third quarter 2023 capital expenditures of $50 million decreased primarily due to reduced spending for our newbuild rigs under construction. This compares with $76 million in the prior quarter.

“For the sixth consecutive quarter Transocean increased its backlog, ending the third quarter at $9.4 billion dollars. Not only is the size of our backlog industry-leading, but it also contains many of the industry’s highest dayrate fixtures,” said Chief Executive Officer, Jeremy Thigpen. “In particular, we are pleased to have secured a three-year contract for Deepwater Aquila in Brazil, as it facilitated the acquisition of the outstanding interest in Liquila Ventures Ltd. The addition of the Aquila further reinforces Transocean’s leadership position in the high-specification, ultra-deepwater drilling market, as she is our eighth 1400 short ton, dual activity, seventh generation drillship, of which, there are only 12 in the global competitive fleet.”

Thigpen continued “Based on our ongoing conversations with customers, we firmly believe that we remain in the early stages of a multi-year upcycle. With our fleet of the most capable high-specification ultra-deepwater drillships and harsh environment semisubmersibles, Transocean is uniquely positioned to capitalize on current and future opportunities.”


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 28 ultra-deepwater floaters and nine 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. CEST, on Tuesday, October 31, 2023, to discuss the results. To participate, dial +1 785-424-1226 and refer to conference code 403372 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. CEST, on Tuesday, October 31, 2023. The replay, which will be archived for approximately 30 days, can be accessed at +1 402-220-7358, passcode 403372. 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, 2022, 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)

Three months ended

Nine months ended

September 30, 

September 30, 

   

2023

   

2022

   

2023

   

2022

 

Contract drilling revenues

$

713

$

691

$

2,091

$

1,969

Costs and expenses

Operating and maintenance

524

411

1,417

1,256

Depreciation and amortization

192

182

560

549

General and administrative

44

42

137

127

760

635

2,114

1,932

Loss on impairment of assets

(5)

(58)

Loss on disposal of assets, net

(3)

(3)

(173)

(6)

Operating income (loss)

(55)

53

(254)

31

Other income (expense), net

Interest income

12

9

42

15

Interest expense, net of amounts capitalized

(232)

(96)

(649)

(298)

Gain (loss) on retirement of debt

7

(32)

7

Other, net

12

(6)

35

(2)

(208)

(86)

(604)

(278)

Loss before income tax expense (benefit)

(263)

(33)

(858)

(247)

Income tax expense (benefit)

(43)

(5)

(8)

24

Net loss

(220)

(28)

(850)

(271)

Net income attributable to noncontrolling interest

Net loss attributable to controlling interest

$

(220)

$

(28)

$

(850)

$

(271)

Loss per share, basic and diluted

$

(0.28)

$

(0.04)

$

(1.13)

$

(0.39)

Weighted-average shares, basic and diluted

774

714

755

690


TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)

September 30,

December 31,

   

2023

   

2022

 

Assets

Cash and cash equivalents

 

$

594

$

683

Accounts receivable, net of allowance of $2 at September 30, 2023 and December 31, 2022

532

485

Materials and supplies, net of allowance of $206 and $199 at September 30, 2023 and December 31, 2022, respectively

410

388

Restricted cash and cash equivalents

214

308

Other current assets

217

144

Total current assets

1,967

2,008

Property and equipment

23,674

24,217

Less accumulated depreciation

(6,761)

(6,748)

Property and equipment, net

16,913

17,469

Contract intangible assets

11

56

Deferred tax assets, net

26

13

Other assets

1,091

890

Total assets

 

$

20,008

$

20,436

Liabilities and equity

Accounts payable

 

$

316

$

281

Accrued income taxes

20

19

Debt due within one year

320

719

Other current liabilities

525

539

Total current liabilities

1,181

1,558

Long-term debt

7,066

6,628

Deferred tax liabilities, net

507

493

Other long-term liabilities

936

965

Total long-term liabilities

8,509

8,086

Commitments and contingencies

Shares, CHF 0.10 par value, 1,021,294,549 authorized, 142,362,093 conditionally authorized, 843,715,858 issued

and 782,540,300 outstanding at September 30, 2023, and 905,093,509 authorized, 142,362,675 conditionally

authorized, 797,244,753 issued and 721,888,427 outstanding at December 31, 2022

78

71

Additional paid-in capital

14,364

13,984

Accumulated deficit

(3,929)

(3,079)

Accumulated other comprehensive loss

(196)

(185)

Total controlling interest shareholders’ equity

10,317

10,791

Noncontrolling interest

1

1

Total equity

10,318

10,792

Total liabilities and equity

 

$

20,008

$

20,436


TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Nine months ended

September 30, 

    

2023

    

2022

   

Cash flows from operating activities

Net loss

 

$

(850)

$

(271)

Adjustments to reconcile to net cash provided by operating activities:

Contract intangible asset amortization

45

98

Depreciation and amortization

560

549

Share-based compensation expense

30

22

Loss on impairment of assets

58

Loss on disposal of assets, net

173

6

Fair value adjustment to bifurcated compound exchange feature

272

(Gain) loss on retirement of debt

32

(7)

Deferred income tax expense

1

20

Other, net

59

56

Changes in deferred revenues, net

40

(49)

