0001451505false0001451505us-gaap:CommonStockMember2022-11-022022-11-020001451505rig:SeniorUnsecuredExchangeableBonds0.5PercentMember2022-11-022022-11-0200014515052022-11-022022-11-02

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (date of earliest event reported): November 2, 2022

Graphic

TRANSOCEAN LTD.

(Exact name of registrant as specified in its charter)

Switzerland

001-38373

98-0599916

(State or other jurisdiction of incorporation or organization)

(Commission file number)

(I.R.S. Employer Identification No.)

Turmstrasse 30

Steinhausen, Switzerland

CH-6312

(Address of principal executive offices)

(Zip Code)

+41 (41) 749-0500

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Shares, CHF 0.10 par value

RIG

New York Stock Exchange

0.50% Exchangeable Senior Bonds due 2023

RIG/23

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 2.02.

Results of Operations and Financial Condition

Transocean Ltd.’s press release dated November 2, 2022, concerning financial results for the third quarter 2022, furnished as Exhibit 99.1 to this report, is incorporated by reference herein.

Item 9.01.

Financial Statements and Exhibits

(d)  Exhibits

The exhibit to this report is furnished pursuant to Item 9.01 as follows:

Number

Description

99.1

Press Release Reporting Third Quarter 2022 Financial Results

101

Interactive data files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting Language

104

Cover Page Interactive Data File (formatted as inline XBRL)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

TRANSOCEAN LTD.

Date: November 2, 2022

By

/s/ Daniel Ro-Trock

Daniel Ro-Trock

Authorized Person

EXHIBIT 99.1

https://cdn.kscope.io/7125fd8d530a7ab563480705b7dff6ea-logoa03.gif

TRANSOCEAN LTD. REPORTS THIRD QUARTER 2022 RESULTS

Total contract drilling revenues were $691 million, compared to $692 million in the second quarter of 2022 (total adjusted contract drilling revenues of $730 million, compared to $722 million in the second quarter of 2022);
Revenue efficiency(1) was 95.0%, compared to 97.8% in the prior quarter;
Operating and maintenance expense was $411 million, compared to $433 million in the prior period;
Net loss attributable to controlling interest was $28 million, $0.04 per diluted share, compared to $68 million, $0.10 per diluted share, in the second quarter of 2022;
Adjusted EBITDA was $268 million, compared to $245 million in the prior quarter; and
Contract backlog was $7.3 billion as of the October 2022 Fleet Status Report.

STEINHAUSEN, Switzerland—November 2, 2022—Transocean Ltd. (NYSE: RIG) today reported a net loss attributable to controlling interest of $28 million, $0.04 per diluted share, for the three months ended September 30, 2022.

Third quarter results included favorable items of $13 million, or $0.02 per diluted share as follows:

$7 million, $0.01 per diluted share, gain on retirement of debt; and
$6 million, $0.01 per diluted share, discrete tax items.

After consideration of these favorable items, third quarter 2022 adjusted net loss was $41 million, $0.06 per diluted share.

At $691 million, contract drilling revenues for the three months ended September 30, 2022 were approximately flat sequentially. Lower revenue efficiency in the period was partially offset by net $14 million in revenue associated with the early termination of the Transocean Equinox contract and one additional calendar day in the third quarter.

Contract intangible amortization represented a non-cash revenue reduction of $39 million, compared to $30 million in the second quarter of 2022. The increase was primarily due to the accelerated recognition of $10 million of remaining contract intangible for Transocean Equinox as the result of customer’s early termination of the drilling contract.

Operating and maintenance expense was $411 million, compared with $433 million in the prior quarter. The sequential decrease was primarily due to reduced activity from rigs that became idle in the third quarter and the favorable impact of the strengthening U.S. dollar.


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

Interest expense, net of amounts capitalized, was $96 million, compared with $100 million in the prior quarter. Interest income was $9 million, compared with $4 million in the previous quarter.

The Effective Tax Rate(2) was 16.3% in the current quarter and (4.7)% in the prior quarter. The change in the rate was primarily due to release of valuation allowance and movement in deferred tax expense. The Effective Tax Rate excluding discrete items was (1.2)% compared to (5.2)% in the previous quarter.

