Market Overview

Transocean Ltd. Reports Second Quarter 2019 Results

  • Total contract drilling revenues were $758 million (total adjusted contract drilling revenues of $805 million), compared with $754 million in the first quarter of 2019 (total adjusted contract drilling revenues of $799 million);
  • Revenue efficiency(1) was 97.8%, compared with 97.9% in the prior quarter;
  • Operating and maintenance expense was $510 million, compared with $508 million in the prior period;
  • Net loss attributable to controlling interest was $208 million, $0.34 per diluted share, compared with net loss attributable to controlling interest of $171 million, $0.28 per diluted share, in the first quarter of 2019;
  • Adjusted net loss was $209 million, $0.34 per diluted share, excluding $1 million of net favorable items. This compares with adjusted net loss of $181 million, $0.30 per diluted share, in the prior quarter;
  • Adjusted EBITDA was $257 million, compared with adjusted EBITDA of $254 million in the prior quarter; and
  • Contract backlog was $11.4 billion as of the July 2019 Fleet Status Report.

STEINHAUSEN, Switzerland, July 29, 2019 (GLOBE NEWSWIRE) -- Transocean Ltd. (NYSE:RIG) today reported net loss attributable to controlling interest of $208 million, $0.34 per diluted share, for the three months ended June 30, 2019.

Second quarter 2019 results included net favorable items of $1 million as follows:

  • $9 million, $0.01 per diluted share, gain on bargain purchase, and
  • $5 million related to discrete tax items.

These favorable items were partially offset by:

  • $9 million, $0.01 per diluted share, loss on retirement of debt,
  • $3 million loss on impairment or disposal assets, and
  • $1 million in acquisition and restructuring costs.

After consideration of these net favorable items, second quarter 2019 adjusted net loss was $209 million, or $0.34 per diluted share.

Contract drilling revenues for the three months ended June 30, 2019, sequentially increased $4 million, primarily due to an additional operating day.

The second quarter included a non-cash revenue reduction of $47 million from contract intangible amortization associated with the Songa and Ocean Rig acquisitions. The first quarter non-cash revenue reduction from contract intangible amortization was $45 million.

Operating and maintenance expense was $510 million, compared with $508 million in the prior quarter. The sequential increase was the result of higher in-service maintenance cost across our fleet.

General and administrative expense was $45 million, compared with $49 million in the prior quarter. The decrease was primarily due to costs related to the Ocean Rig acquisition incurred in the first quarter that were not repeated in the second quarter.

Interest expense, net of amounts capitalized, was $168 million, compared with $166 million in the prior quarter and capitalized interest was $9 million in each quarter. Interest income was $12 million, compared with $10 million in the prior quarter.

The Effective Tax Rate(2) was (21.9)%, down from 4.5% in the prior quarter. The decrease was primarily due to settlements of various uncertain tax positions, partially offset by changes in the valuation allowance related to deferred tax assets and adjustments to our deferred taxes on a new operating structure in the U.S. Additionally, the relative blend of income from operations from certain jurisdictions and first quarter financial results impacted the effective tax rate.

Cash flows provided by operating activities was $153 million, compared to cash used in operating activities of $51 million in the prior quarter. Second quarter cash provided by operating activities increased primarily due to increased collections from customers.

Second quarter 2019 capital expenditures of $86 million were related to the company's newbuild drillships coupled with capital expenditures primarily relating to capital upgrades for certain rigs in our existing fleet. This compares with $52 million in the previous quarter.

"We continued to operate at a high level throughout the second quarter, with strong rig uptime and attained performance bonuses producing revenue efficiency of approximately 98% across our global floater fleet," said Jeremy Thigpen, President and Chief Executive Officer. "As importantly, we generated strong cash flows from operations of $153 million through the efficient conversion of our industry best $11.4 billion backlog."

Thigpen added, "Despite some continued uncertainty around oil prices, offshore project economics remain compelling, driving increases in floater contracting and increasing dayrates in both the harsh environment and ultra-deepwater markets."

Thigpen concluded: "Our industry-leading floater fleet, consistently strong operating performance, solid liquidity position, and enviable backlog, position us well as the market continues to recover."

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:

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 47 mobile offshore drilling units consisting of 31 ultra-deepwater floaters, 13 harsh environment floaters and three midwater floaters. In addition, Transocean is constructing four ultra-deepwater drillships and one harsh environment semisubmersible in which the company holds a 33.0% interest.

For more information about Transocean, please visit:

Conference Call Information

Transocean will conduct a teleconference starting at 9 a.m. EST, 3 p.m. CEST, on Tuesday, July 30, 2019, to discuss the results. To participate, dial +1 323-794-2590 and refer to conference code 6485183 approximately 10 minutes prior to the scheduled start time.

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

A replay of the conference call will be available after 12 p.m. EST, 6 p.m. CEST, on July 30, 2019. The replay, which will be archived for approximately 30 days, can be accessed at +1 719-457-0820, passcode 6485183. The replay will also be available on the company's website.

Forward-Looking Statements

The 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: 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:

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.


  1. Revenue efficiency is defined as actual contract drilling revenues 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 amounts related to incentive provisions. See the accompanying schedule entitled "Revenue Efficiency."
  2. Effective Tax Rate is defined as income tax expense for continuing operations divided by income from continuing operations before income taxes. See the accompanying schedule entitled "Supplemental Effective Tax Rate Analysis."

Analyst Contacts:
Bradley Alexander
+1 713-232-7515

Lexington May
+1 832-587-6515

Media Contact:
Pam Easton
+1 713-232-7647

(In millions, except per share data)

    Three months ended   Six months ended  
    June 30,    June 30,   
    2019    2018    2019    2018   
Contract drilling revenues   $  758     $  790     $  1,512     $  1,454    
Costs and expenses                          
Operating and maintenance      510        431        1,018        855    
Depreciation and amortization      219        211        436        413    
General and administrative      45        52        94        99    
       774        694        1,548        1,367    
Loss on impairment      (1 )      (1,014 )      (1 )      (1,014 )  
Gain (loss) on disposal of assets, net      (10 )      1        (3 )      6    
Operating loss      (27 )      (917 )      (40 )      (921 )  
Other income (expense), net              
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