Total contract drilling revenues were $792 million (total adjusted contract drilling revenues of $839 million), compared with $784 million in the third quarter of 2019 (total adjusted contract drilling revenues of $832 million);Revenue efficiency⁽¹⁾ was 96.2%, compared with 97.0% in the prior quarter;Operating and maintenance expense was $575 million, compared with $547 million in the previous quarter;Net loss attributable to controlling interest was $51 million, $0.08 per diluted share, compared with net loss attributable to controlling interest of $825 million, $1.35 per diluted share, in the third quarter of 2019;Adjusted net loss was $263 million, $0.43 per diluted share, excluding $212 million of net favorable items. This compares with adjusted net loss of $234 million, $0.38 per diluted share, in the prior quarter;Adjusted EBITDA was $223 million, compared with adjusted EBITDA of $245 million in the prior quarter; andContract backlog was $10.2 billion as of the February 2020 Fleet Status Report.STEINHAUSEN, Switzerland, Feb. 17, 2020 (GLOBE NEWSWIRE) — Transocean Ltd. (NYSE: RIG) today reported net loss attributable to controlling interest of $51 million, $0.08 per diluted share, for the three months ended December 31, 2019.Fourth quarter 2019 results included net favorable items of $212 million, or $0.35 per diluted share, as follows:$132 million, $0.22 per diluted share, gain on termination of construction contracts,$110 million, $0.18 per diluted share, related to discrete tax items; and$2 million, gain on disposal of assets.These favorable items were partially offset by:$25 million, $0.04 per diluted share, loss on impairment of assets,$5 million, $0.01 per diluted share, in acquisition and restructuring costs; and$2 million, loss on retirement of debt.After consideration of these net favorable items, fourth quarter 2019 adjusted net loss was $263 million, or $0.43 per diluted share.Contract drilling revenues for the three months ended December 31, 2019, increased sequentially by $8 million, primarily due to rig reactivations, including of the ultra‑deepwater floaters Deepwater Mykonos and Deepwater Corcovado. The quarter was also favorably impacted by higher utilization on the rest of the company’s ultra‑deepwater fleet and a full quarter of revenues from the newbuild harsh environment floater Transocean Norge. These increases were partially offset by lower reimbursable revenue and lower revenue efficiency.Fourth quarter 2019 results reflected a non-cash revenue reduction of $47 million, compared to $48 million in the third quarter, from contract intangible amortization associated with the Songa and Ocean Rig acquisitions.Operating and maintenance expense was $575 million, compared with $547 million in the prior quarter. The sequential increase was the result of a full quarter of operations from the harsh environment floater Transocean Norge and higher concentration of maintenance expenses in the fourth quarter related to our capital spares program and in service fleet. This was partially offset by lower expenses reimbursed by our customers.General and administrative expense was $54 million, up from $45 million in the third quarter of 2019. The increase was primarily due to legal, professional and advisory fees.Interest expense, net of amounts capitalized, was $160 million, compared with $166 million in the prior quarter and capitalized interest was $10 million, unchanged from the prior quarter. Interest income was $10 million, compared with $11 million in the previous quarter.The Effective Tax Rate⁽²⁾ was 30.3%, up from (6.9)% in the prior quarter. The increase was primarily due to releases of unrecognized tax benefits. The Effective Tax Rate excluding discrete items was (47.2)% compared to (37.5)% in previous quarter.Cash flows provided by operating activities were $147 million, compared to $91 million in the prior quarter. The fourth quarter increase was primarily due to increased cash received from our unconsolidated affiliates for delivery and mobilization of Transocean Norge.Fourth quarter 2019 capital expenditures of $128 million were related to the company’s maintenance capital which includes the reactivation of Deepwater Corcovado and Deepwater Mykonos and our newbuild drillships under construction. This compares with $121 million in the previous quarter.“I would like to recognize, and thank, the entire Transocean team for once again delivering solid operating and financial results in the fourth quarter,” said President and Chief Executive Officer Jeremy Thigpen. “As utilization across our floating fleet improved for the first time in over five years, and dayrates for high‑specification ultra‑deepwater assets increased 75% over the course of the year, we believe that 2019 marked the beginning of the much-anticipated recovery in the offshore drilling industry.”Thigpen added, “As a direct result of our strong performance in 2019, we generated almost $1 billion in adjusted EBITDA, which, when combined with the multiple financing transactions consummated throughout the year, further bolstered our liquidity position. This liquidity, coupled with our industry‑leading $10.2 billion backlog, provides us the financial stability to continue to invest in our people, the maintenance of our assets, and new technologies that will further differentiate us in the eyes of our customers and shareholders.”“Looking forward, we are mindful of the risks COVID-19 presents to near-term oil demand, but believe that improving longer-term market fundamentals, along with an increasing list of opportunities, bodes well for a year-over-year increase in contracting activity, utilization and dayrates.”Full Year 2019For the year ended December 31, 2019, net loss attributable to controlling interest totaled $1.3 billion, or $2.05 per diluted share. Full year results included $368 million, or $0.60 per diluted share, net of unfavorable items listed as follows:$609 million, $0.99 per diluted share, loss on impairment, primarily for three floaters previously announced for retirement,$41 million, $0.07 per diluted share, loss on retirement of debt,$6 million, $0.01 per diluted share, in acquisition costs and restructuring; and$5 million, $0.01 per diluted share, loss on disposal of assets.These unfavorable items were partially offset by:$150 million, $0.24 per diluted share, related to discrete tax items,$132 million, $0.22 per diluted share, gain on termination of construction contracts; and$11 million, $0.02 per diluted share, gain on bargain purchase.After consideration of these net unfavorable items, adjusted net loss for 2019 was $887 million, or $1.45 per diluted share.Non-GAAP Financial MeasuresWe 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 TransoceanTransocean 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 45 mobile offshore drilling units consisting of 28 ultra-deepwater floaters, 14 harsh environment floaters and three midwater floaters. In addition, Transocean is constructing two ultra-deepwater drillships.For more information about Transocean, please visit: www.deepwater.com.Conference Call InformationTransocean will conduct a teleconference starting at 9 a.m. EST, 3 p.m. CET, on Tuesday, February 18, 2020, to discuss the results. To participate, dial +1 334-777-6978 and refer to conference code 5581050 approximately 10 minutes prior to the scheduled start time.The teleconference will be simulcast in a listen-only mode at: www.deepwater.com, by selecting Investors, News, and Webcasts. Supplemental materials that may be referenced during the teleconference will be available at: www.deepwater.com, by selecting Investors, Financial Reports.A replay of the conference call will be available after 12 p.m. EST, 6 p.m. CET, on February 18, 2020. The replay, which will be archived for approximately 30 days, can be accessed at +1 719-457-0820, passcode 5581050 and pin 3332. The replay will also be available on the company’s website.Forward-Looking StatementsThe statements described in this press release 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 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 future prices of oil and gas, the intention to scrap certain drilling rigs, the results of our final accounting for the periods presented in this press release, the ability to successfully integrate the Transocean and Ocean Rig businesses, the success of our business following the acquisition of Ocean Rig UDW Inc. (“Ocean Rig”) and Songa Offshore SE (“Songa”), 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, 2018, 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 article 652a or article 1156 of the Swiss Code of Obligations. 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
Analyst Contacts:
Bradley Alexander
+1 713-232-7515Lexington May
+1 832-587-6515Media Contact:
Pam Easton
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