Changes in deferred costs, net

(125)

23

Changes in other operating assets and liabilities, net

(229)

(177)

Net cash provided by operating activities

66

270

Cash flows from investing activities

Capital expenditures

(207)

(308)

Investments in equity of unconsolidated affiliates

(10)

(27)

Investment in loans to unconsolidated affiliates

(3)

(2)

Proceeds from disposal of assets, net

10

4

Proceeds from acquisition of unconsolidated affiliate

7

Net cash used in investing activities

(203)

(333)

Cash flows from financing activities

Repayments of debt

(1,707)

(453)

Proceeds from issuance of debt, net of issue costs

1,664

176

Proceeds from issuance of shares, net of issue costs

264

Proceeds from issuance of warrants, net of issue costs

12

Other, net

(3)

(7)

Net cash used in financing activities

(46)

(8)

Net decrease in unrestricted and restricted cash and cash equivalents

(183)

(71)

Unrestricted and restricted cash and cash equivalents, beginning of period

991

1,412

Unrestricted and restricted cash and cash equivalents, end of period

 

$

808

$

1,341


TRANSOCEAN LTD. AND SUBSIDIARIES

FLEET OPERATING STATISTICS

Three months ended

September 30, 

June 30

September 30, 

Contract Drilling Revenues (in millions)

    

2023

  

2023

  

2022

  

Ultra-deepwater floaters

$

516

$

536

$

433

Harsh environment floaters

197

193

258

Total contract drilling revenues

$

713

$

729

$

691

Three months ended

September 30, 

June 30

September 30, 

Average Daily Revenue (1)

    

2023

  

2023

  

2022

  

Ultra-deepwater floaters

$

406,500

$

380,600

$

326,600

Harsh environment floaters

 

357,400

 

332,000

 

374,000

Total fleet average daily revenue

$

391,300

$

367,000

$

343,400

Three months ended

 

  

  

September 30, 

  

June 30

  

September 30, 

 

Utilization (2)

2023

2023

2022

 

Ultra-deepwater floaters

45.0

%

53.7

%

53.1

%

Harsh environment floaters

63.0

%

57.7

%

75.7

%

Total fleet average rig utilization

49.4

%

54.7

%

59.4

%

Three months ended

September 30, 

June 30

September 30, 

Revenue Efficiency (3)

  

  

2023

  

2023

  

2022

Ultra-deepwater floaters

94.3

%

97.3

%

93.5

%

Harsh environment floaters

98.1

%

96.8

%

97.5

%

Total fleet average revenue efficiency

95.4

%

97.2

%

95.0

%

(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

  

09/30/23

  

09/30/23

  

06/30/23

  

06/30/23

  

03/31/23

 

Adjusted Net Loss

Net loss attributable to controlling interest, as reported

$

(850)

$

(220)

$

(630)

$

(165)

$

(465)

Loss on impairment of assets

58

5

53

53

Loss on disposal of assets, net

169

169

169

Loss on debt conversion

3

3

3

Loss on retirement of debt

32

32

32

Discrete tax items

 

(77)

 

(65)

 

(12)

 

(1)

 

(11)

Net loss, as adjusted

$

(665)

$

(280)

$

(385)

$

(110)

$

(275)

Adjusted Diluted Loss Per Share:

Diluted loss per share, as reported

$

(1.13)

$

(0.28)

$

(0.85)

$

(0.22)

$

(0.64)

Loss on impairment of assets

0.08

0.01

0.07

0.07

Loss on disposal of assets, net

0.23

0.23

0.23

Loss on debt conversion

Loss on retirement of debt

 

0.04

 

 

0.04

 

 

0.04

Discrete tax items

 

(0.10)

 

(0.09)

 

(0.01)

 

 

(0.01)

Diluted loss per share, as adjusted

$

(0.88)

$

(0.36)

$

(0.52)

$

(0.15)

$

(0.38)

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)


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

  

09/30/23

  

09/30/23

 

06/30/23

  

06/30/23

 

03/31/23

 

Contract drilling revenues

$

2,091

$

713

$

1,378

$

729

$

649

Contract intangible asset amortization

45

8

37

19

18

Adjusted Contract Drilling Revenues

$

2,136

$

721

$

1,415

$

748

$

667

Net loss

$

(850)

$

(220)

$

(630)

$

(165)

$

(465)

Interest expense, net of interest income

607

220

387

157

230

Income tax expense (benefit)

(8)

(43)

35

(16)

51

Depreciation and amortization

560

192

368

186

182

Contract intangible asset amortization

45

8

37

19

18

EBITDA

354

157

197

181

16

Loss on disposal of assets, net

169

169

169

Loss on impairment

58

5

53

53

Loss on debt conversion

3

3

3

Loss on retirement of debt

32

32

32

Adjusted EBITDA

$

616

$

162

$

454

$

237

$

217

Loss margin

(40.7)

%

(30.9)

%

(45.7)

%

(22.6)

%

(71.6)

%

EBITDA margin

16.6

%

21.8

%

13.9

%

24.2

%

2.4

%

Adjusted EBITDA margin

28.9

%

22.5

%

32.1

%

31.7

%

32.5

%

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