Market Overview

Transocean Ltd. Reports Third Quarter 2019 Results

  • Total contract drilling revenues were $784 million (total adjusted contract drilling revenues of $832 million), compared with $758 million in the second quarter of 2019 (total adjusted contract drilling revenues of $805 million);
  • Revenue efficiency(1) was 97.0%, compared with 97.8% in the prior quarter;
  • Operating and maintenance expense was $547 million, compared with $510 million in the previous quarter;
  • Net loss attributable to controlling interest was $825 million, $1.35 per diluted share, compared with net loss attributable to controlling interest of $208 million, $0.34 per diluted share, in the second quarter of 2019;
  • Adjusted net loss was $234 million, $0.38 per diluted share, excluding $591 million of net unfavorable items. This compares with adjusted net loss of $209 million, $0.34 per diluted share, in the prior quarter;
  • Adjusted EBITDA was $245 million, compared with adjusted EBITDA of $257 million in the prior quarter; and
  • Contract backlog was $10.8 billion as of the October 2019 Fleet Status Report.

STEINHAUSEN, Switzerland, Oct. 28, 2019 (GLOBE NEWSWIRE) -- Transocean Ltd. (NYSE:RIG) today reported net loss attributable to controlling interest of $825 million, $1.35 per diluted share, for the three months ended September 30, 2019.

Third quarter 2019 results included net unfavorable items of $591 million, or $0.97 per diluted share, as follows:

  • $583 million, $0.96 per diluted share, loss on impairment primarily for three floaters previously announced for retirement,
  • $12 million, $0.02 per diluted share, loss on retirement of debt; and
  • $6 million, $0.01 per diluted share, loss on disposal of assets.

These unfavorable items were partially offset by:

  • $10 million, $0.02 per diluted share, related to discrete tax items.

After consideration of these net unfavorable items, third quarter 2019 adjusted net loss was $234 million, or $0.38 per diluted share.

Contract drilling revenues for the three months ended September 30, 2019, sequentially increased $26 million, primarily due to the commencement of operations of the newbuild harsh environment floater Transocean Norge. The quarter was also favorably impacted by increased fleet utilization and an additional operating day. These increases were partially offset by increased shipyard days.

The third quarter included a non-cash revenue reduction of $48 million, compared to $47 million in the second quarter, from contract intangible amortization associated with the Songa and Ocean Rig acquisitions.

Operating and maintenance expense was $547 million, compared with $510 million in the prior quarter. The sequential increase was the result of higher shipyard costs and contract preparation related to the reactivation of the ultra-deepwater drillships Deepwater Corcovado and Deepwater Mykonos, and the commencement of operations of the newbuild Transocean Norge.

General and administrative expense was $45 million, in line with the second quarter.

Interest expense, net of amounts capitalized, was $166 million, compared with $168 million in the prior quarter and capitalized interest sequentially increased $1 million to $10 million. Interest income was $11 million, compared with $12 million in the prior quarter.

The Effective Tax Rate(2) was (6.9)%, up from (21.9)% in the prior quarter. The increase was primarily due to impairment losses in jurisdictions with no tax benefit. This was partially offset by a decrease to tax expense related to settlements of various uncertain tax positions. The Effective Tax Rate excluding discrete items was (37.5)% compared to (25.4)% in previous quarter.

Cash flows provided by operating activities were $91 million, compared to $153 million in the prior quarter. The third quarter decrease was primarily due to reduced collections of customer receivables, and the timing of interest payments.

Third quarter 2019 capital expenditures of $121 million were related to the company's newbuild drillships under construction at the Jurong shipyard along with capital upgrades for certain rigs in our fleet. This compares with $86 million in the previous quarter.

"In the third quarter, the Transocean team continued to operate at a high level for our customers and our shareholders," said President and Chief Executive Officer Jeremy Thigpen. "Driven by strong uptime performance across our global fleet, we delivered revenue efficiency of 97%, resulting in an Adjusted EBITDA Margin of 29%."

Thigpen added, "As we approach the end of the year, we will remain focused on exceeding our customers' performance expectations. We continue to become more encouraged by our current and future prospects and our increasing level of tender participation. We are gaining improved visibility to additional opportunities in the harsh environment market of Norway; along with escalating interest in our fleet of high-specification ultra-deepwater assets for upcoming projects in the Gulf of Mexico, Brazil and West Africa."

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 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:

Conference Call Information

Transocean will conduct a teleconference starting at 9 a.m. EDT, 2 p.m. CET, on Tuesday, October 29, 2019, to discuss the results. To participate, dial +1 334-777-6978 and refer to conference code 6385237 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. EDT,5 p.m. CET, on October 29, 2019. The replay, which will be archived for approximately 30 days, can be accessed at +1 719-457-0820, passcode 6385237 and pin 3332. 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   Nine months ended  
    September 30,    September 30,   
    2019     2018     2019     2018    
Contract drilling revenues   $  784     $  816     $  2,296     $  2,270    
Costs and expenses                          
Operating and maintenance      547        447        1,565        1,302    
Depreciation and amortization      212        201        648        614    
General and administrative      45        35        139        134    
       804        683        2,352        2,050    
Loss on impairment      (583 )      (432 )      (584 )      (1,446 )  
Loss on disposal of assets, net      (4 )      (6 )      (7
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