Cash provided by operating activities was $230 million, compared to $41 million in the prior quarter. The sequential increase is primarily due to lower payment to vendors and increased collections from customers, partially offset by the timing of interest payments.

Third quarter 2022 capital expenditures of $87 million, compared to $115 million in the prior quarter, were primarily related to the company’s newbuild drillships under construction, including the cash component of the final milestone payment for the delivery of Deepwater Atlas in June 2022.

“The Transocean team continued to provide safe, reliable and efficient operations during the third quarter, resulting in uptime of 97.5%” said Chief Executive Officer Jeremy Thigpen, “I would like to extend my sincere gratitude to the entire Transocean team – offshore and onshore – for delivering for our customers and continuing to take the steps necessary to maximize value for our shareholders.”

Thigpen added, “The robust demand for our assets and services helped us secure an incremental $1.6 billion since our July 25 Fleet Status Report, contributing to our already industry-leading backlog. We remain encouraged by the sustained strength in the offshore drilling market globally and expect demand for the increasingly scarce high-capability drilling rigs Transocean owns and operates to remain strong for the foreseeable future, resulting in higher utilization and dayrates.”

Non-GAAP Financial Measures

We present our operating results in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). We believe certain financial measures, such as Adjusted Contract Drilling Revenues, EBITDA, Adjusted EBITDA and Adjusted Net Income, which are non-GAAP measures, provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We believe that such non-GAAP measures, when read in conjunction with our operating results presented under U.S. GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. Such non-GAAP measures should be considered as a supplement to, and not as a substitute for, financial measures prepared in accordance with U.S. GAAP.

All non-GAAP measure reconciliations to the most comparative U.S. GAAP measures are displayed in quantitative schedules on the company’s website at: www.deepwater.com.


About Transocean

Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services and believes that it operates one of the most versatile offshore drilling fleets in the world.

Transocean owns or has partial ownership interests in and operates a fleet of 38 mobile offshore drilling units consisting of 28 ultra-deepwater floaters and 10 harsh environment floaters. In addition, Transocean is constructing one ultra-deepwater drillship.

For more information about Transocean, please visit: www.deepwater.com.

Conference Call Information

Transocean will conduct a teleconference starting at 9 a.m. EDT, 2 p.m. CET, on Thursday, November 3, 2022, to discuss the results. To participate, dial +1 785-424-1205 and refer to conference code 260431 approximately 15 minutes prior to the scheduled start time.

The teleconference will be simulcast in a listen-only mode at: www.deepwater.com, by selecting Investors, News, and Webcasts. Supplemental materials that may be referenced during the teleconference will be available at: www.deepwater.com, by selecting Investors, Financial Reports.

A replay of the conference call will be available after 12 p.m. EDT, 5 p.m. CET, on Thursday, November 3, 2022. The replay, which will be archived for approximately 30 days, can be accessed at +1 402-220-4975, passcode 260431. The replay will also be available on the company’s website.

Forward-Looking Statements

The statements described herein that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements could contain words such as "possible," "intend," "will," "if," "expect," or other similar expressions. Forward-looking statements are based on management’s current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, estimated duration of customer contracts, contract dayrate amounts, future contract commencement dates and locations, planned shipyard projects and other out-of-service time, sales of drilling units, timing of the company’s newbuild deliveries, operating hazards and delays, risks associated with international operations, actions by customers and other third parties, the fluctuation of current and future prices of oil and gas, the global and regional supply and demand for oil and gas, the intention to scrap certain drilling rigs, the success of our business following prior acquisitions, the effects of the spread of and mitigation efforts by governments, businesses and individuals related to contagious illnesses, such as COVID-19, and other factors, including those and other risks discussed in the company's most recent Annual Report on Form 10-K for the year ended December 31, 2021, and in the company's other filings with the SEC, which are available free of charge on the SEC's website at: www.sec.gov. Should one or more of these risks or uncertainties materialize (or the other consequences of such a development worsen), or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or expressed or implied by such forward-looking statements. All subsequent written and oral forward-looking statements attributable to the company or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks


only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that occur, or which we become aware of, after the date hereof, except as otherwise may be required by law. All non-GAAP financial measure reconciliations to the most comparative GAAP measure are displayed in quantitative schedules on the company’s website at: www.deepwater.com.

This press release, or referenced documents, do not constitute an offer to sell, or a solicitation of an offer to buy, any securities, and do not constitute an offering prospectus within the meaning of the Swiss Financial Services Act (“FinSA”) or advertising within the meaning of the FinSA. Investors must rely on their own evaluation of Transocean and its securities, including the merits and risks involved. Nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of Transocean.

Notes

(1)Revenue efficiency is defined as actual operating revenues, excluding revenues for contract terminations and reimbursements, for the measurement period divided by the maximum revenue calculated for the measurement period, expressed as a percentage. Maximum revenue is defined as the greatest amount of contract drilling revenues the drilling unit could earn for the measurement period, excluding revenues for incentive provisions, reimbursements and contract terminations. See the accompanying schedule entitled “Revenue Efficiency.”

(2)Effective Tax Rate is defined as income tax expense divided by income before income taxes. See the accompanying schedule entitled “Supplemental Effective Tax Rate Analysis.”

Analyst Contact:

Alison Johnson

+1 713-232-7214

Media Contact:

Pam Easton

+1 713-232-7647


TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

(Unaudited)

Three months ended

Nine months ended

September 30, 

September 30, 

   

2022

   

2021

   

2022

   

2021

 

Contract drilling revenues

$

691

$

626

$

1,969

$

1,935

Costs and expenses

Operating and maintenance

411

398

1,256

1,267

Depreciation and amortization

182

185

549

558

General and administrative

42

40

127

118

635

623

1,932

1,943

Loss on disposal of assets, net

(3)

(3)

(6)

(61)

Operating income (loss)

53

31

(69)

Other income (expense), net

Interest income

9

4

15

11

Interest expense, net of amounts capitalized

(96)

(110)

(298)

(340)

Gain on retirement of debt

7

7

51

Other, net

(6)

3

(2)

26

(86)

(103)

(278)

(252)

Loss before income tax expense (benefit)

(33)

(103)

(247)

(321)

Income tax expense (benefit)

(5)

27

24

10

Net loss

(28)

(130)

(271)

(331)

Net income attributable to noncontrolling interest

1

Net loss attributable to controlling interest

$

(28)

$

(130)

$

(271)

$

(332)

Loss per share, basic and diluted

$

(0.04)

$

(0.20)

$

(0.39)

$

(0.53)

Weighted-average shares, basic and diluted

714

653

690

630


TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)

September 30, 

December 31, 

   

2022

   

2021

 

Assets

Cash and cash equivalents

 

$

954

$

976

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

599

492

Materials and supplies, net of allowance of $194 and $183 at September 30, 2022 and December 31, 2021, respectively

398

392

Restricted cash and cash equivalents

387

436

Other current assets

131

148

Total current assets

2,469

2,444

Property and equipment

23,728

23,152

Less accumulated depreciation

(6,570)

(6,054)

Property and equipment, net

17,158

17,098

Contract intangible assets

75

173

Deferred tax assets, net

11

7

Other assets

908

959

Total assets

 

$

20,621

$

20,681

Liabilities and equity

Accounts payable

 

$

275

$

228

Accrued income taxes

4

17

Debt due within one year

750

513

Other current liabilities

476

545

Total current liabilities

1,505

1,303

Long-term debt

6,451

6,657

Deferred tax liabilities, net

471

447

Other long-term liabilities

963

1,068

Total long-term liabilities

7,885

8,172

Commitments and contingencies

Shares, CHF 0.10 par value, 905,093,509 authorized, 142,362,675 conditionally authorized, 797,244,753 issued

and 721,888,427 outstanding at September 30, 2022, and 891,379,306 authorized, 142,363,356 conditionally

authorized, 728,176,456 issued and 655,505,335 outstanding at December 31, 2021

71

64

Additional paid-in capital

13,979

13,683

Accumulated deficit

(2,729)

(2,458)

Accumulated other comprehensive loss

(91)

(84)

Total controlling interest shareholders’ equity

11,230

11,205

Noncontrolling interest

1

1

Total equity

11,231

11,206

Total liabilities and equity

 

$

20,621

$

20,681


TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Nine months ended

September 30, 

    

2022

    

2021

   

Cash flows from operating activities

Net loss

 

$

(271)

$

(331)

Adjustments to reconcile to net cash provided by operating activities:

Contract intangible asset amortization

98

170

Depreciation and amortization

549

558

Share-based compensation expense

22

21

Loss on disposal of assets, net

6

61

Gain on retirement of debt

(7)

(51)

Deferred income tax expense

20

43

Other, net

56

29

Changes in deferred revenues, net

(49)

(87)

Changes in deferred costs, net

23

8

Changes in other operating assets and liabilities, net

(177)

(31)

Net cash provided by operating activities

270

390

Cash flows from investing activities

Capital expenditures

(308)

(137)

Investments in equity of unconsolidated affiliates

(27)

Investment in loans to unconsolidated affiliates

(2)

(33)

Proceeds from disposal of assets, net

4

8

Net cash used in investing activities

(333)

(162)

Cash flows from financing activities

Repayments of debt

(453)

(423)

Proceeds from issuance of shares, net of issue costs

264

141

Proceeds from issuance of debt, net of issue costs

176

Proceeds from issuance of warrants, net of issue costs

12

Other, net

(7)

(30)

Net cash used in financing activities

(8)

(312)

Net decrease in unrestricted and restricted cash and cash equivalents

(71)

(84)

Unrestricted and restricted cash and cash equivalents, beginning of period

1,412

1,560

Unrestricted and restricted cash and cash equivalents, end of period

 

$

1,341

$

1,476


TRANSOCEAN LTD. AND SUBSIDIARIES

FLEET OPERATING STATISTICS

Three months ended

Nine months ended

 

September 30, 

June 30,

September 30, 

September 30, 

September 30, 

 

Contract Drilling Revenues (in millions)

    

2022

  

2022

  

2021

  

2022

  

2021

  

Contract drilling revenues

Ultra-deepwater floaters

$

433

$

451

$

428

$

1,274

$

1,288

Harsh environment floaters

258

241

198

695

647

Total contract drilling revenues

$

691

$

692

$

626

$

1,969

$

1,935

Three months ended

Nine months ended

 

September 30, 

June 30,

September 30, 

September 30, 

September 30, 

 

Average Daily Revenue (1)

    

2022

  

2022

  

2021

  

2022

  

2021

  

Ultra-deepwater floaters

$

326,600

$

334,400

$

351,900

$

324,000

$

362,100

Harsh environment floaters

 

374,000

 

406,000

 

401,600

 

385,800

 

385,700

Total fleet average daily revenue

$

343,400

 

358,100

$

367,100

$

344,600

$

370,100

Three months ended

Nine months ended

 

  

  

September 30, 

  

June 30,

  

September 30, 

  

September 30, 

  

September 30, 

 

Utilization (2)

2022

2022

2021

2022

2021

 

Ultra-deepwater floaters

53.1

%

53.8

%

50.2

%

52.2

%

48.7

%

Harsh environment floaters

75.7

%

70.0

%

59.8

%

68.7

%

65.9

%

Total fleet average rig utilization

59.4

%

58.2

%

52.8

%

56.7

%

53.4

%

Three months ended

Nine months ended

September 30, 

June 30,

September 30, 

September 30, 

September 30, 

Revenue Efficiency (3)

  

  

2022

  

2022

  

2021

  

2022

  

2021

Ultra-deepwater floaters

93.5

%

96.8

%

96.0

%

95.1

%

97.0

%

Harsh environment floaters

97.5

%

99.5

%

102.5

%

97.4

%

99.5

%

Total fleet average revenue efficiency

95.0

%

97.8

%

98.1

%

95.9

%

97.8

%

(1) Average daily revenue is defined as operating revenues, excluding revenues for contract terminations, reimbursements and contract intangible amortization, earned per operating day. An operating day is defined as a day for which a rig is contracted to earn a dayrate during the firm contract period after operations commence.

(2) Rig utilization is defined as the total number of operating days divided by the total number of rig calendar days in the measurement period, expressed as a percentage.

(3) Revenue efficiency is defined as actual operating revenues, excluding revenues for contract terminations and reimbursements, for the measurement period divided by the maximum revenue calculated for the measurement period, expressed as a percentage.  Maximum revenue is defined as the greatest amount of contract drilling revenues the drilling unit could earn for the measurement period, excluding revenues for incentive provisions, reimbursements and contract terminations.


TRANSOCEAN LTD. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

ADJUSTED NET INCOME (LOSS) AND ADJUSTED DILUTED EARNINGS (LOSS) PER SHARE

(In millions, except per share data)

YTD

QTD

YTD

QTD

YTD

  

09/30/22

  

09/30/22

06/30/22

  

06/30/22

  

03/31/22

 

Adjusted Net Loss

Net loss attributable to controlling interest, as reported

$

(271)

$

(28)

$

(243)

$

(68)

$

(175)

Gain on retirement of debt

(7)

(7)

Discrete tax items

(14)

(6)

(8)

 

(8)

Net loss, as adjusted

$

(292)

$

(41)

$

(251)

$

(68)

$

(183)

Adjusted Diluted Loss Per Share:

Diluted loss per share, as reported

$

(0.39)

$

(0.04)

$

(0.36)

$

(0.10)

$

(0.26)

Gain on retirement of debt

 

(0.01)

 

(0.01)

 

 

 

Discrete tax items

 

(0.02)

 

(0.01)

 

(0.01)

 

 

(0.02)

Diluted loss per share, as adjusted

$

(0.42)

$

(0.06)

$

(0.37)

$

(0.10)

$

(0.28)

YTD

QTD

YTD

QTD

YTD

QTD

YTD

 

    

12/31/21

   

12/31/21

  

09/30/21

   

09/30/21

  

06/30/21

  

06/30/21

  

03/31/21

 

Adjusted Net Loss

Net loss attributable to controlling interest, as reported

$

(592)

$

(260)

$

(332)

$

(130)

$

(202)

$

(103)

$

(99)

Allowance for excess materials and supplies, certain items

 

28

 

28

 

 

 

 

 

(Gain) loss on disposal of assets, net

 

57

 

(3)

 

60

 

 

60

 

 

60

Loss on impairment of investment in unconsolidated affiliate

 

37

 

37

 

 

 

 

 

Gain on retirement of debt

(51)

(51)

(51)

(51)

Discrete tax items

 

47

72

(25)

8

(33)

(6)

(27)

Net loss, as adjusted

$

(474)

$

(126)

$

(348)

$

(122)

$

(226)

$

(109)

$

(117)

Adjusted Diluted Loss Per Share:

Diluted loss per share, as reported

$

(0.93)

$

(0.40)

$

(0.53)

$

(0.20)

$

(0.33)

$

(0.17)

$

(0.16)

Allowance for excess materials and supplies, certain items

 

0.04

 

0.04

 

 

 

 

 

(Gain) loss on disposal of assets, net

 

0.09

 

 

0.10

 

 

0.10

 

 

0.10

Loss on impairment of investment in unconsolidated affiliate

 

0.06

 

0.06

 

 

 

 

 

Gain on retirement of debt

(0.08)

 

 

(0.08)

 

 

(0.08)

 

 

(0.08)

Discrete tax items

 

0.08

 

0.11

 

(0.04)

 

0.01

 

(0.06)

 

(0.01)

 

(0.05)

Diluted loss per share, as adjusted

$

(0.74)

$

(0.19)

$

(0.55)

$

(0.19)

$

(0.37)

$

(0.18)

$

(0.19)


TRANSOCEAN LTD. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

ADJUSTED CONTRACT DRILLING REVENUES

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION AND RELATED MARGINS

(In millions, except percentages)

YTD

QTD

YTD

QTD

YTD

  

09/30/22

09/30/22

06/30/22

06/30/22

03/31/22

 

Contract drilling revenues

$

1,969

$

691

$

1,278

$

692

$

586

Contract intangible asset amortization

98

39

59

30

29

Adjusted Contract Drilling Revenues

$

2,067

$

730

$

1,337

$

722

$

615

Net loss

$

(271)

$

(28)

$

(243)

$

(68)

$

(175)

Interest expense, net of interest income

283

87

196

96

100

Income tax expense (benefit)

24

(5)

29

3

26

Depreciation and amortization

549

182

367

184

183

Contract intangible asset amortization

98

39

59

30

29

EBITDA

683

275

408

245

163

Gain on retirement of debt

(7)

(7)

Adjusted EBITDA

$

676

$

268

$

408

$

245

$

163

EBITDA margin

33.0

%

37.6

%

30.5

%

33.9

%

26.5

%

Adjusted EBITDA margin

32.7

%

36.7

%

30.5

%

33.9

%

26.5

%

YTD

QTD

YTD

QTD

YTD

QTD

YTD

12/31/21

  

12/31/21

  

09/30/21

  

09/30/21

  

06/30/21

  

06/30/21

  

03/31/21

Contract drilling revenues

$

2,556

$

621

$

1,935

$

626

$

1,309

$

656

$

653

Contract intangible asset amortization

220

50

170

57

113

57

56

Adjusted Contract Drilling Revenues

$

2,776

$

671

$

2,105

$

683

$

1,422

$

713

$

709

Net loss

$

(591)

$

(260)

$

(331)

$

(130)

$

(201)

$

(103)

$

(98)

Interest expense, net of interest income

432

103

329

106

223

111

112

Income tax expense (benefit)

121

111

10

27

(17)

4

(21)

Depreciation and amortization

742

184

558

185

373

186

187

Contract intangible asset amortization

220

50

170

57

113

57

56

EBITDA

924

188

736

245

491

255

236

Allowance for excess materials and supplies, certain items

28

28

(Gain) loss on disposal of assets, net

57

(3)

60

60

60

Loss on impairment of investment in unconsolidated affiliate

37

37

Gain on retirement of debt

(51)

(51)

(51)

(51)

Adjusted EBITDA

$

995

$

250

$

745

$

245

$

500

$

255

$

245

EBITDA margin

33.3

%

28.0

%

35.0

%

35.9

%

34.5

%

35.8

%

33.3

%

Adjusted EBITDA margin

35.8

%

37.3

%

35.4

%

35.9

%

35.2

%

35.8

%

34.6

%


TRANSOCEAN LTD. AND SUBSIDIARIES

SUPPLEMENTAL EFFECTIVE TAX RATE ANALYSIS

(In millions, except tax rates)

Three months ended

Nine months ended

September 30, 

    

June 30,

    

September 30, 

September 30, 

September 30, 

 

2022

    

2022

    

2021

    

2022

    

2021

 

Loss before income taxes

$

(33)

$

(65)

$

(103)

$

(247)

$

(321)

Loss on disposal of assets, net

 

 

 

 

 

60

Gain on retirement of debt

 

(7)

 

 

 

(7)

 

(51)

Adjusted loss before income taxes

$

(40)

$

(65)

$

(103)

$

(254)

$

(312)

Income tax expense (benefit)

$

(5)

$

3

$

27

$

24

$

10

Loss on disposal of assets, net

 

 

 

 

 

Gain on retirement of debt

 

 

 

 

Changes in estimates (1)

6

(8)

14

25

Adjusted income tax expense (2)

$

1

$

3

$

19

$

38

$

35

Effective Tax Rate (3)

16.3

%

(4.7)

%

(26.1)

(9.6)

%

(3.2)

%

Effective Tax Rate, excluding discrete items (4)

(1.2)

%

(5.2)

%

(18.1)

%

(14.9)

%

(11.2)

%

(1) Our estimates change as we file tax returns, settle disputes with tax authorities, or become aware of changes in laws and other events that have an effect on our (a) deferred taxes, (b) valuation allowances on deferred taxes and (c) other tax liabilities.

(2) The three months ended September 30, 2022 included $6 million of additional tax benefit, reflecting the cumulative effect of a decrease in the annual effective tax rate from the previous quarter estimate.

(3) Our effective tax rate is calculated as income tax expense divided by income before income taxes.

(4) Our effective tax rate, excluding discrete items, is calculated as income tax expense, excluding various discrete items (such as changes in estimates and tax on items excluded from income before income taxes), divided by income before income tax expense, excluding gains and losses on sales and similar items pursuant to the accounting standards for income taxes related to estimating the annual effective tax rate.